NASA employee used COVID funds to grow pot and pay off his real estate debt, feds say

A NASA employee was caught using COVID-19 relief loans to support an illegal marijuana-growing endeavor and erase his real estate debt, federal prosecutors said.

Armen Hovanesian, 32, who works for NASA’s Jet Propulsion Laboratory, an agency research center run by the California Institute of Technology in Pasadena, had applied for COVID-19 relief loans to help his small businesses during the early stages of the pandemic in 2020, according to the U.S. Attorney’s Office for the Central District of California.

As a result, the Economic Injury Disaster Loan program, run by the Small Business Administration, granted Hovanesian $151,900 in COVID-19 relief funds, federal prosecutors said.

Hovanesian, of Glendale, California, went on to defraud the federal loan program — which provided economic aid to businesses struggling during the pandemic — by using the loans to buy marijuana cultivation equipment and to repay real estate debt, court documents show.

He’s agreed to plead guilty to wire fraud, the attorney’s office announced in a July 24 news release. After doing so, he will face up to 20 years in prison, according to prosecutors.

Information regarding Hovanesian’s legal representation wasn’t listed in court records as of July 25.

Hovanesian works as a cost-control and budget-planning resource analyst at NASA’s Jet Propulsion Laboratory.

In a statement to McClatchy News on July 25, the center said “we are not able to comment on the government’s investigation or employee matters, but we take the charge of misconduct seriously.”

We are not able to comment on the government’s investigation or employee matters, but we take the charge of misconduct seriously.

Hovanesian lied on three loan applications submitted between June 2020 and October 2020, causing the Small Business Administration to wire him EIDL loan proceeds, according to prosecutors.

Specifically, he lied about his business’ gross revenues and promised to “use all the (loan) proceeds” only “as working capital to alleviate economic injury caused by disaster,” prosecutors said.

Hovanesian will appear in court on Aug. 11, according to the release.

As of June 27, the SBA has disbursed $1.2 trillion in Economic Injury Disaster Loans and Paycheck Protection Program money since the beginning of the COVID-19 pandemic, according to a report released by the administration.

Of this amount, more than $200 billion, or 17%, were “disbursed to potentially fraudulent actors,” the SBA said in the report.

Glendale is about 10 miles north of Los Angeles.

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