Sentencing Memorandum — USA v. Margaryan et al (Dkt. 358, C.D. Cal.)
Summary
The government's sentencing position for defendant Sarkis Sarkisyan in United States v. Sarkisyan, No. 2:25-CR-00458-CV-2, in the United States District Court for the Central District of California, dated and filed August 11, 2026 as Document 358 and signed by Assistant United States Attorney Andrew M. Roach, for a hearing on August 28, 2026. It recounts the admitted PPP fraud, a Prime Funding, Inc. loan of $786,457, and a $25,000 transfer, and argues that relevant conduct includes two Preferred Lender Program loans and attempted EIDL applications, for total losses of $4,866,457. The government adopts the plea agreement's Total Offense Level of 23 and Criminal History Category III, for a range of 57 to 71 months. It recommends 70 months, three years of supervised release, restitution of $4,866,457 to the SBA and a $300 special assessment.
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Cite this document
“Sentencing Memorandum — USA v. Margaryan et al (Dkt. 358, C.D. Cal.).”
Original at ecf.cacd.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/sentencing-memorandum-usa-v-margaryan-et-al-dkt-358-c-d-cal-8d272c0260/
, SHA-256 1ee20b108e17f224f6211695d60190618e4f1b16c7ff398dc1e14a1ee03c153c.Full text
Case 2:25-cr-00458-CV Document 358 Filed 08/11/26 Page 1 of 14 Page ID
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1 TODD BLANCHE
Attorney General
2 BILAL A. ESSAYLI
First Assistant United States Attorney
3 JENNIFER L. WAIER
Chief Assistant United States Attorney
4 Chief, Criminal Division
ANDREW M. ROACH (Cal. Bar No. 293375)
5 Assistant United States Attorney
Major Frauds Section
6 1100 United States Courthouse
312 North Spring Street
7 Los Angeles, California 90012
Telephone: (213) 894-0306
8 E-mail: andrew.roach@usdoj.gov
9 Attorneys for Plaintiff
UNITED STATES OF AMERICA
10
UNITED STATES DISTRICT COURT
11
FOR THE CENTRAL DISTRICT OF CALIFORNIA
12
UNITED STATES OF AMERICA, No. 2:25-CR-00458-CV-2
13
Plaintiff, GOVERNMENT’S SENTENCING POSITION
14 FOR DEFENDANT SARKIS SARKISYAN
v.
15 Hearing Date: August 28, 2026
SARKIS SARKISYAN, Hearing Time: 10:30 a.m.
16 aka “Samuel Shan,” Location: 10B
17 Defendant. [Filed Concurrently with
Declaration of Special Agent Eric
18 Ley]
19
20 Plaintiff United States of America, by and through its counsel
21 of record, the First Assistant United States Attorney for the Central
22 District of California and Assistant United States Attorney
23 Andrew M. Roach, hereby files the Government’s Sentencing Position
24 for Defendant Sarkis Sarkisyan.
25 //
26 //
27 //
28
Case 2:25-cr-00458-CV Document 358 Filed 08/11/26 Page 2 of 14 Page ID
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1 This sentencing position is based upon the attached memorandum
2 of points and authorities, the files and records in this case, and
3 such further evidence and argument as the Court may permit.
4
5 Dated: August 11, 2026 Respectfully submitted,
6 TODD BLANCHE
Attorney General
7
BILAL A. ESSAYLI
8 First Assistant United States Attorney
9 JENNIFER L. WAIER
Chief Assistant United States Attorney
10 Chief, Criminal Division
11
/s/ Andrew M. Roach
12 ANDREW M. ROACH
Assistant United States Attorney
13
Attorneys for Plaintiff
14 UNITED STATES OF AMERICA
15
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Case 2:25-cr-00458-CV Document 358 Filed 08/11/26 Page 3 of 14 Page ID
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1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 Defendant Sarkis Sarkisyan pleaded guilty to two counts of wire
4 fraud related to defendant’s fraudulent application and receipt of a
5 Paycheck Protection Program (“PPP”) loan for over $786,000, and one
6 count of transactional money laundering for making a wire transfer of
7 $25,000 from the proceeds of bank and wire fraud. But that is less
8 than half of defendant’s true criminal conduct in this scheme. In
9 reality, defendant and his co-schemers defrauded the federal
10 government out of millions of dollars. Beyond the PPP fraud that he
11 pleaded guilty to in his plea agreement, defendant and co-schemers
12 Vahe Margaryan, aka “William McGrayan,” and Aksel Markaryan, aka
13 “Axel Mark,” also fraudulently applied for U.S. Small Business
14 Administration Preferred Lender Program (“PLP”) loans. Defendant
15 personally applied for two separate PLP loans -- totaling over
16 $4,080,000 -- and in the process submitted false applications and
17 made false misrepresentations that he would purportedly use one loan
18 to purchase a straw company from a straw seller or use another loan
19 for the non-existent business. All of this was fraud, with the total
20 losses amounting to $4,866,457 in taxpayer funds –- and all of this
21 is relevant conduct for sentencing.
22 As part of the plea agreement, the government agreed to not
23 argue for a Total Offense Level higher than 23, based on an agreement
24 to not seek a loss amount higher than the 16-level enhancement under
25 U.S.S.G. § 2B1.1(b)(1)(I) for a loss between $1.5 million and $3.5
26 million. (Dkt. 301 at 8.) The government stands by the plea
27 agreement and its agreed-upon Sentencing Guidelines. It recommends
28 that the Court adopt a Total Offense Level of 23. With a Total
Case 2:25-cr-00458-CV Document 358 Filed 08/11/26 Page 4 of 14 Page ID
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1 Offense Level of 23 and Criminal History Category III, defendant’s
2 resulting advisory Guidelines are 57 to 71 months’ imprisonment.
3 The government recommends the Court impose a Guidelines sentence
4 of 70 months, followed by three years of supervised release, and
5 order defendant to pay $4,866,457 in restitution and the special
6 assessment of $300.
7 II. STATEMENT OF FACTS
8 Defendant was involved in multiple fraudulent loan schemes:
9 (1) a PPP loan scheme, (2) PLP loan scheme, and (3) an Economic
10 Injury Disaster Loan (“EIDL”) loan scheme. Defendant only admitted
11 to his involvement in the PPP loan scheme and transactional money
12 laundering as part of his plea agreement, but the evidence shows that
13 he was also involved in other loan fraud.
14 A. Defendant’s Admitted Conduct in Plea Agreement: The PPP
15 Loan Scheme and Transactional Money Laundering1
16 On April 14, 2021, during the midst of the Covid-19 pandemic,
17 defendant submitted online to JPMorgan Chase Bank (“JPMC”) a PPP loan
18 application on behalf of his business, Prime Funding, Inc. (“Prime”),
19 which fraudulently stated that the purpose of the PPP loan was to
20 cover Prime’s payroll costs for 57 employees at an average monthly
21 payroll of $314,583. In reality, however, Prime did no business, had
22 no employees or employee salaries to pay, and had no monthly payroll
23 expenses -- all things defendant knew.
24 In further support of Prime’s PPP loan application, defendant:
25 a. caused to be fabricated, and then submitted to JPMC,
26 fraudulent Internal Revenue Service Forms 941 (quarterly
27
28 1The facts underlying defendant’s PPP loan fraud scheme are
from defendant’s plea agreement, see Dkt. 301 at 27-32.
2
Case 2:25-cr-00458-CV Document 358 Filed 08/11/26 Page 5 of 14 Page ID
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1 payroll tax returns) that purported to show that Prime had
2 incurred and paid substantial employee taxes. Defendant
3 then well knew that such returns were fraudulent because
4 Prime had neither employees nor paid any employee taxes;
5 and
6 b. fabricated and then submitted to JPMC fraudulent payroll
7 reports purportedly prepared by a third-party payroll
8 processor that falsely identified wages of more than $1.5
9 million paid to 56 Prime employees whose job titles
10 included “customer service,” “sales,” or “admin.”
11 Defendant then well knew that the reports were fraudulent
12 because, among other things, Prime had no employees.
13 Defendant signed the Prime PPP loan application, electronically
14 transmitted it to JPMC, and certified that PPP loan proceeds would
15 only be used by Prime to retain employees or for other permissible
16 business expenses, when defendant then well knew and intended that
17 none of the PPP loan proceeds would be used for the approved
18 purposes.
19 In reliance on defendant’s material false statements and
20 fictitious documents, JPMC approved the Prime application and funded
21 the loan of $786,457 by wire transferring the proceeds to an account
22 solely controlled by defendant.
23 Then, on June 30, 2022, defendant submitted an application for
24 forgiveness of the entire Prime PPP loan which falsely certified that
25 Prime’s payroll costs for the period covered by the Prime PPP loan
26 were more than $1.5 million, a figure that defendant then well knew
27 was entirely fraudulent because Prime had no employees at all. This
28 false certification was capable of influencing JPMC to forgive the
3
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1 Prime PPP loan -- and it did forgive the loan -- and thus part with
2 money. See generally Presentence Report (PSR) (Dkt. 357), ¶¶ 34-39.
3 Transactional Money Laundering
4 On June 28, 2023, defendant caused co-defendant Margaryan to
5 wire transfer $25,000 to a Prime account at JPMC that defendant
6 solely controlled, the source of which was proceeds of an SBA-
7 guaranteed loan in the amount of $2.83 million for defendant to
8 purchase a straw entity called Dynamic Delivery Install, Inc. At the
9 time, defendant knew that Dynamic Delivery Install, Inc., was a shell
10 entity that did no business, that the $25,000 wire transfer involved
11 criminally derived property, and that the transfer was designed to
12 conceal the commission of that wire fraud scheme. See generally PSR
13 ¶ 47.
14 B. Defendant’s PLP Loan Scheme
15 Defendant also applied for and received two fraudulent PLP
16 loans: (1) a loan for $2,830,000 on behalf of his shell company
17 Dynamic IT Solutions for the purported purchase of Dynamic Delivery
18 Install, Inc. and (2) a separate loan for $1,250,000 for Dynamic
19 Delivery Install, Inc. See PSR ¶¶ 40-46.
20 The Complaint in Case No. 2:25-MJ-03132 outlines the facts
21 supporting defendant’s fraud with respect to his $2,830,000 loan on
22 behalf of his shell company Dynamic IT Solutions for the purported
23 purchase of Dynamic Delivery Install. See Complaint, Case No. 2:25-
24 MJ-03132 (“Compl.”), ¶¶ 35-55. In essence, in June 2023, defendant
25 submitted documents which concealed his criminal background, lied
26 about his work history, falsified bank statements by inflating the
27 amount of money defendant had in his bank account, and filed fake tax
28 returns in his business name, to apply for a loan for $2,830,000 to
4
Case 2:25-cr-00458-CV Document 358 Filed 08/11/26 Page 7 of 14 Page ID
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1 buy the fake shell company Dynamic Delivery Install from co-defendant
2 Markaryan. The loan was approved and the funds ultimately went to
3 co-defendant Markaryan. Compl. ¶ 52.
4 Defendant essentially did the same thing three months later,
5 with a second loan, this one for $1,250,000 on behalf of the newly
6 acquired shell company Dynamic Delivery Install. (Ex. 1 (Declaration
7 of Eric Ley (Ley Decl.)), ¶ 4; PSR ¶¶ 48-49.)
8 C. Defendant’s Attempted EIDL Loans
9 Beyond these three approved loans, defendant also submitted two
10 separate applications for Economic Injury Disaster Loans (“EIDL”)
11 from the SBA in the amount of $500,000 each. Those funds were never
12 ultimately funded, but defendant’s applications can be considered
13 additional intended loss. (Ley Decl. ¶ 5.)
14 D. Total Loan Proceeds
15 Defendant therefore received a total of $4,866,457 from the
16 three loans that he applied for and were funded. Defendant received
17 the PPP loan funds directly into his bank account, while the PLP
18 loans went into the bank account of co-defendant Markaryan. Those
19 funds were transferred to a variety of entities with most of those
20 funds believed to have returned to defendant through various
21 transfers. The investigation revealed that certain less
22 knowledgeable co-schemers received as much as 75% of the loans they
23 applied for and received. (Ley Decl. ¶6.) Applying this
24 conservative number to defendant’s loans, the government estimates
25 that defendant likely personally profited over $3.5 million from
26 these loans, with the remainder of funds going to various co-
27 schemers.
28
5
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1 III. PRESENTENCE REPORT AND GUIDELINE CALCULATION
2 A. Probation’s Calculation and Recommendation
3 The PSR, filed on August 6, 2026 (Dkt. 357), calculates
4 defendant’s Guidelines as follows (PSR ¶¶ 64-82):
5 Base Offense Level: 7 U.S.S.G. § 2B1.1(a)(1)
Specific Offense
6 Characteristics:
7
- Loss amount between $3.5 +18 U.S.S.G. § 2B1.1(b)(1)(J)
8 million and $9.5 million
9 - Sophisticated means +2 U.S.S.G. § 2B1.1(b)(10)(C)
10 - Money laundering +1 U.S.S.G. § 2S1.1(b)(2)(A)
conviction under
11 18 U.S.C. § 1957
12 Adjust Offense Level 28
(Subtotal)
13 Acceptance of Responsibility -3 U.S.S.G. § 3E1.1
Total Offense Level 25
14 Defendant has six criminal history points, placing him in
15 Criminal History Category III. (PSR ¶¶ 97-98.) With a Total Offense
16 Level of 25 and Criminal History Category of III, the PSR calculates
17 defendant’s resulting sentencing guidelines at 70 to 87 months’
18 imprisonment.
19 The probation officer recommends that defendant be sentenced 70
20 months’ imprisonment, followed by three years of supervised release,
21 and ordered to pay restitution in the amount of $4,866,457 and the
22 special assessment of $300. (Dkt. 356.)
23 B. The Parties’ Agreed-Upon Guidelines Calculation
24 Consistent with the plea agreement, the government recommends
25 the following Guidelines calculation:
26 Base Offense Level: 7 U.S.S.G. § 2B1.1(a)(1)
Specific Offense
27 Characteristics:
28
6
Case 2:25-cr-00458-CV Document 358 Filed 08/11/26 Page 9 of 14 Page ID
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1 - Loss amount between $1.5 +16 U.S.S.G. § 2B1.1(b)(1)(I)
million and $3.5 million
2 +2 U.S.S.G. § 2B1.1(b)(10)(C)
- Sophisticated means
3
+1 U.S.S.G. § 2S1.1(b)(2)(A)
4 - Money laundering
conviction under
5 18 U.S.C. § 1957
Adjust Offense Level 26
6 (Subtotal)
Acceptance of Responsibility -3 U.S.S.G. § 3E1.1
7 Total Offense Level 23
8 The government agreed in the plea agreement to not seek any
9 further specific offense characteristics (other than the 16-level
10 enhancement for loss under U.S.S.G. § 2B1.1(b)(1)(I), which the
11 evidence supports, as explained above). (Dkt. 301 at 9.) The
12 government also reserved the right to seek a sentence outside of the
13 Guidelines range.
14 With a Total Offense Level of 23 and Criminal History Category
15 of III, the defendant’s resulting sentencing guidelines under this
16 calculation would be 57 to 71 months’ imprisonment.
17 IV. ARGUMENT
18 A. Recommended Sentence of 70 Months
19 The government recommends defendant be sentenced to a total
20 sentence of 70 months’ imprisonment, followed by three years of
21 supervised release, and ordered to pay $4,866,457 in restitution and
22 the special assessment of $300. This recommendation is sufficient,
23 but not greater than necessary, to achieve the 18 U.S.C. § 3553(a)
24 factors, namely, the nature and circumstances of the offense, the
25 history and characteristics of defendant, and the need for the
26 sentence to reflect the seriousness of the offense and to afford
27 adequate deterrence to criminal conduct.
28
7
Case 2:25-cr-00458-CV Document 358 Filed 08/11/26 Page 10 of 14 Page ID
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1 First, the nature and circumstances of defendant’s offense
2 demands a 70-month sentence. Defendant admittedly participated in a
3 massive scheme to defraud multiple banks and, ultimately, taxpayers,
4 out of almost $5 million in funds from lending programs designed to
5 benefit small businesses and those in need during the Covid-19
6 pandemic. This was not a simple matter of making false statements
7 about a job or income; it involved fabricating out of whole cloth
8 businesses to make them appear legitimate entities whose funds
9 taxpayers would expect to be an engine for the greater economy or in
10 need of dire assistance during the pandemic. Defendant and his co-
11 schemers exploited the goodwill of lenders and taxpayers and then,
12 via repeated money laundering activity, concealed their fraud.
13 Another factor that calls for a 70-month sentence is the loss
14 amount. Defendant was personally involved in the theft of nearly
15 $5 million in taxpayer funds. The government’s agreed-upon
16 Guidelines calculation in the plea agreement, which the government
17 stands by, does not fully account for this loss because the
18 government agreed to argue for no more than a loss of $3.5 million
19 when the true loss is nearly $5 million. Given the government’s
20 agreement to not seek a higher Guideline calculation for loss amount,
21 defendant deserves to be sentenced at the high-end of the parties’
22 agreed-upon range to account for the true loss amount.
23 Second, defendant’s history and circumstances also warrant a
24 stiff custodial sentence. Defendant’s past frauds warrant
25 consideration. Defendant has a history of credit card skimming and
26 other offenses. Defendant’s prior fraud convictions and his decision
27 to continue to commit fraud through both PPP-loan and SBA-loan fraud
28
8
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1 is troubling and demands a more significant sentence to deter him in
2 the future.
3 Another troubling aspect of defendant’s history and
4 circumstances is defendant’s continued fraud by way of unexplained
5 lavish lifestyle, mysterious tax filings, and questionable finances
6 that is an undercurrent theme in the PSR. This information suggests
7 that defendant has not changed his ways and is attempting to pull off
8 yet another fraud on this Court.
9 The PSR, for example, details how defendant and his family were
10 living in a “lavishly furnished” residence with a “brand new”
11 Mercedes Benz parked in the driveway that apparently was his ex-
12 wife’s car. PSR ¶¶ 114. This alone raises certain questions that
13 are only compounded by defendant’s failure to disclose other basic
14 financial information. Defendant’s failure to disclose his ex-wife’s
15 financial information, who by all accounts he still lives with and
16 appears to hold out as his wife, raises the question of whether
17 defendant is having her hide assets for him. PSR ¶ 143(c). His
18 failure to disclose other basic information, like what kind of car he
19 is driving, which is a reasonable question given his wife’s brand new
20 Mercedes, is evidence that he continues to conceal the truth. PSR
21 ¶ 143(c). And defendant’s complete failure to disclose his ownership
22 in other corporate entities is very concerning given that corporate
23 entities are an instrumentality of the crime. PSR ¶ 143(d).
24 Defendant’s tax returns also show evidence of potential fraud.
25 Defendant reports very little in wage or business income for tax
26 years 2023, 2024, and 2025. PSR ¶ 145. The bulk of his earnings
27 purportedly come from gambling winnings, over $500,000 for each tax
28 year, which are then quickly offset by gambling losses of nearly the
9
Case 2:25-cr-00458-CV Document 358 Filed 08/11/26 Page 12 of 14 Page ID
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1 same, leaving his tax liability around $10,000 per year.2 Id.
2 Describing unexplained large amounts of cash as “gambling winnings”
3 to banks and IRS is questionable. And while this money could
4 actually be the result of gambling, it’s equally plausible that
5 defendant is using this as a sham: To try to launder and legitimize
6 his significant and illicit cash dealings by claiming large gambling
7 winnings on paper which he avoids paying taxes on by simultaneously
8 claiming large gambling losses.
9 Needless to say, all of this raises significant questions and
10 leads to the probation officer’s well-supported conclusion that
11 defendant “appears to have undisclosed [financial] assets.” PSR
12 ¶ 150. Defendant’s continued actions in this regard underscore what
13 appears to be a life of fraud far beyond this case. He is thus more
14 than deserving of the 70-month sentence the government recommends.
15 Next, the need for the sentence to reflect the seriousness of
16 the offense, promote respect for the law, provide just punishment,
17 and afford adequate deterrence is appropriately accounted for with a
18 70-month sentence. In particular, a sufficiently strong sentence is
19 also necessary for both specific deterrence and, more importantly,
20 general deterrence. Due to defendant’s prior criminal history, there
21 is a strong possibility that he will reoffend in the future. So
22 specific deterrence is a consideration. General deterrence is also
23 important and it demands a sizeable sentence: People must know that
24 theft of taxpayer funds will be caught and prosecuted to the fullest
25 extent of the law.
26
27 2 Under the Internal Revenue Code, gambling losses are
deductible only to the extent of winnings. Therefore, a gambler
28 needs to disclose $100 in winnings to claim $100 in losses. The net
of this would be a potential zero tax liability.
10
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1 Finally, § 3553(a)(6) requires a court to impose a sentence to
2 avoid unwarranted sentence disparities among defendants with similar
3 records who have been found guilty of similar conduct.
4 The government recommends a guidelines sentence here because it
5 is the best way to avoid unwarranted sentencing disparity. Based on
6 U.S. Sentencing Commission’s Judiciary Sentencing Information,3 the
7 average and median lengths of imprisonment for defendants at this
8 offense level (23), Guideline (U.S.S.G. § 2S1.1), and criminal
9 history, is approximately 41 and 48 months, respectively. The
10 government is mindful that this data shows that approximately 33% of
11 defendants received a Guidelines sentence, while 47% received a
12 downward departure or variance, and the remaining received upward
13 departures or credit under U.S.S.G. § 5K1.1 or an upward variance.
14 The government does not recommend any further variance because the
15 Guidelines calculation that it has agreed to is already a concession
16 in that it does not include (1) the additional two levels for loss if
17 the true loss amount of between $3.5 million to $9.5 million was
18 applied, triggering the 18-level enhancement under U.S.S.G.
19 §2B1.1(b)(1)(J), and (2) an additional two-level enhancement for
20 receiving over $1 million in gross receipts from a financial
21 institution under U.S.S.G. § 2B1.1(b)(17)(A). The government is not
22 mentioning this to ask the Court to impose these particular
23 Guidelines enhancements, it simply points out these facts as they cut
24 against any variance.
25
26
27
28
3 See https://jsin.ussc.gov/.
11
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1 B. Three Years of Supervised Release is Appropriate
2 The government recommends the Court impose three years of
3 supervised release. Such supervision is essential to ensure that
4 defendant remains on a law-abiding path and to protect the public
5 should defendant stray, especially given defendant’s prior criminal
6 history.
7 C. Fine and Special Assessment
8 The government does not recommend the imposition of a fine
9 because defendant has established that he is unable to pay and is not
10 likely to become able to pay any fine. However, a special assessment
11 of $300 is mandatory.
12 D. Restitution
13 The government recommends the Court order defendant to pay
14 $4,866,457 in restitution to the SBA.
15 V. CONCLUSION
16 For the foregoing reasons, the government recommends a 70-month
17 sentence, followed by three years of supervised release, and that
18 defendant be ordered to pay $4,866,457 in restitution and the special
19 assessment of $300.
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