DOJ described scheme as “one of the more sophisticated” they'd ever seen.The mastermind of a years-long fraudulent trademark scam that federal authorities dubbed as "one of the more sophisticated, elaborate, and premeditated operations" they had ever seen has been sentenced to eight years in prison after pleading guilty to fraud.
In addition, on Monday, a federal judge in Los Angeles also sentenced Artashes Darbinyan to pay more than $1.5 million in restitution. US District Judge Stephen V. Wilson additionally ordered that Darbinyan’s two co-conspirators serve 18 and 24 months in prison, with restitution orders ranging from $1.04 to $1.2 million each.
Darbinyan’s scheme involved setting up a company that he called the “Trademark Compliance Office” and another called “Trademark Compliance Center.” Beginning in September 2013, he sent out unsolicited, official-looking (but fake) invoices to over 100,000 unsuspecting businesses. The letter, complete with a return envelope, would ask for a $385 “processing fee” promising trademark registration and monitoring services that did not exist. The return address was one of a few cities in and around Washington, DC. This gave the letter the veneer of
legitimacy.In the end, Darbinyan made over $1.66 million from more 4,400 victims.
Once the checks were deposited, Darbinyan would immediately cash out and use the money to buy gold and make the funds untraceable. That’s according to a
superseding indictment filed in July
2016.The actual addresses were for “virtual office” spaces in Northern Virginia and Washington. Mail sent there was routinely forwarded to another virtual office in Glendale, California, a suburb of Los Angeles. Darbinyan used a fake name, “Iurii Berlach,” with which he also opened up an e-mail account,
berlach777@yahoo.com.
According to a
sentencing memorandum, Darbinyan only logged in to those accounts on computers that were connected to prepaid wireless modems, and he only used cash-paid burner phones.