A California family's elaborate fraud scheme, which netted $18 million in COVID-19 relief funds for luxury purchases before the perpetrators attempted to flee the country, has spurred new legislation aimed at preventing such abuse by "fraudster families."
Sen. Joni Ernst (R-Iowa) is championing the "No Cash for Cohabitating Kins of Crooks Act," which seeks to block individuals living with convicted criminals or fraudsters from receiving federal grants, loans, subawards, or reimbursements. The proposed law includes exemptions for spouses living separately from a convicted individual or survivors of domestic abuse.
"Committing fraud is literally all relative for these families of felons," Ernst stated. "My latest investigation found schemes sprouting from family trees across the country, with kin teaming up to rip off taxpayers to the tune of $50 million."
The California case that partly inspired the bill involved Richard Ayvazyan, identified as the ringleader, and his wife, Marietta Terabelian. They, along with Ayvazyan's sister-in-law Tamara Dadyan and her husband Artur Ayvazyan, used stolen identities of foreign exchange students, as well as deceased and elderly individuals, to fraudulently obtain COVID-19 relief funds. The scheme was uncovered in 2021.
Ayvazyan and Terabelian were convicted and sentenced to 17 years and six years in prison, respectively. They were apprehended in Montenegro after cutting off their ankle monitors and fleeing the U.S. following their convictions. A judge described Ayvazyan as a "cold-hearted fraudster" who "views fraud as an achievement."
Ernst highlighted other cases in her push for the legislation. Among them was a family involved in the "Feeding Our Future Fraud Scheme" in Minnesota, where Gandi Yusuf Mohamed and five relatives allegedly defrauded the Federal Child Nutrition Program of over $10 million, funds intended to feed needy children.
Another cited instance involved the Edwards family in Florida, who allegedly created a fake family ministry to solicit $6 million from the Small Business Administration's Paycheck Protection Program. While the son, Josh, was sentenced to over four years in prison, most of the family members reportedly faced no charges.
Additionally, Ernst pointed to a case of four sisters, referred to as "grifting grandmothers," who were found to have submitted approximately 200 false claims for farm aid, acquiring about $11.5 million from the Department of Agriculture. The funds were used for luxury purchases, despite evidence that the individuals had not engaged in farming activities.
A family in Washington state was also mentioned, where individuals feigned caregiver roles to defraud the Veterans Affairs Administration of $1.1 million. The scheme involved Kelly Lee-Carroll, who falsely claimed partial paralysis, with her sister and son acting as her caretakers. Lee-Carroll received a 17-month sentence, and her son received 14 months.
Ernst's office compiled a list totaling approximately $50 million in fraud committed by 15 "fraudster families." The "No Cash for Cohabitating Kins of Crooks Act" is the latest in a series of legislative efforts by the senator to address government waste, fraud, and abuse. "Their next scam-ily reunion will be in the slammer," Ernst remarked.