Former Banker Arrested for Allegedly Obtaining $2.7 Million in COVID Business-Relief Funds Using Stolen IDs of Disabled Persons

LOS ANGELES – A former Wells Fargo & Co. banker and his brother have been arrested on an eight-count federal grand jury indictment alleging they schemed to fraudulently obtain more than $2.7 million in taxpayer-funded COVID-19 relief funds and federally-guaranteed small business loans, including by submitting applications using the stolen identities of developmentally disabled persons who lived in long-term care facilities, the Justice Department announced today. 

Norayr Madadi, 40, of Burbank, and Vazrik Madadi, 44, of Glendale, were arrested Wednesday morning.

Both men are charged with one count of conspiracy to commit wire fraud, two counts of wire fraud, and three counts of money laundering. Norayr Madadi is separately charged with one count of aggravated identity theft and one count of making a false statement to a government agent.

They pleaded not guilty at their arraignment Wednesday afternoon in United States District Court in Los Angeles. A federal magistrate judge ordered Norayr Madadi released on $25,000 bond, ordered Vazrik Madadi released on $50,000 bond, and scheduled a September 2 trial date.

According to the indictment returned on June 17 and unsealed Wednesday, Norayr Madadi was a banker at Wells Fargo and opened fraudulent accounts in the names of shell companies and persons including using stolen and fictious identities.

From March 2020 through April 2021, the defendants obtained millions in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) loans by submitting loan applications with false statements about revenues, operations, and employees. The defendants used fake and stolen identities to further the fraudulent scheme, including the stolen identities of two victims who are developmentally disabled and live in long-term care facilities.

The Small Business Administration (SBA) and PPP participating lenders disbursed the loans into bank accounts controlled by the defendants, including the Wells Fargo bank accounts opened by Norayr Madadi. The Madadi brothers allegedly spent the loan proceeds at casinos, paying for luxury cars and jewelry, and cash withdrawals.

Law enforcement believes the losses caused by this scheme are approximately $2.7 million.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

If convicted, each defendant would face a statutory maximum sentence of 20 in federal prison for each wire fraud-related count and up to 10 years in federal prison for each money laundering count. Norayr Madadi would face up to five years in federal prison if convicted of the false statements count and would face a mandatory two-year consecutive prison term if convicted of the aggravated identity theft count.

The FBI is investigating this matter. 

Assistant United States Attorney Jason Pang of the General Crimes Section is prosecuting this case, with substantial assistance from Assistant United States Attorney Ryan Waters of the Asset Forfeiture and Recovery Section.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.