Attorney faces 27-month prison sentence for money laundering scheme

A Glendale sole practitioner faces a recommended 27-month federal prison sentence after admitting to laundering fraudulently earned money through his client trust accounts, part of a $14 million tax fraud and identity theft scheme.

Arthur S. Charchian pleaded guilty Friday to felony money laundering and making a false statement to the Social Security Administration, part of a plea agreement in a sprawling investigation that includes criminal charges against 16 other people.

A State Bar member since 2006, 44-year-old Charchian admitted to trying to hide $549,000 in profits from a stolen identity ring that involved false identities and fake passports from the Republic of Armenia that opened hundreds of bank accounts where fraudsters hide money they'd received from falsified tax returns.

Charchian faced an offense level of 21, which brings a standard sentencing range of 37 to 46 months, but his plea deal allows for a downward departure to 18 for acceptance of responsibility, which carries 27 to 33 months. Assistant U.S. Attorney Charles E. Pell also agreed to recommend the low end of the range.

According to the deal, brokered by his attorney, Mark J. Werksman of Werksman Jackson & Quinn LLP, Charchian was the go-to lawyer for schemers who used fraudulent identities and altered Armenian passports to open bank accounts with the intent of laundering money through them.

When banks froze the accounts, Charchian "was hired to seek the release of the frozen funds," which he did in exchange for a 10-percent cut.

"Specifically, defendant was aware of a high probability that the financial transactions that he was conducting involved criminal derived property, but he deliberately avoided learning the truth," according to the agreement. United States v. Charchian, 18-CR00851 (C.D. Cal., filed Dec. 7, 2018).

Charchian also kept approximately 10 percent of the checks he laundered, which he did by depositing the checks into client trust accounts then writing outgoing checks to the original check writers that returned their ill-gotten gains, minus his handling fee, according to the agreement.

Between April 2012 and June 2014, Charchian laundered "more than 15 incoming checks" totaling $549,352 while writing "approximately 11 outgoing checks" totaling $344,492. Charchian also admitted to falsely telling the Social Security Administration an outgoing check for $51,486 was written because the recipient received a settlement in that amount.

The larger scheme involved approximately 7,000 fraudulent tax returns that sought $38 million in refunds, about $14 million of which were ultimately issued by the Internal Revenue Service.

Werksman said Monday Charchian "let himself be used."

"He should have known better, but this represents a lapse in judgment of a man who otherwise led an exemplary, responsible and law-abiding life," Werksman said. "He should have known it was money laundering, but he didn't figure out until it was too late and he was too involved."

U.S. District Judge Andrew J. Guilford accepted Charchian's guilty plea and is to sentence him in September 2019.

Charchian is not in custody. A man who answered the phone at his Glendale law office on Monday said he was unavailable.

The case is among 11 convictions resulting from the 17-defendant investigation so far, which includes the seizure of four homes and more than $700,000, the U.S. attorney's office said in a news release. Four defendants are fugitives, and two are scheduled for trial next year.