NASA Employee Faces Prison Time For Diverting COVID Relief Funds Into Weed Business

A NASA employee recently confessed to misusing COVID relief funds intended for small businesses by diverting them towards an illicit cannabis operation.

What Happened: Armen Hovanesian, 32, made three fraudulent loan applications under the guise of business entities that he controlled.

The incidents took place between June 2020 and October 2020, according to the plea agreement. The applications were submitted to the Economic Injury Disaster Loan Program, a program overseen by the Small Business Administration.

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Hovanesian, a cost-control and budget-planning resource analyst for NASA's Jet Propulsion Laboratory, has “agreed to plead guilty to a single-count information charging him with wire fraud,” the Justice Department wrote.

The plea agreement was filed in a U.S. District Court, and Hovanesian is expected to make his initial court appearance on Aug. 11.

Hovanesian faces a maximum sentence of 20 years in federal prison.

Why It Matters: The NASA employee confessed to deliberately providing inaccurate information on the loan applications, including misrepresenting the actual gross revenues garnered by his businesses over the previous year and falsifying his intended use of the loan funds.

Specifically, he allegedly used interstate wire transfers to unlawfully transfer a significant sum of $151,900 in proceeds, which he used for his own benefit, including repaying a personal real-estate debt and funding his illegal marijuana cultivation.

Grant recipients are required to utilize the entire loan amount for which they have applied exclusively as working capital. The money addresses any economic harm inflicted by the disaster under the Economic Injury Disaster Loan program.

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