A Glendale man was sentenced to eight years in federal prison and ordered to pay $1.5 million in restitution on Monday — along with two other SoCal men given shorter sentences and million-dollar restitution to pay — after the three operated a $1.66 million mass mailing scam aimed at trademark holders, the Department of Justice announced in a news release.
Of the three men, Artashes Darbinyan, 37, was given the most prison time and highest amount of restitution to pay as he was the “mastermind” of a scam targeting small businesses who recently applied for trademark protection with the U.S. Patent & Trademark Office, according to federal prosecutors. It targeted a total of 4,446 victims.
For two years, Darbinyan’s scam would give small businesses fraudulent offers to protect their trademark by monitoring for infringing marks and registering their trademark with the U.S. Customs and Border Protection — an agency that offers a real service for monitoring infringing trademarks, prosecutors said.
The scam sent out these fraudulent offers in the mail and offered services for $385, federal prosecutors said.
However, Darbinyan never monitored or registered — or even intended to ever monitor or register — any of the trademarks for the customers who paid, as he later admitted to prosecutors as part of his guilty plea.
Glendale resident Orbel Hakobyan, 42, was sentenced to two years in prison and was ordered to pay a little over $1.2 million in restitution. Meanwhile, Albert Yagubyan, 37, of Burbank, was sentenced to 18 months in prison and ordered to pay $1,048,069 in restitution.
The two men helped Darbinyan conceal his control over the scam. Darbinyan told prosecutors he would illegally use the identities of other people to open accounts at virtual office centers in the Washington, D.C. Then, he would send victims’ payments to virtual office centers in the Los Angeles area.
With the help of Hakobyan and Yagubyan, he would then use those same identities to open bank accounts at Wells Fargo to launder the money he scammed, federal prosecutors said.
Hakobyan would deposit victims’ checks into bank accounts at Wells Fargo that were opened with false names, prosecutors said. He “misrepresented his identity” to withdraw money from the accounts “in the form of cash and cashier’s checks,” according to a news release from the DOJ. Then, he would purchase gold to avoid having the stolen funds traced back to him.
Yagubyan, as the manager of a Wells Fargo branch in Glendale, instructed subordinates at the bank “to open bogus bank accounts” that would hold the scammed money as well as to process “fraudulent withdrawals, wire transfers and cashier’s checks” for the three men, according to a DOJ news release.
Yagubyan “made payments and promises of promotion to subordinates” to get them to make the fraudulent transactions, the DOJ news release said. He was also paid a portion of the scammed money by Darbinyan.
The money was turned into gold and cash so it could not be traced back to the scammers, federal prosecutors said.
To avoid getting caught, Darbinyan paid fees for the virtual offices with money orders, used bogus email accounts that he would only log into when using prepaid wireless modems, and regularly changed cell phone numbers, according to prosecutors.
He pleaded guilty to one count of mail fraud and one count of conspiracy to launder monetary instruments in December 2016. Meanwhile, Hakobyan pleaded guilty to one count of conspiracy to launder monetary instruments. Yagubyan was convicted of one count of conspiracy to launder monetary instruments, four counts of concealment money laundering and one count of false bank entries after a jury trial in March 2017.
The false identities used to open bank accounts came from individuals in Eastern Europe who were not in the U.S. when the accounts were opened, prosecutors said.