Court filing
Opposition to First Notice of Motion and Motion to Suppress — USA v. Ayvazyan et al. (Dkt. 207, C.D. Cal.)
Filed March 22, 2021 in USA v. Ayvazyan et al.; one of 233 filings from this case.
Record facts
| Court | U.S. District Court for the Central District of California |
|---|---|
| Filed | 2021-03-22 |
U.S. District Court for the Central District of California · No. 2:20-cr-00579-SVW · Doc. 207 · 2021-03-22 · Docket on CourtListener
Full text
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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.govv
Attorneys for Plaintiff
UNITED STATES OF AMERICA
UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
UNITED STATES OF AMERICA,
Plaintiff,
v.
RICHARD AYVAZYAN,
aka “Richard Avazian” and
“Iuliia Zhadko,”
MARIETTA TERABELIAN,
aka “Marietta Abelian” and
“Viktoria Kauichko,”
ARTUR AYVAZYAN,
aka “Arthur Ayvazyan,” and
TAMARA DADYAN,
MANUK GRIGORYAN,
aka “Mike Grigoryan,” and
“Anton Kudiumov,”
ARMAN HAYRAPETYAN,
EDVARD PARONYAN,
No. CR 20-579(A)-SVW
GOVERNMENT’S OPPOSITION TO
DEFENDANT A. AYVAZYAN’S AND
DEFENDANT T. DADYAN’S MOTION TO
SUPPRESS (ECF 149); DECLARATIONS
OF CHRISTOPHER FENTON AND TIMOTHY
MASSINO; EXHIBITS
Hearing Date: April 12, 2021
Hearing Time: 11:00 a.m.
Location:
Courtroom of the
Hon. Stephen V.
Wilson
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aka “Edvard Paronian” and
“Edward Paronyan,” and
VAHE DADYAN,
Defendants.
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
Attorney Christopher Fenton, hereby files its Opposition to defendant
Artur Ayvazyan’s and defendant Tamara Dadyan’s Motion to Suppress
(ECF No. 149).
This opposition is based upon the attached memorandum of points
and authorities, the Declaration of Christopher Fenton and attached
//
//
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exhibits, the Declaration of Timothy Massino, the files and records
in this case, and such further evidence and argument as the Court may
permit.
Dated: March 22, 2021
Respectfully submitted,
TRACY L. WILKISON
Acting United States Attorney
BRANDON D. FOX
Assistant United States Attorney
Chief, Criminal Division
/s/
SCOTT PAETTY
BRIAN FAERSTEIN
Assistant United States Attorneys
CHRISTOPHER FENTON
Department of Justice Trial Attorney
Attorneys for Plaintiff
UNITED STATES OF AMERICA
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TABLE OF CONTENTS
DESCRIPTION
PAGE
I.
INTRODUCTION .................................................... 1
II.
STATEMENT OF FACTS .............................................. 2
A.
The Investigation ......................................... 2
B.
Firearm Possession and Ties to Organized Crime ............ 4
C.
The Complaints............................................. 6
D.
The Search Warrant ........................................ 6
E.
The Search ................................................. 9
III. ARGUMENT ....................................................... 12
A.
The Search Warrant Is Sufficiently Particular ............ 14
B.
The Search Warrant Is Not Overbroad ...................... 17
C.
The Execution of the Search Warrant Was Reasonable....... 19
D.
No Evidence Should Be Excluded Because the Agents
Acted in Good Faith ...................................... 20
E.
The Government Obtained an Order Extending Its Time to
Review Digital Devices for Responsiveness ................ 21
IV.
CONCLUSION ..................................................... 21
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TABLE OF AUTHORITIES
DESCRIPTION
PAGE
Federal Cases
Horton v. California,
496 U.S. 128 (1990) ............................................ 19
Illinois v. Gates,
462 U.S. 213 (1983) ............................................ 19
United States v. Adjani,
452 F.3d 1140 (9th Cir. 2006) .................................. 13
United States v. Banks,
556 F.3d 967 (9th Cir. 2009) ................................... 13
United States v. Fannin,
817 F.2d 1379 (9th Cir. 1987) .................................. 14
United States v. Gourde,
440 F.3d 1065 (9th Cir. 2006) .................................. 19
United States v. Hayes,
794 F.2d 1348 (9th Cir. 1986) .................................. 14
United State v. Holzman,
871 F.2d 1496 (9th Cir. 1989) .................................. 19
United States v. Leon,
468 U.S. 897 (1984) ........................................ 20, 21
United States v. Riley,
906 F.2d 841 (2d Cir. 1990) .................................... 14
United States v. Rude,
88 F.3d 1538 (9th Cir. 1996) ................................... 13
United States v. SDI Future Health, Inc.,
568 F.3d 684 (9th Cir. 2009) ................................... 14
United States v. Spilotro,
800 F.2d 864 (9th Cir. 1986) ............................... 13, 14
Federal Statutes
15 U.S.C. § 645(A) ................................................. 7
18 U.S.C. § 1014 ................................................... 7
18 U.S.C. § 1028A .................................................. 7
18 U.S.C. § 1343 ................................................... 7
18 U.S.C. § 1344 ................................................... 7
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TABLE OF AUTHORITIES (CONTINUED)
DESCRIPTION
PAGE
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18 U.S.C. § 1349 ................................................... 7
18 U.S.C. §§ 1956 (a), (h) ........................................ 7
\
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I.
INTRODUCTION
The warrant at issue authorized the search of an Encino
residence used in connection with a massive scheme to fraudulently
obtain millions of dollars in COVID-19 disaster relief funds using
fake and stolen identities and business names. The defendants who
lived there – Artur Ayvazyan (“A. Ayvazyan”) and his wife Tamara
Dadyan (“T. Dadyan”) – had a history of possessing firearms and ties
to the “Armenian Power” gang. Law enforcement took measures to
protect officer safety, including to have an FBI SWAT team initially
secure the property. The safety precautions proved necessary: agents
seized an arsenal of 12 firearms, ammunition and empty magazines.
Agents also seized an overwhelming amount of evidence showing
defendants’ role in the fraud, including driver’s licenses, social
security cards, credit cards, and personally identifiable information
for dozens of fake, stolen, and synthetic identities, many of which
were used to apply for COVID-19 disaster relief loans; fraudulent
COVID-19 disaster relief loan applications; and blank checks and bank
records for fake and stolen businesses, including businesses that
applied for COVID-19 disaster relief loans. Agents also found
evidence related to the creation of fraudulent documents, including
official-looking rubber stamps purportedly belonging to California
state and federal courts, including the Clerk for the United States
Bankruptcy Court for the Central District of California.
Defendants do not dispute that the warrant was sufficiently
particular and narrow to permit the seizure of the overwhelming
evidence showing their role in the fraud. Defendants only
specifically challenge the government’s seizure of (i) defendant A.
Ayvazyan’s truck GPS systems (which may contain evidence of his
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travels to locations used as part of the scheme); and (ii) an
envelope of $2,100 in cash that defendant T. Dadyan claims belonged
to her daughter (but that was found in a safe alongside a plastic
grocery bag stuffed with an additional $12,500 in cash and
defendants’ passports).
The search warrant was amply supported by probable cause, and
was executed in a targeted fashion by law enforcement agents who
acted pursuant to the terms of the warrant in a professional manner
and with good faith that the warrant, which was authorized by U.S.
Magistrate Judge Alka Sagar, was valid. For all of these reasons,
the Court should deny defendants’ motion to suppress.
II.
STATEMENT OF FACTS
A.
The Investigation
In June 2020, the government opened an investigation into a Los
Angeles-based ring that was using stolen, fake, and synthetic
identities to fraudulently apply for COVID-19 relief funds.
(Declaration of Timothy Massino (“Massino Decl.”) ¶ 1.) Over the
next four months, the government served over 200 subpoenas, obtaining
information from federal and state agencies, lenders, retail banks,
and escrow companies, among others. (Id. ¶ 2.) The investigation
identified dozens of fraudulent loan applications that had been
submitted on behalf of fake businesses or businesses whose identities
had been stolen. (See generally ECF 1 (“Ayvazyan Compl.”); United
States v. Dadyan, et al., 20-mj-5321 (filed Nov. 3, 2020), ECF 1
(“Dadyan Compl.”).) Defendants A. Ayvazyan and T. Dadyan submitted
some of these fraudulent applications using their own names; others
they and their co-conspirators submitted using fake or stolen
identities. (See generally Ayvazyan Compl., Dadyan Compl.) The
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investigation further revealed that fraudulent documents had been
submitted in support of the applications, including fake driver’s
licenses, federal tax forms, payroll reports, and bank statements.
(Affidavit, In the Matter of the Search of [REDACTED] Encino
California 91316, No. 2:20-MJ-05286 (“SW Aff.”) ¶¶ 29, 41-42, 50.)
The investigation determined that four residences were being
used in connection with fraud, including SUBJECT PREMISES-4, which is
where defendants A. Ayvazyan and T. Dadyan reside. (SW Aff. ¶¶ 8-11,
17, 39, 47, 52.) The investigation revealed that these four
addresses were used in connection with the fraudulent loan
applications or with the bank accounts used to receive and launder
the criminal proceeds, or both. (Id.) For example, SUBJECT
PREMISES-4 was listed as the business address for Allstate Towing and
Transport LLC and Secureline Realty and Funding Inc., which,
together, fraudulently applied for over $500,000 in disaster relief
loans. (SW Aff. ¶ 39; Dadyan Compl. ¶¶ 15-47.)
Law enforcement agents traced the funds and learned that a
substantial amount of the proceeds had been laundered through various
bank accounts and had been used by defendant A. Ayvazyan’s brother,
defendant Richard Ayvazyan (“R. Ayvazyan”), and sister-in-law,
defendant Marietta Terabelian, to purchase three luxury properties.
(Ayvazyan Compl. ¶¶ 5, 16-26, 27-33; Dadyan Compl. ¶¶ 5, 23-24, 47;
SW Aff. ¶¶ 5-7, 23, 26-29, 34.) The investigation also revealed that
a substantial portion of the stolen disaster relief funds had been
funneled through various bank accounts, and that large amounts of the
funds had not yet been located and were believed to have been
liquidated to cash. (SW Aff. ¶¶ 62.f-g.)
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Law enforcement agents began conducting surveillance on the
seven properties, including, in some instances, to search the trash
left outside for pickup. (SW Aff. ¶¶ 25, 32-33, 35, 38, 43-44, 59.)
The surveillance yielded additional evidence that further confirmed
the relationship between the properties and their use as part of the
fraud. For example, at SUBJECT PREMISES-4, agents found:
• a copy of a California driver’s license for “T.G.,” which was
confirmed to be a fraudulent document;
• a social security card for “T.G.”;
• an earnings statement for “T.G.” from “Crystalcare Home
Health, Inc.,” which had applied for a PPP loan using the name
of T. Dadyan’s brother, A.D.;
• a FedEx Airbill for “EM Construction,” which had applied for
an EIDL loan using the name “A.Z.”;
• a closing letter for a real estate transaction addressed to
“Anton Kudiumov,” which is a synthetic identity that was used
to apply for numerous PPP and EIDL loans; and
• correspondence from one of the lenders through which
Secureline Realty applied for a PPP loan.
(SW Aff. ¶¶ 43-44.)
B.
Firearm Possession and Ties to Organized Crime
As part of its investigation, law enforcement conducted
background checks which revealed that, in 2012, defendants R.
Ayvazyan and Terabelian both pled guilty to conspiracy to commit bank
fraud for their role in a four-year scheme to defraud several
financial institutions. (See United States v. Ayvazyan, et al., CR
11-180-CJC (CDCA).) At the time that he pled guilty, defendant R.
Ayvazyan owned at least five firearms including: one Taurus Forjas 38
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Caliber Revolver; one semi-automatic Carl Walther P99 Pistol; one
semi-automatic Kie Kimber Pistol; one semi-automatic Sig Sauer
Pistol; and one Smith and Wesson Revolver. (Declaration of
Christopher Fenton (“Fenton Decl.”) ¶ 1, Ex. 1.) After entering his
plea, he purportedly sold or transferred his firearms to defendant A.
Ayvazyan (id.), who lived with defendant T. Dadyan. In addition, a
background check on A. Ayvazyan as of October 27, 2020, showed that
he had previously owned at least one semi-automatic Carl Walther P99
Pistol. (Id. ¶ 2, Ex. 2.)
Surveillance also revealed that defendants had ties to known
associates of the “Armenian Power” gang. For example, on October 5,
2020, surveillance identified an individual believed to be defendant
T. Dadyan leaving one of the properties defendants had purchased
using fraudulently obtained disaster relief funds in a black Mercedes
SUV registered to A.P. (SW Aff. ¶¶ 35-37.) A.P. is defendant R.
Ayvazyan’s brother-in-law and purported business partner. (Id.) In
2013, A.P. pled guilty to racketeering conspiracy charges related to
the “Armenian Power” criminal enterprise. (Id. (referencing United
States v. Darbinyan, et al., 11-cr-72, ECF 2598).) Specifically,
A.P. admitted he was an associate of the “Armenian Power” gang and
had abetted the illegal possession of a firearm by one of the gang’s
leaders. (Id.)
Two days after the individual believed to be defendant T. Dadyan
had been seen leaving the property driving A.P.’s Mercedes SUV, law
enforcement agents searched the trash outside and found empty
packages of carbine rifle attachments to include a CTR Stock, an AR-
15 pistol grip attachment, a carbine handguard, and a carbine
charging handle. (SW Aff. ¶ 38; Fenton Decl. ¶ 3, Ex. 3.) An empty
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box of 9mm ammunition was also discovered along with various pieces
of mail with the identifying information removed. (Id.)
As discussed below, when executing the search warrants for
SUBJECT PREMISES-4, among others, an FBI SWAT team made the initial
entrance to secure the properties and ensure the safety of the
officers who would conduct the searches. These steps proved
necessary: at SUBJECT PREMISES-4, as described further below, agents
found and seized an arsenal of 12 firearms, including four rifles,
two shotguns, and six handguns (pistols and revolvers). (Fenton
Decl. ¶ 4, Ex. 4.) The searching agents also found ammunition, empty
magazines, and a gun safe. (Id. ¶¶ 5-6, Exs. 5, 6.)
C.
The Complaints
On October 20, 2020, the government filed a complaint against
defendants R. Ayvazyan and Terabelian. (See Ayvazyan Compl.) On
November 3, 2020, the government filed a complaint against defendants
A. Ayvazyan and T. Dadyan. (See Dadyan Compl.) The complaints
summarized in detail the evidence establishing probable cause that
defendants R. Ayvazyan, Terabelian, A. Ayvazyan, and T. Dadyan
participated in a massive conspiracy to commit wire fraud and bank
fraud. The complaints detailed the manner and means of the
conspiracy (repeated fraudulent applications for disaster relief
loans), provided specific examples of fraudulent loan applications
defendants had submitted, and traced the flow of disaster relief
funds, which showed that these funds had been used to purchase luxury
residential properties.
D.
The Search Warrant
On November 3, 2020, the same day the government filed a
complaint against defendants A. Ayvazyan and T. Dadyan, the
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government obtained a warrant to search SUBJECT PREMISES-4, which was
defendants A. Ayvazyan’s and T. Dadyan’s residence. The search
warrant was authorized by the Honorable Alka Sagar, United States
Magistrate Judge, based on an affidavit sworn out by FBI Special
Agent Justin Palmerton. The affidavit incorporated by reference the
Ayvazyan Complaint and attached a copy as an exhibit. (SW Aff. ¶ 20;
Ex. 1.) The warrant authorized the search of SUBJECT PREMISES-4,
which was the residential property described in Attachment A-4, for
items described in Attachment B.
Attachment B limited the agents’ discretion to search by clearly
identifying the criminal activity being investigated and by providing
an express limitation on the relevant time period.
The first sentence of Attachment B states: “[t]he items to be
seized are evidence, contraband, fruits, or instrumentalities of
violations of 18 U.S.C. § 1343 (Wire Fraud); 18 U.S.C. § 1344 (Bank
Fraud); 18 U.S.C. § 1349 (Conspiracy to Commit Wire and Bank Fraud);
18 U.S.C. §§ 1956(a) and (h) (Money Laundering and Conspiracy to
Commit Money Laundering); 18 U.S.C. § 1014 (False Statements to a
Financial Institution); 18 U.S.C. § 1028A (Aggravated Identity
Theft); and 15 U.S.C. § 645(A) (False Statements to the Small
Business Administration) ... occurring on or after January 1, 2020.”
Attachment B then lists specific items to guide the agents
conducting the search to determine what they have the authority to
seize. The items clearly relate to the fraudulent scheme, which is
straightforward: defendants submitted fraudulent loan applications
using fake and stolen identities, laundered the proceeds and spent
the money for their personal benefit.
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For example, the first item to be seized includes records
relating to the names of the fake and stolen businesses used to
fraudulently apply for loans and launder and misuse the proceeds.
(Attachment B ¶ 1.a.) A similar item to be seized includes records
relating to the names of the fake, stolen and synthetic individual
identities used to fraudulently apply for loans and launder and
misuse the proceeds (id. ¶ 1.d), including records concerning the
creation, maintenance, or use of these aliases (id. ¶ 1.e).
The following items to be seized include related requests, such
as:
• records concerning the PPP, EIDL, or other SBA or commercial
loan programs (id. ¶ 1.b);
• records concerning PPP or EIDL loan applications and supporting
documentation (id. ¶ 1.c); and
• records concerning the creation, alteration, falsification, or
use of such supporting documentation (id. ¶ 1.i).
The warrant also authorized the seizure of banking and financial
records for the specific individuals and entities involved in the
fraudulent scheme, which relates both to the falsity of the claims
made in the fraudulent loan applications concerning the applying
companies’ business activities and operations, and the laundering and
spending of loan proceeds: “Banking and financial records for any
bank, credit card, and brokerage or investment accounts associated
with RICHARD AYVAZYAN, ARTHUR AYVAYZAN, MARIETTA TERABELIAN, TAMARA
DADYAN, ANNA MANUKYAN, or any of the other individuals and entities
described herein in Attachment B.” (Id. ¶ 1.m.)
The warrant also provides for the seizure of cash in amounts
greater than $1,000 because: (i) “[i]ndividuals who commit financial
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crimes including loan fraud will often liquidate criminal proceeds to
cash ... in order to launder the proceeds and profit from the
crimes”; and (ii) in this particular case, there remains a large
amount of proceeds that law enforcement has not yet located, that
defendants could use to flee the jurisdiction. (Attachment B ¶ 1.r;
SW Aff. ¶¶ 62.f-g.)
Attachment B also provides that agents may seize digital devices
found on defendants A. Ayvazyan and T. Dadyan, or at SUBJECT
PREMISES-4 (Attachment B ¶¶ 1.t-u, 3-8), based on several of the
affiant’s statements about the role that digital devices play in the
scheme, including that: “[e]vidence of digital and virtual
submissions, such as the fraudulent PPP and EIDL loan applications,
are likely to be stored on digital devices that subjects were using
to apply for these loans and direct the transfer of the funds.” (SW
Aff. ¶ 62.a). Attachment B also sets forth special procedures
relating to the search of digital devices, including permitting the
agents who conduct the search to seize and transport the digital
devices offsite for examination. (Attachment B ¶¶ 4-8.)
E.
The Search
On November 5, 2020, at around 6:00 a.m., law enforcement
executed the search warrant on SUBJECT PREMISES-4. In light of
concerns about firearms and links to “Armenian Power,” an FBI SWAT
team initially entered the property to secure it and ensure the
safety of the officers who would conduct the actual search. (Massino
Decl. ¶¶ 3-6.) To protect officer safety, the SWAT team disabled
security cameras. (Id.) The presence of a tactical unit and
disabling of security cameras are commonly used methods to protect
law enforcement agents when executing warrants. (Id. ¶ 6.) Recent
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events underscore the importance of these tactics for officer safety.
For example, on the morning of February 2, 2021, two FBI special
agents were shot and killed while serving a warrant on a child
pornographer who is believed to have monitored the approach of the
agents with a doorbell camera and ambushed the agents through the
unopened door with an assault-style rifle.1
Pursuant to the authorized arrest warrants, defendant A.
Ayvazyan and T. Dadyan were taken into custody and transported from
SUBJECT PREMISES-4. (Fenton Decl. ¶ 7, Ex. 7.) After it secured the
property, the SWAT team turned control of the search site over to the
search team for the execution of the search warrant. (Id.)
The agents who conducted the search seized only 42 items from SUBJECT
PREMISES-4. (Fenton Decl. ¶ 4, Ex. 4.) More than one-third of the
seized items (15 out of 42) were firearms or firearm accessories.
(Id.) Specifically, agents seized an arsenal of 12 firearms,
ammunition, and empty magazines, including two Berretta Shotguns, one
Savage Rifle with scope, one Henry Repeating Rifle, one Tikka T3X
Rifle with scope, one Mossberg Rifle, one Berretta 9MM Pistol, one
Smith and Wesson .357 Magnum Pistol, one Colt .45 Pistol, two .38
Special Taurus Revolvers, and one Titan .25 Pistol. (Id.)2
1 See, e.g., “2 FBI agents killed, three wounded while serving
warrant. Gunman, now dead, shot them through the door,” Miami Herald,
Feb. 3, 2021, available at
www.miamiherald.com/news/local/crime/article248942479.html.
2 Around 14 of the items seized were comprised of records and
other documents. Some of the records within some of these items were
organized in multiple folders.
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Agents also seized items evidencing defendant A. Ayvazyan’s and
defendant T. Dadyan’s possession and use of dozens of fake, stolen
and synthetic identities to commit fraud, including:
• dozens of unauthorized and counterfeit access devices, such as
fake and stolen California driver’s licenses, social security
cards, and credit cards, including for individuals whose names
were used to fraudulently apply for PPP and EIDL loans (Fenton
Decl. ¶ 8, Ex. 8);
• handwritten and typed lists of personally identifiable
information (“PII”) for fake, stolen and synthetic identities,
including for names used in furtherance of the fraud (id. ¶ 9,
Ex. 9);
• lists of “EMAILS FOR BORROWERS,” which were lists of email
addresses created for fake, stolen and synthetic identities
used to apply for fraudulent loans (id. ¶ 10, Ex. 10);
• fraudulent PPP and EIDL loan applications using T. Dadyan’s
name and the names of other individuals (id. ¶ 11, Ex. 11);
• blank checks and other records for accounts that received PPP
and EIDL funds, including blank checks signed by “T.T,” who is
recently deceased (id. ¶ 12, Ex. 12); and
• official looking rubber stamps, including stamps for the Clerk
of the United States Bankruptcy Court for the Central District
of California, Los Angeles Registrar-Recorder/County Clerk,
the Los Angeles Superior Court, and numerous notaries (id. ¶
13, Ex. 13).
Defendants A. Ayvazyan and T. Dadyan were also in possession of
digital devices believed likely to contain evidence of the fraud
including iPhones, iPads, laptop and desktop computers, and truck GPS
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systems. (Fenton Decl. ¶ 4, Ex. 4.) Agents seized all of these
devices for off-site inspection, as permitted by the warrant.
(Attachment B ¶ 4.a.) The GPS systems potentially contained evidence
relating to defendants’ travel to and from the seven residences used
in connection with the fraud, as well as travel to and from other
locations that may contain evidence or proceeds.
Finally, agents seized a single valuable: $14,600 in U.S.
currency found in a safe alongside defendants’ passports. A portion
of the money - $2,100 – was in a pink envelope; the rest was in a
plastic grocery bag. (Fenton Decl. ¶ 14, Ex. 14.) The cash was in
an amount greater than $1,000 and thus subject to seizure pursuant to
the warrant authorized by Judge Sagar. (Attachment B ¶ 1.r.) As
discussed above, there was probable cause to believe such sizeable
amounts of cash were proceeds from the massive fraud, a large portion
of which had not yet been located.3 (SW Aff. ¶¶ 62.f-g.) There was
also reason to believe the cash was evidence of defendants’ plans and
wherewithal to leave the jurisdiction, which, as the affidavit
states, is particularly common for perpetrators of financial crimes
of the magnitude being investigated in this case. (Id.)
III. ARGUMENT
The Fourth Amendment concepts of particularity and overbreadth
are distinct. “Particularity is the requirement that the warrant
must clearly state what is sought. Breadth deals with the
3 The remainder of the items seized are all similarly within the
scope of the search warrant, which is amply supported by probable
cause in all respects.
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requirement that the scope of the warrant be limited by the probable
cause on which the warrant is based.” United States v. Banks, 556
F.3d 967, 972-73 (9th Cir. 2009) (citation omitted).
With respect to particularity, a warrant “need only be
reasonably specific, rather than elaborately detailed.” United
States v. Rude, 88 F.3d 1538, 1551 (9th Cir. 1996) (citation
omitted). Specificity is a case-specific determination and “varies
depending on the circumstances of the case and the type of items
involved.” Id. (quoting United States v. Spilotro, 800 F.2d 959, 963
(9th Cir. 1986)).
The Ninth Circuit generally considers three factors when
determining whether a warrant is sufficiently particular:
“(1) whether probable cause exists to seize all items of a particular
type described in the warrant; (2) whether the warrant sets out
objective standards by which executing officers can differentiate
items subject to seizure from those which are not; and (3) whether
the government was able to describe the items more particularly in
light of the information available to it at the time the warrant was
issued.” United States v. Adjani, 452 F.3d 1140, 1148 (9th Cir.
2006) (quoting Spilotro, 800 F.2d at 963)).
Notably, “[w]arrants which describe generic categories of items
are not necessarily invalid if a more precise description of the
items subject to seizure is not possible.” Spilotro, 800 F.2d at
963. As the Second Circuit explained, even though descriptions of
categories of documents to be seized, including illustrations, may
not “eliminate all discretion of the officers executing the warrant,
. . . the particularity requirement is not so exacting . . . The
Fourth Amendment is not violated because the officers executing the
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warrant must exercise some minimal judgment as to whether a
particular document falls within the described category.” United
States v. Riley, 906 F.2d 841, 844-45 (2d Cir. 1990).
As for overbreadth, the Ninth Circuit has explained that a
“warrant must not only give clear instructions to a search team, it
must also give legal, that is, not overbroad, instructions.” United
States v. SDI Future Health, Inc., 568 F.3d 684, 702 (9th Cir. 2009).
Under the Fourth Amendment, “this means that there [must] be probable
cause to seize the particular thing[s] named in the warrant.” Id.
(citation omitted). “The number of files that could be scrutinized .
. . is not determinative. The search and seizure of large quantities
of material is justified if the material is within the scope of the
probable cause underlying the warrant.” United States v. Hayes, 794
F.2d 1348, 1355 (9th Cir. 1986).
A warrant that, standing on its own, might be overbroad may
still be valid when one of three factors are satisfied: (1) the
warrant describes in “detail the items one commonly expects to find
on premises used for the criminal activities in question,” or (2) the
warrant refers to specific criminal activities, or (3) a descriptive
affidavit is attached to and incorporated in the warrant. United
States v. Fannin, 817 F.2d 1379, 1384 (9th Cir. 1987) (citing
Spilotro, 800 F.2d at 864, 867).
A.
The Search Warrant Is Sufficiently Particular
While contending that the search warrant was “unconstitutionally
lacking in particularity,” defendants do not allege any particular
facts or law underlying their specific challenge, other than
incorporating by reference the motion to suppress filed by
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codefendants R. Ayvazyan and Terabelian.4 (ECF 149 at 10.) Nor do
defendants specifically challenge the seizure of any of the numerous
documentary items found at their residence evidencing the extensive
fraudulent scheme alleged in the search warrant affidavit.
Indeed, as described above, at SUBJECT PREMISES-4, agents seized
overwhelming evidence showing defendants’ involvement in the alleged
fraud. The evidence seized included dozens of unauthorized and
counterfeit access devices, such as fake and stolen California
driver’s licenses, social security cards, and credit cards, including
for individuals whose name were used to fraudulently apply for PPP
and EIDL loans; lists of PII for fake, stolen and synthetic
identities; lists of email addresses created for fake, stolen and
synthetic identities used to apply for fraudulent loans; PPP and EIDL
loan applications; blank checks and other records for accounts that
received PPP and EIDL funds; and items used in the creation of
fraudulent documents such as rubber stamps for California state and
federal courts. All of these items related directly to the
fraudulent scheme alleged in the search warrant affidavit: defendants
used fake and stolen identities to fraudulently apply for disaster
relief loans on behalf of sham companies that do not actually have
business operations or activities. Defendants then laundered the
funds through bank accounts belonging to these and other sham
companies and used them for their personal benefit.
4 Rather than repeat the government’s response to defendants R.
Ayvazyan and Terabelian’s motion to suppress evidence seized from
SUBJECT PREMISES-1, for the sake of efficiency, the government
incorporates its opposition to that motion by reference here (ECF
188).
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Instead, defendants A. Ayvazyan’s and T. Dadyan’s argument is
that “[t]he opening paragraph of the [w]arrant renders the rest of
the document irrelevant by defining all items and records related to
[defendants] [A.] Ayvazyan and [T.] Dadyan (or either of their co-
defendants) as ‘evidence’ to be seized.” (ECF 149 at 8.)
Defendants’ argument is based on factual inaccuracies. The
paragraph defendants challenge is not the “opening paragraph” as
defendants claim, but the first item to be seized. This is a fatal
flaw in defendants’ argument because the opening paragraph sets forth
key criteria relevant to the particularity analysis: it articulates
the specific crimes under investigation by reference to statute and
prescribes the relevant time-frame (i.e., January 1, 2020 through the
present). The items that follow provide the searching agents with
specific illustrations of the types of records they should seize in
light of this limiting criteria.
In addition, in adopting wholesale codefendants R. Ayvazyan’s
and Terabelian’s arguments, defendants misquote the paragraph at
issue and apply a hyper-technical interpretation of the misquoted
language in an effort to arrive at an absurd result. (ECF 149 at 8.)
Defendants claim the paragraph instructs agents to seize all
“[r]ecords or items [concerning Ayvazyan and/or Dadyan’s business or
a series of businesses affiliated with Ayvazyan, Dadyan, and their
co-defendants], or any affiliated ... individuals.” (Id. (purportedly
quoting Attachment B ¶ 1.a).) In reality, the paragraph instructs
agents to seize records relating to the sham companies involved in
fraudulently obtaining and laundering disaster relief proceeds,
specifically:
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Records or items concerning ABC Realty Advisors, Allstate Towing
and Transport, Crystalcare Home Health, EM Construction, Fadehaus
Barbershop, Fiber One Media, G&A Diamonds, Inception Fund,
Journeymen Construction, Nelson’s Nursery, Redline Auto Mechanics
Inc., Runyan Tax Services, Secureline Realty and Funding, Timeline
Transport, VB Trucking, TM Events, Top Quality Contracting, or
any affiliated entities or individuals;
(Attachment B ¶ 1.a.)
In any event, this argument has no practical import here because
defendants do not actually challenge the seizure of any particular
records related to A. Ayvazyan or T. Dadyan. Nor can they. All of
these records were properly seized because the records were
responsive to items listed in Attachment B that were sufficiently
particular and defendants do not argue otherwise. (Compare Fenton
Decl. ¶ 11, Ex. 11, with Attachment B ¶¶ 1.b-c; Fenton Decl. ¶ 8, Ex.
8, with Attachment B ¶ 1.d; Fenton Decl. ¶ 12, Ex. 12, with
Attachment B ¶ 1.m).
B.
The Search Warrant Is Not Overbroad
Defendants’ challenges to the breadth of the search warrant
focus only on the seizure of two truck GPS systems and $14,600 in
cash. Defendants’ arguments fail on this ground as well.
Defendants’ challenge to the seizure of the truck GPS systems is
based on their argument that the affidavit did not allege that
criminal proceeds had been used to purchase the devices. (ECF 149 at
10.) The agents, however, did not seize the truck GPS systems for
the reason that defendants state; rather, they seized the truck GPS
systems because the truck GPS systems were believed to be “digital
devices” that were properly within the scope of the search warrant
and had evidentiary value. As explained above, the search warrant
authorized by Judge Sagar expressly provided for the seizure of
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“digital devices” (Attachment B ¶ 1.t-u), which is defined to include
“any electronic system or device capable of storing or processing
data in digital form.” (Id. ¶ 3.) Truck GPS systems fit squarely
within that definition because such devices store and process digital
data relating to travel, including address books and travel routes.
Here, such information is relevant because the alleged conspiracy
involves the use of at least seven residences in and around Los
Angeles, as alleged in the search warrant affidavit. (SW Aff. ¶¶ 5-
11, 17, 23, 26-29, 34, 39, 47, 52.)
Defendants also argue that the search warrant was overly broad
because it permitted seizure of $14,600 in cash, $2,100 of which was
contained in a pink envelope that purportedly belonged to defendants’
daughter. (ECF 149 at 10.) Defendants claim that the warrant was
overbroad because the affidavit did not contain allegations
specifically linking their daughter’s money with the allege scheme.
Defendants are wrong. The affidavit established probable cause to
seize all cash greater than $1,000 based on the statements that: (i)
“[i]ndividuals who commit financial crimes including loan fraud will
often liquidate criminal proceeds to cash ... in order to launder the
proceeds and profit from the crimes”; and (ii) “the criminal conduct
[in this case] involves a large amount of fraud proceeds, a large
portion of which, at this point, law enforcement has not been able to
locate.” (SW Aff. ¶¶ 62.f-g.) The affidavit need not have contained
detailed allegations with respect to the source of funds for each
aggregation of cash so long as that aggregated amount exceeded
$1,000. Rather, the affidavit, which alleges the specific crimes of
money laundering and a conspiracy to commit money laundering,
provides ample evidence that there is a fair probability that
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defendants engaged in a massive scheme to steal and launder millions
of dollars, and that a “large amount” of that money has not yet been
identified and that some portion of that money was at SUBJECT
PREMISES-4.5 (See, e.g., SW Aff. ¶¶ 3, 20-21, 62.b-d, f-g; Ayvazyan
Compl. ¶¶ 22, 26, 40.) This is more than sufficient to establish
probable cause to seize the envelope of cash, which was found in a
safe alongside a plastic grocery bag of additional cash in the amount
of $12,500. See United State v. Holzman, 871 F.2d 1496, 1509 (9th
Cir. 1989), abrogated on other grounds by Horton v. California, 496
U.S. 128 (1990) (“[B]ecause the affidavit described the large
quantities of cash carried by appellants at the time of their arrest,
and that counterfeit credit cards were being used to obtain cash
advances, we are satisfied that probable cause existed to support the
search for cash.”).6
C.
The Execution of the Search Warrant Was Reasonable
Defendants’ argument that the execution of the warrant was
“unprecedented in its flagrant disregard” for defendants and their
family is based on the false claim they posed “no threat of
5 Determinations of probable cause must be upheld if, under the
“totality of the circumstances” surrounding a request, the issuing
magistrate had a substantial basis for finding probable cause.
Illinois v. Gates, 462 U.S. 213, 238-39 (1983). The “totality of
circumstances” test requires only a “fair probability” that the
sought-after evidence is located in a particular place. United
States v. Gourde, 440 F.3d 1065, 1069 (9th Cir. 2006) (en banc)
(citing Gates, 462 U.S. 213 at 246).). “Fair probability” does not
require “certainty or even a preponderance of the evidence.” Id.
6 As also explained in the affidavit, the possession of travel
documents and cash can be evidence of “perpetrator’s plans to leave
the jurisdiction, which is particularly common for perpetrators of
financial crimes of the magnitude being investigated in this case.”
(SW Aff. ¶ 62.g.) Here, the pink envelope and plastic grocery bag
filled with cash were found in a safe next to defendants’ passports.
(Fenton Decl. ¶ 14, Ex. 14.)
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violence.” (ECF 149 at 3-6.) Defendants, however, did pose a threat
of violence because they had a history of firearm possession and ties
to the “Armenian Power” gang. And this concern was further confirmed
when, upon searching SUBJECT PREMISES-4, the agents found and seized
an arsenal of 12 firearms, live ammunition, and empty cartridges.
Moreover, there was nothing “unprecedented” about the way law
enforcement handled the search of SUBJECT PREMISES-4: as explained
above, law enforcement commonly uses a tactical unit and disables
security cameras when executing warrants, particularly under
circumstances such as those presented here. (Massino Decl. ¶ 6.)
Defendants also challenge the reasonableness of the search based
on their claim that the “[a]gents appear to have seized anything that
looked like it was valuable without probable cause.” (ECF 149 at 7.)
This is patently false. Agents seized only the $14,600 in cash,
which was expressly permitted by the search warrant authorized by
Judge Sagar based on the ample probable cause finding set forth in
the affidavit. (Attachment B ¶ 1.r; SW Aff. ¶¶ 62.f-g.) No other
item believed to be worth a great deal of money was seized.7
D.
No Evidence Should Be Excluded Because the Agents Acted in
Good Faith
In the context of a search warrant, the evidence obtained by law
enforcement is still admissible where agents relied in good faith on
the validity of the warrant issued by a neutral magistrate. See
7 Defendants argue that it was unreasonable to seize a portion
of the cash - $2,100 of the $14,600 – because it purportedly belonged
to their daughter and represented money given to her for her
birthday. To the contrary, it was reasonable for the agents to seize
this large amount of cash because (i) it was found in a safe along
with a plastic grocery bag of cash and defendants’ passports, not in
the daughter’s bedroom, and (ii) it was a large amount of cash and
thus eligible for seizure pursuant to the warrant.
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United States v. Leon, 468 U.S. 897, 923 (1984). Under Leon, agents
conducting a search pursuant to a validly issued warrant are entitled
to rely on the search warrant unless: (1) “the magistrate or judge in
issuing a warrant was misled by information in an affidavit that the
affiant knew was false or would have known was false except for his
reckless disregard for the truth;” (2) “the issuing magistrate wholly
abandoned his judicial role;” (3) the warrant was “based on an
affidavit so lacking in indicia of probable cause as to render
official belief in its existence entirely unreasonable;” or (4) the
warrant failed to “particularize the place to be searched or things
to be seized.” Id. Here, defendants do not allege any basis to
support a finding that the search warrant was not validly issued.
Accordingly, the Court should conclude that the agents acted in good
faith and deny defendants request to suppress evidence.
E.
The Government Obtained an Order Extending Its Time to
Review Digital Devices for Responsiveness
Defendants’ argument that all digital devices not marked
responsive by March 5, 2021 should be returned regardless of
suppression is based on the original 120 day deadline set forth in
Attachment B of the search warrant. (ECF 149 at 11-12.) Defendants’
argument is moot, however, because the government properly sought and
obtained an order extending the deadline to complete the review by
another 120 days. As set forth in the order, the government now has
until July 3, 2021 to complete its review for responsiveness. See
Order, In re Search Warrants, No. 2:20-mj-05286.
IV.
CONCLUSION
For the foregoing reasons, the government respectfully requests
that this Court deny defendants’ motion to suppress.
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