A California family's $18 million COVID-relief fraud scheme, complete with ankle-bracelet escapes and a fugitive chase to Montenegro, has inspired new Senate legislation aimed at blocking convicted fraudsters' household members from federal money.
Sen. Joni Ernst (R-Iowa) introduced the No Cash for Cohabitating Kins of Crooks Act, a bill that would bar anyone living with a convicted criminal or fraudster from receiving federal grants, loans, subawards, or reimbursements. Ernst rolled out the legislation alongside her August Squeal Award, a monthly spotlight on government waste that this time named 15 families she says collectively swindled taxpayers out of roughly $50 million.
The bill and the award share a common thread: fraud that runs in the family. Ernst's office identified case after case, spanning California, Minnesota, Florida, and Washington state, in which relatives teamed up to loot pandemic-relief programs, nutrition aid, farm subsidies, and veterans' benefits. The schemes exploited programs meant for struggling small businesses, hungry children, disabled veterans, and working farmers.
Ernst, a retiring Republican who leads the Senate DOGE Caucus, told the New York Post the pattern was unmistakable:
"Committing fraud is literally all relative for these families of felons. My latest investigation found schemes sprouting from family trees across the country, with kin teaming up to rip off taxpayers to the tune of $50 million."
The case that sparked the legislation reads like a crime thriller, except every dollar stolen came from pandemic-relief funds meant for Americans in genuine need. Richard Ayvazyan led a family ring in the Los Angeles area that used stolen identities to swindle $18 million in COVID-19 relief money. His wife, Marietta Terabelian, his brother Artur Ayvazyan, and his sister-in-law Tamara Dadyan, a former L.A.-area real estate broker, all participated in the scheme.
A jury convicted the group in 2021. But Richard Ayvazyan and Terabelian never reported to prison. Instead, they cut off their ankle bracelets, left a goodbye note for their three children, and fled the country. Authorities eventually caught the couple in Montenegro.
Ayvazyan is now serving a 17-year federal prison sentence. Terabelian received six years. The presiding judge, according to a Department of Justice press release, called Ayvazyan a "cold-hearted fraudster" who "views fraud as an achievement."
That characterization, fraud as a family value, is precisely what Ernst says her bill targets.
The Ayvazyan clan was far from the only household operation Ernst flagged. In Minnesota, Gandi Yusuf Mohamed and five family members swindled more than $10 million from the Federal Child Nutrition Program, money earmarked to feed five million needy children. Their scheme was part of the broader Feeding Our Future fraud, a sprawling $250 million scandal that became one of the largest pandemic-era fraud cases in the country.
That case carried its own political dimension. Ernst's report noted that Minnesota Attorney General Keith Ellison had "an infamous meeting" with a member of the Mohamed family, a meeting that drew scrutiny from congressional Republicans. The specific nature of that meeting and which family member attended remain unclear from available records.
In Florida, the Edwards family concocted a bogus ministry to tap the Small Business Administration's Paycheck Protection Program. Pastor Evan Edwards and his sons, including Josh Edwards, claimed to employ more than 500 workers and sought $6 million in PPP loans. An elderly accountant, described in the report as allegedly suffering from dementia, approved the request. The SBA handed over roughly $8.4 million, exceeding even what the family had asked for.
Josh Edwards was sentenced earlier this year to four years and three months in prison. But Evan Edwards was deemed incompetent to stand trial and was never charged. According to NBC News reporting on the case, most of the family got away without being charged at all.
So the taxpayers lost $8.4 million, and the bulk of the family that took it faced no legal consequences. That gap, between the scale of the fraud and the reach of accountability, sits at the center of Ernst's argument for her legislation.
Ernst's Squeal Award also spotlighted four sisters, described as grandmothers, who submitted roughly 200 false claims for USDA farm aid and walked away with approximately $11.5 million. Federal investigators determined the women "in most cases, had not even attempted to farm." They spent the money on six-figure homes and expensive cars. Prosecutors hit them with about 115 fraud counts, though sentencing outcomes were not detailed in Ernst's report.
In Washington state, Kelly Lee-Carroll claimed to be partially paralyzed and unable to walk. She enlisted her sister and son as supposed caretakers and together they defrauded the Veterans Affairs Administration of $1.1 million, money meant for severely disabled veterans. Lee-Carroll received 17 months in federal prison. Her son got 14 months.
The No Cash for Cohabitating Kins of Crooks Act would cut off federal financial assistance to individuals who share a household with someone convicted of fraud or other crimes against government programs. The bill includes exceptions: spouses who live separately from the convicted individual and survivors of domestic abuse would not lose eligibility.
The legislation's current status, whether it has been formally introduced, referred to committee, or attracted co-sponsors, was not detailed. But Ernst framed the bill as a direct response to a pattern her office documented across multiple agencies: the SBA, the USDA, the VA, and the Federal Child Nutrition Program all fell victim to family-run fraud rings.
Ernst did not hold back about the intended message. "Their next scam-ily reunion will be in the slammer," she told the Post.
The cases Ernst compiled share a common feature that goes beyond the dollar figures. In each one, the federal government handed out money with minimal verification, and entire households organized to exploit that weakness. Stolen identities in California. A fake ministry in Florida. Phantom farms in the heartland. A fabricated disability in Washington state. The fraud was brazen, and in several cases the consequences were modest, or nonexistent, for family members who participated.
Whether Ernst's bill can pass a divided Congress is an open question. But the underlying problem it addresses is not theoretical. Fifteen families, $50 million, and a trail of looted programs that were supposed to help people who actually needed them.
When fraud becomes the family business, taxpayers deserve more than a shrug and a sentencing hearing for whichever relative happens to get caught.
