Court filing
POSITION WITH RESPECT TO SENTENCING FACTORS filed by Plaintiff USA as to Defendant… — USA v. Ayvazyan et al (Dkt. 967)
Record facts
| Court | U.S. District Court for the Central District of California |
|---|---|
| Filed | 2021-09-13 |
U.S. District Court for the Central District of California · No. 2:20-cr-00579-SVW · Doc. 967 · 2021-09-13 · Docket on CourtListener
Summary
The government's sentencing position for defendant Arman Hayrapetyan, No. CR 20-00579(A)-SVW-6, in the U.S. District Court for the Central District of California, filed September 13, 2021 as Document 967 ahead of a September 20, 2021 sentencing hearing before Judge Stephen V. Wilson. The filing recounts that the defendant pleaded guilty on June 21, 2021 to money laundering conspiracy (Count 26) under 18 U.S.C. § 1956(h). It reports the Presentence Investigation Report's total offense level of 12 and Criminal History Category I, giving an advisory range of 10 to 16 months. The government asks for 10 months' imprisonment instead of the probation office's recommended split sentence, followed by two years of supervised release, no restitution at this time and a $100 special assessment. The 17-page filing ends with a proof of service.
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TRACY L. WILKISON
Acting United States Attorney
SCOTT M. GARRINGER
Assistant United States Attorney
Chief, Criminal Division
SCOTT PAETTY (Cal. Bar No. 274719)
CATHERINE AHN (Cal. Bar No. 248286)
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) 894-6527/2424/3819
Facsimile: (213) 894-6269/0141
E-mail:
Scott.Paetty@usdoj.gov
Catherine.S.Ahn@usdoj.gov
Brian.Faerstein@usdoj.gov
JOSEPH S. BEEMSTERBOER
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 20-00579(A)-SVW-6
GOVERNMENT’S SENTENCING POSITION FOR
DEFENDANT ARMANY HAYRAPETYAN; PROOF
OF SERVICE
Date: September 20, 2021
Time: 11:00 a.m.
Location: Courtroom of the Hon.
Stephen V. Wilson
Plaintiff United States of America, by and through its counsel
of record, the Acting United States Attorney for the Central District
of California, Assistant United States Attorneys Scott Paetty,
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Catherine Ahn, and Brian Faerstein, and Department of Justice Trial
Attorney Christopher Fenton, hereby files its sentencing position
regarding defendant Arman Hayrapetyan.
The government’s sentencing position is based upon the attached
memorandum of points and authorities, the presentence investigation
report, the files and records in this case, and any other evidence or
argument that the Court may wish to consider at the time of
sentencing.
The government reserves the right to file any supplemental
sentencing position(s) that may be necessary.1
Dated: September 13, 2021
Respectfully submitted,
TRACY L. WILKISON
Acting United States Attorney
SCOTT M. GARRINGER
Assistant United States Attorney
Chief, Criminal Division
/s/
SCOTT PAETTY
CATHERINE AHN
BRIAN FAERSTEIN
Assistant United States Attorneys
CHRISTOPHER FENTON
Department of Justice Trial Attorney
Attorneys for Plaintiff
UNITED STATES OF AMERICA
1 The government notes that on September 13, 2021, defendant
Hayrapetyan’s counsel filed an unopposed motion to continue
sentencing from September 20 to October 11, 2021. (ECF 960). As of
the time of this filing, that motion has yet to be decided.
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TABLE OF CONTENTS
TABLE OF CONTENTS...................................................i
TABLE OF AUTHORITIES...............................................ii
MEMORANDUM OF POINTS AND AUTHORITIES................................1
I.
INTRODUCTION...................................................1
II.
RELEVANT PROCEDURAL HISTORY....................................1
III. DEFENDANT’S OFFENSE CONDUCT....................................3
IV.
ADVISORY SENTENCING GUIDELINES CALCULATION.....................5
V.
SECTION 3553(a) FACTORS........................................5
VI.
GOVERNMENT’S SENTENCING RECOMMENDATION.........................6
A.
Term of Custody...........................................6
1.
Nature and Circumstances of the Offense and
History and Characteristics of the Defendant (18
U.S.C. § 3553(a)(1)).................................6
2.
Seriousness of the Offense, Respect for the Law,
and Just Punishment (18 U.S.C. § 3553(a)(2)(A))......8
3.
Affording Adequate Deterrence and Protecting the
Public from Further Crimes of the Defendant (18
U.S.C. § 3553(a)(2)(B) and (C))......................9
B.
Supervised Release.......................................10
C.
Fine, Restitution, and Mandatory Special Assessment......11
VII. CONCLUSION....................................................11
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TABLE OF AUTHORITIES
CASES
Gall v. United States, 552 U.S. 38 (2007)...........................6
Molina-Martinez v. United States, 136 S.Ct. 1338 (2016).............6
United States v. Carty, 520 F.3d 984 (9th Cir. 2008)................5
United States v. Rita, 551 U.S. 338 (2007)..........................6
STATUTES
18 U.S.C. § 1956(a)(1)(B)(i)........................................5
18 U.S.C. § 1956(h)..............................................1, 5
18 U.S.C. § 3553(a)............................................passim
OTHER AUTHORITIES
U.S.S.G. § 1A1.4(d).................................................9
U.S.S.G. § 2B1.1(b)(1)(C)...........................................5
U.S.S.G. § 2S1.1(a)(2)..............................................5
U.S.S.G. § 2S1.1(b)(2)(B)...........................................5
U.S.S.G. § 3E1.1(a).................................................5
U.S.S.G. § 5D1.1(c)................................................10
U.S.S.G. § 5D1.3(b)................................................11
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MEMORANDUM OF POINTS AND AUTHORITIES
I.
INTRODUCTION
The government respectfully submits this sentencing position to
advise the Court of its sentencing recommendation regarding defendant
Arman Hayrapetyan (“defendant”), who has pleaded guilty to conspiracy
to commit money laundering. The government agrees with the United
States Probation and Pretrial Services Office’s (the “USPO”)
recommendation of a 10-month term of custody, representing the low
end of the advisory Guidelines range. However, defendant should
serve the full term in prison and not the split sentence (5 months’
prison, 5 months’ home confinement) recommended by the USPO. The
government also agrees with the USPO’s recommendation of two years of
supervised release, but recommends additional conditions reasonably
related to defendant’s underlying offense conduct. The government
does not take a position on defendant’s ability to pay a fine, which
the USPO recommends waiving, but concurs with the USPO’s findings
that no identifiable restitution is owed by defendant at this time
under the circumstances of this case and that defendant must pay the
mandatory $100 special assessment.
II.
RELEVANT PROCEDURAL HISTORY
On March 11, 2021, a grand jury returned a first superseding
indictment against defendant and seven codefendants, charging
defendant with conspiracy to commit wire fraud and bank fraud,
multiple counts of wire fraud and bank fraud, aggravated identity
theft, and conspiracy to commit money laundering. (ECF 154.) On May
28, 2021, defendant initially entered a plea agreement with the
government, agreeing to plead guilty to money laundering conspiracy,
in violation of 18 U.S.C. § 1956(h). (ECF 377.) However, during a
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change of plea hearing on June 4, 2021, the Court did not accept
defendant’s guilty plea. (ECF 448.) On June 21, 2021, while four
codefendants were in the midst of trial in this proceeding, defendant
entered a guilty plea pursuant to a subsequent plea agreement to the
same count of money laundering conspiracy (Count 26), which the Court
accepted. (ECF 567.)
On August 13, 2021, the USPO filed a Presentence Investigation
Report (the “PSR”) in which it calculated a total offense level of 12
and a Criminal History Category I, resulting in an advisory
Guidelines range of 10 to 16 months’ imprisonment. (ECF 869.) The
USPO recommends that defendant be sentenced to a split term of five
months in prison and five months of home detention as a condition of
supervised release, two years of supervised release, no fine or
restitution, and a $100 mandatory special assessment. (ECF 868.)
The government agrees with the USPO’s offense level and criminal
history calculations as well as its recommendation of an overall 10-
month custodial sentence at the low-end of the advisory Guidelines
range, consistent with the parties’ plea agreement.1 However, for
the reasons described below, the government disagrees with the USPO’s
recommended split sentence, and instead believes a 10-month term of
imprisonment is appropriate in this case. The government also
addresses the other components of defendant’s sentence below.
1 At the time of the USPO’s filing of its initial PSR, the
government informed the USPO by email, copying defense counsel, that
it did not have any substantive objections to the PSR other than
certain corrections as to dates and other information not impacting
the advisory Guidelines calculations in this case.
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III. DEFENDANT’S OFFENSE CONDUCT
Defendant first met Manuk Grigoryan (“Grigoryan”), one of his
codefendants in this case, in late 2019 and began opening bank
accounts at Grigoryan’s direction in the names of construction
companies. (PSR ¶¶ 31-32.) Among other things, in consultation with
Grigoryan, defendant opened business checking accounts at J.P. Morgan
Chase Bank in the names of “Arman Hayrapetyan DBA [S.] Construction”
and “Arman Hayrapetyan DBA [H.] Construction Co.” in late 2019 and
early 2020, having never met the actual owners (D.S. and M.H.) of
these actual businesses. (Id. ¶¶ 32, 34.) These stolen business
entities – S. Construction and H. Construction – were later used by
defendant’s co-conspirators (including Grigoryan) to cause the
submission of fraudulent Paycheck Protection Program (“PPP”) and
Economic Injury Disaster Loan (“EIDL”) program loan applications in
May 2020 and thereafter.2 (Id. ¶¶ 37, 38.)
When defendant first opened these bank accounts, he purportedly
believed from discussions with Grigoryan that they would be partners
in a large construction company, and defendant’s duties would
include, among other things, overseeing employees and depositing
checks into the construction company bank accounts. (Id. ¶ 31.)
However, defendant never supervised any employees, visited any
construction sites, or met the owners of S. Construction or H.
2 The loan applications fraudulently submitted on behalf of
these stolen company names shared certain hallmarks of the larger
underlying wire fraud and bank fraud conspiracy. For instance, one
of the loan applications submitted on behalf of the supposed company
S. Construction included a purported “Gusto” payroll report that was
virtually identical in substance as a fraudulent payroll report
submitted in support of a PPP loan application for Fadehaus
Barbershop, which defendant Grigoryan caused to be submitted. (See
PSR ¶ 38; ECF 436 (Grigoryan plea agreement) at 16.)
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Construction. (Id. ¶¶ 34, 35.) Defendant’s actual duties amounted
to little more than initially depositing checks into the accounts and
withdrawing large sums of money. (Id. ¶ 33.) Later, after the bank
accounts defendant had opened began receiving large wire transfers,
defendant principally made routine large cash withdrawals without
corresponding deposits. (Id. ¶¶ 33, 35.) In all cases, at
Grigoryan’s direction, defendant would provide the large sums of cash
to an associate of Grigoryan’s and take a 5% cut of the transactions
for himself. (Id. ¶¶ 33, 35.) Defendant soon came to realize that
the purported construction company partnership was a sham. (Id.
¶ 34.) Despite this realization, defendant carried on with the
scheme. (Id. ¶ 36.)
By April 2020, defendant knew or was at least aware of a high
probability that the construction company bank accounts from which he
withdrew large sums of cash were being used to launder proceeds of
unlawful activity. (Id. ¶ 34.) As noted above, these accounts were
ultimately used to funnel the proceeds of fraudulent PPP and EIDL
loans starting in or around May 2020. (Id. ¶¶ 37, 38.) By the time
defendant made two $10,000 cash withdrawals from the “Arman
Hayrapetyan DBA [S.] Construction” on May 19 and 20, 2020,
respectively, this money was directly traceable to a fraudulent
$182,637 PPP loan in the name of S. Construction that defendant’s co-
conspirators caused to be obtained from Webbank in May 2020. (Id.
¶ 38.) Defendant agreed with Grigoryan that he would make this
aggregate withdrawal of $20,000 in cash and provide it to Grigoryan’s
associate. (Id. ¶ 39.) Defendant knew, or deliberately avoided
learning the truth despite all the red flags described above, that in
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so doing, he was conducting financial transactions involving proceeds
of criminal activity in order to conceal or disguise the true nature
of those proceeds. (Id. ¶¶ 37-39.)
IV.
ADVISORY SENTENCING GUIDELINES CALCULATION
Applying the November 1, 2018 Guidelines, and taking into
account relevant conduct that was reasonably foreseeable to
defendant, the USPO calculated defendant’s total offense level as 12
based on the following calculations: base offense level of 12 under
U.S.S.G. §§ 2S1.1(a)(2), 2B1.1(b)(1)(C) (consisting of 8 plus 4
additional levels for laundered funds of more than $15,000); a 2-
level enhancement under U.S.S.G. § 2S1.1(b)(2)(B) for defendant’s
conviction for conspiracy under 18 U.S.C. § 1956(h) with 18 U.S.C.
§ 1956(a)(1)(B)(i) as one of the objects of the conspiracy; and a 2-
level reduction for acceptance of responsibility under U.S.S.G.
§ 3E1.1(a). (PSR ¶¶ 43-56.) In addition, the USPO determined that
defendant has zero criminal history points, resulting in a Criminal
History Category of I.3 (See id. ¶¶ 58-61.) With a total offense
level of 12 and a Criminal History Category I, defendant’s advisory
Guidelines range is 10-16 months’ imprisonment.
V.
SECTION 3553(a) FACTORS
The Court should impose a sentence sufficient, but not greater
than necessary, to reflect the purposes of sentencing identified in
18 U.S.C. § 3553(a). United States v. Carty, 520 F.3d 984, 991 (9th
Cir. 2008). The advisory Guidelines range provides the “starting
point and . . . initial benchmark” for this Court’s consideration of
3 The government notes that defendant first arrived in the
United States in early 2019 and the government does not have any
information about defendant’s prior criminal history, if any, before
moving to this country.
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an appropriate sentence. Molina-Martinez v. United States, 136 S.Ct.
1338, 1345 (2016) (quoting Gall v. United States, 552 U.S. 38, 49
(2007)). Although the Guidelines are not binding, they “reflect a
rough approximation of sentences that might achieve section 3553(a)’s
objectives.” United States v. Rita, 551 U.S. 338, 350 (2007).
Under 18 U.S.C. § 3553(a), in arriving at the appropriate
sentence, the Court should consider, among other factors, the nature
and circumstances of the offense and the history and characteristics
of the defendant, § 3553(a)(1); the need for the sentence imposed to
reflect the seriousness of the offense, to promote respect for the
law, and to provide just punishment for the offense, § 3553(a)(2)(A);
the need for the sentence imposed to afford adequate deterrence to
criminal conduct, § 3553(a)(2)(B); the need for the sentence imposed
to protect the public from further crimes of the defendant,
§ 3553(a)(2)(C); the kinds of sentences available, § 3553(a)(3); and
the need to avoid unwarranted sentence disparities, § 3553(a)(6).
VI.
GOVERNMENT’S SENTENCING RECOMMENDATION
A.
Term of Custody
In light of the relevant 18 U.S.C. § 3553(a) factors, a low-end
Guidelines sentence of 10 months in prison is sufficient, but not
greater than necessary, to achieve the goals of sentencing here.
1.
Nature and Circumstances of the Offense and History
and Characteristics of the Defendant (18 U.S.C.
§ 3553(a)(1))
Defendant played an important role in enabling what, in the
grand scheme, was a massive conspiracy to launder the proceeds of
millions of dollars of fraudulently-obtained PPP and EIDL loans.
Defendant was complicit in this money laundering conspiracy, whether
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or not he knew at the very outset in December 2019 that the bank
accounts he opened would be used to launder some of the proceeds of
fraud. Even in opening these bank accounts, defendant brazenly used
his own name (e.g., “Arman Hayrapetyan DBA S. Construction”) when he
had never met the owners or employees of the purported construction
businesses nor seen any evidence of actual ongoing work. And
defendant very quickly learned there was nothing legitimate about the
purported construction company partnership he entered with Grigoryan
and Grigoryan’s associate. He made the conscious decision to
continue playing an integral role in the conspiracy, however,
withdrawing large sums of cash for distribution to co-conspirators
even after the bank accounts became flush with money from
fraudulently-obtained PPP and EIDL loans.
Defendant had the knowledge and ability to understand the
seriousness of the illegal conduct in which he engaged. According to
defendant, he obtained the equivalent of a juris doctorate in Armenia
in 2017. (PSR ¶ 78.) Prior to that, defendant represented to the
USPO that he was an officer in the Armenian Army for fifteen years,
served in NATO forces, and grew up with a father in law enforcement.
(Id. ¶¶ 66, 82.) Despite this upbringing and training – and within
his first year of emigrating to and seeking asylum within the United
States – defendant chose to break the law. He conspired with those
he knew to be engaged in illegal financial transactions and furthered
their unlawful ends, motivated by a 5% cut of the money he helped
launder.
Defendant was not an unsophisticated new arrival swindled into
illegal conduct. He knew right from wrong, chose the unlawful path,
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and continued down it for months, even as the full scope of the
laundering scheme in which he was engaged became apparent. A
Guidelines sentence of 10 months in prison is appropriate based on an
individualized assessment of this defendant and the circumstances of
his volitional involvement in conduct he knew to be wrong.
2.
Seriousness of the Offense, Respect for the Law, and
Just Punishment (18 U.S.C. § 3553(a)(2)(A))
A custodial sentence within the advisory Guidelines range is
also needed in this case to reflect the seriousness of the offense,
promote respect for the law, and provide just punishment for the
offense. The money laundering conspiracy in which defendant
participated arose out of and sought to conceal the proceeds of a
vast conspiracy to steal COVID-19 disaster relief loan funds. Those
funds were earmarked for legitimate small businesses and their
employees that desperately needed them in 2020 to survive as the
COVID-19 pandemic paralyzed the economy. While a large swath of the
population was struggling to make ends meet, defendant was
withdrawing substantial sums of cash that ultimately derived, in some
or large part, from fraudulently obtained PPP and EIDL proceeds.
Although defendant may not have known the details of the
PPP/EIDL wire and bank fraud scheme, his direct and recurring
involvement in the corresponding money laundering conspiracy cannot
be divorced from the reality of the COVID-19 disaster relief loan
fraud that it serviced. Defendant’s involvement in laundering those
funds, and conspiring with others to do so, reflects very serious
conduct necessitating just punishment in this case. As the COVID-19
pandemic continues and additional opportunities arise for the
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criminal-minded to exploit this ongoing disaster, a significant
sentence is further needed to promote respect for the law during this
exceptional time. Nonetheless, defendant expressed a willingness to
accept responsibility relatively early in the course of his
involvement in this case. A low-end Guidelines sentence of 10 months
in prison here is sufficient but not greater than necessary to strike
the right balance of achieving the goals of sentencing in this case.
3.
Affording Adequate Deterrence and Protecting the
Public from Further Crimes of the Defendant (18 U.S.C.
§ 3553(a)(2)(B) and (C))
The sentence here should also serve as an adequate deterrent not
only to defendant but also to those in society who may consider
engaging in similar conduct in the future. As the USPO recognizes,
the Sentencing Commission sought to ensure that for white-collar
crimes, “the definite prospect of prison, even though the term may be
short, will serve as a significant deterrent, particularly when
compared to pre-guidelines practice where probation, not prison, was
the norm.” (ECF 868 (quoting U.S.S.G. § 1A1.4(d)).) Similar to the
need to promote respect for the law, a low-end Guidelines sentence in
a case such as this will signal to other potential wrongdoers that
there are significant consequences for exploiting a national
emergency such as that brought on by the COVID-19 pandemic.
While the Court is also required to consider the “kinds of
sentences available,” 18 U.S.S.C. § 3553(a)(3), the government
disagrees with the USPO’s recommendation of splitting the 10-month
custodial sentence between five months in prison and five months on
home detention. As previously explained, defendant’s involvement in
the money laundering conspiracy helped enable the underlying PPP/EIDL
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fraud conspiracy under exceptional circumstances for this country.
Defendant should have been especially attuned to the unlawfulness of
his conduct during an unprecedented time, given his self-reported
prior legal training and service in law enforcement in Armenia. A
split-sentence under these circumstances will undermine the overall
deterrent effect here – both as to defendant and society at large.
With these factors in mind, the government respectfully submits
that a low-end custodial sentence of 10 months in prison is
sufficient, but not greater than necessary, to achieve the goals of
sentencing in this case.
B.
Supervised Release
The government concurs with the USPO’s recommended term of two
years of supervised release following defendant’s release from
prison, should he not be deported following his term of custody.4
The government recommends two additional special conditions of
supervised release in light of defendant’s underlying financial
crimes and use of stolen individual and business names to open bank
accounts and engage in financial transactions. Specifically, the
government recommends that: (1) defendant shall be prohibited from
using any name other than his own legal name for any purpose,
4 The Sentencing Guidelines advise that sentencing courts
ordinarily should not impose a term of supervised release for aliens
who are likely to be deported after a period of imprisonment. See
U.S.S.G. § 5D1.1(c). The commentary provides that “[t]he court
should, however, consider imposing a term of supervised release on
such a defendant if the court determines it would provide an added
measure of deterrence and protection based on the facts and
circumstances of a particular case.” U.S.S.G. § 5D1.1, comment. n.5.
In this case, while the government understands defendant has been
granted asylum and may be deported following his federal term of
imprisonment, a two-year term of supervised release will provide an
added measure of deterrence and protection of the public based on
defendant’s engaging in financial crimes only shortly after arriving
in the United States. See id.
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including to open or access bank, brokerage or cryptocurrency
accounts; apply for loans or credit; and/or engage in any financial
transaction; and (2) defendant shall be prohibited from engaging in
any financial transaction in an amount of $10,000 or greater unless
he obtains prior approval from the USPO. These conditions are
largely aimed at protecting the public from further financial and
identity theft crimes of defendant, which are reasonably related to
the sentencing factors described more fully above. U.S.S.G.
§ 5D1.3(b).
C.
Fine, Restitution, and Mandatory Special Assessment
The government takes no position on the imposition of a fine,
including the USPO’s recommendation that the Court waive imposition
of a fine in this case. The government notes, however, that while
defendant reports to have limited assets or liquidity on a monthly
basis, he arranged to retain counsel in this case.
Consistent with the parties’ plea agreement and the nature and
circumstances of defendant’s money laundering offense of conviction
here, the government is not aware of compensable restitution that is
owed by defendant at this time.5
Finally, the government concurs with the USPO’s recommendation
that defendant pay the $100 special assessment, which is mandatory in
this case.
VII. CONCLUSION
For the reasons set forth above, the government respectfully
5 Should further facts come to light supporting a compensable
restitution amount as to defendant as a result of the government’s
ongoing efforts to follow the money in this case, the government
reserves the right to return to the Court to seek to modify the
sentence as to restitution at a later time, to the extent permitted
by governing law.
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requests that defendant be sentenced as follows: (1) 10 months’
imprisonment; (2) a two-year period of supervised release to follow;
(3) a fine to be determined by the Court; (4) no restitution to be
ordered at this time; and (5) a mandatory special assessment of $100.
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PROOF OF SERVICE
I, Brian R. Faerstein, declare:
That I am a citizen of the United States and a resident of or
employed in Los Angeles County, California; that my business address
is the Office of the United States Attorney, 312 North Spring Street,
Los Angeles, California 90012; that I am over the age of 18; and that
I am not a party to the above-titled action;
That I am employed by the United States Attorney for the Central
District of California, who is a member of the Bar of the United
States District Court for the Central District of California, at
whose direction I served a copy of:
GOVERNMENT’S SENTENCING POSITION FOR DEFENDANT ARMAN HAYRAPETYAN
upon United States Probation Officer Cristina Torres by way of email
addressed to Cristina_Torres@cacp.uscourts.gov.
This Proof of Service is executed on September 13, 2021, at Los
Angeles, California.
I declare under penalty of perjury that the foregoing is true
and correct to the best of my knowledge.
Brian R. Faerstein
Case 2:20-cr-00579-SVW Document 967 Filed 09/13/21 Page 17 of 17 Page ID
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