Opposition to First Application — USA v. Ayvazyan et al. (Dkt. 276, C.D. Cal.)

Record facts

U.S. District Court for the Central District of California · No. 2:20-cr-00579-SVW · Doc. 276 · 2021-04-09 · Docket on CourtListener

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TRACY L. WILKISON 
Acting United States Attorney 
BRANDON D. FOX 
Assistant United States Attorney 
Chief, Criminal Division 
SCOTT PAETTY (Cal. Bar No. 274719) 
BRIAN FAERSTEIN (Cal. Bar No. 274850) 
Assistant United States Attorneys 
Major Frauds/Environmental and Community Safety Crimes Sections 
1100/1300 United States Courthouse 
312 North Spring Street 
Los Angeles, California 90012 
Telephone: (213) 894-6527/3819 
Facsimile: (213) 894-6269/0141 
E-mail: 
Scott.Paetty@usdoj.gov/Brian.Faerstein@usdoj.gov 
 
DANIEL S. KAHN 
Acting Chief, Fraud Section 
Criminal Division, U.S. Department of Justice 
CHRISTOPHER FENTON 
Trial Attorney, Fraud Section 
Criminal Division, U.S. Department of Justice 
1400 New York Avenue NW, 3rd Floor 
Washington, DC 20530 
Telephone: (202) 320-0539 
Facsimile: (202) 514-0152 
 
E-mail: 
Christopher.Fenton@usdoj.gov 
 
Attorneys for Plaintiff 
UNITED STATES OF AMERICA 
 
UNITED STATES DISTRICT COURT 
 
FOR THE CENTRAL DISTRICT OF CALIFORNIA 
 
UNITED STATES OF AMERICA, 
Plaintiff, 
v. 
ARMAN HAYRAPETYAN, 
 
Defendant. 
No. CR 20-579(A)-SVW-6 
GOVERNMENT’S OPPOSITION TO 
DEFENDANT ARMAN HAYRAPETYAN’S 
MOTION FOR REVIEW/RECONSIDERATION 
OF ORDER SETTING CONDITIONS OF 
RELEASE/DETENTION (ECF 263); 
MEMORANDUM OF POINTS AND 
AUTHORITIES; EXHIBIT 
 
Plaintiff United States of America, by and through its counsel 
of record, the Acting United States Attorney for the Central District 
of California and Assistant United States Attorneys Scott Paetty and 
Brian Faerstein, and United States Department of Justice Trial 
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Attorney Christopher Fenton, hereby files this opposition to 
Defendant Arman HAYRAPETYAN’s Motion for Review/Reconsideration of 
Order Setting Conditions of Release/Detention (ECF 263). 
This opposition is based on the attached memorandum of points 
and authorities and accompanying exhibit, the files and records in 
this case, and such further evidence and argument as the Court may 
permit. 
Dated: April 9, 2021 
Respectfully submitted, 
 
TRACY L. WILKISON 
Acting United States Attorney 
 
BRANDON D. FOX 
Assistant United States Attorney 
Chief, Criminal Division 
 
 
      /s/ 
 
BRIAN FAERSTEIN 
SCOTT PAETTY 
Assistant United States Attorneys 
CHRISTOPHER FENTON 
Department of Justice Trial Attorney 
 
Attorneys for Plaintiff 
UNITED STATES OF AMERICA 
 
 
 
 
 
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I. 
INTRODUCTION 
On March 25, 2021, defendant Arman HAYRAPETYAN made his initial 
appearance on the First Superseding Indictment in this case.  
Following a detention hearing, Magistrate Judge Maria A. Audero 
ordered defendant detained pending trial based on risk of flight.  
Defendant is an Armenian citizen whose entire family lives in 
Armenia, and defendant has virtually no ties to this district or the 
United States, nor significant bail resources to draw upon.  
Defendant traveled to Armenia for approximately four months just last 
year -- immediately after he is alleged to have stolen and laundered 
hundreds of thousands of dollars in COVID-19 disaster relief funds.  
And defendant allegedly engaged in such conduct using stolen 
identities of real people, giving rise to Judge Audero’s concern he 
could do the same to flee the country. 
Defendant HAYRAPETYAN now seeks this Court’s review of Judge 
Audero’s order of detention, relying on substantially the same 
factual record presented during the initial detention hearing, with 
the exception of proffering a proposed surety to sign an unsecured 
bond.  Defendant’s proffered facts and arguments as well as the 
proposal of a surety without justification remain insufficient to 
mitigate the risk of flight in this case, and thus his motion for 
reconsideration should be denied.  
II. 
RELEVANT BACKGROUND AND PROCEDURAL HISTORY 
The First Superseding Indictment, filed March 9, 2021, charges 
defendant HAYRAPETYAN with conspiracy to commit bank fraud and wire 
fraud, individual counts of bank fraud and wire fraud, money 
laundering conspiracy, and one count of aggravated identity theft.  
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(ECF 154.)  These charges arise out of defendant HAYRAPETYAN’s 
participation in an expansive scheme to use stolen, fake, and 
synthetic identities of individuals and business entities to submit 
fraudulent COVID-19 disaster relief loan applications and launder the 
proceeds of the fraudulent loans.  (Id.) 
The overt acts alleged in the conspiracy counts in the First 
Superseding Indictment provide examples of some, but not all, of the 
fraudulent loan applications defendant HAYRAPETYAN caused to be 
submitted in furtherance of the alleged conspiracy.  (Id., ¶ 33 
(Overt Acts 1-7).)  In particular, defendant HAYRAPETYAN is alleged 
to have stolen the identities of two real people (“D.S” and “M.H.”) 
as well as their actual companies (“S.” Construction and “H.” 
Construction) for purposes of submitting COVID-19 disaster relief 
loan applications in their names.  (Id.)  The proceeds from these 
fraudulent loans were deposited into bank accounts that defendant 
HAYRAPETYAN had opened using the stolen names of these companies.  
(Id., ¶ 27(a)-(c) (describing one bank account opened as “Arman 
Hayrapetyan DBA S. Construction” and two bank accounts opened as 
“Arman Hayrapetyan DBA H. Construction”).)  Defendant HARYAPETYAN 
directed some of the fraudulent loan proceeds to coconspirators, 
including, but not limited to, a company called Fiber One Media 
controlled by “Viktoria Kauichko,” an alias alleged to be used by 
codefendant Marietta TERABELIAN.  (Id., ¶ 33 (Overt Act 7).) 
On March 11, 2021, three of the four newly-charged defendants in 
the First Superseding Indictment -- defendants Manuk GRIGORYAN, 
Edvard PARONYAN, and Vahe DADYAN -- were arrested and made their 
initial appearances.  (See ECF 177, 191, 198.)  However, despite 
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significant efforts, agents were unable to locate defendant 
HAYRAPETYAN at either of his two likely residential addresses, and he 
did not self-surrender until two weeks later, on March 25, 2021.  
(See Exh. 1 attached hereto (Transcript of 3/25/21 Hearing), at 
11:14-20; ECF 263 (Defendant’s Motion to Reconsider) at 3.) 
Pretrial Services recommended defendant HAYRAPETYAN be detained 
based on risk of flight.  Pretrial Services cited its concerns that 
he possessed an Armenian passport, had family ties to Armenia, had no 
family ties to this District, and did not have any bail resources.  
Pretrial Services also could not fully verify his background as 
proffered.1 
Judge Audero agreed and similarly concluded that defendant posed 
a risk of flight that could not be mitigated by any condition or 
combination of conditions of bond.  (ECF 255.)  Judge Audero found 
that defendant posed a risk of non-appearance based on the reasons 
stated in the Pretrial Services Report and by the parties, including: 
“He has an Armenian passport; foreign travel history, recent; no bail 
resources; partially verified background information; all of his 
family is in Armenia; and he has got no family ties to this 
district.”  (See Exh. 1 at 23:14-17.)  Judge Audero also stated her 
concern about risk of flight based on “the nature of the allegations 
being the assumption of other people’s identities.”  (Id. at 23:1-3.)  
And Judge Audero noted her concerns about an “unsecured appearance 
bond by someone who you are telling me really is here just starting 
 
1 The government understands that the Pretrial Services Report 
is part of the Court’s record in this case but it is not to be made 
public. 
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his life, I don’t know if he has any resources at all.”  (Id. at 
23:8-10.) 
III. ARGUMENT 
Under the Bail Reform Act of 1984, pretrial detention of a 
defendant is required where no condition or combination of conditions 
will reasonably assure the appearance of the person as required and 
the safety of any other person and the community.  18 U.S.C. 
§ 3142(e)(1).  Detention is appropriate where a defendant is either a 
danger to the community or a flight risk; it is not necessary to 
prove both.  United States v. Motamedi, 767 F.2d 1403, 1406 (9th Cir. 
1985).  “[T]he government bears the burden of showing by a 
preponderance of the evidence that the defendant poses a flight 
risk.”  United States v. Gebro, 948 F.2d 1118, 1121 (9th Cir. 1991). 
Courts must consider several factors when determining whether 
there are conditions that could reasonably assure the appearance of 
defendant and the safety of the community, including: (1) the nature 
and circumstances of the offense charged; (2) the weight of the 
evidence against the defendant; (3) the history and characteristics 
of the defendant; and (4) the nature and seriousness of the danger to 
any person or to the community that would be posed by the defendant’s 
release.  18 U.S.C. § 3142(g); United States v. Winsor, 785 F.2d 755, 
757 (9th Cir. 1986).  While the weight of the evidence is the least 
important of the factors, the nature of the offense and evidence of 
guilt are relevant in terms of the likelihood that a person will fail 
to appear or pose a danger to the community.  Id. 
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A. 
Defendant is a Serious Flight Risk 
At the detention hearing, defendant HAYRAPETYAN proffered 
substantially the same facts and arguments as are set forth in his 
motion for reconsideration, which Judge Audero found insufficient to 
ensure his appearance in this case.  The only new fact is that 
defendant proposes a surety to sign on to an unsecured bond.  This 
development alone is inadequate to mitigate his serious risk of 
flight.2 
Defendant HAYRAPETYAN is an Armenian citizen who moved to the 
United States in 2019.  (ECF 263 at 6.)  All of defendant’s family -- 
including his parents, his wife, and his daughter -- live in Armenia; 
he has no family ties to this District.  (ECF 263 at 6-7.)  He does 
not own property in this District (or in the United States) and he 
does not have anyone willing to post property on his behalf.3  (ECF 
263 at 7.)  Defendant recently traveled to Armenia for approximately 
 
2 During the initial detention hearing, the government also 
argued that defendant poses a danger to the community in light of his 
alleged theft of at least two real individuals’ identities and the 
identities of their businesses.  (ECF 154, § 33 (Overt Acts 1-7); 
Exh. 1 at 14:22 -15:4.)  As alleged in the First Superseding 
Indictment, defendant used these stolen identities in connection with 
the fraud.  (Id.)  The Ninth Circuit has held that “danger may, at 
least in some cases, encompass pecuniary or economic harm.”  United 
States v. Reynolds, 956 F.2d 192, 192-93 (9th Cir. 1992).  Judge 
Audero based her decision regarding detention on defendant’s risk of 
flight, but his risk of danger to the community is an alternative 
basis to detain him. 
3 As explained further herein, the government does not suggest 
that defendant should be detained solely because he does not have 
sufficient bail resources.  Rather, given the other significant risks 
of flight present here, the risk is compounded by the lack of a 
significant financial commitment in mitigation of the aggregate risk.   
See United States v. Fidler, 419 F.3d 1026, 1028 (9th Cir. 2005). 
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four months in 2020.  (ECF 263 at 6.)  Defendant has strong ties to 
Armenia and virtually no ties to the United States. 
The timing of defendant’s 2020 travel to Armenia raises 
significant concerns in light of the allegations in the First 
Superseding Indictment.  Defendant traveled to Armenia immediately 
after allegedly receiving hundreds of thousands of dollars in 
proceeds from fraudulent COVID-19 disaster relief loans, and remained 
abroad for approximately four months before returning to Los Angeles 
in September 2020.4  (ECF 154, ¶ 33 (Overt Acts 1-7).)   
In addition, although defendant apparently informed Pretrial 
Services that he has held his current job since 2019, his employer 
provided information contradicting that assertion.  His employer 
verified that, as of March 25, 2021, defendant had only worked for 
the company for six months -- and thus he likely would not have 
started the job until after returning from Armenia in September 2020.  
This critical discrepancy -- i.e., whether defendant was in fact 
employed by this company during the key time period during which he 
is alleged to have participated in the conspiracy -- raises concerns 
about the veracity of this and other information defendant provided 
to Pretrial Services.  It also provides the government additional 
apprehension about whether he can be trusted to follow conditions of 
pretrial release. 
Moreover, as Judge Audero found, the nature of the allegations 
in this case present other concerns about potential flight, 
 
4 Defendant asserts that he “was given approval from the 
Government to go home during this time.”  (ECF 263 at 7.)  To the 
extent defendant implies the government was aware of his alleged 
involvement in the COVID-19 disaster relief fraudulent scheme 
immediately preceding his travel, he is wrong.   
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specifically defendant’s alleged “assumption of other people’s 
identities.”  (Exh. 1 at 23:2-3.)  Defendant used the stolen 
identities of at least two people and two businesses to commit fraud.  
Even were he to surrender his passport, there is a risk he would use 
fake identities to evade law enforcement and flee. 
Defendant points to his decision to self-surrender two weeks 
after the other newly-charged defendants were arrested as evidence 
that he does not intend to flee.  (ECF 263 at 6.)  Defendant may not 
have understood the seriousness of the charges.  Now that he has 
access to the discovery and appreciates the potential sentence (which 
includes a two-year mandatory minimum), he may be incentivized to 
flee to escape prison and be with his family.  The proposed 
conditions are insufficient to mitigate such risk.  See United States 
v. Townsend, 897 F.2d 989, 995 (9th Cir. 1990) (holding that the 
district court properly considered “penalties possible under the 
present indictment” as providing an “incentive to consider flight”). 
B. 
The Proposed Surety Does Not Mitigate the Risk of Flight 
Defendant’s newly proposed surety -- to sign on to a $50,000 to 
$75,000 unsecured appearance bond -- is insufficient to ensure 
defendant’s appearance and mitigate his risk of flight.  
First, although defendant notes that “a third party surety has 
come forward and offered to sign an appearance bond on Mr. 
Hayrapetyan’s behalf,” (ECF 263 at 7), defendant offers no details 
about the proposed surety’s background, relationship to defendant, or 
financial solvency.  It is critical that defendant have significant 
ties to any proposed surety to ensure the surety’s commitment to the 
bond provides moral suasion to defendant in complying with his 
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conditions of release.  Equally important, the government must be 
able to look to the surety for payment on the bond should defendant 
flee the jurisdiction or otherwise not be able to satisfy an order of 
bail forfeiture.  Defendant’s submission lacks all of this 
information and does not provide a basis to assure the government or 
the Court that the proposed surety will mitigate the substantial risk 
of flight here.  Notably, the government spoke with the proposed 
surety on April 8, 2021, and has significant doubts as to whether the 
proffered individual has the type of close relationship to defendant 
or the financial resources to satisfy the objectives of a surety. 
Second, a secured bond is necessary to mitigate the significant 
risk of flight in this case.  Such a requirement is consistent with 
the Court’s approach to six out of the other seven defendants in this 
case, where it has required the posting of property or corporate 
surety bonds to secure defendants’ appearance bonds.  (See ECF 5, 20, 
44-45, 47-48, 177, 191.)  Such is the case for the other five 
defendants who, like defendant HAYRAPETYAN, are charged with 
aggravated identity theft in addition to the other conspiracy and 
fraudulent scheme counts in the indictment.5  The total bond amounts 
for these other five defendants (with some portion of the bond 
secured by property) range from $100,000 to $250,000.  Importantly, 
defendant HAYRAPETYAN’s risk of flight is greater than any of his co-
 
5 In addition to defendant HAYRAPETYAN, defendants Richard 
AYVAZYAN, Marietta TERABELIAN, Artur AYVAZYAN, Tamara DADYAN, and 
Manuk GRIGORYAN also are charged with aggravated identity theft in 
the First Superseding Indictment.  (ECF 154, ¶¶ 42-51.) 
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defendants because he has strong ties to Armenia and virtually no 
ties to the United States.6 
IV. 
CONCLUSION 
For the foregoing reasons, the government respectfully requests 
the Court deny defendant HAYRAPETYAN’s Motion for Review/ 
Reconsideration of Order Setting Conditions of Release/Detention (ECF 
263). 
 
6 The government does not seek the imposition of a secured bond 
or a bond with additional sureties for the purpose of imposing a “de 
facto detention” in this case.  United States v. Fidler, 419 F.3d 
1026, 1028 (9th Cir. 2005).  As the government apprised Judge Audero 
and defense counsel acknowledged, the government initially proposed 
to defense counsel a bond package that it viewed as adequate to 
mitigate the risks of flight and danger here.  (See Exh. 1 at 21:18-
25, 22:11-17.)  In any event, as detailed above, there is an 
independent risk of flight in this case, and the proposed bond 
package is not sufficient to mitigate that risk.  See Fidler, 419 
F.3d at 1028 (“[T]he de facto detention of a defendant under these 
circumstances does not violate § 3142(c)(2) if the record shows that 
the detention is not based solely on the defendant’s inability to 
meet the financial condition, but rather on the district court’s 
determination that the amount of the bond is necessary to reasonably 
assure the defendant’s attendance at trial or the safety of the 
community.  This is because, under those circumstances, the 
defendant's detention is not because he cannot raise the money, but 
because without the money, the risk of flight [or danger to others] 
is too great.”) (internal quotation and citation omitted). 
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