HOLLYWOOD HILLS—On Monday, November 16, 2020 the United States Attorney’s Office announced that Mikayel Hmayakyan, 43, of Glendale, was sentenced to 84 months in federal prison for a series of “bust out” scams. Hmayakyan defrauded over 20 banks out of $5 million by using fraudulently obtained credit cards to buy liquor and cemetery plots worth millions of dollars and later sold them for profit.
Hmayakyan pleaded guilty on June 29 to one count of aggravated identity theft and two counts of bank fraud, he was also ordered to pay $4,906,534 in restitution.
A “bust out” scam is a type of fraud in which a person fraudulently obtains a credit card usually using a stolen identity with the intention of “maxing out” the card with no intention to pay off the debt.
Hmayakyan and other conspirators fraudulently obtained credit cards using either their real names or fake identities created with both fictitious and real information. After the cards reached the credit limits, defendants paid the debt by using fake accounts or accounts with insufficient funds to restore the credit line, which they made additional fraudulent purchases.
From 2014 through 2017, Hmayakyan charged and directed others to charge more than $3 million to purchase liquor, Forest Lawn cemetery plots, and Rolex watches.
The liquor was purchased at a store where co-defendant Vahan Aloyan, 45, of Glendale was the manager. During the execution of a 2016 search warrant, officers seized $13,000 in cash from the store as well as 37,000 bottles of alcoholic beverages worth $300,000. An additional $13,000 was seized from Aloyan’s residence along with 37 watches.
From 2010 through 2011 and from 2015 through 2016 Hmayakyan applied for several loans in the name of fictitious and real people. The loans were used to finance vehicles, but he did not make the payments. The banks lost $400,000 from giving loans to Hmayakyan.
The financial institutions were exposed to a total loss of $4,906,534.
Hollywood Hills resident Gayane Hakobyan, 70, participated in the “bust out” scheme by allowing others to open accounts and credit cards in her name. She was sentenced on October 8, 2020, to two years probation, and fined $223,235 in restitution.
North Hollywood resident Mikayel Hovhannisyan, 38, pleaded guilty in 2019 to one count of bank fraud. He was sentenced to nine months in federal prison and was fined $412,413 in restitution.
Aloyan, the remaining defendant in the case is scheduled for trial on March 15, 2021.
The Glendale Police Department and the United States Secret Service investigated the case.