Government’s Opposition to Defendant A. Ayvazyan’s and Defendant T. Dadyan’s Motion to Suppress (ECF 149) — United States v. Richard Ayvazyan et al., No. 2:20-cr-00579-SVW (Dkt. 207, C.D. Cal.)
Summary
Federal prosecutors filed this March 22, 2021 opposition to Artur Ayvazyan’s and Tamara Dadyan’s motion to suppress evidence from the search of their Encino residence, which the government says was used to obtain millions of dollars in COVID-19 disaster relief funds with fake and stolen identities. The government says an FBI SWAT team first secured the property because of the couple’s history of possessing firearms and ties to the “Armenian Power” gang, and that agents seized 12 firearms. It lists seized identity documents, loan applications, rubber stamps purportedly belonging to California state and federal courts and a closing letter addressed to “Anton Kudiumov,” which it calls a synthetic identity used to apply for numerous PPP and EIDL loans. It argues the warrant was particular and not overbroad, and says it has until July 3, 2021 to finish reviewing digital devices.
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Case 2:20-cr-00579-SVW Document 207 Filed 03/22/21 Page 1 of 27 Page ID #:1684
1 TRACY L. WILKISON
Acting United States Attorney
2 BRANDON D. FOX
Assistant United States Attorney
3 Chief, Criminal Division
SCOTT PAETTY (Cal. Bar No. 274719)
4 BRIAN FAERSTEIN (Cal. Bar No. 274850)
Assistant United States Attorneys
5 Major Frauds/Environmental and Community Safety Crimes Sections
1100/1300 United States Courthouse
6 312 North Spring Street
Los Angeles, California 90012
7 Telephone: (213) 894-6527/3819
Facsimile: (213) 894-6269/0141
8 E-mail: Scott.Paetty@usdoj.gov/Brian.Faerstein@usdoj.gov
9 DANIEL S. KAHN
Acting Chief, Fraud Section
10 Criminal Division, U.S. Department of Justice
CHRISTOPHER FENTON
11 Trial Attorney, Fraud Section
Criminal Division, U.S. Department of Justice
12 1400 New York Avenue NW, 3rd Floor
Washington, DC 20530
13 Telephone: (202) 320-0539
Facsimile: (202) 514-0152
14 E-mail: Christopher.Fenton@usdoj.govv
15 Attorneys for Plaintiff
UNITED STATES OF AMERICA
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UNITED STATES DISTRICT COURT
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FOR THE CENTRAL DISTRICT OF CALIFORNIA
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UNITED STATES OF AMERICA, No. CR 20-579(A)-SVW
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Plaintiff, GOVERNMENT’S OPPOSITION TO
20 DEFENDANT A. AYVAZYAN’S AND
v. DEFENDANT T. DADYAN’S MOTION TO
21 SUPPRESS (ECF 149); DECLARATIONS
RICHARD AYVAZYAN, OF CHRISTOPHER FENTON AND TIMOTHY
22 aka “Richard Avazian” and MASSINO; EXHIBITS
“Iuliia Zhadko,”
23 MARIETTA TERABELIAN, Hearing Date: April 12, 2021
aka “Marietta Abelian” and Hearing Time: 11:00 a.m.
24 “Viktoria Kauichko,” Location: Courtroom of the
ARTUR AYVAZYAN, Hon. Stephen V.
25 aka “Arthur Ayvazyan,” and Wilson
TAMARA DADYAN,
26 MANUK GRIGORYAN,
aka “Mike Grigoryan,” and
27 “Anton Kudiumov,”
ARMAN HAYRAPETYAN,
28 EDVARD PARONYAN,
Case 2:20-cr-00579-SVW Document 207 Filed 03/22/21 Page 2 of 27 Page ID #:1685
1 aka “Edvard Paronian” and
“Edward Paronyan,” and
2 VAHE DADYAN,
3 Defendants.
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5 Plaintiff United States of America, by and through its counsel
6 of record, the Acting United States Attorney for the Central District
7 of California and Assistant United States Attorneys Scott Paetty and
8 Brian Faerstein, and United States Department of Justice Trial
9 Attorney Christopher Fenton, hereby files its Opposition to defendant
10 Artur Ayvazyan’s and defendant Tamara Dadyan’s Motion to Suppress
11 (ECF No. 149).
12 This opposition is based upon the attached memorandum of points
13 and authorities, the Declaration of Christopher Fenton and attached
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Case 2:20-cr-00579-SVW Document 207 Filed 03/22/21 Page 3 of 27 Page ID #:1686
1 exhibits, the Declaration of Timothy Massino, the files and records
2 in this case, and such further evidence and argument as the Court may
3 permit.
4 Dated: March 22, 2021 Respectfully submitted,
5 TRACY L. WILKISON
Acting United States Attorney
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BRANDON D. FOX
7 Assistant United States Attorney
Chief, Criminal Division
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9 /s/
SCOTT PAETTY
10 BRIAN FAERSTEIN
Assistant United States Attorneys
11 CHRISTOPHER FENTON
Department of Justice Trial Attorney
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Attorneys for Plaintiff
13 UNITED STATES OF AMERICA
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Case 2:20-cr-00579-SVW Document 207 Filed 03/22/21 Page 4 of 27 Page ID #:1687
1 TABLE OF CONTENTS
2 DESCRIPTION PAGE
3 I. INTRODUCTION .................................................... 1
4 II. STATEMENT OF FACTS .............................................. 2
5 A. The Investigation ......................................... 2
6 B. Firearm Possession and Ties to Organized Crime ............ 4
7 C. The Complaints............................................. 6
8 D. The Search Warrant ........................................ 6
9 E. The Search ................................................. 9
10 III. ARGUMENT ....................................................... 12
11 A. The Search Warrant Is Sufficiently Particular ............ 14
12 B. The Search Warrant Is Not Overbroad ...................... 17
13 C. The Execution of the Search Warrant Was Reasonable....... 19
14 D. No Evidence Should Be Excluded Because the Agents
Acted in Good Faith ...................................... 20
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E. The Government Obtained an Order Extending Its Time to
16 Review Digital Devices for Responsiveness ................ 21
17 IV. CONCLUSION ..................................................... 21
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Case 2:20-cr-00579-SVW Document 207 Filed 03/22/21 Page 5 of 27 Page ID #:1688
1 TABLE OF AUTHORITIES
2 DESCRIPTION PAGE
3 Federal Cases
4 Horton v. California,
496 U.S. 128 (1990) ............................................ 19
5
Illinois v. Gates,
6 462 U.S. 213 (1983) ............................................ 19
7 United States v. Adjani,
8 452 F.3d 1140 (9th Cir. 2006) .................................. 13
9 United States v. Banks,
556 F.3d 967 (9th Cir. 2009) ................................... 13
10
United States v. Fannin,
11 817 F.2d 1379 (9th Cir. 1987) .................................. 14
12 United States v. Gourde,
440 F.3d 1065 (9th Cir. 2006) .................................. 19
13
United States v. Hayes,
14 794 F.2d 1348 (9th Cir. 1986) .................................. 14
15 United State v. Holzman,
871 F.2d 1496 (9th Cir. 1989) .................................. 19
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United States v. Leon,
17 468 U.S. 897 (1984) ........................................ 20, 21
18 United States v. Riley,
906 F.2d 841 (2d Cir. 1990) .................................... 14
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United States v. Rude,
20 88 F.3d 1538 (9th Cir. 1996) ................................... 13
21 United States v. SDI Future Health, Inc.,
568 F.3d 684 (9th Cir. 2009) ................................... 14
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United States v. Spilotro,
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800 F.2d 864 (9th Cir. 1986) ............................... 13, 14
24 Federal Statutes
25 15 U.S.C. § 645(A) ................................................. 7
26 18 U.S.C. § 1014 ................................................... 7
18 U.S.C. § 1028A .................................................. 7
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18 U.S.C. § 1343 ................................................... 7
28 18 U.S.C. § 1344 ................................................... 7
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1 TABLE OF AUTHORITIES (CONTINUED)
2 DESCRIPTION PAGE
3 18 U.S.C. § 1349 ................................................... 7
4 18 U.S.C. §§ 1956 (a), (h) ........................................ 7
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1 I. INTRODUCTION
2 The warrant at issue authorized the search of an Encino
3 residence used in connection with a massive scheme to fraudulently
4 obtain millions of dollars in COVID-19 disaster relief funds using
5 fake and stolen identities and business names. The defendants who
6 lived there – Artur Ayvazyan (“A. Ayvazyan”) and his wife Tamara
7 Dadyan (“T. Dadyan”) – had a history of possessing firearms and ties
8 to the “Armenian Power” gang. Law enforcement took measures to
9 protect officer safety, including to have an FBI SWAT team initially
10 secure the property. The safety precautions proved necessary: agents
11 seized an arsenal of 12 firearms, ammunition and empty magazines.
12 Agents also seized an overwhelming amount of evidence showing
13 defendants’ role in the fraud, including driver’s licenses, social
14 security cards, credit cards, and personally identifiable information
15 for dozens of fake, stolen, and synthetic identities, many of which
16 were used to apply for COVID-19 disaster relief loans; fraudulent
17 COVID-19 disaster relief loan applications; and blank checks and bank
18 records for fake and stolen businesses, including businesses that
19 applied for COVID-19 disaster relief loans. Agents also found
20 evidence related to the creation of fraudulent documents, including
21 official-looking rubber stamps purportedly belonging to California
22 state and federal courts, including the Clerk for the United States
23 Bankruptcy Court for the Central District of California.
24 Defendants do not dispute that the warrant was sufficiently
25 particular and narrow to permit the seizure of the overwhelming
26 evidence showing their role in the fraud. Defendants only
27 specifically challenge the government’s seizure of (i) defendant A.
28 Ayvazyan’s truck GPS systems (which may contain evidence of his
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1 travels to locations used as part of the scheme); and (ii) an
2 envelope of $2,100 in cash that defendant T. Dadyan claims belonged
3 to her daughter (but that was found in a safe alongside a plastic
4 grocery bag stuffed with an additional $12,500 in cash and
5 defendants’ passports).
6 The search warrant was amply supported by probable cause, and
7 was executed in a targeted fashion by law enforcement agents who
8 acted pursuant to the terms of the warrant in a professional manner
9 and with good faith that the warrant, which was authorized by U.S.
10 Magistrate Judge Alka Sagar, was valid. For all of these reasons,
11 the Court should deny defendants’ motion to suppress.
12 II. STATEMENT OF FACTS
13 A. The Investigation
14 In June 2020, the government opened an investigation into a Los
15 Angeles-based ring that was using stolen, fake, and synthetic
16 identities to fraudulently apply for COVID-19 relief funds.
17 (Declaration of Timothy Massino (“Massino Decl.”) ¶ 1.) Over the
18 next four months, the government served over 200 subpoenas, obtaining
19 information from federal and state agencies, lenders, retail banks,
20 and escrow companies, among others. (Id. ¶ 2.) The investigation
21 identified dozens of fraudulent loan applications that had been
22 submitted on behalf of fake businesses or businesses whose identities
23 had been stolen. (See generally ECF 1 (“Ayvazyan Compl.”); United
24 States v. Dadyan, et al., 20-mj-5321 (filed Nov. 3, 2020), ECF 1
25 (“Dadyan Compl.”).) Defendants A. Ayvazyan and T. Dadyan submitted
26 some of these fraudulent applications using their own names; others
27 they and their co-conspirators submitted using fake or stolen
28 identities. (See generally Ayvazyan Compl., Dadyan Compl.) The
2
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1 investigation further revealed that fraudulent documents had been
2 submitted in support of the applications, including fake driver’s
3 licenses, federal tax forms, payroll reports, and bank statements.
4 (Affidavit, In the Matter of the Search of [REDACTED] Encino
5 California 91316, No. 2:20-MJ-05286 (“SW Aff.”) ¶¶ 29, 41-42, 50.)
6 The investigation determined that four residences were being
7 used in connection with fraud, including SUBJECT PREMISES-4, which is
8 where defendants A. Ayvazyan and T. Dadyan reside. (SW Aff. ¶¶ 8-11,
9 17, 39, 47, 52.) The investigation revealed that these four
10 addresses were used in connection with the fraudulent loan
11 applications or with the bank accounts used to receive and launder
12 the criminal proceeds, or both. (Id.) For example, SUBJECT
13 PREMISES-4 was listed as the business address for Allstate Towing and
14 Transport LLC and Secureline Realty and Funding Inc., which,
15 together, fraudulently applied for over $500,000 in disaster relief
16 loans. (SW Aff. ¶ 39; Dadyan Compl. ¶¶ 15-47.)
17 Law enforcement agents traced the funds and learned that a
18 substantial amount of the proceeds had been laundered through various
19 bank accounts and had been used by defendant A. Ayvazyan’s brother,
20 defendant Richard Ayvazyan (“R. Ayvazyan”), and sister-in-law,
21 defendant Marietta Terabelian, to purchase three luxury properties.
22 (Ayvazyan Compl. ¶¶ 5, 16-26, 27-33; Dadyan Compl. ¶¶ 5, 23-24, 47;
23 SW Aff. ¶¶ 5-7, 23, 26-29, 34.) The investigation also revealed that
24 a substantial portion of the stolen disaster relief funds had been
25 funneled through various bank accounts, and that large amounts of the
26 funds had not yet been located and were believed to have been
27 liquidated to cash. (SW Aff. ¶¶ 62.f-g.)
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Case 2:20-cr-00579-SVW Document 207 Filed 03/22/21 Page 10 of 27 Page ID #:1693
1 Law enforcement agents began conducting surveillance on the
2 seven properties, including, in some instances, to search the trash
3 left outside for pickup. (SW Aff. ¶¶ 25, 32-33, 35, 38, 43-44, 59.)
4 The surveillance yielded additional evidence that further confirmed
5 the relationship between the properties and their use as part of the
6 fraud. For example, at SUBJECT PREMISES-4, agents found:
7 • a copy of a California driver’s license for “T.G.,” which was
8 confirmed to be a fraudulent document;
9 • a social security card for “T.G.”;
10 • an earnings statement for “T.G.” from “Crystalcare Home
11 Health, Inc.,” which had applied for a PPP loan using the name
12 of T. Dadyan’s brother, A.D.;
13 • a FedEx Airbill for “EM Construction,” which had applied for
14 an EIDL loan using the name “A.Z.”;
15 • a closing letter for a real estate transaction addressed to
16 “Anton Kudiumov,” which is a synthetic identity that was used
17 to apply for numerous PPP and EIDL loans; and
18 • correspondence from one of the lenders through which
19 Secureline Realty applied for a PPP loan.
20 (SW Aff. ¶¶ 43-44.)
21 B. Firearm Possession and Ties to Organized Crime
22 As part of its investigation, law enforcement conducted
23 background checks which revealed that, in 2012, defendants R.
24 Ayvazyan and Terabelian both pled guilty to conspiracy to commit bank
25 fraud for their role in a four-year scheme to defraud several
26 financial institutions. (See United States v. Ayvazyan, et al., CR
27 11-180-CJC (CDCA).) At the time that he pled guilty, defendant R.
28 Ayvazyan owned at least five firearms including: one Taurus Forjas 38
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1 Caliber Revolver; one semi-automatic Carl Walther P99 Pistol; one
2 semi-automatic Kie Kimber Pistol; one semi-automatic Sig Sauer
3 Pistol; and one Smith and Wesson Revolver. (Declaration of
4 Christopher Fenton (“Fenton Decl.”) ¶ 1, Ex. 1.) After entering his
5 plea, he purportedly sold or transferred his firearms to defendant A.
6 Ayvazyan (id.), who lived with defendant T. Dadyan. In addition, a
7 background check on A. Ayvazyan as of October 27, 2020, showed that
8 he had previously owned at least one semi-automatic Carl Walther P99
9 Pistol. (Id. ¶ 2, Ex. 2.)
10 Surveillance also revealed that defendants had ties to known
11 associates of the “Armenian Power” gang. For example, on October 5,
12 2020, surveillance identified an individual believed to be defendant
13 T. Dadyan leaving one of the properties defendants had purchased
14 using fraudulently obtained disaster relief funds in a black Mercedes
15 SUV registered to A.P. (SW Aff. ¶¶ 35-37.) A.P. is defendant R.
16 Ayvazyan’s brother-in-law and purported business partner. (Id.) In
17 2013, A.P. pled guilty to racketeering conspiracy charges related to
18 the “Armenian Power” criminal enterprise. (Id. (referencing United
19 States v. Darbinyan, et al., 11-cr-72, ECF 2598).) Specifically,
20 A.P. admitted he was an associate of the “Armenian Power” gang and
21 had abetted the illegal possession of a firearm by one of the gang’s
22 leaders. (Id.)
23 Two days after the individual believed to be defendant T. Dadyan
24 had been seen leaving the property driving A.P.’s Mercedes SUV, law
25 enforcement agents searched the trash outside and found empty
26 packages of carbine rifle attachments to include a CTR Stock, an AR-
27 15 pistol grip attachment, a carbine handguard, and a carbine
28 charging handle. (SW Aff. ¶ 38; Fenton Decl. ¶ 3, Ex. 3.) An empty
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1 box of 9mm ammunition was also discovered along with various pieces
2 of mail with the identifying information removed. (Id.)
3 As discussed below, when executing the search warrants for
4 SUBJECT PREMISES-4, among others, an FBI SWAT team made the initial
5 entrance to secure the properties and ensure the safety of the
6 officers who would conduct the searches. These steps proved
7 necessary: at SUBJECT PREMISES-4, as described further below, agents
8 found and seized an arsenal of 12 firearms, including four rifles,
9 two shotguns, and six handguns (pistols and revolvers). (Fenton
10 Decl. ¶ 4, Ex. 4.) The searching agents also found ammunition, empty
11 magazines, and a gun safe. (Id. ¶¶ 5-6, Exs. 5, 6.)
12 C. The Complaints
13 On October 20, 2020, the government filed a complaint against
14 defendants R. Ayvazyan and Terabelian. (See Ayvazyan Compl.) On
15 November 3, 2020, the government filed a complaint against defendants
16 A. Ayvazyan and T. Dadyan. (See Dadyan Compl.) The complaints
17 summarized in detail the evidence establishing probable cause that
18 defendants R. Ayvazyan, Terabelian, A. Ayvazyan, and T. Dadyan
19 participated in a massive conspiracy to commit wire fraud and bank
20 fraud. The complaints detailed the manner and means of the
21 conspiracy (repeated fraudulent applications for disaster relief
22 loans), provided specific examples of fraudulent loan applications
23 defendants had submitted, and traced the flow of disaster relief
24 funds, which showed that these funds had been used to purchase luxury
25 residential properties.
26 D. The Search Warrant
27 On November 3, 2020, the same day the government filed a
28 complaint against defendants A. Ayvazyan and T. Dadyan, the
6
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1 government obtained a warrant to search SUBJECT PREMISES-4, which was
2 defendants A. Ayvazyan’s and T. Dadyan’s residence. The search
3 warrant was authorized by the Honorable Alka Sagar, United States
4 Magistrate Judge, based on an affidavit sworn out by FBI Special
5 Agent Justin Palmerton. The affidavit incorporated by reference the
6 Ayvazyan Complaint and attached a copy as an exhibit. (SW Aff. ¶ 20;
7 Ex. 1.) The warrant authorized the search of SUBJECT PREMISES-4,
8 which was the residential property described in Attachment A-4, for
9 items described in Attachment B.
10 Attachment B limited the agents’ discretion to search by clearly
11 identifying the criminal activity being investigated and by providing
12 an express limitation on the relevant time period.
13 The first sentence of Attachment B states: “[t]he items to be
14 seized are evidence, contraband, fruits, or instrumentalities of
15 violations of 18 U.S.C. § 1343 (Wire Fraud); 18 U.S.C. § 1344 (Bank
16 Fraud); 18 U.S.C. § 1349 (Conspiracy to Commit Wire and Bank Fraud);
17 18 U.S.C. §§ 1956(a) and (h) (Money Laundering and Conspiracy to
18 Commit Money Laundering); 18 U.S.C. § 1014 (False Statements to a
19 Financial Institution); 18 U.S.C. § 1028A (Aggravated Identity
20 Theft); and 15 U.S.C. § 645(A) (False Statements to the Small
21 Business Administration) ... occurring on or after January 1, 2020.”
22 Attachment B then lists specific items to guide the agents
23 conducting the search to determine what they have the authority to
24 seize. The items clearly relate to the fraudulent scheme, which is
25 straightforward: defendants submitted fraudulent loan applications
26 using fake and stolen identities, laundered the proceeds and spent
27 the money for their personal benefit.
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1 For example, the first item to be seized includes records
2 relating to the names of the fake and stolen businesses used to
3 fraudulently apply for loans and launder and misuse the proceeds.
4 (Attachment B ¶ 1.a.) A similar item to be seized includes records
5 relating to the names of the fake, stolen and synthetic individual
6 identities used to fraudulently apply for loans and launder and
7 misuse the proceeds (id. ¶ 1.d), including records concerning the
8 creation, maintenance, or use of these aliases (id. ¶ 1.e).
9 The following items to be seized include related requests, such
10 as:
11 • records concerning the PPP, EIDL, or other SBA or commercial
12 loan programs (id. ¶ 1.b);
13 • records concerning PPP or EIDL loan applications and supporting
14 documentation (id. ¶ 1.c); and
15 • records concerning the creation, alteration, falsification, or
16 use of such supporting documentation (id. ¶ 1.i).
17 The warrant also authorized the seizure of banking and financial
18 records for the specific individuals and entities involved in the
19 fraudulent scheme, which relates both to the falsity of the claims
20 made in the fraudulent loan applications concerning the applying
21 companies’ business activities and operations, and the laundering and
22 spending of loan proceeds: “Banking and financial records for any
23 bank, credit card, and brokerage or investment accounts associated
24 with RICHARD AYVAZYAN, ARTHUR AYVAYZAN, MARIETTA TERABELIAN, TAMARA
25 DADYAN, ANNA MANUKYAN, or any of the other individuals and entities
26 described herein in Attachment B.” (Id. ¶ 1.m.)
27 The warrant also provides for the seizure of cash in amounts
28 greater than $1,000 because: (i) “[i]ndividuals who commit financial
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1 crimes including loan fraud will often liquidate criminal proceeds to
2 cash ... in order to launder the proceeds and profit from the
3 crimes”; and (ii) in this particular case, there remains a large
4 amount of proceeds that law enforcement has not yet located, that
5 defendants could use to flee the jurisdiction. (Attachment B ¶ 1.r;
6 SW Aff. ¶¶ 62.f-g.)
7 Attachment B also provides that agents may seize digital devices
8 found on defendants A. Ayvazyan and T. Dadyan, or at SUBJECT
9 PREMISES-4 (Attachment B ¶¶ 1.t-u, 3-8), based on several of the
10 affiant’s statements about the role that digital devices play in the
11 scheme, including that: “[e]vidence of digital and virtual
12 submissions, such as the fraudulent PPP and EIDL loan applications,
13 are likely to be stored on digital devices that subjects were using
14 to apply for these loans and direct the transfer of the funds.” (SW
15 Aff. ¶ 62.a). Attachment B also sets forth special procedures
16 relating to the search of digital devices, including permitting the
17 agents who conduct the search to seize and transport the digital
18 devices offsite for examination. (Attachment B ¶¶ 4-8.)
19 E. The Search
20 On November 5, 2020, at around 6:00 a.m., law enforcement
21 executed the search warrant on SUBJECT PREMISES-4. In light of
22 concerns about firearms and links to “Armenian Power,” an FBI SWAT
23 team initially entered the property to secure it and ensure the
24 safety of the officers who would conduct the actual search. (Massino
25 Decl. ¶¶ 3-6.) To protect officer safety, the SWAT team disabled
26 security cameras. (Id.) The presence of a tactical unit and
27 disabling of security cameras are commonly used methods to protect
28 law enforcement agents when executing warrants. (Id. ¶ 6.) Recent
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1 events underscore the importance of these tactics for officer safety.
2 For example, on the morning of February 2, 2021, two FBI special
3 agents were shot and killed while serving a warrant on a child
4 pornographer who is believed to have monitored the approach of the
5 agents with a doorbell camera and ambushed the agents through the
6 unopened door with an assault-style rifle. 1
7 Pursuant to the authorized arrest warrants, defendant A.
8 Ayvazyan and T. Dadyan were taken into custody and transported from
9 SUBJECT PREMISES-4. (Fenton Decl. ¶ 7, Ex. 7.) After it secured the
10 property, the SWAT team turned control of the search site over to the
11 search team for the execution of the search warrant. (Id.)
12 The agents who conducted the search seized only 42 items from SUBJECT
13 PREMISES-4. (Fenton Decl. ¶ 4, Ex. 4.) More than one-third of the
14 seized items (15 out of 42) were firearms or firearm accessories.
15 (Id.) Specifically, agents seized an arsenal of 12 firearms,
16 ammunition, and empty magazines, including two Berretta Shotguns, one
17 Savage Rifle with scope, one Henry Repeating Rifle, one Tikka T3X
18 Rifle with scope, one Mossberg Rifle, one Berretta 9MM Pistol, one
19 Smith and Wesson .357 Magnum Pistol, one Colt .45 Pistol, two .38
20 Special Taurus Revolvers, and one Titan .25 Pistol. (Id.) 2
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25 See, e.g., “2 FBI agents killed, three wounded while serving
1
warrant. Gunman, now dead, shot them through the door,” Miami Herald,
26 Feb. 3, 2021, available at
www.miamiherald.com/news/local/crime/article248942479.html.
27
2 Around 14 of the items seized were comprised of records and
28 other documents. Some of the records within some of these items were
organized in multiple folders.
10
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1 Agents also seized items evidencing defendant A. Ayvazyan’s and
2 defendant T. Dadyan’s possession and use of dozens of fake, stolen
3 and synthetic identities to commit fraud, including:
4 • dozens of unauthorized and counterfeit access devices, such as
5 fake and stolen California driver’s licenses, social security
6 cards, and credit cards, including for individuals whose names
7 were used to fraudulently apply for PPP and EIDL loans (Fenton
8 Decl. ¶ 8, Ex. 8);
9 • handwritten and typed lists of personally identifiable
10 information (“PII”) for fake, stolen and synthetic identities,
11 including for names used in furtherance of the fraud (id. ¶ 9,
12 Ex. 9);
13 • lists of “EMAILS FOR BORROWERS,” which were lists of email
14 addresses created for fake, stolen and synthetic identities
15 used to apply for fraudulent loans (id. ¶ 10, Ex. 10);
16 • fraudulent PPP and EIDL loan applications using T. Dadyan’s
17 name and the names of other individuals (id. ¶ 11, Ex. 11);
18 • blank checks and other records for accounts that received PPP
19 and EIDL funds, including blank checks signed by “T.T,” who is
20 recently deceased (id. ¶ 12, Ex. 12); and
21 • official looking rubber stamps, including stamps for the Clerk
22 of the United States Bankruptcy Court for the Central District
23 of California, Los Angeles Registrar-Recorder/County Clerk,
24 the Los Angeles Superior Court, and numerous notaries (id. ¶
25 13, Ex. 13).
26 Defendants A. Ayvazyan and T. Dadyan were also in possession of
27 digital devices believed likely to contain evidence of the fraud
28 including iPhones, iPads, laptop and desktop computers, and truck GPS
11
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1 systems. (Fenton Decl. ¶ 4, Ex. 4.) Agents seized all of these
2 devices for off-site inspection, as permitted by the warrant.
3 (Attachment B ¶ 4.a.) The GPS systems potentially contained evidence
4 relating to defendants’ travel to and from the seven residences used
5 in connection with the fraud, as well as travel to and from other
6 locations that may contain evidence or proceeds.
7 Finally, agents seized a single valuable: $14,600 in U.S.
8 currency found in a safe alongside defendants’ passports. A portion
9 of the money - $2,100 – was in a pink envelope; the rest was in a
10 plastic grocery bag. (Fenton Decl. ¶ 14, Ex. 14.) The cash was in
11 an amount greater than $1,000 and thus subject to seizure pursuant to
12 the warrant authorized by Judge Sagar. (Attachment B ¶ 1.r.) As
13 discussed above, there was probable cause to believe such sizeable
14 amounts of cash were proceeds from the massive fraud, a large portion
15 of which had not yet been located. 3 (SW Aff. ¶¶ 62.f-g.) There was
16 also reason to believe the cash was evidence of defendants’ plans and
17 wherewithal to leave the jurisdiction, which, as the affidavit
18 states, is particularly common for perpetrators of financial crimes
19 of the magnitude being investigated in this case. (Id.)
20 III. ARGUMENT
21 The Fourth Amendment concepts of particularity and overbreadth
22 are distinct. “Particularity is the requirement that the warrant
23 must clearly state what is sought. Breadth deals with the
24
25
26
27
3The remainder of the items seized are all similarly within the
28 scope of the search warrant, which is amply supported by probable
cause in all respects.
12
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1 requirement that the scope of the warrant be limited by the probable
2 cause on which the warrant is based.” United States v. Banks, 556
3 F.3d 967, 972-73 (9th Cir. 2009) (citation omitted).
4 With respect to particularity, a warrant “need only be
5 reasonably specific, rather than elaborately detailed.” United
6 States v. Rude, 88 F.3d 1538, 1551 (9th Cir. 1996) (citation
7 omitted). Specificity is a case-specific determination and “varies
8 depending on the circumstances of the case and the type of items
9 involved.” Id. (quoting United States v. Spilotro, 800 F.2d 959, 963
10 (9th Cir. 1986)).
11 The Ninth Circuit generally considers three factors when
12 determining whether a warrant is sufficiently particular:
13 “(1) whether probable cause exists to seize all items of a particular
14 type described in the warrant; (2) whether the warrant sets out
15 objective standards by which executing officers can differentiate
16 items subject to seizure from those which are not; and (3) whether
17 the government was able to describe the items more particularly in
18 light of the information available to it at the time the warrant was
19 issued.” United States v. Adjani, 452 F.3d 1140, 1148 (9th Cir.
20 2006) (quoting Spilotro, 800 F.2d at 963)).
21 Notably, “[w]arrants which describe generic categories of items
22 are not necessarily invalid if a more precise description of the
23 items subject to seizure is not possible.” Spilotro, 800 F.2d at
24 963. As the Second Circuit explained, even though descriptions of
25 categories of documents to be seized, including illustrations, may
26 not “eliminate all discretion of the officers executing the warrant,
27 . . . the particularity requirement is not so exacting . . . The
28 Fourth Amendment is not violated because the officers executing the
13
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1 warrant must exercise some minimal judgment as to whether a
2 particular document falls within the described category.” United
3 States v. Riley, 906 F.2d 841, 844-45 (2d Cir. 1990).
4 As for overbreadth, the Ninth Circuit has explained that a
5 “warrant must not only give clear instructions to a search team, it
6 must also give legal, that is, not overbroad, instructions.” United
7 States v. SDI Future Health, Inc., 568 F.3d 684, 702 (9th Cir. 2009).
8 Under the Fourth Amendment, “this means that there [must] be probable
9 cause to seize the particular thing[s] named in the warrant.” Id.
10 (citation omitted). “The number of files that could be scrutinized .
11 . . is not determinative. The search and seizure of large quantities
12 of material is justified if the material is within the scope of the
13 probable cause underlying the warrant.” United States v. Hayes, 794
14 F.2d 1348, 1355 (9th Cir. 1986).
15 A warrant that, standing on its own, might be overbroad may
16 still be valid when one of three factors are satisfied: (1) the
17 warrant describes in “detail the items one commonly expects to find
18 on premises used for the criminal activities in question,” or (2) the
19 warrant refers to specific criminal activities, or (3) a descriptive
20 affidavit is attached to and incorporated in the warrant. United
21 States v. Fannin, 817 F.2d 1379, 1384 (9th Cir. 1987) (citing
22 Spilotro, 800 F.2d at 864, 867).
23 A. The Search Warrant Is Sufficiently Particular
24 While contending that the search warrant was “unconstitutionally
25 lacking in particularity,” defendants do not allege any particular
26 facts or law underlying their specific challenge, other than
27 incorporating by reference the motion to suppress filed by
28
14
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1 codefendants R. Ayvazyan and Terabelian. 4 (ECF 149 at 10.) Nor do
2 defendants specifically challenge the seizure of any of the numerous
3 documentary items found at their residence evidencing the extensive
4 fraudulent scheme alleged in the search warrant affidavit.
5 Indeed, as described above, at SUBJECT PREMISES-4, agents seized
6 overwhelming evidence showing defendants’ involvement in the alleged
7 fraud. The evidence seized included dozens of unauthorized and
8 counterfeit access devices, such as fake and stolen California
9 driver’s licenses, social security cards, and credit cards, including
10 for individuals whose name were used to fraudulently apply for PPP
11 and EIDL loans; lists of PII for fake, stolen and synthetic
12 identities; lists of email addresses created for fake, stolen and
13 synthetic identities used to apply for fraudulent loans; PPP and EIDL
14 loan applications; blank checks and other records for accounts that
15 received PPP and EIDL funds; and items used in the creation of
16 fraudulent documents such as rubber stamps for California state and
17 federal courts. All of these items related directly to the
18 fraudulent scheme alleged in the search warrant affidavit: defendants
19 used fake and stolen identities to fraudulently apply for disaster
20 relief loans on behalf of sham companies that do not actually have
21 business operations or activities. Defendants then laundered the
22 funds through bank accounts belonging to these and other sham
23 companies and used them for their personal benefit.
24
25
26
4Rather than repeat the government’s response to defendants R.
27 Ayvazyan and Terabelian’s motion to suppress evidence seized from
SUBJECT PREMISES-1, for the sake of efficiency, the government
28 incorporates its opposition to that motion by reference here (ECF
188).
15
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1 Instead, defendants A. Ayvazyan’s and T. Dadyan’s argument is
2 that “[t]he opening paragraph of the [w]arrant renders the rest of
3 the document irrelevant by defining all items and records related to
4 [defendants] [A.] Ayvazyan and [T.] Dadyan (or either of their co-
5 defendants) as ‘evidence’ to be seized.” (ECF 149 at 8.)
6 Defendants’ argument is based on factual inaccuracies. The
7 paragraph defendants challenge is not the “opening paragraph” as
8 defendants claim, but the first item to be seized. This is a fatal
9 flaw in defendants’ argument because the opening paragraph sets forth
10 key criteria relevant to the particularity analysis: it articulates
11 the specific crimes under investigation by reference to statute and
12 prescribes the relevant time-frame (i.e., January 1, 2020 through the
13 present). The items that follow provide the searching agents with
14 specific illustrations of the types of records they should seize in
15 light of this limiting criteria.
16 In addition, in adopting wholesale codefendants R. Ayvazyan’s
17 and Terabelian’s arguments, defendants misquote the paragraph at
18 issue and apply a hyper-technical interpretation of the misquoted
19 language in an effort to arrive at an absurd result. (ECF 149 at 8.)
20 Defendants claim the paragraph instructs agents to seize all
21 “[r]ecords or items [concerning Ayvazyan and/or Dadyan’s business or
22 a series of businesses affiliated with Ayvazyan, Dadyan, and their
23 co-defendants], or any affiliated ... individuals.” (Id. (purportedly
24 quoting Attachment B ¶ 1.a).) In reality, the paragraph instructs
25 agents to seize records relating to the sham companies involved in
26 fraudulently obtaining and laundering disaster relief proceeds,
27 specifically:
28
16
Case 2:20-cr-00579-SVW Document 207 Filed 03/22/21 Page 23 of 27 Page ID #:1706
1 Records or items concerning ABC Realty Advisors, Allstate Towing
and Transport, Crystalcare Home Health, EM Construction, Fadehaus
2 Barbershop, Fiber One Media, G&A Diamonds, Inception Fund,
Journeymen Construction, Nelson’s Nursery, Redline Auto Mechanics
3
Inc., Runyan Tax Services, Secureline Realty and Funding, Timeline
4 Transport, VB Trucking, TM Events, Top Quality Contracting, or
any affiliated entities or individuals;
5
(Attachment B ¶ 1.a.)
6
In any event, this argument has no practical import here because
7
defendants do not actually challenge the seizure of any particular
8
records related to A. Ayvazyan or T. Dadyan. Nor can they. All of
9
these records were properly seized because the records were
10
responsive to items listed in Attachment B that were sufficiently
11
particular and defendants do not argue otherwise. (Compare Fenton
12
Decl. ¶ 11, Ex. 11, with Attachment B ¶¶ 1.b-c; Fenton Decl. ¶ 8, Ex.
13
8, with Attachment B ¶ 1.d; Fenton Decl. ¶ 12, Ex. 12, with
14
Attachment B ¶ 1.m).
15
B. The Search Warrant Is Not Overbroad
16
Defendants’ challenges to the breadth of the search warrant
17
focus only on the seizure of two truck GPS systems and $14,600 in
18
cash. Defendants’ arguments fail on this ground as well.
19
Defendants’ challenge to the seizure of the truck GPS systems is
20
based on their argument that the affidavit did not allege that
21
criminal proceeds had been used to purchase the devices. (ECF 149 at
22
10.) The agents, however, did not seize the truck GPS systems for
23
the reason that defendants state; rather, they seized the truck GPS
24
systems because the truck GPS systems were believed to be “digital
25
devices” that were properly within the scope of the search warrant
26
and had evidentiary value. As explained above, the search warrant
27
authorized by Judge Sagar expressly provided for the seizure of
28
17
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1 “digital devices” (Attachment B ¶ 1.t-u), which is defined to include
2 “any electronic system or device capable of storing or processing
3 data in digital form.” (Id. ¶ 3.) Truck GPS systems fit squarely
4 within that definition because such devices store and process digital
5 data relating to travel, including address books and travel routes.
6 Here, such information is relevant because the alleged conspiracy
7 involves the use of at least seven residences in and around Los
8 Angeles, as alleged in the search warrant affidavit. (SW Aff. ¶¶ 5-
9 11, 17, 23, 26-29, 34, 39, 47, 52.)
10 Defendants also argue that the search warrant was overly broad
11 because it permitted seizure of $14,600 in cash, $2,100 of which was
12 contained in a pink envelope that purportedly belonged to defendants’
13 daughter. (ECF 149 at 10.) Defendants claim that the warrant was
14 overbroad because the affidavit did not contain allegations
15 specifically linking their daughter’s money with the allege scheme.
16 Defendants are wrong. The affidavit established probable cause to
17 seize all cash greater than $1,000 based on the statements that: (i)
18 “[i]ndividuals who commit financial crimes including loan fraud will
19 often liquidate criminal proceeds to cash ... in order to launder the
20 proceeds and profit from the crimes”; and (ii) “the criminal conduct
21 [in this case] involves a large amount of fraud proceeds, a large
22 portion of which, at this point, law enforcement has not been able to
23 locate.” (SW Aff. ¶¶ 62.f-g.) The affidavit need not have contained
24 detailed allegations with respect to the source of funds for each
25 aggregation of cash so long as that aggregated amount exceeded
26 $1,000. Rather, the affidavit, which alleges the specific crimes of
27 money laundering and a conspiracy to commit money laundering,
28 provides ample evidence that there is a fair probability that
18
Case 2:20-cr-00579-SVW Document 207 Filed 03/22/21 Page 25 of 27 Page ID #:1708
1 defendants engaged in a massive scheme to steal and launder millions
2 of dollars, and that a “large amount” of that money has not yet been
3 identified and that some portion of that money was at SUBJECT
4 PREMISES-4. 5 (See, e.g., SW Aff. ¶¶ 3, 20-21, 62.b-d, f-g; Ayvazyan
5 Compl. ¶¶ 22, 26, 40.) This is more than sufficient to establish
6 probable cause to seize the envelope of cash, which was found in a
7 safe alongside a plastic grocery bag of additional cash in the amount
8 of $12,500. See United State v. Holzman, 871 F.2d 1496, 1509 (9th
9 Cir. 1989), abrogated on other grounds by Horton v. California, 496
10 U.S. 128 (1990) (“[B]ecause the affidavit described the large
11 quantities of cash carried by appellants at the time of their arrest,
12 and that counterfeit credit cards were being used to obtain cash
13 advances, we are satisfied that probable cause existed to support the
14 search for cash.”). 6
15 C. The Execution of the Search Warrant Was Reasonable
16 Defendants’ argument that the execution of the warrant was
17 “unprecedented in its flagrant disregard” for defendants and their
18 family is based on the false claim they posed “no threat of
19
20
5Determinations of probable cause must be upheld if, under the
“totality of the circumstances” surrounding a request, the issuing
21 magistrate had a substantial basis for finding probable cause.
Illinois v. Gates, 462 U.S. 213, 238-39 (1983). The “totality of
22 circumstances” test requires only a “fair probability” that the
sought-after evidence is located in a particular place. United
23 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
24 require “certainty or even a preponderance of the evidence.” Id.
25 6As also explained in the affidavit, the possession of travel
documents and cash can be evidence of “perpetrator’s plans to leave
26 the jurisdiction, which is particularly common for perpetrators of
financial crimes of the magnitude being investigated in this case.”
27
(SW Aff. ¶ 62.g.) Here, the pink envelope and plastic grocery bag
28 filled with cash were found in a safe next to defendants’ passports.
(Fenton Decl. ¶ 14, Ex. 14.)
19
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1 violence.” (ECF 149 at 3-6.) Defendants, however, did pose a threat
2 of violence because they had a history of firearm possession and ties
3 to the “Armenian Power” gang. And this concern was further confirmed
4 when, upon searching SUBJECT PREMISES-4, the agents found and seized
5 an arsenal of 12 firearms, live ammunition, and empty cartridges.
6 Moreover, there was nothing “unprecedented” about the way law
7 enforcement handled the search of SUBJECT PREMISES-4: as explained
8 above, law enforcement commonly uses a tactical unit and disables
9 security cameras when executing warrants, particularly under
10 circumstances such as those presented here. (Massino Decl. ¶ 6.)
11 Defendants also challenge the reasonableness of the search based
12 on their claim that the “[a]gents appear to have seized anything that
13 looked like it was valuable without probable cause.” (ECF 149 at 7.)
14 This is patently false. Agents seized only the $14,600 in cash,
15 which was expressly permitted by the search warrant authorized by
16 Judge Sagar based on the ample probable cause finding set forth in
17 the affidavit. (Attachment B ¶ 1.r; SW Aff. ¶¶ 62.f-g.) No other
18 item believed to be worth a great deal of money was seized. 7
19 D. No Evidence Should Be Excluded Because the Agents Acted in
Good Faith
20
21 In the context of a search warrant, the evidence obtained by law
22 enforcement is still admissible where agents relied in good faith on
23 the validity of the warrant issued by a neutral magistrate. See
24
25 7Defendants argue that it was unreasonable to seize a portion
of the cash - $2,100 of the $14,600 – because it purportedly belonged
26 to their daughter and represented money given to her for her
birthday. To the contrary, it was reasonable for the agents to seize
27 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
28 the daughter’s bedroom, and (ii) it was a large amount of cash and
thus eligible for seizure pursuant to the warrant.
20
Case 2:20-cr-00579-SVW Document 207 Filed 03/22/21 Page 27 of 27 Page ID #:1710
1 United States v. Leon, 468 U.S. 897, 923 (1984). Under Leon, agents
2 conducting a search pursuant to a validly issued warrant are entitled
3 to rely on the search warrant unless: (1) “the magistrate or judge in
4 issuing a warrant was misled by information in an affidavit that the
5 affiant knew was false or would have known was false except for his
6 reckless disregard for the truth;” (2) “the issuing magistrate wholly
7 abandoned his judicial role;” (3) the warrant was “based on an
8 affidavit so lacking in indicia of probable cause as to render
9 official belief in its existence entirely unreasonable;” or (4) the
10 warrant failed to “particularize the place to be searched or things
11 to be seized.” Id. Here, defendants do not allege any basis to
12 support a finding that the search warrant was not validly issued.
13 Accordingly, the Court should conclude that the agents acted in good
14 faith and deny defendants request to suppress evidence.
15 E. The Government Obtained an Order Extending Its Time to
Review Digital Devices for Responsiveness
16
17 Defendants’ argument that all digital devices not marked
18 responsive by March 5, 2021 should be returned regardless of
19 suppression is based on the original 120 day deadline set forth in
20 Attachment B of the search warrant. (ECF 149 at 11-12.) Defendants’
21 argument is moot, however, because the government properly sought and
22 obtained an order extending the deadline to complete the review by
23 another 120 days. As set forth in the order, the government now has
24 until July 3, 2021 to complete its review for responsiveness. See
25 Order, In re Search Warrants, No. 2:20-mj-05286.
26 IV. CONCLUSION
27 For the foregoing reasons, the government respectfully requests
28 that this Court deny defendants’ motion to suppress.
21
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