Financial Fraud: Four Persons Arrested Credit Card Bust-Out Scheme

Fourth Defendant Arrested in Credit Card ‘Bust-Out’ Scheme that Spent $2 Million on Luxury Watches, Liquor, Cars and Cemetery Plots

LOS ANGELES – With the surrender this morning of the final defendant, federal authorities have taken into custody four people named in a grand jury indictment that alleges a “bust-out” scheme in which the defendants fraudulently charged nearly $2 million in less than a year to credit cards often opened with “synthetic identities.”

Gayane Hakobyan, 69, of Hollywood Hills, was taken into custody this morning and is expected to be arraigned on the indictment this afternoon in United States District Court.

Previously in this case, Mikayel Hovhannisyan, 36, of North Hollywood, surrendered on December 3. The other two defendants in the case – Mikayel Hmayakyan, 41, of Glendale; and Vahan Aloyan, 43, also of Glendale – were arrested on November 20. During their arraignments, all three of these defendants entered not guilty pleas and were freed on bond.

The defendants allegedly conspired to carry out a wide-ranging credit card fraud scheme, using the fraudulently obtained cards to purchase hundreds of thousands of dollars’ worth of liquor and luxury watches. The 22-count indictment alleges a bust-out scheme in which the defendants obtained credit cards – sometimes under their real names, but often with synthetic identities created with a combination of real and fictitious information – that were run up to the credit limit. Members of the scheme then allegedly “paid down” by submitting payments from accounts with insufficient funds or through fake accounts to restore the credit line, which allowed them to make additional purchases.

All four defendants allegedly used the fraudulently-obtained credit cards to purchase hundreds of thousands of dollars in alcoholic beverages on behalf of the now-closed Liquor Spot in Glendale, where Aloyan was a manager.

The indictment also charges Hmayakyan with bank fraud for using fraudulent credit cards in the names of various aliases – including “Liam Sarcozzy” – to purchase plots at Forest Lawn Cemetery in Glendale, which he then sold at a profit. Hmayakyan is also accused of conspiring with others to fraudulently apply for loans under an alias to obtain a Kia Optima and in a real person’s name for a 2016 Lexus GX460. The indictment alleges that Hmayakyan never intended to pay any credit card bills nor made any payments on the loans.

During the execution of a search warrant in 2016, law enforcement seized more than 37,000 bottles of alcoholic beverages, worth approximately $300,000, from the Liquor Spot. They also seized nearly $13,000 in U.S. currency from the store, as well as nearly $13,000 and 37 watches and other jewelry items from Aloyan’s residence.

All four defendants are charged with one count of conspiracy to commit bank fraud and 10 counts of bank fraud. Hmayakyan is charged separately with six additional counts of bank fraud. Hmayakyan and Aloyan also are charged with possessing “unauthorized access devices,” which included credit cards, debit cards, bank account information and Social Security numbers belonging to other people. Hmayakyan is also charged with two counts of aggravated identity theft.

Each count of bank fraud and conspiracy to commit bank fraud carries a statutory maximum penalty of 30 years in federal prison. The charge of possession of unauthorized access devices carries a statutory maximum penalty of 10 years. The aggravated identity theft charges carry a mandatory consecutive sentence of two years.

United States District Judge George H. Wu has scheduled a trial in this case for early January.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case was investigated by the United States Secret Service and the Glendale Police Department.

This case is being prosecuted by Assistant United States Attorney Poonam G. Kumar of the Major Fraud Section.