Declaration — USA v. Ayvazyan et al (Dkt. 1305.1)

Summary

Lori Hershorin, attorney for prospective intervenors WFG and Novastar, LLC, declares in support of their joint ex parte application to shorten time on a motion to intervene and access sealed judicial records, Document 1305-1, filed 04/29/22 in United States v. Richard Ayvazyan et al., Case Number 2:20-CV-00579-SVW. She says WFG and Novastar have civil cases against Tamara Dadyan, Arthur Ayvazyan and others, and that WFG seeks $2,169,221.00 and Novastar $637,000 in damages. Novastar's bench trial is set for May 17, 2022 and WFG's trial for July 25, 2022. She says she learned on March 29, 2022 from an NBC special that exhibits in this case relate to those civil cases, and that the sealed exhibits are vital because the defendants did not produce documents in discovery.

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Case 2:20-cr-00579-SVW Document 1305-1
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LORI C. HERSHORIN (SBN 155977)
HERSHORIN & HENRY, LLP
26475 Rancho Parkway South

Lake Forest, California 92630
949-859-5600

Email: Lorih@hhlawgroup.com

Attorney for Prospective Intervenor
WFG TITLE INSURANCE COMPANY,

Filed 04/29/22 Pagel1of5 Page ID

A South Carolina Corporation and NOVASTAR, LLC
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
UNITED STATES OF AMERICA Case Number: 2:20-CV-00579-SVW
Plaintiff,
DECLARATION OF LORI HERSHORIN
v. IN SUPPORT OF WEG TITLE
INSURANCE COMPANY AND
RICHARD AYVAZYAN, NOVASTAR LLC’S JOINT EX PARTE
aka “Richard Avazian” and APPLICATION FOR ORDER
“Tuliia Zhadko,”
? S NING TIME
MARIETTA TERABELIAN, HORTENING TI
aka “Marietta Abelian” and
“Viktoria Kauichko,”
ARTUR AYVAZYAN, DATE:
aka “Arthur Ayvazyan,” TIME:
TAMARA DADYAN, JUDGE: Hon. Stephen V. Wilson
MANUK GRIGORYAN, COURTROOM: 10A
aka “Mike Grigoryan,” and LOCATION: 350 W. 157 ST.
Anton Kudiumov,” Los Angeles, CA 90012
ARMAN HAYRAPETYAN,
EDVARD PARONYAN.
aka “Edvard Paronian” and
“Edward Paronyan,” and
VAHE DADYAN,
Defendants.

DECLARATION OF LORI HERSHORIN, ESQ.

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Case 2:20-cr-00579-SVW Document 1305-1 Filed 04/29/22 Page2of5 PageID
#:20171

I, LORI HERSHORIN, declare as follows:

1. I am an attorney at law duly admitted to practice before all courts of the State of
California, I am authorized to practice law in the Central District of California, and am an attorney at
Hershorin & Henry, LLP, counsel of record for Prospective Intervenors, WFG National Title Insurance
Company, a South Carolina corporation (“WFG”) and Novastar, LLC (“Novastar’’) (collectively as
“Prospective Intervenors”) and make this Declaration in support of WFG and Novastar’s Joint Motion
to Intervene for the Limited Purpose of Accessing Judicial Records (“Joint Motion”). I have personal
knowledge as to the discovery and pleadings in this matter. I have reviewed the documents in our
firm’s file for this litigation matter, which contains records generated in the ordinary course of business
at or near the time of the occurrence of the events related thereto by persons who have a business duty
to make and maintain such records. I have personal knowledge of the following facts or I have gained
such knowledge from my review of the file, and if called and sworn as a witness could testify thereto.

2. I represent both WFG and Novastar in their respective civil cases filed against Tamara
Dadyan and Arthur Ayvayzian (“Criminal Defendants”), and their co-conspirators. Criminal
Defendants and their co-conspirators conducted an elaborate real estate fraud scheme which caused
WFG and Novastar damages. Hereafter the term “Defendants” refers collectively to the Criminal
Defendants, Novastar Defendants, and WFG Defendants.

3. Defendants’ criminal enterprise utilizes a common plan or scheme to conduct its
fraudulent loan and real estate transactions whereby Defendants knowingly participate in a racketeering
enterprise that creates synthetic identities of purported sellers, buyers, and borrowers; falsifies real
property and banking information; forges multitudes of documents; and funnels the fraudulently
obtained funds into various shell companies owned by the criminal enterprise.

4. WFG commenced its action in the California Superior Court for the County of Los
Angeles on November 8, 2016, case number BC640157 alleging damages in the sum of $2,169,221.00
as a result of Defendants fraudulent real estate transaction scheme. On February 11, 2021, WGF filed
its second amended complaint against the WFG Defendants.

5. WFG commenced the discovery process in December 2016, by serving deposition

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DECLARATION OF LORI HERSHORIN, ESQ.

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Case 2:20-cr-00579-SVW Document 1305-1 Filed 04/29/22 Page3of5 PageID
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requests; however, many WFG Defendants failed to appear at their properly noticed depositions.
However, I was able to take the videotaped deposition of Tamara Dadyan on July 24, 2018 and the
deposition of Arthur Ayvazyan on October 18, 2018, but they refused to produce any requested
documents.

6. Beginning in 2017, WFG propounded further discovery from Tamara Dadyan, Arthur
Ayvazyan, and other WFG Defendants in the form of Requests for Admission, Form Interrogatories,
and Request for Production of Documents. Neither party has responded to this last request.

7. In April 2017, the California Superior Court for County of Los Angeles — Stanley Mosk
Courthouse granted Novastar leave to file a cross complaint against Novastar Defendants alleging
$637,000 in damages for Defendants’ fraudulent real estate transaction scheme, case number
BC597238, entitled Akopyan v. Yesayan.

8. Novastar commenced the process of discovery in September 2017, by serving deposition
requests; however, many Defendants failed to respond. Although I was able to take the videotaped
deposition of Tamara Dadyan on July 24, 2018 and the deposition of Arthur Ayvazyan on October 18,
2018, they refused to produce any documents.

9. In April 2018, Novastar began propounding further discovery in the form of Requests
for Admission, Form Interrogatories, and Request for Production of Documents. To date, no documents
or information has been forthcoming.

10. Novastar’s case is set for bench trial on May 17, 2022 and WFG’s case is set for trial on
July 25, 2022.

11. On March 29, 2022, I watched a clip from an NBC special that documented the Criminal
Defendants’ PPP loan scheme. In that special, NBC broadcasted photos to a national audience of
Novastar and WFG Defendants. NBC further broadcast to a national audience copies of identification
cards belonging to named Defendants, who are believed to be “synthetic” persons created by Criminal
Defendants and their co-conspirators, such as Karapet Emboyan.

12. _—_- Prior to viewing the NBC broadcast, I was unaware that the Exhibits submitted to this

Court directly related to WFG and Novastar’s civil cases against Defendants, or that such exhibits were

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DECLARATION OF LORI HERSHORIN, ESQ.

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Case 2:20-cr-00579-SVW Document 1305-1 Filed 04/29/22 Page4of5 PageID
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sealed.
13. Between March 30, 2022 and April 7, 2022, I conducted a comprehensive search of this
Court’s docket and discovered that all evidence in support of WFG and Novastar’s claims against

Defendants was sealed. This sealed evidence is vital to proving Prospective Intervenors’ claims against

Defendants.
14. | Many of the Exhibits placed under seal include items WFG and Novastar requested
during their respective discovery periods, but which Defendants failed to produce or denied the

existence thereof. In addition, many of the Exhibits Placed under seal prove Defendants conducted the
fraudulent activities giving rise to WFG and Novastar’s damages and prove Defendants utilized a
common plan or scheme in the perpetration of the PPP loan fraud and the real estate transaction fraud.

15. Because of this Court’s Protective Order and Orders to Seal, there is no other way that
WEG and Novastar can gain access to the documents which they seek from this court.

16. The earliest date available for the hearing on a regularly noticed motion is June 6, 2022;
thus, if Prospective Intervenors’ Joint Motion were heard on regular time, Prospective Intervenors will
not have access to sufficient evidence to present at trial to prove Defendants conducted the fraudulent
real estate transactions in question or participated in an elaborate scheme of racketeering — even though
such evidence is in existence.

17. The public has a strong interest in ensuring Prospective Intervenors are able to produce
as much relevant evidence as possible against Defendants because the activities of fraudsters like
Defendants have a direct impact on the public’s future acquisition of home loans and title insurers
willing to issue title insurance policies. It is an unfortunate truth of the lending and insurance industry
that when lenders’ and title insurers’ risks increase, so does the cost to future consumers — something
which Prospective Intervenors hope to avoid.

18. Prospective Intervenors understand the privacy concerns of Defendants and third parties;
thus, WFG and Novastar agree to adhere to this Court’s protective order and all documents currently
under seal in this matter used in the civil actions would be submitted under seal to the Superior Court of

California.

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DECLARATION OF LORI HERSHORIN, ESQ.

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Case 2:20-cr-00579-SVW Document 1305-1 Filed 04/29/22 Page5of5 PageID
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19. Prospective Intervenors seek to unseal all trial exhibits and the exhibits submitted with
the Government’s Opposition to Defendants’ Motion to Suppress evidence seized at Premises-1 and
Premises-4 (Docket nos. 188 and 207).

20. Prospective Intervenors believe in good faith that Criminal Defendants will not respond
to their additional discovery requests or produce the requested information.

I declare under penalty of perjury under the laws of the State of California that the forgoing is

true and correct. Executed on April 28, 2022, at Lake Forest, California.

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DECLARATION OF LORI HERSHORIN, ESQ.

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