Case 2:08-cr-00427-MCE Document 801 Filed 10/17/13 Page 1 of 6

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BENJAMIN B. WAGNER
United States Attorney
JEAN M. HOBLER
Assistant United States Attorney
501 I Street, Suite 10-100
Sacramento, CA 95814
Telephone: (916) 554-2700
Facsimile: (916) 554-2900

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Attorneys for Plaintiff

The United States of America

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IN THE UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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UNITED STATES OF AMERICA,

CASE NO. 2:08-CR-427

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Plaintiff,

GOVERNMENTS SENTENCING
MEMORANDUM REGARDING DEFENDANT
MIGRAN PETROSYAN

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v.
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MIGRAN PETROSYAN,
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aka, MAX, ARTHUR DUPONT
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Defendant.
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I.

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THE GUIDELINES

The Government has no objection to the factual statements in the Presentence Investigation Report

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(PSR), but does disagree with its application of the facts to the Guidelines Provisions. We set forth below

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the PSRs recommendations and the Governments recommended application of the same Guideline factors,

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which we will address below where they differ from the PSRs recommendation. Specifically, the PSRs

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calculations are at odds with the stipulations in the plea agreement. It is in accordance with the

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Governments obligations under the plea agreement that we address these differences and present the

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Governments view of the appropriate bases for applying the Guidelines factors as set forth in the plea

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agreement.

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Governments Sentencing Memo, M. Petrosyan

Case 2:08-cr-00427-MCE Document 801 Filed 10/17/13 Page 2 of 6

Table: PSR and Governments Guidelines

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Base Offense Level (2B1.1(a)(2))

Loss Amount (2B1.1(b)(1))
Sophisticated Means (2B1.1(b)(9)(C))
Unauth. Use of ID (2B1.1(b)(10)(C)(i)
Role in the Offense (3B1.1)
Adjusted Offense Level
Acceptance of Responsibility (3E1.1)
Total Offense Level
Criminal History Category
Resulting Guideline Range

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PSR
Recommendation
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16
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30
-3
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70 to 87 months

A.

Governments
Recommendation
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2
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25
-3
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41 to 51 months

Loss Amount

Petrosyans primary role related to the Richmond clinic and the PSR recommends a 16-level increase

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based upon the amounts billed to Medicare for that clinic, approximately $1.1 million. USSG 2B1.1. In

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accordance with its obligations under the plea agreement, the government recommends a 12-level increase

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based upon actual loss at that clinic, i.e., $490,671.10 that was paid by Medicare, less $120,063 that was

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credited back to Medicare, resulting in an actual loss of greater than $200,000, less than $400,000.

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B.

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The Government agrees with the PSRs recommendation of a 2-level increase for sophisticated

Sophisticated Means

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means. USSG 2B1.1(b)(9)(C). The plea agreement leaves it open for the parties to argue in favor of or

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against this enhancement and the Government is in favor of it. Specifically, this scam involved setting up

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fake clinics hundreds of miles from the associated doctors, staffing those clinics with unlicensed but

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somewhat medically knowledgeable individuals, keeping medical equipment at the clinics that was used to

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perform actual (unnecessary) tests on real patients, shipping the charts to Southern California, and ferrying

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the charts to the doctors who signed off on anything they were asked to sign off on. In regard to the

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Richmond clinic, specifically, Petrosyan recruited the doctors (Johnson and LeChabrier) and personally

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ferried the charts to and from the Southern California office of the conspirators and the doctors for signature

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and billing. In creating hundreds of fake charts to justify billing to Medicare, charts that were used to

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support Medicare appeals, and in operating clinics hundreds of miles away from the associated doctors, the

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sophisticated means enhancement is undeniably applicable.

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Governments Sentencing Memo, M. Petrosyan

Case 2:08-cr-00427-MCE Document 801 Filed 10/17/13 Page 3 of 6

C.

The Government agrees with the PSRs recommendation of a 2-level increase for unauthorized use

Unauthorized Use of Means of Identification

of a means of identification. USSG 2B1.1(b)(10)(C)(i). That enhancement applies where a means of

identification of an individual other than the defendant . . . is used without that individuals authorization

unlawfully to produce or obtain another means of identification. An example of conduct to which

subsection (b)(10)(C)(i) applies is:

A defendant obtains an individuals name and social security number from a
source (e.g., from a piece of mail taken from the individuals mailbox) and
obtains a bank loan in that individuals name. In this example, the account
number of the bank loan is the other means of identification that has been
unlawfully obtained.

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2B1.1, App. Note 9(C)(ii).

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The plea agreement leaves it open for the parties to argue in favor of or against this enhancement and

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the Government is in favor of it. As outlined in the factual basis for the plea agreement, some of the funds in

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the physician bank accounts for the Richmond clinic were transferred/deposited into an account that

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Petrosyan opened at the Bank of America under the name Arthur Dupount.1 Plea Agreement, at p. A-2:20-

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23. In opening the accounts, Petrosyan used a social security number that actually belonged to a third

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person. Thus, the enhancement applies in this case.

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D.

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The PSR recommends a 4-level increase for role in the offense, USSG 3B1.1(a). The Plea

Role in the Offense

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Agreement permits the Government to argue for a 3-level increase under this provision. The Government

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believes that increase, 3-levels, is appropriate here. There is no question that Petrosyan was a primary player

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at the Richmond clinic, but the charged conspiracy addresses three clinics and relative to the undisputed

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leader of the scheme, Vardges Egiazarian, Petrosyan played a more modest role.

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E.

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Consistent with its obligations under the plea agreement, and the PSRs recommendation of an

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acceptance of responsibility reduction, the Government moves for a third level reduction under USSG

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3E1.1(b) for acceptance of responsibility.

Acceptance of Responsibility

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The factual basis for the plea sets forth sufficient information to support this enhancement. We
will, however, have available additional supporting evidence.
Governments Sentencing Memo, M. Petrosyan

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II.

USSG SECTION 5K1.1

Petrosyans plea agreement contained a cooperation provision under USSG 5K1.1. The

Government addresses that provision and its recommendations thereunder under separate cover to be lodged

with the Court and copied to Petrosyans counsel.

III.

THE SECTION 3553 FACTORS

A.

Petrosyan stole from a program meant to provide basic healthcare services to seniors and the

Nature and Circumstances of the Offense

disabled. This was unquestionably a serious offense. Even absent the current healthcare crisis, the

defendants decision to defraud a program that exists to provide those in need with the most elemental of

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services evinces a callous disregard for the consequences of his actions.

In addition, the Court should consider the manner in which Petrosyan committed this offense. His

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crime certainly was no accident. In essence, he put forth all the effort necessary to create an actual

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healthcare clinic. He secured locations, had physicians and staff, opened accounts and set up billing

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protocols, and recruited patients. The only thing he didnt see to was providing legitimate healthcare.

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Instead, all of that effort was directed at implementing and sustaining a scam.

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B.

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As reflected in the PSR, Petrosyan has no significant criminal history. Based upon what is before the

History and Characteristics of the Defendant

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Court, the history and characteristics of the defendant weigh in his favor. However, this factor has been

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taken into account by the government in making its recommendation. It is reflected in the fact that the

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defendant has been assigned the lowest possible criminal history score, and thus faces the lowest possible

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sentencing range for his offense level. It is also reflected in the fact that the Government has made a mid-

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range recommendation, despite any obligation to do so in the plea agreement.

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C.

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The seriousness of the Petrosyans offense is described above. Clearly, there is a need to deter others

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The Need for the Sentence to Reflect the Seriousness of the Offense

from engaging in similar acts and to protect the limited resources available to programs like Medicare.

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D.

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The sentence recommended by the government is below that which is called for by the guidelines in

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The Need to Avoid Unwarranted Sentencing Disparities

that it holds the defendant accountable only for actual, as opposed to intended, loss at a single clinic. With
Governments Sentencing Memo, M. Petrosyan

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that exception, it is consistent with the sentencing guidelines and reflects the nature and scope of Petrosyans

offense, as well as his role in carrying it out. It will not result in sentencing disparities.
Notably, only four people have been sentenced in this case. Vardges Egiazarian was the first, and the

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ringleader, and his sentence of 78 months imprisonment was imposed pursuant to a plea agreement entered

before the trial in this case. He did not cooperate, but he did get the benefit of bargaining with the

Government before the Government had prepared for trial, and marshaled the evidence and testimony that

revealed the fuller scope of the harms imposed by this crime. It is the Governments position that all those

who pleaded before trial are in the same position as Egiazarian; they should receive the benefit of their

bargains. The other three sentenced defendants are the three doctors who went to trial in this matter; each

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was subject to sentencing enhancements based on their special roles as physicians, reckless disregard for

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human life (in two of three cases), and obstruction. Thus, each received a sentence of between 78 and 120

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months.
Those who pleaded guilty early and who cooperated with the Government are not similarly

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situated to those who went to trial for purposes of analyzing sentencing disparities. In other words, to the

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extent a disparity between trial defendants and those who pleaded guilty are disparate, that disparity is not

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unwarranted. It was the cooperation of those who pleaded with 5K provisions before trial (whether they

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testified or not) that assisted the Government in marshaling the evidence that not only resulted in convictions

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after trial, but also in identifying the full scope of the harm caused by this scheme. Had all defendants

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pleaded guilty, the Government never would have obtained much of the evidence used at trial that resulted in

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more significant sentences for the trial defendants. Those who pleaded guilty, therefore, should get the

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benefits of their bargains.

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Governments Sentencing Memo, M. Petrosyan

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IV.

GOVERNMENTS RECOMMENDATION

The Government believes the appropriate application of the Guidelines in this case results in a

sentencing range of 41 to 51 months, as set forth in the table above. Consistent with its obligations under the

plea agreement, the Government recommends a low end sentence of 41 months, subject to the 5K provisions

addressed under separate cover.

Dated: October 17, 2013

BENJAMIN B. WAGNER
United States Attorney

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By: /s/ Jean M. Hobler
JEAN M. HOBLER
Assistant United States Attorney

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Governments Sentencing Memo, M. Petrosyan