Court Opinion

ID: 9539247
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:01:02.988542+00
Date Added: 2024-06-11T14:59:19.678669
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                No. 21-50237

             Plaintiff-Appellee,           D.C. No.
                                        2:20-cr-00579-
 v.                                        SVW-8

VAHE DADYAN,
                                           OPINION
             Defendant-Appellant.

UNITED STATES OF AMERICA,                No. 21-50302

             Plaintiff-Appellee,          D.C. Nos.
                                        2:20-cr-00579-
 v.                                        SVW-3
                                        2:20-cr-00579-
ARTUR AYVAZYAN, AKA Arthur                  SVW
Ayvazyan,

             Defendant-Appellant.

      Appeal from the United States District Court
          for the Central District of California
      Stephen V. Wilson, District Judge, Presiding
2                         USA V. DADYAN

              Argued and Submitted June 8, 2023
                    Pasadena, California

                      Filed August 7, 2023

      Before: MILAN D. SMITH, JR. and ROOPALI H.
    DESAI, Circuit Judges, and CAROL BAGLEY AMON, *
                        District Judge.

             Opinion by Judge Milan D. Smith, Jr.

                          SUMMARY **

                          Criminal Law

    The panel affirmed in part and vacated in part the district
court’s imposition of restitution obligations on Vahe Dadyan
and Artur Ayvazyan following their convictions of various
offenses stemming from an eight-person conspiracy to
fraudulently obtain and launder millions of dollars in federal
Covid-relief funds that were intended to assist businesses
impacted by the pandemic.
   The panel held that, under the Mandatory Victims
Restitution Act (MVRA), the district court properly imposed

*
  The Honorable Carol Bagley Amon, United States District Judge for
the Eastern District of New York, sitting by designation.
**
  This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                        USA V. DADYAN                         3

restitution in the full amount of the loss caused by the
conspiracy instead of just the loss caused by the fraudulent
loan applications Vahe and Artur personally played a role in
submitting.
    As to Artur, the panel held that the district court properly
ordered a restitution amount under the MVRA based on the
“value” of fraudulently obtained property, which exceeded
the amount of “actual loss” the district court found when
sentencing him under U.S.S.G. § 2B1.1(b)(1). Artur’s
proposed rule to make a Guidelines-loss finding a hard cap
on a restitution calculation could not be squared with Ninth
Circuit precedent, or with the text and purpose of the
MVRA.
    The panel held that Artur failed to establish that the
district court clearly erred in calculating the amount of
restitution.
    The panel held that precedent foreclosed Artur’s
argument that his Fifth and Sixth Amendment rights to due
process and a jury trial required that a jury, not a district
judge, find all facts underpinning restitution beyond a
reasonable doubt.
     As to Vahe, the panel vacated and remanded for the
district court to amend his judgment and commitment order
to specify, as the government conceded, that his restitution
obligation runs jointly and severally with those of his four
trial co-defendants.
    In separately filed memorandum dispositions, the panel
affirmed Vahe and Artur’s jury convictions, affirmed the
district court’s application of the Sentencing Guidelines to
Artur, and vacated and remanded for Artur’s resentencing
4                       USA V. DADYAN

because the district court plainly erred by failing to invite his
allocution.

                         COUNSEL

Verna J. Wefald (argued), Law Office of Verna Wefald,
Pasadena, California, for Defendant-Appellant Vahe
Dadyan.
Kathryn A. Young (argued), Deputy Federal Public
Defender; Cuauhtemoc Ortega, Federal Public Defender;
Federal Public Defender’s Office, Los Angeles, California;
for Defendant-Appellant Artur Ayvazyan.
David M. Lieberman (argued) and Christopher Fenton,
Attorneys, Appellate and Fraud Sections; Lisa H. Miller,
Deputy Assistant Attorney General; Kenneth A. Polite, Jr.,
Assistant Attorney General; E. Martin Estrada, United States
Attorney; Criminal Division, United States Department of
Justice, United States Attorney’s Office; Washington, D.C.;
Daniel G. Boyle and Scott Paetty, Assistant United States
Attorneys; Bram M. Alden, Criminal Appeals Section Chief;
United States Department of Justice, United States
Attorney’s Office; Los Angeles, California; Jeremy R.
Sanders, Trial Attorney; United States Department of
Justice; New York, New York; for Plaintiff-Appellee.
                            USA V. DADYAN                               5

                              OPINION

M. SMITH, Circuit Judge:

    Vahe Dadyan and Artur Ayvazyan were convicted of
various offenses stemming from an eight-person conspiracy
to fraudulently obtain and launder millions of dollars in
federal Covid-relief funds that were intended to assist
businesses impacted by the pandemic. On appeal, Vahe and
Artur challenge their restitution obligations on both legal and
factual grounds. We affirm their restitution obligations,
except that we vacate and remand for Vahe’s judgment and
commitment order to be amended to specify that, as all
parties agree, his restitution obligation runs jointly and
severally with those of his trial co-codefendants. 1
                 FACTUAL BACKGROUND
     In March 2020, the federal government provided two
lifelines to businesses impacted by the Covid-19 pandemic.
The Coronavirus Aid, Relief, and Economic Security
(CARES) Act established the Paycheck Protection Program
(PPP), which made billions of dollars in government-
guaranteed loans available to qualifying businesses for
payroll retention and other authorized expenses. Pub. L. No.
116-136, § 1102, 134 Stat. 281, 286–94 (2020). The
CARES Act also authorized the Small Business
Administration, through the Economic Injury Disaster Loans
(EIDL) program, to make low-interest loans to qualifying

1
  In separately filed memorandum dispositions, we affirm Vahe and
Artur’s jury convictions, affirm the district court’s application of the
Sentencing Guidelines to Artur, and vacate and remand for Artur’s
resentencing because the district court plainly erred by failing to invite
his allocution.
6                          USA V. DADYAN

businesses for certain authorized expenses, including
providing sick leave to employees who contracted Covid and
maintaining payroll during Covid-related business
disruptions. Id. § 1110, 306–08.
    Vahe, Artur, and six other individuals conspired to
submit fraudulent PPP and EIDL loan applications and, once
those loan applications were approved, to launder the
fraudulently obtained funds. 2 Vahe, for example, signed a
$157,500 PPP loan application stating that his business had
eleven employees and average monthly payroll expenses of
$63,000—but, in reality, his business had no employees and
no payroll expenses. Similarly, Artur (among other things)
submitted a $124,000 PPP loan application containing false
payroll information. Nor did Vahe and Artur use the PPP
funds for authorized business expenses. Instead, after taking
a circuitous route, the bulk of Vahe’s and Artur’s PPP funds
ended up facilitating co-conspirators’ multi-million-dollar
real estate transactions.
    A jury convicted Vahe of conspiracy to commit bank and
wire fraud (18 U.S.C. §§ 1343–1344, 1349); conspiracy to
commit money laundering (id. § 1956(h)); and substantive
counts of wire fraud, bank fraud, and concealment money
laundering (id. §§ 1343–1344, 1956(a)(1)(B)(i)). The
district court sentenced Vahe to one year and one day in
prison and held him jointly and severally liable along with
his trial co-defendants for $10,706,188.13 in restitution—
with that figure representing the district court’s calculation

2
 Because Vahe and Artur are related to and share the same last names
as some of their co-conspirators, we refer to them by their first names.
                            USA V. DADYAN                               7

of all losses the conspiracy directly and proximately caused
to victims after Vahe joined it. 3
    A jury convicted Artur of conspiracy to commit bank and
wire fraud (18 U.S.C. §§ 1343–1344, 1349); conspiracy to
commit concealment money laundering (id. § 1956(h));
substantive counts of wire and bank fraud (id. §§ 1343–
1344); and aggravated identity theft (id. § 1028A(a)(1)).
The district court sentenced Artur to five years in prison and
held him jointly and severally liable along with his trial co-
defendants for $17,723,141.26 in restitution—with that
figure representing the district court’s calculation of all
losses the conspiracy directly and proximately caused to
victims. Vahe and Artur timely appealed.
    JURISDICTION AND STANDARD OF REVIEW
    We have jurisdiction pursuant to 28 U.S.C. § 1291. “The
legality of a restitution order is reviewed de novo, as is the
district court’s valuation methodology. If the order is within
statutory bounds, then the restitution calculation is reviewed
for abuse of discretion, with any underlying factual findings
reviewed for clear error.” United States v. Gagarin, 950
F.3d 596, 607 (9th Cir. 2020) (cleaned up).
                             ANALYSIS
I. Co-Conspirator Liability
    Vahe and Artur argue that the district court erred as a
matter of law by imposing restitution in the full amount of
loss caused by the conspiracy instead of just the loss caused
by the fraudulent loan applications they personally played a

3
  As explained below, the parties agree that Vahe’s restitution obligation
runs jointly and severally with his trial co-defendants, but his current
judgment and commitment order does not reflect that. Infra section V.
8                           USA V. DADYAN

role in submitting. 4 We reject this argument as foreclosed
by precedent: Where a defendant is convicted of conspiracy,
the Mandatory Victims Restitution Act (MVRA) authorizes
a district court to hold the defendant jointly and severally
liable, see 18 U.S.C. § 3664(h), “for all [victims] harmed by
the entire scheme,” United States v. Riley, 335 F.3d 919, 931
(9th Cir. 2003) (emphasis added).
    In Riley, the defendant pled guilty to, among other
offenses, conspiracy to produce fictitious financial
instruments (there, checks and money orders). Id. at 923–
25. Challenging his restitution obligation, the defendant
argued that “he should not be held accountable for the losses
caused by his coconspirators’ check cashing”—that is, his
co-conspirators’ conduct within the scope of and in
furtherance of the conspiracy he joined. Id. at 931. We
rejected this argument and held: “[I]n a case involving a
conspiracy or scheme, restitution may be ordered for all
persons harmed by the entire scheme. . . . A conspirator is
vicariously liable for reasonably foreseeable substantive
crimes committed by a coconspirator in furtherance of the
conspiracy.” Id. at 931–32. So too here: The district court
did not err by holding Vahe and Artur jointly and severally
liable for restitution in the full amount of loss that the entire
conspiracy caused. 5

4
  Vahe’s restitution obligation (about $10.7 million) is less than Artur’s
(about $17.7 million) because the district court excluded from Vahe’s
obligation all losses caused before Vahe joined the conspiracy.
5
  This is not to suggest that a district court must follow the approach
taken here. Instead, a district court has a choice where it “finds that more
than 1 defendant has contributed to the loss of a victim.” 18 U.S.C.
§ 3664(h). A court may, as the district court did here, hold each
                           USA V. DADYAN                               9

II. Different    Restitution             and        Guidelines-Loss
    Calculations
    Artur argues that the district court erred as a matter of
law by ordering a restitution amount (about $17.7 million)
that exceeded the amount of loss the district court found
when sentencing him (more than $1.5 million but less $3.5
million). As above, our precedent forecloses this argument:
There is no categorical rule that restitution must be equal to
or less than the amount of loss found when applying
Sentencing Guidelines § 2B1.1(b)(1) or similar loss-based
Guidelines sections.
    As Artur’s argument suggests, MVRA restitution
calculations in property-deprivation cases and Guidelines
section 2B1.1(b)(1) loss calculations do share common
ground. When calculating MVRA restitution for a property-
based offense and the “return of the [fraudulently obtained]
property . . . is impossible, impracticable, or inadequate,” the
district court “shall require” the defendant to pay “the value
of the property.” 18 U.S.C. § 3663A(b)(1)(B) (emphasis
added). When calculating the Guidelines range for a
defendant convicted of a standard property-deprivation
crime, a district court increases the defendant’s Guidelines
range to account for the amount of “loss” caused, with loss
defined as the greater of the “actual” or “intended” amount
of “pecuniary harm.” U.S.S.G. § 2B1.1(b)(1) & Application
Note 3(A). Given the high-level similarity of these terms
(“value” of fraudulently obtained property and “pecuniary
harm”), restitution and Guidelines-loss figures often mirror
one another when the Guidelines calculation is based on
actual (rather than intended) loss. See United States v.

defendant jointly and severally “liable for payment of the full amount of
restitution,” or it “may apportion liability among the defendants.” Id.
10                      USA V. DADYAN

Lawrence, 189 F.3d 838, 842 (9th Cir. 1999) ($574,700 for
both); cf. United States v. Anderson, 741 F.3d 938, 951 (9th
Cir. 2013) (Guidelines § 2B5.3(b)(1) loss of at least
$200,000; restitution of $247,144).
     Moreover, some of our decisions include statements
equating restitution and actual loss. See, e.g., United States
v. Begay, 33 F.4th 1081, 1096 (9th Cir. 2022) (“any award
is limited to the victim’s actual losses” (citation omitted));
United States v. Rizk, 660 F.3d 1125, 1137 (9th Cir. 2011)
(“[a] district court may not order restitution such that victims
will receive an amount greater than their actual losses”);
United States v. Stoddard, 150 F.3d 1140, 1147 (9th Cir.
1998) (“[r]estitution can only be based on actual loss”). As
we have done before, “[w]e acknowledge that [these
decisions] use of the phrase ‘actual loss’ in discussion of
restitution generates some confusion.” United States v.
Nosal, 844 F.3d 1024, 1046–47 (9th Cir. 2016) (citation
omitted). That is because those decisions used “actual loss”
in the colloquial sense, not necessarily tethered to a
Guidelines calculation. The point being emphasized in those
statements is that victims may not receive restitution that
exceeds the losses they actually suffered.
    But those statements and the noted similarities between
restitution and Guidelines loss do not add up to the
categorical rule, advanced by Artur, that once a court
determines “actual loss” for Sentencing Guidelines
purposes, its restitution determination cannot exceed that
amount. Instead, when our court has actually been presented
with Artur’s categorical argument, we have rejected it. In
Nosal, we explained: “We must initially decide whether, as
[the defendant] urges, the restitution award is invalid
because it exceeds the actual loss that the district court
determined for the purposes of the Sentencing Guidelines
                        USA V. DADYAN                       11

U.S.S.G. § 2B1.1(b) . . . . The answer to that question is
found in our observation that ‘calculating loss under the
guidelines is not necessarily identical to loss calculation for
purposes of restitution.’” Id. at 1046 (citation omitted).
Indeed, we have cautioned district courts to not reflexively
“rely on [their] calculation of the loss under the Sentencing
Guidelines to determine the amount of restitution as the two
measures serve different purposes and utilize different
calculation methods.” Anderson, 741 F.3d at 952; see also
United States v. Gossi, 608 F.3d 574, 582 (9th Cir. 2010)
(“we reject [the defendant’s] argument that we should look
to the advisory Sentencing Guidelines for calculating the
victim’s losses”). Artur’s proposed categorial rule, which
would make a Guidelines-loss finding a hard cap on a
restitution calculation, cannot be squared with our court’s
precedent.
     Nor can Artur’s proposed categorical rule be squared
with the text and purpose of the MVRA. The MVRA does
not just set forth the high-level guidance that restitution
should equal the “value” of fraudulently obtained property;
it provides specific instructions on how to calculate “value”
in specific situations—sometimes doing so in ways that
expressly contradict the Guidelines’ approach to calculating
loss. Consider the following two examples: The MVRA
requires compensation for “expenses incurred during
participation in the investigation,” while Guidelines
commentary provides that “[l]oss shall not include . . . costs
incurred by victims primarily to aid the government in[] the
prosecution and criminal investigation of an offense.”
Nosal, 844 F.3d at 1046–47 (quoting 18 U.S.C.
§ 3663A(b)(4); U.S.S.G. § 2B1.1 Application Note
3(D)(ii)). Similarly, the MVRA “can include prejudgment
interest,” United States v. Catherine, 55 F.3d 1462, 1465
12                          USA V. DADYAN

(9th Cir. 1995), while Guidelines commentary provides that
“[l]oss shall not include . . . interest of any kind,” U.S.S.G.
§ 2B1.1 Application Note 3(D)(i). In each example, the
MVRA not only tolerates but requires a restitution
calculation that exceeds Guidelines loss.
    That is not to suggest that a large discrepancy will always
be without significance. An unexplained discrepancy may,
in certain cases, facilitate a defendant’s clear-error challenge
to his or her restitution obligation—though we caution
against overreliance on a discrepancy, as it does not indicate
which figure, restitution or Guidelines loss, might be
erroneous. 6 Or, an unexplained discrepancy not rooted in
statutory differences might provide a hint that the district
court included a non-cognizable form of loss in its restitution
calculation. But to reiterate our holding: A discrepancy,
standing alone, does not establish legal error.
III. Clear-Error Challenge
    We now turn to and reject Artur’s clear-error challenge.
In the district court, “[a]ny dispute as to the proper amount
or type of restitution shall be resolved by the court by the
preponderance of the evidence,” with the government
bearing “[t]he burden of demonstrating the amount of loss
sustained by a victim as a result of the offense.” 18 U.S.C.
§ 3664(e). In resolving such a dispute, the district court must
rely on “evidence that possesses sufficient indicia of

6
 Here, for instance, the government suggested at oral argument that the
district court’s Guidelines loss calculation constituted procedural error,
before clarifying that it was not raising that argument on appeal.
“Because the government did not take an appeal” on this issue and Artur
“has nothing to gain from a higher advisory guidelines range,” we
express no view on whether the district court committed procedural
error. United States v. Dokich, 614 F.3d 314, 320 (7th Cir. 2010).
                        USA V. DADYAN                         13

reliability to support its probable accuracy.” Anderson, 741
F.3d at 951–52 (citation omitted); see also United States v.
Waknine, 543 F.3d 546, 557–58 (9th Cir. 2008) (victim
affidavits in question “were too summary and too conclusory
to be sufficiently reliable in the face of [the defendant’s]
objections”). “[E]xact precision is not required and district
courts do have a degree of flexibility in accounting for a
victim’s complete losses.” Anderson, 741 F.3d at 954.
Accordingly, the district court is entitled to draw reasonable
inferences when coming to its restitution calculation. See
United States v. Walter-Eze, 869 F.3d 891, 914–15 (9th Cir.
2017).
    On appeal, a factual challenge to a restitution calculation
is subject to clear-error review. Gagarin, 950 F.3d at 607.
Broad, unsupported contentions of inaccuracy will generally
not overcome that deferential standard of review. A
defendant-appellant must undermine the reliability of
specific evidence on which the district court relied or
undermine specific factual underpinnings of the calculation.
See Waknine, 543 F.3d at 557–58 (clear error to rely on
“summary and . . . conclusory” victim affidavits when
defendant challenged affidavits’ assertions); United States v.
Matsumaru, 244 F.3d 1092, 1108–09 (9th Cir. 2001) (clear
error to not discount from calculation the value that the
victim did receive in the fraudulent transaction).
    Here, the district court elected not to calculate restitution
at the time of sentencing and instead ordered supplemental
briefing. The government largely rested on its prior papers
and a declaration that attached as an exhibit a table of over
one hundred fraudulently obtained loans the government
contended were connected to the conspiracy. Artur argued
in his supplemental brief that “many of th[e] loans” in the
government’s table “involv[ed] real companies” and that it
14                       USA V. DADYAN

is “unclear whether the loans were fraudulent at all or
whether the third party simply had a [legitimate ]
connection” to one of the co-conspirators. In a written order,
the district court accepted the $17.7 million sum supported
by the government’s table. Addressing Artur’s argument,
the court explained that all the loans in the table “are
connected to the conspiracy” in “a variety of ways.” The
table includes loans that were obtained via applications
submitted in co-conspirators’ own names, using co-
conspirators’ known aliases, and from IP addresses traced to
co-conspirators’ homes. Proceeds from included loans were
traced to bank accounts and entities controlled by co-
conspirators. And the loans included in the table supported
the bank and wire fraud counts on which the jury convicted.
    On appeal, Artur again suggests in passing that it is
“unclear” whether some loans included in the restitution
amount were “fraudulent at all” and described the
government’s table as resting on “cryptic summaries that did
not explain [the loans’] illegality.” Artur does not identify
any particular loans that he thinks were legitimate; nor does
he identify which particular “summaries” are so “cryptic”
that the loans they describe cannot be connected to the
conspiracy. Moreover, Artur does not challenge any of the
district court’s detailed factual findings that connected the
loans in the table to the conspiracy. Accordingly, Artur fell
far short of establishing that the district court clearly erred in
calculating restitution.
IV. Due Process and Jury-Trial Right
    Artur argues that his Fifth and Sixth Amendment rights
to due process and a jury trial require that a jury (not a district
judge) find all facts underpinning restitution beyond a
reasonable doubt (not by a preponderance of the evidence).
                        USA V. DADYAN                       15

Artur concedes that our precedent forecloses this argument,
and he raises it before this panel only to preserve it. See
United States v. George, 949 F.3d 1181, 1188 (9th Cir.
2020); United States v. Green, 722 F.3d 1146, 1148–51 (9th
Cir. 2013).
V. Joint and Several Liability
    Vahe requests a limited remand instructing the district
court to amend his judgment and commitment order to
reflect that his restitution obligation runs jointly and
severally with that of his trial co-defendants. The MVRA
provides the district court with two options where it “finds
that more than 1 defendant has contributed to the loss of a
victim”: The “court may make each defendant liable for
payment of the full amount of restitution or may apportion
liability among the defendants.” 18 U.S.C. § 3664(h)
(emphasis added). Here, the district court determined in an
order addressing the restitution obligations of four of Vahe’s
co-defendants that joint and several liability is appropriate.
The judgment and commitment order for each of those four
defendants further specifies that their restitution obligations
run jointly and severally. Yet Vahe’s judgment and
commitment order does not so specify. The government
concedes on appeal that Vahe’s restitution obligation runs
jointly and severally and that a limited remand would be
appropriate. Accordingly, we remand Vahe’s case on this
narrow ground and instruct the district court to amend
Vahe’s judgment and commitment order to specify, as
everyone agrees, that his restitution obligation runs jointly
and severally with those of his four trial co-defendants.
                      CONCLUSION
    For the above reasons, we AFFIRM Vahe’s and Artur’s
restitution obligations, except that we VACATE AND
16                   USA V. DADYAN

REMAND for the district court to amend Vahe’s judgment
and commitment order to specify that his obligation runs
jointly and severally. We address in separately filed
memorandum dispositions Vahe and Artur’s arguments
regarding their jury convictions and Artur’s arguments
regarding his sentencing.