September 21, 2023 – LOS ANGELES, CA – The ringleader and mastermind of a check-kiting scheme who conspired with his wife and other family members to defraud major banks out of more than $1.7 million has been sentenced to 81 months in federal prison, the Justice Department announced on Wednesday.

Ara Malkhasyan, 52, of Winnetka, was sentenced late Tuesday by United States District Judge Dolly M. Gee, who will schedule restitution hearing in the coming weeks.

Malkhasyan pleaded guilty in April 2021 to one count of conspiracy to commit bank fraud and one count of aggravated identity theft.

From May 2015 to September 2017, Malkhasyan and his co-conspirators obtained genuine Armenian passports issued to other people, altered the passports to include the photos of themselves, and used the fraudulent documents to obtain other identity documents and to open bank accounts at the victim banks.

Malkhasyan and his accomplices used the bank accounts, which were opened in the names that appeared on the altered passports, to write bad checks to other fraudulently obtained bank accounts. They exploited bank rules that allowed them to transfer money from one account to another, and then to immediately withdraw funds at ATMs in Las Vegas casinos and other locations before the checks bounced.

In total, Malkhasyan and his co-conspirators used 331 fraudulently altered Armenian passports to unlawfully obtain $1,304,307 from Bank of America.

In a separate scheme, from April 2017 to May 2019, Malkhasyan conspired with his brother-in-law, Smbat Khechumyan, 41, of North Hollywood, to conduct similar forged and fraudulent check scheme in which one of them would open a Wells Fargo account using a stolen Armenian passport, counterfeit Ukrainian or Belarusian passport, deposit forged checks into the account, and then withdraw funds from the account through ATMs at Las Vegas casinos. Wells Fargo suffered a loss of $401,420.

Khechumyan pleaded guilty in October 2021 to one count of conspiracy to commit bank fraud and one count of aggravated identity theft. He is serving a two-year prison sentence for his crimes.

Sveta Khechumyan, 49, of Winnetka, Malkhasyan’s wife and Smbat’s sister, pleaded guilty in April 2021 to one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Her sentencing hearing is scheduled for November 3.

In total, prosecutors have secured nine guilty pleas in this case.

Homeland Security Investigations investigated this matter and received substantial assistance from the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, and the FBI.

Assistant United States Attorney Kevin J. Butler of the Violent and Organized Crime Section prosecuted this case.

Source: DOJ Release