Man pleads guilty to fraud

Former Glendale business owner admits he scammed customers out of about $20 million. LOS ANGELES -- A 43-year-old Van Nuys man pleaded guilty Wednesday to felony federal mail fraud charges in connection with an investment scam that bilked about $20 million from mostly Armenian-Americans, many of whom were from Glendale and Burbank, officials with the United States Attorney's Office said.

Melkon Gharakhanian could face up to five years in federal prison for using his Glendale-based company, National Investment Enterprises Inc., to collect $20 million from 1999 to 2001 from investors who thought their money was going toward the purchase of technological security systems, United States Attorney's Office spokesman Thom Mrozek said.

Many of those victims -- 200 of them -- were from the Glendale-Burbank area, officials said.

Gharakhanian, whose alias was Mike Garian, entered his guilty plea in the United States District Court in Los Angeles based on a written plea agreement, Asst. United States Attorney Michael R. Wilner.

"Under the written agreement, Mr. Garian admitted [Wednesday] that he engaged in a massive investment fraud scheme," Wilner said. "He also agreed to plead guilty and faces a considerable sentence."

Gharakhanian, who was arrested at a Pasadena post office in October, mailed investors false monthly statements about the company and its purchases of shares, Mrozek said.

National Investment Enterprises Inc. went under in 2001 after Gharakhanian used investor funds for personal use and to pay for the company's operating expenses, Mrozek said.

Gharakhanian admitted that investors lost anywhere from $2.5 to $10 million when the company collapsed, he said.

Had the case gone to trial, Gharakhanian probably would have faced a longer prison sentence, Wilner said.

"This is a very good result for investors who lost considerable amounts of money to this man," he said.

Under the plea agreement, Gharakhanian faces the possibility of paying restitution fees to investors, Wilner said, but the judge will decide that.

Gharakhanian will return to federal court on May 1 for sentencing.

* TANIA CHATILA covers public safety and courts. She may be reached at (818) 637-3232 or by e-mail at tania.chatila@latimes.com.