$25 Million SBA Loan Fraud Exploits Valid IRS Filings
May 30, 2025
Bob Coleman
Founder & Publisher
Fraud Friday: $25 Million SBA Loan Fraud Exploits Valid IRS Filings
Eighteen individuals from Southern California’s San Fernando Valley and Glendale predominately Armenian community are facing federal charges for perpetrating a $25 million scam involving fraudulent SBA PLP and PPP loans. What sets this case apart is how the perpetrators actively filed fraudulent tax returns with the IRS to bolster their sham loan applications—tricking lenders who relied on IRS verifications to approve loans.
A Fraud Built on False Tax Filings
The group, led by alleged mastermind Vahe Margaryan, filed false tax returns with the IRS that claimed millions of dollars in corporate income to support business acquisition loans. These tax filings were an essential element of the scheme, as lenders typically pulled verifications directly from the IRS as part of their loan underwriting process.
By creating a façade of legitimate business activity backed by federal tax documents, as well as a host of other photoshopped fake documents, the scam participants were able to secure SBA PLP loan approvals, and loan fundings by a number of high-profile 7(a) lenders.
The Mechanics of the Scheme
Margaryan allegedly oversaw the creation of shell companies with names designed to appear reliable, including entities like “Dynamic IT” and “Optimal Business Solutions.” These companies were nothing more than paper entities with no real business activity.
The fraud team utilized the shell companies to present fake financial documents, including tax returns that were filed with the IRS. Participants were reportedly recruited during social and spiritual gatherings and persuaded to act as “owners” of these fake businesses. As part of the scam, these nominal owners opened bank accounts for the shell corporations, granting Margaryan access to manage these funds. As evidence of their meticulous planning most checking accounts were opened in the early 2020s, years before the SBA biz aq applications hit the underwriter’s desk.
They even had equity injection covered. Funds from previous fraudulent loans were parked in accounts for three or four months to give a further air of legitimacy.
The supposed businesses were housed in small one or two person offices for the lenders to obtain assignment of leases and landlord waivers. And these documents were also forged.
The Scope of Damage and Charges
Among the eighteen total defendants named in the complaints, four are believed to have fled to Armenia after receiving “target” letters from the Feds. The defendants are charged with:
- Conspiracy to defraud the government with respect to claims
- False, fictitious, or fraudulent claims
- Wire fraud and attempted wire fraud
- Bank fraud and attempted bank fraud
- Money laundering conspiracy
- Laundering of monetary instruments
- Engaging in monetary transactions in property derived from specified unlawful activity
- Structuring financial transactions to evade reporting requirements