CA man pleads guilty to COVID-19 fraud scheme
By SDCN Editor
A California man pleaded guilty Friday to fraudulently obtaining $345,108 in COVID-19 pandemic relief loans from a financial institution and the Small Business Administration (SBA).
According to court documents, Artur Chanchikyan, 55, of Los Angeles, was the owner of Gentle Touch Home Health Care Incorporated, a home health agency that was located in North Hollywood, California.
On Dec. 27, 2019, the Centers for Medicare and Medicaid Services (CMS) placed Chanchikyan under Medicare payment suspension based on fraud allegations. While under suspension, around April 2020, Chanchikyan applied for a Paycheck Protection Program (PPP) loan seeking $160,000 on behalf of Gentle Touch. In the PPP application, Chanchikyan made false representations, including the number of employees to whom Gentle Touch paid wages and Gentle Touch’s average monthly payroll expenses at the time of the application, and false certifications that the loan would be used for permissible business purposes by Gentle Touch. As a result, Gentle Touch received approximately $45,472 in PPP loan proceeds.
Around April 2020, the Department of Health and Human Services (HHS) Provider Relief Fund program deposited approximately $139,736 into Gentle Touch’s bank account. The fund program automatically distributed funds to providers who met certain criteria to help healthcare providers who were financially impacted by COVID-19, as well as to provide care to patients who were suffering from COVID-19 and compensate providers for the cost of that care. On or about May 1, 2020, Chanchikyan falsely certified to HHS that he would use the funds to prevent, prepare for, and respond to COVID-19 or to reimburse Gentle Touch for healthcare-related expenses or lost revenue attributable to COVID-19 as required.
Additionally, around July 2020, Chanchikyan submitted an application to the SBA seeking a low-interest loan from the Economic Injury Disaster Loan (EIDL) Program. In the EIDL application, Chanchikyan falsely represented the number of employees at Gentle Touch and falsely certified that the loan would be used for permissible business purposes. As a result, Gentle Touch received approximately $159,900 in EIDL proceeds.
Chanchikyan used the funds from the PPP, PRF, and EIDL programs for his own benefit and for purposes that were different from those he certified.
He pleaded guilty to wire fraud. He is scheduled to be sentenced on Dec. 5 and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
