A Burbank blood-testing laboratory owner who used Medicare reimbursement money to support a gambling habit, pay personal expenses and evade millions in taxes has been sentenced to more than four years in federal prison.
Armen Muradyan, 60, from California, was ordered to serve 51 months behind bars by U.S. District Judge John A. Kronstadt. The court also directed him to pay $15.16 million in restitution.
Muradyan pleaded guilty in August 2025 to conspiracy to commit health care fraud, wire fraud and tax evasion. Federal prosecutors said his conduct involved a long-running effort to conceal his role in a laboratory business, obtain Medicare payments and hide income from tax authorities.
Court hears how Burbank laboratory owner devised scheme to fund gambling habit
According to court records, Muradyan owned and operated Genex Laboratories Inc., a blood-testing laboratory in Burbank. After Medicare barred him from submitting claims, prosecutors said he arranged for a longtime friend identified as “L.S.” in court documents to appear as the company’s owner.
Authorities said the move allowed Medicare reimbursement payments to keep flowing while masking Muradyan’s involvement. Court records show that Medicare deposited more than $23 million into bank accounts opened in L.S.’s name but controlled by Muradyan.
Prosecutors said Muradyan agreed to pay L.S. $2,000 each month in exchange for serving as the laboratory’s owner on paper. He allegedly told his friend that Medicare enrollment paperwork had to be filed under L.S.’s name because Muradyan was prohibited from filing claims himself.
Although L.S. was listed as the owner, investigators said he did not actually run the company. Instead, he reportedly came to the Burbank office to collect monthly payments and occasionally signed documents at Muradyan’s direction while Muradyan remained in charge of the business.
Federal prosecutors said Muradyan spent proceeds from the fraud scheme on personal obligations, including mortgage payments, gambling and other expenses.
The government also said the arrangement supported a tax evasion scheme that lasted from 2015 through 2023. During that period, Muradyan instructed L.S. to report Genex financial activity on personal tax returns using summaries that falsely suggested the company earned little profit or operated at a loss.
This was then provided to L.S.’s tax preparer, who prepared returns using the information supplied by Muradyan, according to prosecutors.
Authorities also said Muradyan filed personal tax returns that omitted Genex financial activity and reported average annual income of about $40,000 despite receiving and spending millions generated by the laboratory. He also failed to file tax returns from 2021 through 2023.
Prosecutors said he concealed roughly $23.9 million in taxable income, resulting in more than $11.2 million in unpaid federal taxes. Court records further state that California suffered about $2.7 million in tax losses.
The case also included a fraudulent Economic Injury Disaster Loan application submitted in July 2020 on behalf of an entity called GenMed. Prosecutors said Muradyan falsely claimed the business had employees and generated $800,000 in revenue during 2019. The Small Business Administration approved a $99,900 loan, and authorities said the money was later spent on personal expenses not allowed under the program.
IRS Criminal Investigation, the FBI and the Department of Health and Human Services Office of Inspector General investigated the case. Prosecutors from the U.S. Attorney’s Office and the Department of Justice handled the prosecution.
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