By / August 9, 2023

NASA Employee Financed Illegal Cannabis Cultivation with Pandemic Support Funds

NASA (National Aeronautics and Space Administration) employee admitted to using funds meant for supporting small businesses during the COVID pandemic for illegal cannabis cultivation.

A NASA-Jet Propulsion Laboratory (JPL) employee confessed to fraud in a government loan program established during the COVID-19 pandemic. He admitted that a portion of the funds was used to finance an illegal cannabis operation – the U.S. Department of Justice reported on July 24th.

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Charges and Admission

“Armen Hovanesian, a 32-year-old from Glendale, a cost control and budget planning analyst at JPL, a government research and development center funded by the California Institute of Technology for NASA, admitted to the fraud charge,” wrote the Department of Justice. “The information and plea agreement were filed on Thursday in the U.S. District Court. Hovanesian is scheduled to appear in court for a preliminary hearing on August 11.”

Fraudulent Loan Applications

According to the information provided by the Department of Justice, from June 2020 to October 2020, Hovanesian applied for three loans from the Economic Injury Disaster Loan (EIDL) program, an administered program that offered low-interest financing for small businesses, renters, and homeowners, specifically for businesses affected by the COVID-19 pandemic.

“Hovanesian admitted to making false statements in loan applications regarding the gross revenue each business generated the previous year and false statements about his intended use of the loan funds.”

The Small Business Administration (SBA) mandates—under penalty of perjury—that beneficiaries “use the full amount” of the loans they applied for “solely as working capital to mitigate economic damage” in accordance with the terms and limitations of the EIDL program.

However, instead of using the funds to support his businesses during COVID, the NASA employee used the funds for personal gain, settling personal real estate debts and financing his illegal cannabis cultivation.

Legal Consequences for NASA Employee

The Department of Justice stated that Hovanesian used the SBA to transmit via interstate wires funds from EIDL totaling $151,900.

The punishment is severe: After pleading guilty, Hovanesian faces a maximum sentence of 20 years in federal prison.

Misuse of Pandemic Support Funds

Misuse of pandemic support funds was rampant. To address this issue, the U.S. Attorney General established a Task Force to Combat COVID-19-related Frauds in May 2021.

Pandemic support programs, such as the SBA financing and the Paycheck Protection Program, were often misused.

NBC News reported that pandemic support funds were used to purchase Lamborghinis, Ferraris, Teslas, and Bentleys. The NASA Employees’ misuse of the funds is just the latest in this series of cases.

The Inspector General of the Department of Justice, Michael Horowitz, overseeing pandemic support expenditure, told NBC’s Lester Holt that pandemic support programs were structured in a way that made them especially easy to exploit, with many businessmen caught buying expensive sports cars and other luxury goods with the money.

(Featured image courtesy of Pixabay via Pexels)

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