Government's Sentencing Position for Defendant Manuk Grigoryan (Document 1055)
Summary
Government's Sentencing Position for Defendant Manuk Grigoryan in United States v. Manuk Grigoryan, No. CR 20-00579(A)-SVW-5, filed October 18, 2021 as Document 1055, with sentencing listed for October 25, 2021. The memorandum says he pleaded guilty to bank fraud and aggravated identity theft in a fraud on pandemic relief programs, and agrees with the Probation calculation of an effective advisory range of 65 to 75 months, including a mandatory consecutive 24 months. It argues that a sentence within that range is appropriate and a variance below it is not warranted, and takes no position on where within the range. It also seeks four years of supervised release and restitution of $2,684,798, not $2,602,798.
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“Government's Sentencing Position for Defendant Manuk Grigoryan (Document 1055).”
Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-c-d-cal-no-2-20-cr-00579-dkt-1055-c-d-cal-d345590045/
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Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 1 of 20 Page ID #:17484
1 TRACY L. WILKISON
Acting United States Attorney
2 SCOTT M. GARRINGER
Assistant United States Attorney
3 Chief, Criminal Division
SCOTT PAETTY (Cal. Bar No. 274719)
4 CATHERINE AHN (Cal. Bar No. 248286)
BRIAN FAERSTEIN (Cal. Bar No. 274850)
5 Assistant United States Attorneys
Major Frauds/Environmental and Community Safety Crimes Sections
6 1100/1300 United States Courthouse
312 North Spring Street
7 Los Angeles, California 90012
Telephone: (213) 894-6527/2424/3819
8 Facsimile: (213) 894-6269/0141
E-mail: Scott.Paetty@usdoj.gov
9 Catherine.S.Ahn@usdoj.gov
Brian.Faerstein@usdoj.gov
10
JOSEPH S. BEEMSTERBOER
11 Acting Chief, Fraud Section
Criminal Division, U.S. Department of Justice
12 CHRISTOPHER FENTON
Trial Attorney, Fraud Section
13 Criminal Division, U.S. Department of Justice
1400 New York Avenue NW, 3rd Floor
14 Washington, DC 20530
Telephone: (202) 320-0539
15 Facsimile: (202) 514-0152
E-mail: Christopher.Fenton@usdoj.gov
16
Attorneys for Plaintiff
17 UNITED STATES OF AMERICA
18 UNITED STATES DISTRICT COURT
19 FOR THE CENTRAL DISTRICT OF CALIFORNIA
20 UNITED STATES OF AMERICA, No. CR 20-00579(A)-SVW-5
21 Plaintiff, GOVERNMENT’S SENTENCING POSITION FOR
DEFENDANT MANUK GRIGORYAN
22 v.
Date: October 25, 2021
23 MANUK GRIGORYAN, Time: 11:00 a.m.
aka “Mike Grigoryan,” and Location: Courtroom of the Hon.
24 “Anton Kudiumov,” Stephen V. Wilson
25 Defendant.
26
27 Plaintiff United States of America, by and through its counsel
28 of record, the Acting United States Attorney for the Central District
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 2 of 20 Page ID #:17485
1 of California, Assistant United States Attorneys Scott Paetty,
2 Catherine Ahn, and Brian Faerstein, and Department of Justice Trial
3 Attorney Christopher Fenton, hereby files its sentencing position
4 regarding defendant Manuk Grigoryan.
5 The government’s sentencing position is based upon the attached
6 memorandum of points and authorities, the presentence investigation
7 report, the files and records in this case, and any other evidence or
8 argument that the Court may wish to consider at the time of
9 sentencing.
The government reserves the right to file any supplemental
10
sentencing position(s) that may be necessary.
11
Dated: October 18, 2021 Respectfully submitted,
12
TRACY L. WILKISON
13 Acting United States Attorney
14 SCOTT M. GARRINGER
Assistant United States Attorney
15 Chief, Criminal Division
16 /s/
SCOTT PAETTY
17 CATHERINE AHN
BRIAN FAERSTEIN
18 Assistant United States Attorneys
CHRISTOPHER FENTON
19 Department of Justice Trial Attorney
20 Attorneys for Plaintiff
UNITED STATES OF AMERICA
21
22
23
24
25
26
27
28
2
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 3 of 20 Page ID #:17486
1 TABLE OF CONTENTS
2 TABLE OF CONTENTS...................................................i
3 TABLE OF AUTHORITIES...............................................ii
4 MEMORANDUM OF POINTS AND AUTHORITIES................................1
5 I. INTRODUCTION...................................................1
6 II. RELEVANT PROCEDURAL HISTORY....................................1
7 III. DEFENDANT’S OFFENSE CONDUCT....................................2
8 IV. ADVISORY SENTENCING GUIDELINES CALCULATION.....................5
9 V. SECTION 3553(a) FACTORS........................................6
10 VI. GOVERNMENT’S SENTENCING RECOMMENDATION.........................7
11 A. Term of Custody...........................................7
12 1. Nature and Circumstances of the Offense and
History and Characteristics of the Defendant (18
13 U.S.C. § 3553(a)(1)).................................7
14 2. Seriousness of the Offense, Respect for the Law,
and Just Punishment (18 U.S.C. § 3553(a)(2)(A)).....10
15
3. Affording Adequate Deterrence and Protecting the
16 Public from Further Crimes of the Defendant (18
U.S.C. § 3553(a)(2)(B) and (C)).....................12
17
B. Supervised Release.......................................13
18
C. Restitution, Fine, and Mandatory Special Assessment......14
19
VII. CONCLUSION....................................................14
20
21
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26
27
28
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 4 of 20 Page ID #:17487
1 TABLE OF AUTHORITIES
2 CASES
3 Gall v. United States, 552 U.S. 38 (2007)...........................6
4 Molina-Martinez v. United States, 136 S.Ct. 1338 (2016).............6
5 United States v. Carty, 520 F.3d 984 (9th Cir. 2008)................6
6 United States v. Rita, 551 U.S. 338 (2007)..........................7
7 STATUTES
8 18 U.S.C. § 1028A(a)(1).............................................2
9 18 U.S.C. § 1344(2).................................................2
10 18 U.S.C. § 3553(a)............................................passim
11 OTHER AUTHORITIES
12 U.S.S.G. § 2B1.1(a)(1)..............................................6
13 U.S.S.G. § 2B1.1(b)(1)(I)...........................................6
14 U.S.S.G. § 2B1.1(b)(10)(C)..........................................6
15 U.S.S.G. § 2B1.6....................................................6
16 U.S.S.G. § 2S1.1(a)(2)..............................................6
17 U.S.S.G. § 3E1.1(a), (b)............................................6
18 U.S.S.G. § 5D1.3(b)................................................14
19
20
21
22
23
24
25
26
27
28
ii
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 5 of 20 Page ID #:17488
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 The government respectfully submits this sentencing memorandum
4 to advise the Court of its sentencing position regarding defendant
5 Manuk Grigoryan (“defendant”), who has pleaded guilty to bank fraud
6 and aggravated identity theft in connection with his role as part of
7 a massive fraud to profit from a national catastrophe at the expense
8 of his fellow citizens. Consistent with the parties’ plea agreement,
9 the government agrees with the United States Probation and Pretrial
10 Services Office’s (the “USPO”) calculation of the advisory Guidelines
11 range and submits that a sentence within that range is appropriate in
12 light of the sentencing factors under 18 U.S.C. § 3553(a). The
13 government also agrees with the USPO’s recommendation of four years
14 of supervised release, but recommends an additional condition
15 reasonably related to defendant’s underlying offense conduct. The
16 government takes no position on the imposition of a fine, but, for
17 the reasons explained in the government’s response to the presentence
18 investigation report (“PSR”) and additional information discussed
19 herein, the government submits that defendant should be ordered to
20 pay restitution in the amount of $2,684,798, not $2,602,798.
21 II. RELEVANT PROCEDURAL HISTORY
22 On March 11, 2021, a grand jury returned a first superseding
23 indictment against defendant and seven codefendants, charging
24 defendant with conspiracy to commit wire fraud and bank fraud,
25 multiple counts of wire fraud and bank fraud, aggravated identity
26 theft, and conspiracy to commit money laundering. (ECF 154.) On
27 June 7, 2021, pursuant to a plea agreement with the government,
28 defendant pleaded guilty to one count of bank fraud (Count 19), in
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 6 of 20 Page ID #:17489
1 violation of 18 U.S.C. § 1344(2), and one count of aggravated
2 identity theft (Count 23), in violation of 18 U.S.C. § 1028A(a)(1).
3 (ECF 436, 454.)
4 On September 20, 2021, the USPO filed its PSR in which it
5 calculated a total offense level of 22 (with respect to Count 19, the
6 bank fraud offense) and a Criminal History Category I, resulting in
7 an advisory Guidelines range of 41 to 51 months’ imprisonment for
8 Count 19. (ECF 974.) Taking into account the 24-month mandatory
9 consecutive sentence for Count 23, the USPO thus calculated the
10 effective advisory Guideline range as 65 to 75 months’ imprisonment.
11 The USPO recommends that defendant be sentenced to a term of 65
12 months in prison, four years of supervised release, no fine,
13 restitution of $2,602,798, and a $200 mandatory special assessment.
14 (ECF 973.)
15 The government agrees with the USPO’s offense level and criminal
16 history calculations and the resulting effective advisory Guidelines
17 range of 65 to 75 months’ imprisonment (which includes the mandatory
18 consecutive 24 months). For the reasons described below, the
19 government believes that a custodial sentence within this range is
20 appropriate and that a variance below the Guidelines (as defendant
21 requests) is not warranted in this case. 1 The government also
22 addresses the other components of defendant’s sentence below.
23 III. DEFENDANT’S OFFENSE CONDUCT
24 Defendant was actively involved in numerous aspects of his and
25 his codefendants’ fraudulent scheme to submit fraudulent Paycheck
26
27 1Consistent with its obligations under the parties’ plea
agreement, the government does not make a recommendation as to the
28 appropriate point within the applicable advisory Guidelines range.
2
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 7 of 20 Page ID #:17490
1 Protection Program (“PPP”) and Economic Injury Disaster Loan (“EIDL”)
2 program loan applications from March 2020 through August 2020. (PSR
3 ¶ 31.)
4 Defendant used or was associated with multiple synthetic or
5 stolen individual identities that were central to the fraudulent
6 scheme. For example, defendant used the synthetic identity “Anton
7 Kudiumov” to submit seven separate PPP and EIDL loan applications on
8 behalf of four separate fictitious businesses or businesses defendant
9 knew not to have actual operations. (Id. ¶ 37.) For three of those
10 supposed business entities (“Fadehaus Barbershop,” “Redline Auto
11 Mechanics,” and “TM Events Inc.”), defendant submitted or caused to
12 be submitted both a fraudulent PPP loan application to an
13 institutional lender and a fraudulent EIDL loan application to the
14 United States Small Business Administration (SBA), doubling down on
15 the fraud. (Id.)
16 Defendant used other synthetic or misappropriated identities in
17 furtherance of the fraudulent scheme. Defendant knowingly used the
18 synthetic identity “Viktoria Kauichko,” among other things adding
19 this name to the lease of an apartment he rented on Canoga Avenue in
20 Woodland Hills in order to aid in the submission of additional
21 fraudulent loan applications that used this fraudulent applicant name
22 and purported address. (Id. ¶ 32.) At codefendant Richard
23 Ayvazyan’s direction, defendant collected mail at the Canoga Avenue
24 apartment that was addressed to “Viktoria Kauickho” and other
25 purported names identified as business owners in connection with
26 fraudulent PPP/EIDL loan applications. (Id. ¶ 32.) The Kauichko
27 identity was used in six fraudulent PPP or EIDL loan applications,
28
3
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1 including four separate loan applications submitted on behalf of the
2 purported company “Fiber One Media, Inc.” (Id. ¶ 37.)
3 Defendant also used the name “Anna Manukyan” to submit five
4 additional PPP or EIDL applications on behalf of three separate
5 purported businesses (“Manukyan Construction,” “Apex Health and
6 Safety Consultants,” and “Greenshop Hydro Inc.”). (Id.) And
7 defendant went so far as to use his father’s name, Artashes
8 Grigoryan, to submit two additional fraudulent PPP and EIDL loan
9 applications for the business G&A Diamonds, lying about the number of
10 employees the business had (it had none) and the intention to use the
11 loan proceeds for business purposes (they were not). (Id. ¶¶ 34, 37,
12 71.)
13 In connection with the fraudulent PPP and EIDL loan applications
14 he submitted, defendant used and submitted numerous fraudulent
15 materials to further the scheme. For example, as part of a PPP
16 application on behalf of the fictitious company “Redline Auto
17 Mechanics” for $276,600 (the basis for Count 19 to which defendant
18 pleaded guilty), 2 defendant submitted a copy of a fraudulent
19 California’s driver’s license in the name of the synthetic identity
20 “Anton Kudiumov” and the address of the Canoga Avenue apartment.
21 (Id. ¶ 35.) Defendant also submitted a fake payroll report in
22 support of this loan application, using a form that fraudulently
23 purported to have been prepared by payroll service provider Gusto.
24
25 2
According to defendant, he has been employed by Redline Auto
Collision (as distinguished from Redline Auto Mechanics) in Sun
26 Valley, California since 2018. (PSR ¶ 93.) Redline Auto Collision
is or was operated by codefendant Edvard Paronyan (id.), and was used
27 by defendant Paronyan to submit two separate fraudulent PPP and EIDL
loan applications (see ECF 469 (Defendant Paronyan Plea Agreement)
28 ¶ 11).
4
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 9 of 20 Page ID #:17492
1 (Id.) Defendant further submitted a fake Internal Revenue Service
2 Form 940, which falsely listed an annual payroll amount for Redline
3 Auto Mechanics, a fictitious company with no actual operations.
4 (Id.)
5 In order to seek to further lend the appearance of legitimacy to
6 this fake tax document, the Form 940 listed an actual tax preparer,
7 victim A.F., as the preparer of the form, when in fact A.F. had no
8 idea his/her name and identifying information were being used. (Id.)
9 Defendant knew A.F. was a real person and that defendant did not have
10 authority to use A.F.’s name. (Id.) Defendant’s knowing possession,
11 use, and transfer of A.F.’s name without lawful authority in
12 connection with the Redline Auto Mechanics fraudulent PPP loan
13 submission (i.e., aggravated identity theft) forms the basis for the
14 24-month mandatory consecutive custodial sentence defendant faces in
15 this case. (Id.)
16 In all, as part of the same course of conduct and common scheme
17 and plan as defendant’s offenses of conviction, defendant submitted,
18 caused to be submitted, or was otherwise associated with twenty
19 fraudulent PPP/EIDL loan applications. (Id. ¶ 37.) These loan
20 applications collectively sought $3,405,282 in fraudulent proceeds
21 and caused the actual loss of $2,684,798 to victim lenders and the
22 SBA. 3 (Id.; see also Appendix A.)
23 IV. ADVISORY SENTENCING GUIDELINES CALCULATION
24 Applying the November 1, 2018 Sentencing Guidelines, and taking
25 into account relevant conduct, the USPO calculated defendant’s total
26
For the reasons explained in section VI.C herein, the intended
3
27 loss amount in the PSR should be corrected from $3,398,282 to
$3,405,282, and the actual loss amount should be corrected from
28 $2,602,798 to $2,684,798.
5
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 10 of 20 Page ID #:17493
1 offense level for Count 19 (bank fraud) as 22 based on the following
2 calculations: base offense level of 7 under U.S.S.G. § 2B1.1(a)(1);
3 16 additional levels for an intended loss of $3,405,282 (greater than
4 $1,500,000 but less than $3,500,000) under U.S.S.G. § 2B1.1(b)(1)(I);
5 2 additional levels for the offense conduct involving sophisticated
6 means under U.S.S.G. § 2B1.1(b)(10)(C); and a 3-level reduction for
7 acceptance of responsibility under U.S.S.G. §§ 3E1.1(a) and (b).
8 (PSR ¶¶ 45-58.) With respect to Count 23 (aggravated identity
9 theft), the USPO found that the mandatory consecutive 24-month
10 sentence applies by application of statute under U.S.S.G. § 2B1.6.
11 In addition, the USPO determined that defendant has zero criminal
12 history points, resulting in a Criminal History Category I. (See id.
13 ¶¶ 61-65.) With a total offense level of 22 (for Count 19) and a
14 Criminal History Category I, the resulting advisory Guidelines range
15 is 41 to 51 months’ imprisonment for the bank fraud offense.
16 Accounting for the mandatory consecutive 24-month sentence for the
17 aggravated identity theft offense (Count 23), the effective advisory
18 Guidelines range is 65 to 75 months’ imprisonment.
19 V. SECTION 3553(a) FACTORS
20 The Court should impose a sentence sufficient, but not greater
21 than necessary, to reflect the purposes of sentencing identified in
22 18 U.S.C. § 3553(a). United States v. Carty, 520 F.3d 984, 991 (9th
23 Cir. 2008). The advisory Guidelines range provides the “starting
24 point and . . . initial benchmark” for this Court’s consideration of
25 an appropriate sentence. Molina-Martinez v. United States, 136 S.Ct.
26 1338, 1345 (2016) (quoting Gall v. United States, 552 U.S. 38, 49
27 (2007)). Although the Guidelines are not binding, they “reflect a
28
6
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 11 of 20 Page ID #:17494
1 rough approximation of sentences that might achieve section 3553(a)’s
2 objectives.” United States v. Rita, 551 U.S. 338, 350 (2007).
3 Under 18 U.S.C. § 3553(a), in arriving at the appropriate
4 sentence, the Court should consider, among other factors, the nature
5 and circumstances of the offense and the history and characteristics
6 of the defendant, § 3553(a)(1); the need for the sentence imposed to
7 reflect the seriousness of the offense, to promote respect for the
8 law, and to provide just punishment for the offense, § 3553(a)(2)(A);
9 the need for the sentence imposed to afford adequate deterrence to
10 criminal conduct, § 3553(a)(2)(B); the need for the sentence imposed
11 to protect the public from further crimes of the defendant,
12 § 3553(a)(2)(C); and the need to avoid unwarranted sentence
13 disparities, § 3553(a)(6).
14 VI. GOVERNMENT’S SENTENCING RECOMMENDATION
15 A. Term of Custody
16 In light of the relevant 18 U.S.C. § 3553(a) factors, a sentence
17 within the advisory Guidelines range of 65 to 75 months’ imprisonment
18 is sufficient, but not greater than necessary, to achieve the goals
19 of sentencing in this case.
20 1. Nature and Circumstances of the Offense and History
and Characteristics of the Defendant (18 U.S.C.
21 § 3553(a)(1))
22 Defendant’s involvement in the fraudulent scheme to submit
23 fraudulent PPP and EIDL loan applications was integral and extensive.
24 Defendant used or facilitated the use of multiple identities,
25 including the synthetic identities “Anton Kudiumov” and “Viktoria
26 Kauichko,” in the submission of twenty fraudulent PPP and EIDL loan
27 applications. The applications were in the names of a variety of
28
7
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 12 of 20 Page ID #:17495
1 purported businesses, many of which were fictitious or did not have
2 actual operations as reflected in the fraudulent applications. The
3 same purported businesses were used multiple times to submit
4 fraudulent applications, both to institutional lenders and the SBA.
5 Defendant leased the Canoga Avenue apartment that was used as
6 the supposed associated address for purported applicants for a number
7 of these fraudulent loan applications. Defendant coordinated with
8 codefendant Richard Ayvazyan in controlling the Canoga Avenue
9 apartment for this illicit purpose. Defendant’s leasing and control
10 of the Canoga Avenue apartment further enabled the overall fraudulent
11 scheme. By adding the Kauichko synthetic identity to the lease,
12 defendant provided fuel to the fiction that Kauichko was a real
13 person that could legitimately apply for PPP/EIDL loans, in the same
14 vein that defendant used the Canoga Avenue apartment as the purported
15 address of “Anton Kudiumov” for loan applications submitted in the
16 name of that synthetic identity.
17 In addition to the fraudulent loan applications themselves,
18 defendant submitted or caused the submission of the three chief types
19 of fraudulent documents used to paper and perpetrate the scheme: fake
20 driver’s licenses, fake IRS tax forms, and fake Gusto payroll
21 reports. Defendant used all three of these fraudulent devices in the
22 Redline Auto Mechanics PPP application, making it more difficult for
23 the lender to detect the fraud. Defendant used the stolen identity
24 of one victim (tax preparer A.F.) to lend further credence to the
25 appearance of the fabricated IRS tax form in this application.
26 Defendant’s history and characteristics do not mitigate the
27 deliberate and calculated nature of his involvement in the fraudulent
28
8
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 13 of 20 Page ID #:17496
1 scheme to warrant a variance below the advisory Guidelines range,
2 which defendant seeks in this case. 4 By all accounts from the PSR,
3 defendant appears to have had a stable and supportive upbringing,
4 both prior to emigrating to the United States and since arriving here
5 and being naturalized as a citizen in 2012. While defendant provided
6 background information to the USPO about certain substance abuse
7 issues, 5 any such issues do not excuse nor explain defendant’s
8 engaging in a sophisticated and elaborate fraudulent scheme over the
9 course of approximately five months. Defendant’s involvement in the
10 scheme was intentional and prolonged and not on account of a
11 momentary lapse of judgment. Moreover, defendant’s lack of prior
12 criminal convictions is reflected in his Criminal History Category I
13 and the resulting advisory Guidelines range. 6
14 In sum, the nature and circumstances of defendant’s offenses of
15 conviction and relevant conduct typified the hallmarks of the fraud
16 at the heart of the PPP/EIDL scheme and the coordination that was
17 necessary to execute the extensive and sophisticated scheme.
18 Defendant’s history and characteristics do not warrant a sentence
19 below the advisory Guidelines range.
20
21
22
23
4 Defendant seeks a custodial sentence of 40 months in prison.
24 (See ECF 1054.)
5 These issues are reflected in the publicly-filed modification
25 of the conditions of defendant’s pretrial release as well as
defendant’s sentencing position. (See ECF 873, 1054.)
26
6 Defendant had two prior state arrests in 2016 (including one
27 for identity theft) that were not prosecuted for lack of sufficient
evidence. Defendant also has a pending state court case for identity
28 theft and possession of a controlled substance. (PSR ¶¶ 67-69.)
9
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 14 of 20 Page ID #:17497
1 2. Seriousness of the Offense, Respect for the Law, and
Just Punishment (18 U.S.C. § 3553(a)(2)(A))
2
3 A custodial sentence within the advisory Guidelines range is
4 also needed in this case to reflect the seriousness of the offense,
5 promote respect for the law, and provide just punishment for the
6 offense.
7 As described further in sections III and VI.A.1 above, the scope
8 and execution of defendant’s offenses of conviction and relevant
9 conduct make plain the seriousness of the offense. The context in
10 which the fraudulent scheme was carried out only underscores the
11 gravity of the offenses. Defendant and his co-schemers sought
12 critical COVID-19 disaster relief funds as the pandemic paralyzed the
13 economy in the spring and summer of 2020. While businesses and their
14 employees were trying to make ends meet, defendant turned his
15 attention to exploiting the national emergency. The use of multiple
16 synthetic or misappropriated identities, sham business entities, and
17 fraudulent back-up documentation sought to deceive institutional
18 lenders and the SBA as they worked to meet the vital needs of
19 legitimate businesses. Defendant’s and his co-schemers’ conduct was
20 as brazen as it was callous, causing the submission of multiple
21 fraudulent loan applications in the names of the same purported
22 companies to the victim lenders and SBA. The intricacies and
23 coordination of the scheme which defendant and his codefendants
24 carried out against the backdrop of an unprecedented public health
25 and economic crisis reflect a significant lack of respect for the law
26 and the need for just punishment in this case.
27
28
10
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 15 of 20 Page ID #:17498
1 Based on the fraudulent conduct for which the parties agree
2 defendant should be held accountable, defendant and his codefendants
3 caused the submission of 20 fraudulent loan applications seeking
4 $3,405,282 in fraudulent loan proceeds. The corresponding 16
5 additional levels under the loss table and the 2 additional levels
6 for sophisticated means appropriately capture the nature and scope of
7 defendant’s fraudulent conduct. See U.S.S.G. § 2B1.1 cmt. backgr.
8 (“[O]rdinarily, the sentences of defendants convicted of federal
9 offenses should reflect the nature and magnitude of the loss caused
10 or intended by their crimes. Accordingly, along with other relevant
11 factors under the guidelines, loss serves as a measure of the
12 seriousness of the offense and the defendant’s relative culpability
13 and is a principal factor in determining the offense level under this
14 guideline.”) The reduction of three levels for defendant’s
15 acceptance of responsibility also adequately accounts for defendant’s
16 willingness to be held responsible for his conduct. And the
17 inclusion of the 24-month mandatory term of imprisonment in the
18 effective Guidelines range based on defendant’s aggravated identity
19 theft conviction appropriately accounts for the seriousness of that
20 offense.
21 The resulting advisory Guidelines range of 65 to 75 months’
22 imprisonment is the proper measure of the seriousness of defendant’s
23 offense conduct, and a sentence within that range is sufficient, but
24 not greater than necessary to strike the right balance of achieving
25 the goals of sentencing in this case.
26
27
28
11
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 16 of 20 Page ID #:17499
1 3. Affording Adequate Deterrence and Protecting the
Public from Further Crimes of the Defendant (18 U.S.C.
2 § 3553(a)(2)(B) and (C))
3 A Guidelines sentence in this case would also serve as an
4 effective deterrent, both as to defendant and others in society more
5 broadly.
6 With respect to specific deterrence, defendant acted with
7 volition and intent in engaging in the fraudulent scheme over the
8 course of a number of months and at the height of the pandemic, with
9 the backdrop of the unfolding economic disaster. The fraudulent
10 scheme was sophisticated and designed to deceive numerous victims,
11 including the federal government, and to evade law enforcement
12 detection. Defendant needs to be deterred from engaging in the same
13 criminal calculus after he serves a term of custody in this case.
14 The government also notes several additional factors for the
15 Court’s consideration. While defendant has been on pretrial release
16 in this case, the USPO has filed two Pretrial Violation Reports. The
17 first alleged that defendant had not disclosed certain information to
18 Pretrial Services following his arrest that he later provided to the
19 USPO, ultimately leading to additional conditions of pretrial
20 release. (See ECF 871, 873.) The second alleged separate issues
21 relating to a trip defendant took in or around August 2021, with a
22 recommendation to the Court that no action be taken at that time.
23 (See ECF 962.) To the extent these issues reflect on defendant’s
24 appreciation of the magnitude of the instant proceedings and his
25 underlying criminal conduct, a Guidelines sentence is necessary to
26 impress upon defendant the consequences of his choices.
27
28
12
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 17 of 20 Page ID #:17500
1 The sentence here should also deter others from similarly
2 exploiting the ongoing pandemic or a future national economic crisis
3 where federally-backed resources are made available for those who
4 need them most. Similar to the need to promote respect for the law,
5 a sentence within the Guidelines range in a case such as this will
6 signal to other potential wrongdoers that they will be held
7 accountable for taking advantage of national emergencies.
8 With these factors in mind, the government respectfully submits
9 that defendant should receive a custodial sentence within the
10 advisory Guidelines range and not receive a variance below the
11 Guidelines. Such a custodial sentence is sufficient, but not greater
12 than necessary, to achieve the goals of sentencing in this case.
13 B. Supervised Release
14 The government concurs with the USPO’s recommended term of four
15 years of supervised release following defendant’s release from
16 prison. The government recommends one additional special condition
17 of supervised release in light of defendant’s underlying financial
18 crimes and fraudulent conduct. Specifically, the government
19 recommends that defendant shall be prohibited from engaging in any
20 financial transaction in an amount of $10,000 or greater unless he
21 obtains prior approval from the USPO. This condition was imposed as
22 one of defendant’s pretrial release conditions in this case (ECF
23 191), and, in light of the alleged conduct described in the Pretrial
24 Violation Report filed with the Court on September 13, 2021 (ECF
25 962), the government believes this condition should be reimposed when
26 defendant commences supervised release following incarceration. This
27 condition is aimed at protecting the public from further financial
28
13
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 18 of 20 Page ID #:17501
1 crimes of defendant, which is reasonably related to the sentencing
2 factors described more fully above. U.S.S.G. § 5D1.3(b).
3 C. Restitution, Fine, and Mandatory Special Assessment
4 The government explained in its response to the PSR that the
5 actual loss amount calculated in the PSR undercounted restitution by
6 a net $75,000, omitting $79,000 in EIDL advance payments disbursed by
7 the SBA and overcounting one fraudulent EIDL loan by $4,000. (See
8 ECF 1036 at 2-4, 9.) In its further review of the underlying loan
9 documentation, the government has identified one additional EIDL
10 advance payment that was undercounted by $2,000 (for the Redline Auto
11 Mechanics EIDL loan) and a $5,000 EIDL advance payment that was
12 omitted (for the G&A Diamonds EIDL loan). The government has updated
13 the loan chart to account for these omissions and attached it to this
14 memorandum as Appendix A. 7 Accounting for this additional $82,000,
15 the government submits that the restitution amount owed in this case
16 as to defendant should be calculated as $2,684,798, not $2,602,798. 8
17 The government takes no position on the imposition of a fine,
18 including the USPO’s recommendation that the Court waive a fine in
19 this case.
20 Finally, the government concurs with the USPO’s recommendation
21 that defendant pay the $200 mandatory special assessment.
22 VII. CONCLUSION
23 For the reasons set forth above, the government respectfully
24 requests that defendant be sentenced as follows: (1) a custodial
25
7 The government provided a copy of the updated loan and loss
26 chart to defendant and the USPO.
27 8 For the same reasons, the amount of restitution to be ordered
as payable to the SBA should be adjusted to $1,480,000 instead of
28 $1,398,000.
14
Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 19 of 20 Page ID #:17502
1 sentence within the effective advisory Guidelines range of 65 to 75
2 months’ imprisonment; (2) a four-year period of supervised release to
3 follow; (3) restitution of $2,684,798; (4) a fine, if any, to be
4 determined by the Court; and (5) a mandatory special assessment of
5 $200.
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Case 2:20-cr-00579-SVW Document 1055 Filed 10/18/21 Page 20 of 20 Page ID #:17503
1 APPENDIX A
2
Company Applicant Amount Lender Status Advance
3 Fadehaus Anton
$150,000 SBA Disbursed $10,000
Barbershop Kudiumov
4 Fadehaus Anton
$182,637 WebBank Cancelled
Barbershop Kudiumov
5 Nelson's Anton
$49,000 SBA Disbursed $7,000
Nursery Kudiumov
6 Redline Auto Anton
$150,000 SBA Disbursed $9,000
Mechanics Kudiumov
7
Redline Auto Anton
$276,600 Celtic Bank Disbursed
8 Mechanics Inc. Kudiumov
Anton
TM Events Inc. $276,600 Newtek Disbursed
9 Kudiumov
Anton
TM Events Inc. $150,000 SBA Disbursed $7,000
10 Kudiumov
Manukyan Anna Cross River
$131,195 Disbursed
11 Construction Manukyan Bank
Manukyan Anna
12 $131,195 Celtic Bank Cancelled
Construction Manukyan
Artashes
13 G&A Diamonds $145,000 SBA Disbursed $5,000
Grigoryan
Artashes Cross River
14 G&A Diamonds $113,750 Disbursed
Grigoryan Bank
15 Apex Health
Anna
and Safety $150,000 SBA Disbursed $10,000
Manukyan
16 Consultants
Greenshop Anna
$150,000 SBA Disbursed $10,000
17 Hydro Inc Manukyan
Manukyan Anna
$150,000 SBA Disbursed $10,000
18 Construction Manukyan
Runyan Tax Viktoria Seattle
19 $276,653 Disbursed
Service, Inc Kauichko Bank
Journeymen Viktoria
20 $150,000 SBA Disbursed $8,000
Construction Kauichko
Fiber One Viktoria
21 $150,000 SBA Disbursed $10,000
Media, Inc. Kauichko
22 Fiber One Viktoria
$276,652 WebBank Cancelled
Media, Inc. Kauichko
23 Fiber One Viktoria
$130,000 Celtic Bank Cancelled
Media, Inc. Kauichko
24 Fiber One Viktoria
$130,000
Ready
Disbursed
Media, Inc. Kauichko Capital
25
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