Blood Lab Owner Sentenced to 4 Years in Federal Scheme That Fuelled His Gambling

An elaborate Medicare scheme led to $11.2 million in unpaid taxes by one A.M. from Southern California, with the man receiving a 51-month sentence in a Los Angeles federal court. 

Judge John A. Kronstadt has also ordered the man to pay $15.16 million in restitution on top of his prison sentence. 

Fake Lab Ownership – Real Money to Spend 

A.M. had pleaded guilty to the charges against him back in 2025, which included tax evasion, wire fraud, and healthcare fraud, with the US Attorney’s Office agreeing on a lighter sentence in light of the culprit’s collaboration. He was originally arrested in April 2024, at LAX as he was trying to board a plane to Armenia. 

His scheme ran from 2015 through 2023, and the ill-gotten funds obtained this way were used to support A.M.’s lifestyle, along with gambling trips and spending. 

A.M admitted in court that he used a frontman to legally own the business – Genex Laboratories, which is a blood laboratory in Burbank- as the man himself had been barred from accessing Medicare reimbursements, which kept coming under the straw-man ownership. 

He deposited the funds into an account registered in his friend’s name, one L.S. whom he also paid $2,000 a month to keep up the pretense, and then withdrew the money for himself. A.M. reported a rather low income to the Internal Revenue Service (IRS) in the many years – about $40,000 annually. 

According to prosecutors, A.M. did not report $23.9 million in taxable income, which deprived the federal government of an estimated $11.2 million, along with $3.9 million in accrued interest. 

The friend, L.S., was also drawn into the tax scheme, though not as an independent actor. 

A.M. fed him falsified financial documents that made Genex appear to have minimal profit or even be operating at a loss. L.S. would then pass these documents to his own tax preparer, who filed the returns in good faith based on the false information A.M. had provided.