Yegishe Nazaryan, a former owner of the Corvallis Cannabis Club, was sentenced Tuesday to nearly three years in federal prison for his role in a bank fraud of more than $2.5 million that helped finance his state-licensed marijuana retail store and two illegal grows.
U.S. District Judge Michael J. McShane struggled to understand the motivation behind Nazaryan’s substantial fraud, noting he didn’t suffer from a drug addiction, mental health problems or chaotic childhood. Instead, he had been educated as a veterinarian in his home country of Armenia before immigrating to the United States.
“You don’t have a lot of excuses,” McShane said, adding that simple greed appeared to drive the crime.
Nazaryan, now 45, and his accomplices obtained credit cards using fake names to run up large balances with no intent to pay in what’s called a credit card “bust-up” scheme.
Sometimes, though, a conspirator also reported unauthorized spending on an account and got reimbursed by a credit card company.
All the accounts were applied for online using an IP address that traced back to the Corvallis Cannabis Club.
Nazaryan and others opened over 100 credit cards as part of the conspiracy, resulting in losses to banks in excess of $2.5 million, according to Assistant U.S. Attorney Gavin W. Bruce.
The money was spent on expensive jewelry, clothing, gambling, vacations, operating expenses for the Corvallis Cannabis Club and to operate two large illegal marijuana grows. One of the grows was blocks from the club and the second was in Philomath, according to Bruce.
Some charges on credit cards were issued in the name of a Ukrainian woman who wasn’t in the United States. The charges were for thousands of dollars spent on Amazon purchases that were shipped to Nazaryan, including a $9,000 Hublot watch and airfare, according to prosecutors.
He also used the money to pay rent at the cannabis club and for rent and utility payments at the two marijuana grows, prosecutors said.
Nazaryan pleaded guilty in January to conspiracy to commit bank fraud.
Bruce sought a three-year prison term.
Defense attorney Bryan Boender urged a sentence of time served. He said his client is working part time as a limousine driver and caring for his young son.
Nazaryan’s wife, Mariam Gevorkova, 39, a co-defendant, won’t be released from prison until March 2027. She is serving a five-year sentence for the same crime. She was sentenced in 2023 for conspiracy to commit bank fraud, aggravated identity theft and conspiracy to distribute marijuana.
“Mr. Nazaryan has suffered greatly as a result of his arrest and conviction. The collateral consequences Mr. Nazaryan has already endured and is facing upon his release will serve as a powerful deterrent to other members of society,” Boender argued in court papers.
The judge issued a sentence of two years and nine months.
When the judge asked why the prosecutor sought a lengthier sentence for Nazaryan’s wife, Bruce said it was because she took more of an active role in communicating with banks and recruiting accomplices largely because “her English was better.”
— Maxine Bernstein covers federal court and criminal justice. Reach her at 503-221-8212, mbernstein@oregonian.com, follow her on X @maxoregonian, on Bluesky @maxbernstein.bsky.social or on LinkedIn.
All the credit card accounts used an IP address that traced back to the Corvallis Cannabis Club, according to a federal prosecutor. Read More
