UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION - LOS ANGELES UNITED STATES OF AMERICA, Plaintiff, vs. LEV ASLAN DERMEN, A/K/A LEVON TERMENDZHYAN, Defendant. ) ) ) ) ) ) ) ) ) ) CASE NO: 2:18-MJ-02255 CRIMINAL Los Angeles, California Tuesday, August 28, 2018 (4:34 p.m. to 6:16 p.m.) DETENTION HEARING BEFORE THE HONORABLE GAIL J. STANDISH, UNITED STATES MAGISTRATE JUDGE APPEARANCES: For Plaintiff: RICH ROLWING, ESQ. LESLIE GOEMAAT, ESQ. U.S. Attorney's Office 312 North Spring Street Los Angeles, CA 90012 For Defendant: MARK J. GERAGOS, ESQ. Geragos & Geragos Historic Engine Company No. 28 644 S. Figueroa St. Los Angeles, CA 90017 Court Reporter: Recorded; CourtSmart Courtroom Deputy: E. Carson Transcribed by: Exceptional Reporting Services, Inc. P.O. Box 18668 Corpus Christi, TX 78480-8668 361 949-2988 Proceedings recorded by electronic sound recording; transcript produced by transcription service. EXCEPTIONAL REPORTING SERVICES, INC 2 1 INDEX 2 GOVERNMENT'S WITNESS 3 TYLER HATCHER DIRECT CROSS REDIRECT 23 41 62 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 EXCEPTIONAL REPORTING SERVICES, INC 3 1 Los Angeles, California; Tuesday, August 28, 2018; 4:34 p.m. 2 (Call to order) 3 THE CLERK: Calling Case Number 18-2255-MJ, USA 4 versus Lev Aslan Dermen (indisc.) counsel please state your 5 appearances. 6 MR. GERAGOS: Good afternoon, your Honor, Mark 7 Geragos, G-E-R-A-G-O-S, appearing with Mr. Termendzhyan, who's 8 present in custody. 9 THE COURT: 10 MR. ROLWING: Custody, good afternoon, Mr. Geragos. Good afternoon, your Honor, Richard 11 Rolwing, R-O-L-W-I-N-G, and Leslie Goemaat, G-O-E-M double "A" 12 T, with the -- 13 THE COURT: 14 MR. ROLWING: 15 M, double "A," T. -- with the Department of Justice on behalf of the Government. 16 THE COURT: DOJ, okay. Good afternoon, everybody. 17 You have the file, Ms. Carson, or did I leave it in my 18 chambers? 19 (Judge/Clerk confer) 20 THE COURT: 21 (Pause from 4:35 p.m. to 4:39 p.m. while Judge retrieves file) 24 25 Pardon me, ladies and gentlemen. 22 23 Oh, goodie. THE COURT: exercise. My courtroom deputy just wants me to get Our chambers are about a quarter of a mile around EXCEPTIONAL REPORTING SERVICES, INC 4 1 the building, so I think that she was just making sure that I'm 2 getting my exercise for the day. 3 again. All right, let's do this Are we still on the record? 4 MS. SPEAKER: 5 THE COURT: Yes. Okay, all right. My recollection now is 6 that we were here, we continued the detention hearing because 7 Mr. Geragos was not in court, he had someone specially 8 appearing for him -- 9 MR. GERAGOS: 10 THE COURT: That's correct. -- the first day so we didn't do either 11 the detention hearing or any of the further proceedings for 12 this out-of-district case. 13 for detention that I had in the file previously. 14 usually do is ask the Government to make its proffer in its 15 opening argument as to the issue of detention. 16 MR. ROLWING: So the Government has made a motion Thank you, your Honor. What I Rich Rolwing 17 again, your Honor, thank you. Mr. Dermen, which is a recent 18 name change, formerly known as Levon Termendzhyan, is charged 19 in the District of Utah with significant serious felonies of 20 money laundering, conceal and disguise, I believe four counts 21 carrying with the maximum statutory penalty of 80 years. 22 alleged to have schemed with his two codefendants in this money 23 laundering in defrauding the United States of over $500 24 million. 25 least 456 million of those fraud proceeds being received by his He is The evidence will show that he is involved in at EXCEPTIONAL REPORTING SERVICES, INC 5 1 co-defendants and shared with Mr. Termendzhyan. 2 attempt was in excess of $1.1 billion. 3 offenses carrying with them guidelines that approach, if not 4 exceed, the table. 5 And the These are very serious He's looking at life in prison. It's our burden to show by merely a preponderance at 6 this stage that he is a risk of flight. Mr. Termendzhyan, and 7 I will proffer the evidence that is submitted through the 8 Pretrial Services report, has not just significant ties to 9 Turkey but has lived there, resides there, changed his name as 10 it states to a Turkish name so that he could be more accepted 11 in that country, and has significant assets, these fraud 12 proceeds, with his co-conspirators in Turkey, planning to flee 13 to Turkey if and when it got hot. 14 Services report shows, he was flying to Turkey yesterday, not 15 coincidentally the same time period his codefendant Jacob 16 Kingston was arrested on a flight to Turkey on Thursday last 17 week. 18 individual in Turkey who is investing it on their behalf, and 19 one of those investments as is reported in this Pretrial 20 Services report is a private airline called Borajet Airlines 21 that Mr. Termendzhyan has access to and ownership of. 22 fact as is also reported in this Pretrial Services report, he 23 fled to Turkey; although Mr. Termendzhyan says the last time he 24 was in Turkey was approximately six months ago and he stayed 25 six months. And in fact as the Pretrial They have comingled their fraud proceeds with a third And in It's actually a year ago, August of 2017, when he EXCEPTIONAL REPORTING SERVICES, INC 6 1 departed coincidentally on the same day LAPD was executing 2 search warrants on his home and businesses on a -- the jet -- 3 one of the jets that Borajet Airlines owns. 4 evidence will show. 5 That's what the We also have evidence of in excess of 500 million 6 reportedly being invested by Mr. Termendzhyan and his 7 codefendant Jacob Kingston in this Turkish entity and its 8 investments called SBK Holding AS. 9 codefendant have residences there in Turkey, hundreds of He's got -- he and his 10 millions of dollars in Turkey; and as he has revealed to this 11 Court, he owns no property here in Los Angeles or the United 12 States. 13 years, he owns nothing. 14 It's all well and good and they're willing to put up those 15 residences and properties as some sort of bond to assure 16 Mr. Termendzhyan's appearance here at this trial. 17 no amount of money, no amount of property that Mr. Termendzhyan 18 or his family can offer this Court that will assure this Court 19 of his appearance here to face a trial in which, if convicted, 20 he would face the rest of his life in prison. 21 involved in a long-term scheme, as alleged in the indictment, 22 to steal hundreds of millions of dollars from the United States 23 government, stashing it in Turkey with the plan to flee there, 24 if and when it got hot. 25 do. Although he claims he's been a resident here for 30 It's all in the names of his family. But there is He has been And that's exactly what he intended to EXCEPTIONAL REPORTING SERVICES, INC 7 1 When he left in August of 2017, when the local police 2 department here executed State search warrants, he did not 3 return as is reported in the Pretrial Services report until 4 Mr. Geragos, who was well aware his client was in Turkey the 5 entire time LAPD was dealing with the assets they seized from 6 Mr. Termendzhyan's home and business, negotiated and got a 7 court to order the release and return of all those seized 8 assets because no prosecutor was involved as my understanding - 9 - I wasn't involved in that search warrant, it wasn't part of 10 our investigation. 11 search warrant derived out of. 12 was going to be pursued by prosecuting offices that were other 13 prosecuting offices like mine who were investigating Mr. Dermen 14 at the time, and so there was a decision to return all that. 15 He did not return to the United States until Mr. Geragos 16 sufficiently acquired that court order. 17 returned. 18 least twice since and, as I said, scheduled to leave the 19 country yesterday. 20 Don't know exactly whose investigation that But it was not something that Then Mr. Termendzhyan He has traveled to Turkey according to the report at So it is our burden to show merely by a preponderance 21 that he is a flight risk. And I submit that there is nothing 22 this -- that this Defendant could show to this Court that would 23 convince this Court he would appear for trial in Utah. 24 or $25 million worth of property that is now listed in the 25 Pretrial Services report as offered by his family, which is a EXCEPTIONAL REPORTING SERVICES, INC The 20 8 1 - I'm sure a genuine offer, could be replaced tomorrow by 2 Mr. Termendzhyan to his family when they lost it when he didn't 3 appear. 4 disposal, and a plan to flee. 5 He's got hundreds of millions of dollars at his That has always been the plan. There is also evidence submitted in the Pretrial 6 Services report of Mr. Termendzhyan's danger to the community. 7 As this Court may be aware and this -- the Government is 8 prepared to proffer through special agents, Mr. Termendzhyan 9 has ties to corrupt law enforcement. There is a recently 10 convicted Federal agent here from California who is a close 11 associate of Mr. Termendzhyan; and, in fact, the Government 12 would proffer an exhibit, photos of Mr. Termendzhyan with this 13 Federal agent the week after he was convicted of committing 14 offenses on behalf of Mr. Termendzhyan for an associate of 15 Mr. Termendzhyan. 16 He has longstanding business ties to law enforcement 17 here, hiring them as moonlighting security guards and other 18 associates. 19 Agent Hatcher that apparently he was tipped off to the search 20 warrant that was executed last August because the Borajet plane 21 from which and on which he fled this country in August of 2017 22 was in the United States two days before the search warrant and 23 left the day the search warrants were executed. 24 25 And the Government would proffer through Special So, your Honor, we also have -- I think Special Agent Hatcher would testify if, and I will proffer, that he would EXCEPTIONAL REPORTING SERVICES, INC 9 1 testify no less than four or five witnesses have expressed 2 concern for their safety for reporting facts about their 3 involvement with Mr. Termendzhyan. 4 20-year career in which so many witnesses have expressed a 5 concern about an individual. 6 Hatcher would present of threats these witnesses have heard 7 come from the Defendant's mouth. 8 that around the time of the search warrant, shortly before the 9 search warrant was executed last August, someone took a shot at I have had no case in my There is evidence Special Agent In fact, there was evidence 10 his cousin who Mr. Termendzhyan, according to the witnesses, 11 believed was providing information to the Government. 12 jammed and the cousin was not killed. 13 witnesses say, as well as you would hear other incidents of 14 threats Mr. Termendzhyan has made about and to other witnesses. The gun That's what these 15 I'll -- what is striking is that Mr. Termendzhyan, 16 you would hear from Special Agent Hatcher, surrounds himself 17 with armed body guards all the time. 18 intimidating to those he's in business with, but he is in this 19 case the evidence will show acted has an enforcer and has 20 assumed that role. 21 body guards, he parades around in multiple vehicles with armed 22 body guards, and displays that sort of power and intimidation 23 to all he deals with. 24 with those techniques and I assure this Court as Special Agent 25 Hatcher would proffer, that there is nothing that can be It is not just So he is surrounding himself with armed He is -- has accomplished these crimes EXCEPTIONAL REPORTING SERVICES, INC 10 1 offered that would make him appear to face the crimes that he 2 is charged with and will be charged with. 3 investigation. 4 This is a continuing The last thing I would say is that the charges that 5 were brought are only substantive money laundering counts right 6 now and some tax offenses for the purposes of preserving the 7 statute of limitations during a lengthy investigation in which 8 the Defendants were and have been trying to obstruct the 9 investigation. The investigation continues, and there is a 10 superseding indictment that is planned to be presented to a 11 Grand Jury. 12 but I will submit that the -- as I believe these charges would 13 support, the charges coming are much more severe and detailed 14 in their conspiracy and will lay out how Mr. Termendzhyan is 15 looking at guidelines that will be life in prison. 16 17 I know this Court doesn't have the benefit of that THE COURT: MR. GERAGOS: 19 THE COURT: 20 MR. GERAGOS: 21 THE COURT: I really don't think so because -Well, let me finish because -Okay. -- I'll tell you what I'd like to hear about. 23 MR. GERAGOS: 24 THE COURT: 25 Mr. Geragos, you probably realize you have a bit of an uphill battle here and -- 18 22 Thank you very much. Sure. I am pretty certain that you're -- you know, what you should be focusing on is whether or not he's EXCEPTIONAL REPORTING SERVICES, INC 11 1 going to show up in court, because I really think that that's a 2 critical issue. 3 have the proffer, I -- you know, from the Pretrial Services 4 report and the indictment, I would be at this point -- and, 5 again, I haven't heard your side yet -- inclined to think he's 6 at least an economic danger. 7 would be without even considering the specific information 8 proffered from the agent that is not contained in the Pretrial 9 Services report. 10 And even before we get to whether we need to Again, we haven't had -- that So let me now let you say your -- MR. GERAGOS: Well, as a -- I understand that they 11 don't have a legal basis to ask for detention based on this 12 indictment. 13 ability. 14 under The Bail Reform Act would mandate detention. 15 it's quite the opposite. 16 here, he's in four counts for a total of four payments of 17 $210,000 and two others of 70,000. 18 part of the problem when government prosecutors are listening 19 to their agents and haven't been involved in the case -- I've 20 been involved in this case since the day the search warrant was 21 executed over a year ago. 22 Beach court and appeared in front of Judge Ferrari not once, 23 not twice, but four separate times. 24 -- and by the way, when they say that there was no 25 prosecutorial agency, it took virtually an act of Congress to They -- it's not there. They don't have the There isn't anything that is mentioned here that In fact, The -- everything that is mentioned Unfortunately, and this is I was the one who went down to Long I offered the prosecutors EXCEPTIONAL REPORTING SERVICES, INC 12 1 get a prosecutor down there. 2 Attorney's office. 3 attorney -- 4 I had to serve the City They punted it over to the district THE COURT: Regardless, you're not addressing the 5 fact that whether it's the Government or the Court on its own 6 motion when you've got a defendant in a Federal case that is 7 perceived as a flight risk, a motion is appropriate, whether 8 it's ten dollars or a gazillion dollars. 9 whether what he's actually facing and what might be the issue You can argue about 10 there but, you know, I have an AO-approved checkbox form for 11 detention hearings, and it says, you know, there's the 12 presumption cases and then there's on the motion of the 13 Government or on the Court's own motion when somebody is 14 perceived to be a flight risk. 15 risk so address that for me. 16 MR. GERAGOS: I perceive him to be a flight Okay, he's known about this 17 investigation and the search warrant, which was mandated, for 18 well over a year. 19 search warrant. 20 you the litany of prosecutorial agencies, I've talked to the 21 City Attorney, I've talked repeatedly and appeared with the 22 district attorney's office, I've talked with the LAPD person 23 who was tasked on the task force. 24 U. S. Attorney's involvement here in the Central District. 25 all times he was informed and knew what the status was and It's going on 13 months next month since the At all times -- and the reason I was giving We also were told about the EXCEPTIONAL REPORTING SERVICES, INC At 13 1 returned here. 2 as far as the name change and the assets and everything else 3 is, and I would say this respectfully, is nonsense. 4 about his daughter's wedding in 2016. 5 this year. 6 have this officer get up here and swear under oath as to these 7 proffers, I want to have a hearing and bring the district 8 attorney in who told me they were -- 9 Once again, everything that is stated in here They talk It was just months ago He came back when -- and I can -- if he's going to THE COURT: I don't need the proffer. What I have is 10 a man who was -- he's -- somebody in Utah, a Grand Jury, has 11 found probable cause that he was involved in a very -- in a 12 massive fraud. 13 economic fraud. 14 planning to leave the country, has traveled back and forth. 15 I've got information in the Pretrial Services report that he 16 has, you know, a place to live and he certainly spends a lot of 17 time in Turkey. 18 we don't have an extradition treaty with Turkey. 19 decides to get there, we can't get him back. 20 So that's probable cause regarding some kind of I have a man who does a ton of travel, was And, you know, fortunately or unfortunately, MR. GERAGOS: Okay, that's -- I -- that's where I 21 disagree with Pretrial. 22 Turkey. 23 the subject of much in the news recently. 24 25 So if he We do have an extradition treaty with In fact, that extradition treaty with Turkey has been Number two, I have personally tried two jury trials with Mr. Termendzhyan in the last 15 years where he was facing EXCEPTIONAL REPORTING SERVICES, INC 14 1 substantially more serious charges than this one. 2 one was in Compton. 3 The judge dismissed it and commented at the time it was a 4 complete collapse. 5 6 It ended nine to three for not guilty. He was tried -- THE COURT: I'm interested in the allegations in this case -- 7 MR. GERAGOS: 8 THE COURT: 9 The first I understand that, but he --- and I'm interested in what the Pretrial Services report says here. 10 MR. GERAGOS: 11 THE COURT: Right. And, you know, that he was essentially, 12 you know, arrested on his way out of the country, his 13 codefendant was arrested on his way out of the country, -- 14 MR. GERAGOS: He wasn't arrested on his way out of 15 the country. What they neglected to tell you was he got a call 16 and he went down to meet the agents. 17 surrendered so I don't -- that's what I'm saying, I just 18 listened to this what I -- was a error-filled monologue by the 19 U. S. Attorney which I'm going to try to address and knock down 20 every single one of them. 21 self-surrendered. 22 him; they called him, he went down. 23 days ago that the -- 24 THE COURT: 25 MR. GERAGOS: He didn't flee. He self- He wasn't fleeing the country; he They didn't go out to get him and arrest He knew as recently as 30 Stop screaming. He knew that the prosecutors were EXCEPTIONAL REPORTING SERVICES, INC 15 1 considering a grand theft by false pretense charges in relation 2 to the bio fuel execution of the search warrant. 3 always on the table. 4 that I made the orders for the return of property -- and by the 5 way, all of the property with the exception -- with some 6 limited exceptions was already ordered returned by a judge in 7 this district, albeit a State Court judge, Judge Ferrari, who 8 gave the prosecutors in court a time limit to either put up or 9 shut up, basically is what the order was. 10 flight to flee. 11 12 The only reason that we got the -- or Was there an indicted case or even a criminal complaint on him in the State Court case? MR. GERAGOS: There was a search warrant that had been executed -- 15 THE COURT: 16 MR. GERAGOS: 17 THE COURT: 18 He did not have a He got a phone call -- THE COURT: 13 14 That was There was a search warrant. Was -- There was not a criminal complaint -Was there a finding of probable cause by a grand jury somewhere? 19 MR. GERAGOS: 20 THE COURT: No, there was not. All right, I tell you what, let me hear 21 from the Government, and if you want we'll put the agent up. 22 I'm not going to let you, you know, put this over, call 23 witnesses. 24 would like to, you know, hear the more serious allegations, I 25 don't think I need them. You can do that in Utah if you want. But if you I think that I -- purely on flight EXCEPTIONAL REPORTING SERVICES, INC 16 1 risk I just don't see that if there's, you know, -- 2 MR. GERAGOS: 3 THE COURT: Could I make my record? -- he's got -- you can make your record. 4 He's got the means, clearly has the means to go to Turkey. 5 He's got, you know, could stay there as long as he wants. 6 he has the means to get there as well as to stay there. 7 8 MR. GERAGOS: And So -- Let me offer -- well, so the record is clear, -- 9 THE COURT: 10 MR. GERAGOS: Okay. -- I'm offering $25 million. I spoke to Pretrial yesterday. I'm 11 offering GPS. I'm offering a 12 third party to monitor where he is and be a liaison with the 13 Court. 14 statement that, yes, he didn't know about the probable cause 15 finding, as you've mentioned, but he's listed in only four of 16 the 15 counts, for a grand sum of less than a half a million 17 dollars is what the exposure is. 18 what was just stated, in any kind of a conspiracy. 19 The Bail Reform Act, the duty is to find if there is a less 20 restrictive ability to -- that can be fashioned, which I'm not 21 -- I -- apparently I'm not getting the opportunity to fully 22 argue this as to why I think this Court has a duty under The 23 Bail Reform Act to allow him to proffer all of those conditions 24 which are less restrictive than detention. 25 have the burden. And I'm offering or proffering to the Court the He's not listed, contrary to And under There is no -- they This is not a rebuttable presumption case. EXCEPTIONAL REPORTING SERVICES, INC 17 1 They have only indicted him -- and it's great if they want to 2 make this detention argument, we could have them save it for 3 the time when they do their superseding indictment. 4 fact is right now, he was not fleeing anywhere. 5 and the reason I cited the prior cases, your Honor, is 6 precisely to try to convey to you that he has faced much more 7 serious charges, that he has never run, he's made all court 8 appearances at all time, and he's been acquitted not once but 9 twice before. But the He's been -- The -- invoking the law enforcement or the 10 corrupt Federal agent, they've gotten the facts wrong. I 11 understand you don't want to hear about that so I won't belabor 12 that but the fact remains that the witnesses that the 13 Government is citing are witnesses that are -- that have 14 embezzled money from him and are involved in civil litigation. 15 I understand that the Government can throw around 500 million, 16 400 million, there's no evidence of any of that. 17 somebody, and I suppose it's the case agent, who's listening to 18 the guy who stole $25 million from who, by the way, is a lawyer 19 who's now got the State Bar taking action with him. 20 understand you want me to calm down, but I don't know why I 21 have to listen to the U. S. Attorney cite this parade of 22 nonsense, which I know to be not true because I've been 23 involved with this gentleman and with his family for over a 24 decade, and I know what the facts are. 25 virtually that he said is belied by what the real facts are. They've got So I And every single thing EXCEPTIONAL REPORTING SERVICES, INC 18 1 If you're an Armenian and you're in Turkey, having a 2 Y-A-N or an I-A-N use -- will subject you to all kinds of 3 trouble. 4 not Geragosian. 5 dropped the I-A-N. 6 insensitivity when they make the argument that the reason he 7 converted to Lev Dermen is because he wanted to be Turkish. 8 That isn't it. 9 my grandfather included, when they go to another country and It's one of the reasons why Geragos is Geragos and When my grandfather came to this country, he So there is almost an inherent cultural That's a common trick that what Armenians do, 10 don't want to be discriminated against as an Armenian. 11 not fleeing. 12 He -- there is no economic threat here. He is The idea 13 that this case is at any point economically or more frightening 14 than two of the other trials I've gone through with him is 15 frankly almost a joke because the other cases were double 16 digit, if not life, tops. 17 that were out for days, he never fled. 18 was a hung they dismissed, the other was a not guilty in this 19 Central District here. 20 every appearance. 21 order on the return of property specifically ordered that the - 22 - on this very search warrant that they're talking about, that 23 the money be held in trust pending further order of the Court. 24 He's not going to flee and leave that money. 25 flee and leave his brother, his son, his nephew, his family. And he stood trial, he had jurors And in both cases, one He appeared at every time early for He's not going anywhere. In fact, the Court He's not going to EXCEPTIONAL REPORTING SERVICES, INC 19 1 He's got all of this -- he's built quite a oil and gas empire 2 here in southern California that is run by the rest of his 3 family. 4 going back and forth is not the parade of horribles argument 5 that the Government made here but a highly personal reason on 6 his behalf since the suicide several years ago of his wife. 7 came back smack dab in the middle of this investigation and he 8 did not -- by the way, the facts as just represented, I want to 9 hold the Government to those too in terms of the execution of He's -- the reason that he has been in Turkey and 10 the search warrant and when he left the country and when he 11 came back because they don't comport with the reality on the 12 ground. 13 He He came back and -THE COURT: All right, let me -- then let me hear 14 from the Government and then I want to put the -- go ahead and 15 put the agent on because I am -- you know, if we're going to go 16 down this road, I want him to be able to ask his questions. 17 want to hear about this alleged witness intimidation. 18 want you to address his points about the indictment which I 19 read but I did not re-read. 20 here but I read that at his initial appearance. 21 from the Government again and then we'll get the agent sworn. 22 MR. ROLWING: I And I I will do that while I'm sitting Thank you, your Honor. So I'll hear All the talk 23 Mr. Geragos makes of this so-called search warrant, the search 24 warrant I mentioned is not the search warrant that relates to 25 this investigation at all. It has nothing to do with this EXCEPTIONAL REPORTING SERVICES, INC 20 1 case. There's no allegation of this fraud in that search 2 warrant affidavit, and yet he fled the day it was executed. 3 This -- let me just correct what Mr. Geragos said. 4 This was not a self-surrender by Mr. Dermen. Instead, 5 Mr. Dermen was trying to -- he called the IRS office this week, 6 the evidence will show, to invite himself down to offer 7 evidence on someone else. 8 one witness who has been providing information, according to 9 Mr. Dermen, to the Government. He happens to be in a lawsuit with And he found this out and he's 10 tried to flip the tables and wants to provide information on 11 that individual. 12 week or this past week, invited him down under a ruse to show 13 up so that we could arrest him without his armed body guards 14 coming through security and in his presence. 15 self-surrender. 16 under seal. 17 his own invitation to come down and provide information on 18 another. 19 The IRS, knowing we wanted him arrested this So there was no He was not aware of this indictment. It was He didn't surrender to anything except comply with And, finally, I think the Court can take judicial 20 notice, this is in the public realm, that President Erdogan has 21 announced there will be no extraditions from Turkey to the 22 United States until the United States extradites the cleric, 23 Gulen, in Pennsylvania, who Erdogan is so hot to trot to have 24 extradited and the United States will not extradite. 25 in the public record. That is You can do a Google search on it. EXCEPTIONAL REPORTING SERVICES, INC Even 21 1 if there is a treaty, that treaty is not being applied with per 2 the President of Turkey, President Erdogan. 3 THE COURT: That's actually my recollection. Whether 4 or not I take judicial notice of it is a whole nother issue. 5 But that was my recollection as well. 6 -- you know, Mr. Geragos wants to be able to make his record, 7 and perhaps he's quite eloquent and convince me. 8 skeptical. 9 avoid this so that we weren't here forever but let's go ahead Okay, though, but let's I'm still But I do think that we should -- I was hoping to 10 and put the agent on and make your proffer on the danger 11 issues. 12 MR. ROLWING: 13 THE CLERK: 14 THE CLERK: THE WITNESS: My name's Special Agent Tyler Hatcher. It's T-Y-L-E-R H-A-T-C-H-E-R. 19 20 Please be seated and state your full name and spell your last name for the record. 17 18 Please raise your right hand. TYLER HATCHER, GOVERNMENT'S WITNESS, SWORN 15 16 Government calls Special Agent Hatcher. MR. ROLWING: Your Honor, if I might, I just heard the Court say put on the witness regarding -- 21 THE COURT: You can address whatever you want to 22 address. I just at this point I'm -- you should put on the 23 evidence of flight as well. 24 leaning that direction even on the flight issue. 25 -- because there were a lot of allegations made about danger, I'm just -- because I'm still EXCEPTIONAL REPORTING SERVICES, INC But I wanted 22 1 about potential witness threats or witness tampering, issues 2 like that and, you know, I normally would not consider them at 3 all. 4 I would like the -- you to, you know, get the proffer from the 5 agent and then Mr. Geragos can question if he would like. But if they're -- you know, they're being challenged, so 6 MR. SPEAKER: I was just going to say, if you're 7 normally not going to consider them at all, then I don't need 8 to hear them. 9 of your ruling and your ruling is purely on the economic, I'm 10 That's -- I mean, if that's not going to be part willing to submit on that. 11 THE COURT: Well, now that we've gotten this far, you 12 know, I've had really good argument as I had really good 13 argument when Mr. Geragos was my opposing counsel 20 years ago. 14 And so now I guess I want to make sure that I've got the full 15 picture before I make a decision. 16 and make your proffer through the agent or put on the evidence 17 through the agent. 18 MR. ROLWING: So why don't you go ahead I -- and if I might, your Honor, just 19 remind the Court that the Government's motion for detention is 20 primarily based on the risk of flight of Mr. Dermen, which we 21 need only prove by a preponderance of the evidence under the 22 standards. 23 THE COURT: Yeah, I have my AO form memorized so I 24 think we're good on that, but -- 25 MR. ROLWING: Okay. EXCEPTIONAL REPORTING SERVICES, INC 23 Hatcher - Direct / By Mr. Rolwing 1 2 THE COURT: -- on what the standards are. So let's just get to the facts. 3 DIRECT EXAMINATION 4 BY MR. ROLWING: 5 Q 6 to the Court, who you are, what you do, where you're from? 7 A 8 agent since 2002, and I'm one of the case agents on this 9 investigation. Special Agent Hatcher, would you just introduce yourself Yeah. I'm a special agent with IRS. I've been a special 10 Q How long have you been assigned to this investigation? 11 A Almost two years. 12 Q During the course of that investigation, did you at any 13 time meet Defendant Dermen? 14 A I did. 15 Q When? 16 A It was probably I think in June of this year. 17 Q And did you show up at his place of business with a 18 subpoena? 19 A I did. 20 Q And was it a subpoena for him? 21 A No, it was not. 22 Q Who was it for? 23 A It was for NOIL, his company, but more specifically Dan 24 McDyre, who's listed as the president of NOIL. 25 Q And did you deal with Dan McDyre? EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 24 1 A Sort of. 2 Q Explain. 3 A I went there, I was looking for the president of NOIL, and 4 Mr. Termendzhyan introduced himself as Levon, and answered most 5 of my questions directed at Mr. McDyre. 6 Q You both -- they both were in your presence, -- 7 A Correct. 8 Q -- Mr. McDyre. 9 A That's correct. 10 Q But your questions to Mr. McDyre were answered by 11 Mr. Dermen? 12 A Correct. 13 Q Did you get the sense of who was in charge? 14 A Mr. Termendzhyan was definitely in charge. 15 Q And did you reveal to him that he was under Federal 16 investigation by you and your -- 17 A I did not. 18 Q Did you suspect that he knew this at that time? 19 A I did not. 20 Q In fact, what did you say after this meeting? 21 MR. GERAGOS: Objection, to who? 22 Q 23 whether Mr. Termendzhyan believed he was a target of the 24 investigation at that time? 25 What did you say to your team, your other agents, about MR. GERAGOS: Objection, hearsay. EXCEPTIONAL REPORTING SERVICES, INC 25 Hatcher - Direct / By Mr. Rolwing 1 THE COURT: Yeah, sustained as to what he said. 2 -- he can tell me what he thought or what he believed but I 3 don't think the hearsay itself is necessary. 4 MR. ROLWING: Your Honor, all right, I'll rephrase. 5 BY MR. ROLWING: 6 Q 7 any sense that he believed he was a target of your 8 investigation? 9 After that interaction with Mr. Termendzhyan, did you have MR. GERAGOS: 10 What THE COURT: Objection, calls for speculation. I'll allow it. 11 BY MR. ROLWING: 12 A No, he did not. 13 Q So when he called the -- did you learn that he called the 14 IRS office this past week? 15 A I did. 16 Q And what was the reason Mr. Termendzhyan called the IRS 17 office; was he aware of the indictment, did he say? I spoke to the special agent that took the calls. 18 MR. GERAGOS: 19 THE COURT: 20 MR. GERAGOS: 21 THE COURT: Objection, hearsay, compound, -That's --- speculation. Well, it's not hearsay if it's an 22 admission of a party opponent here. He's saying what -- you 23 know, what the reason -- it's not even for the truth of the 24 matter, what the reason is that he had at least allegedly 25 expressed to the IRS. EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 1 BY MR. ROLWING: 2 A 3 that Mr. Termendzhyan reached out and had some information he 4 wanted to share with the IRS. 5 Q 6 indictment? 7 A No. 8 Q And in fact did -- what instructions did you give that 9 agent? 26 I spoke to the agent that took the phone call and he said Did he indicate that he wanted to self-surrender to an 10 A I asked the agent to make the appointment for Friday, so 11 this last Friday, sometime in the afternoon so that we could 12 arrest him. 13 Q And then why did the arrest happen on Thursday? 14 A Our agents in Los Angeles were busy that day with another 15 operation in the morning and I reached out I think sometime 16 around noon or 1:00 and asked them to put surveillance on 17 Mr. Termendzhyan until we could effect the arrest on Friday. 18 And they at that point decided to contact Mr. Termendzhyan to 19 see if he could come in and make his statement Thursday 20 afternoon. 21 Q 22 Mr. Termendzhyan's access to private planes? 23 A I have. 24 Q Have you -- has anyone revealed to you that he does travel 25 by private plane out of the country? That's when he was arrested. Have you interviewed witnesses surrounding EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 27 1 A Yes. 2 Q Were you informed of his travel last August? 3 A I was. 4 Q Explain to the Court how you learned about it. 5 A I spoke to another special agent associated with 6 investigations in California who relayed to me that he received 7 a phone call from Customs and Border Patrol saying that he was 8 on his way out. 9 MR. GERAGOS: 10 THE COURT: Objection, multiple levels of hearsay. It's also a -- happens to be a detention 11 hearing so it's -- I'll allow it. 12 BY MR. ROLWING: 13 Q He said to you what? 14 A That agent let me know that CBP, Customs and Border 15 Protection, notified him that Mr. Termendzhyan was on his way 16 on a flight out of the country. 17 Q 18 that day did you learn? 19 A 20 last year. 21 Q 22 investigation? 23 A They were not. 24 Q Were they authorized by you? 25 A No. I'm sorry. And did you investigate what -- and what was happening That was the day of the State search warrants in August of And were those State search warrants related to your EXCEPTIONAL REPORTING SERVICES, INC 28 Hatcher - Direct / By Mr. Rolwing 1 Q Your team? 2 A No. 3 Q Were they known that -- before the execution by your team? 4 A No. 5 Q Were you a part of or was the prosecution team you're 6 associated with in your investigation a part of any of those 7 litigation hearings Mr. Geragos spoke to this Court about? 8 A No. 9 Q And did you later investigate and uncover what plane 10 Mr. Termendzhyan left the country on that day in August of 11 2017? 12 A I did. 13 Q What was that plane? 14 A It was a plane that we later found out was a Borajet with 15 "SBK" on the tail. 16 T-C I believe "Y" something. 17 Q MR. ROLWING: THE COURT: 21 MR. ROLWING: 22 THE COURT: 23 MR. ROLWING: 25 If I may, your Honor, approach the witness with an exhibit? 20 24 It's I'm going to hand you -- 18 19 And I don't remember the ail numbers. You have copies for counsel as well? Handed one to Mr. Geragos. Okay. I have one for the witness and for the Court. THE COURT: Thank you. EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 29 1 BY MR. ROLWING: 2 Q Do you recognize that plane, Mr. Hatcher? 3 A I do. 4 Q What -- how do you recognize it? 5 A This is the plane we can see the tail number on that 6 engine, T-C-Y-Y-A. 7 Mr. Termendzhyan left the day of the warrants in August of last 8 year. 9 Q And what is the symbol on the tail? 10 A That's "SBK Holding," which is the "SBK" -- as we know it 11 "SBK Holding AS" in Turkey. 12 based registration. 13 Q And what is SBK Holding AS, as you know it in Turkey? 14 A It's a joint holding company as we understand it, jointly 15 owned or controlled by a Turkish individual whose initials are 16 "SBK," Sezgin Baran Korkmaz, Mr. Termendzhyan, and 17 Mr. Kingston, who's the main target in our investigation in 18 Utah. 19 Q 20 Mr. Kingston -- can you explain who Mr. Kingston is to the 21 Court, please? 22 A 23 Renewable Energies, who was the main target of our 24 investigation and responsible of the 500 million payouts that 25 you mentioned before, and is also a business partner of I recognize this as the plane that The "TC" indicates it's a Turkish- And have you uncovered in your investigation that Yeah, Mr. Kingston's the CEO or owner of Washakie EXCEPTIONAL REPORTING SERVICES, INC 30 Hatcher - Direct / By Mr. Rolwing 1 Mr. Termendzhyan. 2 Q 3 Holding AS in Turkey? 4 A My understanding, yes. 5 Q According to witnesses. 6 A According to witnesses and a press release in Turkey and 7 other documents we've uncovered. 8 Q 9 Exhibit 5. And does Mr. Kingston also share some partnership in SBK I'm going to hand you what's been marked as Government The airplane was Government Exhibit 1. I've handed 10 one to Mr. Geragos. Do you recognize Government Exhibit 5? 11 A I do. 12 Q What is it? 13 A This is an English translation of a Turkish press release 14 that we uncovered through the course of our investigation. 15 Q 16 Investment Support and Promotion Agency." 17 A It does. 18 Q Is that a government agency as far as you know? 19 A My understanding is yes. 20 Q And what is being announced here in September of 2016? 21 A Just speaking in terms of how I interpreted it, it's an 22 announcement of a joint venture, if you will, for $950 million 23 cash flow. 24 already invested in Turkey by as it says at the top here, NOIL 25 Energy Group, U. S.-based Washakie Renewable Energy, and SBK And it says: "The Republic of Turkey Prime Ministry And it was broken down between 450 million that was EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 1 Holding, LLC, which is a U. S.-based joint venture, if you 2 will, between Mr. Termendzhyan and initially Mr. Kingston. 3 Q SBK Holding, LLC is different than SBK Holding AS. 4 A Correct. 5 Q Would you explain that to the Court? 6 A SBK Holding, LLC later changed to SBK Holding USA, is a 7 USA sister company, if you will, of SBK Holdings AS. 8 Q 9 States? 31 And who controlled SBK Holding, LLC here in the United 10 A Initially it was Mr. Kingston and Mr. Termendzhyan, but 11 Mr. Kingston was later pushed out. 12 Q And who was on the bank account for SBK Holding, LLC? 13 A On that one was Mr. Termendzhyan and his son George. 14 Q Was Jacob Kingston ever on the bank account? 15 A Not to my knowledge. 16 Q And this -- if you move down to paragraph one, two, three, 17 four, five, the last sentence of paragraph five on page one. 18 A 19 recovery fund?" Are you referring to "NEG has established a $500 million 20 21 Q 22 THE COURT: He's looking at the -- THE COURT: -- total investments made since 2015. No. 23 A Oh, I'm sorry, yeah, total investment to hit the 950 24 million mark. 25 Q No, the total -- read -- the sentence on the last EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 32 1 paragraph of paragraph five, the one above the one you read. 2 "Total investments made since 2013 in collaboration with and 3 under the management of SBK Holding have reached 500 million." 4 A Yes, I see that. 5 Q Since 2013. 6 A Correct. 7 Q How much did your investigation reveal Washakie Renewable 8 Energy applied for and received from the United States in 2013 9 in refundable, renewable fuel tax credits? I apologize. 10 A They applied for over a billion and received a little over 11 500 million. 12 Q From 2013 forward. 13 A From 2010 forward, correct. 14 Q And in 2013, it was approximately 286 million. 15 A That's correct. 16 Q And 170 million in 2014. 17 A Correct. 18 Q Another 600 million applied for in 2015. 19 A That's correct. 20 Q And this in -- actually applied for in 2016 for the 2015 21 year. 22 A Correct. 23 Q And this press release suggests that in addition to the 24 500 million that has been invested since 2013, another 450 25 million is poised to flow into Turkey. EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 33 1 A Correct. 2 Q Did you trace any of the refunds that the Department of 3 Treasury paid Washakie to Mr. Termendzhyan and Mr. Kingston and 4 Mr. Korkmaz's SBK entity or investments in Turkey? 5 A I have. 6 Q How much? 7 A It's a little over 130 million. 8 Q Directly from the Department of Treasure, U. S. Department 9 of Treasury. 10 A 11 either SBK USA or SBK Turkey or other Turkish investments that 12 we've uncovered. 13 Q 14 -- 15 A They did. 16 Q -- says? 17 sending money to Turkey? 18 A I have. 19 Q Bank records show. 20 SBK Holding USA, did they send money to Turkey? 21 A 22 From Treasury through Mr. Kingston controlled accounts to And did those start in 2013, much like this press release Did you -- have you also seen Mr. Termendzhyan How about SBK Holding, LLC in the US, Yes, they did. (Pause) 23 Q I'm going to hand you what's marked Government Exhibit 24 Number 7. 25 A You recognize this photo, Special Agent Hatcher? I do. EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 34 1 Q Can you tell the Court who's in it? 2 A If we look from my left, on the far left, that's Mr. Jacob 3 Kingston. 4 Baran Korkmaz, as Baran. 5 person with his hands on the chair is the president of 6 Turkey. 7 to him is. 8 Q 9 Mr. Kingston have, through Mr. Korkmaz, some sort of Standing next to him is we know SBK, or Sezgin And I believe the middle And I'm not sure who the person standing next I've never seen him. Has your investigation revealed that Mr. Dermen and 10 relationship with the President of Turkey, Erdogan? 11 A Yes. 12 Q Have witnesses -- have any witnesses mentioned to you and 13 your team of investigators whether Mr. Erdogan is willing to 14 extradite -- agree to some extradition request for these two if 15 they are -- if it's requested by the U. S.? 16 A 17 have used their wealth to ensure that their money would be a 18 safe haven in Turkey as well as protect them against 19 extradition. 20 Q 21 Levon Termendzhyan in a civil suit here in Los Angeles between 22 SBK Holding USA, Inc., that entity you just testified about, 23 and an individual known as Edgar Sargsyan and some other 24 entities? Witnesses have told us that Mr. Baran and Mr. Termendzhyan Government Exhibit 6, is Government 6 a declaration of one EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 35 1 A It is. 2 Q In this declaration, if you turn to paragraph six -- 3 first, let's tell the Court when it's dated on page two of the 4 declaration. 5 A It's dated October 17th of 2017. 6 Q Is that just a few months after he fled on that plane 7 exhibited in Government Exhibit 1? 8 A Yeah, he fled in August. 9 Q And what does he say in paragraph six? 10 A Would you like me to read it verbatim? 11 Q Yes. 12 A It says: 13 "Although I am residing in Turkey, I'm available and 14 willing to be deposed in Istanbul, though I 15 understand Defendant's counsel is not willing to 16 travel to Istanbul. 17 deposition, I have no objection to having my 18 deposition taken by video conference or something 19 similar if the attorneys all agree where I can remain 20 in Istanbul and Defendant's counsel can remain in Los 21 Angeles. 22 prohibitive for me to travel from Istanbul to Los 23 Angeles now to have my deposition taken in Los 24 Angeles, only to then have to fly back to Istanbul 25 thereafter to resume my business operations." Because I am not avoiding a It is incredibly difficult and cost EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 36 1 Q Have you spoken to the attorney representing Edgar 2 Sargsyan in this lawsuit? 3 A I have. 4 Q And has he complained that Mr. Dermen has ignored court 5 orders to appear for depositions? 6 A My understanding is at least once. 7 Q And was he not ordered to appear by August 20th of this 8 month to appear for a deposition in a civil case, which he did 9 not appear? 10 A Correct. 11 Q And this declaration relates to a deposition that they 12 were trying to schedule last -- 2017. 13 A 14 In October. (Pause) 15 Q Please tell the Court do you know where Defendant Dermen 16 lives? 17 A 18 Sheringham. 19 addresses that I have -- was not aware of. 20 Q 21 Mr. Termendzhyan has associated himself with now? 22 A Yes. 23 Q And are -- do you know whether any of the companies other 24 than SBK Holding USA, Inc. or LLC are owned by -- listed as 25 owned by Levon Termendzhyan? I thought that I had an address for him which was on But when he was booked, he listed another couple Are there numerous residences here in Los Angeles that EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 37 1 A No. 2 Q Yet when you went to subpoena Dan McDyre as the president 3 of NOIL Energy, it was Mr. Dermen who said what when you asked 4 Mr. McDyre to possibly appear and be interviewed by you or 5 testify in a Grand Jury? 6 A 7 records. 8 necessary to subpoena him to Utah for a personal appearance. 9 And Mr. Termendzhyan answered for him and said he would not let 10 They're usually held by nominees. Yeah, when I served the subpoena, it was a subpoena for And I advised Mr. McDyre at that time that it may be him come. 11 (Pause) 12 Q Does the IRS or the Federal government have some other 13 means you're aware of to bring Mr. Dermen back from Turkey once 14 he flees there? 15 A No, I'm unaware. 16 Q Is -- based upon your investigation, Special Agent 17 Hatcher, and this press release announcing some four or 500 18 million invested in Turkey, do you believe Mr. Termendzhyan has 19 sufficient assets in Turkey to remain there the rest of his 20 life? 21 A I do. 22 Q Have witnesses told you he has a house there? 23 A Yes. 24 Q More than one. 25 A Possibly. EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 1 (Pause) 2 Q 3 that they are afraid to provide evidence surrounding 4 Mr. Termendzhyan? 5 A 6 of them indicate fear for -- you know, of Mr. Termendzhyan. 7 But I can think of three or four with specific instances of 8 seeing him or hearing of him doing harm to other witnesses in 9 related cases or, you know, employees or people surrounding How many witnesses have indicated to you approximately I've interviewed dozens of witnesses in this case and many 10 him. 11 Q Are you inclined to reveal the witnesses here today? 12 A I would rather not. 13 Q Have they asked -- 14 15 38 MR. GERAGOS: Then there's a motion to strike, it's not admissible evidence. 16 MR. ROLWING: 17 THE COURT: No. It's denied because we're also not 18 talking about -- we're not in a trial now where everything has 19 to be admissible under the Federal rules. 20 considering -- you know, you're going to get an opportunity to 21 cross examine. 22 will, you know, tell you what I need to consider or not 23 consider at the end of these proceedings. 24 play strictly by the rules of evidence in this case. 25 I need to be I realize you won't have the names but -- and I MR. ROLWING: But we don't have to And along those lines, your Honor, I EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 1 want to note that the Ninth Circuit's pretty clear that 2 hearings of this nature are not discovery devices for 3 Defendant. 4 5 THE COURT: 39 And I'm fully aware of that as well. It's -- that's part of my job, too. 6 (Pause) 7 BY MR. ROLWING: 8 Q 9 their money based upon your investigation? In -- have Mr. Termendzhyan and Mr. Kingston comingled 10 A Yes. 11 Q In fact, who paid the VAT tax on the purchase of a mansion 12 in Turkey in March of 2014 for the waterside house? 13 A It came out of Washakie funds. 14 Q Washakie paid how much to -- for a VAT tax related to a 15 waterside mansion in Turkey? 16 A 17 right in front of me. 18 Q 19 Termendzhyan in Turkey at Guaranty Bank, right? 20 A Correct. 21 Q And was that 483,000 paid by Jacob Kingston and Isaiah 22 Kingston, his two codefendants, their company, Washakie 23 Renewable Energy, was that proceeds of their fraud in 2014? 24 A 25 I want to say it was 483,000, but I don't have the wire And they paid it to a bank account in the name of Levon It was. (Pause) EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Direct / By Mr. Rolwing 1 Q 2 has law enforcement contacts and tries to keep tabs on 3 investigations? 4 A Many times. 5 Q And have you taken efforts during the course of this 6 investigation to keep the circle close so that the indictment 7 that was returned would not be leaked? 8 A Yes. 9 Q Do you have any evidence that Mr. Termendzhyan was aware Have any witnesses revealed to you that Mr. Termendzhyan That's why we kept it mostly in Utah. 10 of this indictment that he was arrested on last week? 11 A None whatsoever. 12 Q So was there any sense that he was self-surrendering in 13 your eyes? 14 A 15 our office. 16 40 He was not self-surrendering. We rused him to come into (Pause) 17 Q If the -- the search warrants executed by the State agent 18 and signed by a State judge in that State investigation in 19 August of 2017 were preceded by interviews by that LAPD 20 officer, right? 21 A It's my understanding, yes. 22 Q And did you learn that he interviewed -- did you read his 23 search warrant affidavit? 24 A I don't think I read that one, no. 25 Q Okay. Are you aware of who or whether he claimed he had EXCEPTIONAL REPORTING SERVICES, INC 41 Hatcher - Cross / By Mr. Geragos 1 confidential informants informing him of certain conduct they 2 were investigating of Mr. Dermen? 3 A 4 yes. 5 Q 6 reveal that they thought Mr. Termendzhyan was trying to have 7 one of those witnesses killed? 8 A Yes. 9 Q And were there shots fired at a witness? 10 A My understanding is yes. 11 Q Or did the gun -- or shots attempted to be fired? 12 A Yes. I believe that he had CIs, or confidential informants, And did witnesses you interviewed at or around that time 13 MR. ROLWING: 14 THE COURT: 15 Nothing further, your Honor. Okay. Mr. Geragos? CROSS EXAMINATION 16 BY MR. GERAGOS: 17 Q 18 son? 19 A I am not aware with the -- of the circumstances. 20 Q Well, have you looked at the indictment in this district 21 of the -- and the plea agreement for the officer, you know, 22 John Balunis (phonetic)? 23 A I have not looked at that. 24 Q You haven't looked at that? 25 allegation is the only shots fired were at Mr. Termendzhyan's Are you aware that the shots that were fired were at his Just -- Do you know that the EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Cross / By Mr. Geragos 42 1 son? 2 A I'm not familiar with that. 3 Q Have you seen published reports that Gevork Termendzhyan 4 was the -- the victim, who's sitting in court here, that it 5 wasn't shots fired by Mr. Termendzhyan, it was shots fired at 6 his son? 7 A I am unaware of that. 8 Q Well, who was it that the shots were fired at? 9 A My understanding, it was a witness. 10 Q Well, is -- where did you get that understanding? 11 A From a witness. 12 Q From what witness? 13 A I'm not going to divulge that. 14 Q You're not at liberty to say? 15 A Nope. 16 Q Are you at liberty to review any of the federal matters or 17 information surrounding the shots fired? 18 A 19 it. 20 Q 21 the agents who prosecuted or investigated John Ballion? 22 A I have not talked -- 23 Q Is that your testimony? 24 A I have not talked to him, no. 25 Q You what? It's not a part of my case, so I don't know anything about You've never talked to John Ballion (phonetic) or any of EXCEPTIONAL REPORTING SERVICES, INC 43 Hatcher - Cross / By Mr. Geragos 1 THE COURT: Let me assure you, Mr. Geragos, I'm 2 not -- I am not going to consider, because I just don't think I 3 need to consider, the -- any of the state court proceedings. 4 5 MR. GERAGOS: It isn't state court. I'll get to that in a second. 6 THE COURT: 7 BY MR. GERAGOS: 8 Q 9 correct? All right. You just testified this was a state court warrant, 10 A Which warrant are you referring to? I'm sorry. 11 Q The one that the -- we talked about or that your -- your 12 U.S. Attorney has been talking about; August, last year. 13 A The one last August was a state -- 14 Q Yeah. 15 A -- search warrant. 16 Q Do you know where all the property was turned over to? 17 A I don't know. 18 Q Homeland Security? 19 (phonetic) is? 20 A I don't know who that is. 21 Q General Counsel for ICE, who supervised all of the 22 property, everything that was -- that was seized by LAPD? 23 you aware of that? 24 A I'm not. 25 Q You said you talked to Edgar Sargsyan's lawyer. Do you know who Matthew Denham EXCEPTIONAL REPORTING SERVICES, INC Are Is that Hatcher - Cross / By Mr. Geragos 44 1 right? 2 A Correct. 3 Q Do you know that Edgar Sargsyan is under investigation for 4 embezzling over $10 million from Mr. Termendzhyan? 5 A 6 litigation, but that's all I'm aware of. 7 Q 8 litigation as to Edgar Sargsyan? 9 A I'm not aware of an investigation. I'm aware of the civil What is the -- what's the allegation in the civil I don't know the particulars. I just know there's 10 something going on. 11 Q 12 When you interview somebody who is a lawyer for somebody making 13 accusations, don't you want to know if they have an ax to 14 grind? 15 A I look for the facts relevant to my case. 16 Q Okay. 17 dispute between Edgar Sargsyan or Mr. Termendzhyan? 18 A I'm not sure I understand your question. 19 Q Did you know that Edgar Sargsyan was Mr. Termendzhyan's 20 lawyer and stole over $10 million from him? 21 A I'm not aware that he acted as legal counsel, no. 22 Q Did you know that Mr. Sargsyan is a lawyer? 23 A I did. 24 Q Did you know that Mr. Sargsyan was representing 25 Mr. Termendzhyan? Did you know -- well, you don’t know the particulars. What was the facts relevant to the case as to the EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Cross / By Mr. Geragos 45 1 A I did not. 2 Q Did you ask the lawyer, by the way, what was the 3 relationship between Edgar Sargsyan and Mr. Termendzhyan? 4 A I did ask him. 5 Q And what did he tell you? 6 A He said he was the president or he ran SBK Holdings, USA; 7 he did not act as legal counsel. 8 Q 9 review any documents in connection with that; is that right? Oh. And, so, you accepted that at face value, didn't 10 A I did. 11 Q Did you -- by the way, you said you did the tracing of the 12 funds? 13 A I did. 14 Q And where did you see the funds going from Levon 15 Termendzhyan to the Turkish entity? 16 transfers that you have in your possession? 17 A 18 signatory on the bank account. 19 Q 20 what did you do to substantiate the monies that are mentioned 21 in this press release? 22 A 23 records, but as it's been discussed, they are not cooperative 24 right now. 25 Q Where did -- was that wire Wire transfers from SBK USA, of which Levon is the And this press release. This press release, did you -- Well, we tried to reach out to Turkey to get a request for Well, when you say "discuss," did you translate this? EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Cross / By Mr. Geragos 46 1 A I did not. I don't speak Turkish. 2 Q Okay. 3 A I don't. 4 Q Did you -- where did you get this from? 5 A It came from -- on line. 6 Q On line. 7 had somebody else translate; you have no records whatsoever 8 that support it, correct? 9 A I have bank records that show money went to Turkey. 10 Q Nine hundred million dollars? 11 A Not that much. 12 Q Five hundred million dollars? 13 A No. 14 Q Three hundred million dollars? 15 A A hundred and thirty. 16 Q A hundred and thirty is what you have. 17 release that you don't know who translated it, of unknown 18 origin; it was on the internet. 19 A Correct. 20 Q You have Edgar Sargsyan's lawyer telling you stuff, 21 correct? 22 A Correct. 23 Q You went on your own to Mr. Termendzhyan's office; is that 24 right? 25 A Do you know who did translate this? And, so, you had an online document which you It's been stated. You've got a press Correct? I did. EXCEPTIONAL REPORTING SERVICES, INC 47 Hatcher - Cross / By Mr. Geragos 1 Q A month ago or June? 2 A In June. 3 Q Is that yes? 4 A Yes. 5 Q When you went there, did he tell you, "Uh-oh, I've got to 6 get out of here; the IRS CID is here"? 7 A No. 8 Q Did you identify yourself as the Criminal Investigation 9 Division? Uh-huh. In June. 10 A I did. 11 Q Did you say that you're -- what did you tell him you were 12 investigating? 13 A 14 dropping off a subpoena for records, for the business records 15 of NOIL. 16 Q 17 Division"? 18 A I don't believe so. 19 Q You don't think that your name has that CID next to it? 20 A My name's not on the subpoena. 21 Q Whose name was? 22 A It's the U.S. Attorney's office. 23 Q And does the U.S. Attorney's office say Criminal 24 Investigation Division? 25 A I didn't tell him what I was investigating. Okay. I said I was Does it say on the subpoena "Criminal Investigation I don't think there is a criminal investigation division EXCEPTIONAL REPORTING SERVICES, INC 48 Hatcher - Cross / By Mr. Geragos 1 of the U.S. Attorney's office. 2 Q 3 there a criminal investigation division of the IRS? 4 A Not to my knowledge. 5 Q Not from prosecutors. 6 A Correct. 7 Q How about from the agency? 8 A Sure. 9 Q And did you -- and did he flee after that? 10 A He was unaware that we -- we were looking for him. 11 Q Well, was it a grand jury subpoena? 12 A It was. 13 Q Okay. 14 did it say criminal? 15 A I am not that familiar with the subpoena. 16 Q Well, the subpoena says criminal on it, doesn't it? 17 A I don't know. 18 Q It says grand jury on it, doesn’t it? 19 A It says grand jury subpoena, correct. 20 Q Right. 21 his office; he's the one who -- he was cooperative, correct? 22 A Correct. 23 Q He answered all of your questions, correct? 24 A I wasn't questioning -- questioning him. 25 question Mr. McDyre. No. How about the -- how about from Washington, DC? Is Not -- not from prosecutors. Absolutely. So, you've got a -- and did it say civil on it or So, you've got a grand jury subpoena; you go to EXCEPTIONAL REPORTING SERVICES, INC I was trying to Hatcher - Cross / By Mr. Geragos 49 1 Q Okay. But he was volunteering the information. 2 A Correct. 3 Q He wanted to tell you whatever it was you wanted to know, 4 correct? 5 A 6 looking for, and that was the extent of the -- there wasn't 7 really questions; I was explaining what I was looking for. 8 Q Did he tell you, "Go talk to my lawyer"? 9 A No. 10 Q Did he tell you, "I'm not going to talk to you; I'm 11 invoking the Fifth"? 12 A No. 13 Q Did he say, "I'm not" -- all you got is name, badge, and 14 serial number. 15 A I'm sorry; repeat that question? 16 Q By the way, do you know when his daughter got married? 17 A I know it was this summer. 18 Q Okay. 19 A No. 20 Q Okay. 21 A I have not seen it. 22 Q Okay. 23 here -- by the way, you've never spoken to anybody, whether 24 it's federal, state, or local, regarding the search warrant 25 that was executed a year ago? I was trying to clarify for him which records I was It certainly wasn't 2016, was it? Have you looked at the pretrial report? I'm not privy to that. Do you know that, in fact, that he came back EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Cross / By Mr. Geragos 1 A 2 search warrant, but I don't know of the substantive nature of 3 it. 4 Q 5 were involved? 6 A 7 phone call from CBP on his departure. 8 my knowledge. 9 Q 50 I spoke to some federal agents about the timing of the Did you talk to those -- which -- the federal agents who Not involved, but in this instance an HSI agent got a Okay. And that's the extent of Did you ask or did anybody contact you regarding 10 the property that was seized? 11 A No. 12 Q When you say you didn't have anything to do with it, you 13 knew that -- you're -- been involved for two years; is that 14 correct? 15 A Correct. 16 Q And it's your testimony here that -- how big is your unit 17 or task force? 18 A There's four case agents -- five case agents. 19 Q Five cases? 20 A Correct. 21 Q Okay. 22 warrant that was executed on him and his stations and NOIL. 23 A 24 seized. 25 Q I didn't have anything to do with it. And you never paid any attention to a search I paid attention to one piece of the property that they Which was? EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Cross / By Mr. Geragos 1 A A Bugatti. 2 Q Right. 3 or didn't you have agents go to his house this morning? 4 A I did. 5 Q Yeah. 6 A I thought I did. 7 Q Well, he -- he -- they let you in, they showed you the 8 garage, correct? 9 A Correct. 10 Q Okay. 11 asked you about, wasn't it? 12 address, right? 13 A I had an address. 14 Q Okay. 15 A I went to the address that I knew that he lived at, but 16 it's not the same address that he reported when we arrested 17 him. 18 Q 19 is currently a temporary protective order issued by the judge 20 in the case that you were talking to Mr. Sargsyan's lawyer 21 about? 22 A I am -- I am unaware of that. 23 Q Okay. 24 well, you didn't do any -- you haven't looked at that case 25 file, have you? 51 In fact, didn't you go to his house this morning And you knew where he lived, correct? That was the address that the U.S. Attorney just He asked you if you had an Yes. Did you go to that address? Did you -- by the way, did you know that the -- that there Did you know about that? Did you know that -- that Edgar allowed the -- EXCEPTIONAL REPORTING SERVICES, INC 52 Hatcher - Cross / By Mr. Geragos 1 A Which case file? 2 Q The civil case file of the litigation. 3 A I have not. 4 Q Okay. 5 shown that was marked as an exhibit? 6 A Correct; Exhibit 6. 7 Q Right. 8 paragraph right after the one you read? 9 A I believe we read paragraph six? 10 Q That's correct. 11 A Would you like me to read it? 12 Q Yes. 13 A It says: You just saw a declaration, correct, that you were What was the paragraph -- what does it say in the Is that correct? What does paragraph seven say? 14 "I am aware Defendant's counsel claims in the motion 15 that I fled the United States because of this" -- 16 I'm sorry. 17 My copy is a little messed up. I think that says: 18 "-- issuance of a search warrant. My reasons for 19 reside in Istanbul at this time have nothing to do 20 with the search warrant, and I have not" -- quote, 21 unquote -- "'fled' the United States. 22 residing in Istanbul for legitimate business 23 purposes, operating my business and other investments 24 I have in" -- 25 I believe that says "several." I am currently My copy is not very EXCEPTIONAL REPORTING SERVICES, INC 53 Hatcher - Cross / By Mr. Geragos 1 good, but: 2 "--several countries." 3 Q Okay. Are you aware that almost all of the information 4 you've received regarding Mr. Termendzhyan's flight risk has 5 been generated by Edgar Sargsyan or his lawyer? 6 A It's not generated by those two sources. 7 Q That's your -- that's your testimony today, that it's not 8 generated by them? 9 A Part of it is, but I've spoken to a few more people than 10 that. 11 Q 12 talk to him? Okay. Well, you've spoken to Edgar Sargsyan? 13 MR. ROLWING: 14 THE COURT: Did you I'm going to object to this discovery. It's -- I was just about to say it's 15 getting to the point -- what I -- you know, let's -- let's go 16 directly -- I do realize part of what he is doing is attempting 17 to undermine the credibility of the sources of information, and 18 I'm going to let him continue to do that. 19 MR. GERAGOS: But can you -- I'll -- I'll move on. 20 BY MR. GERAGOS: 21 Q 22 who said that they feel threatened? Is there any other witness that you -- you want to name 23 THE COURT: 24 MR. GERAGOS: 25 And I'm not going to -If you're not going to consider that, I won't get into it. EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Cross / By Mr. Geragos 1 THE COURT: 54 Not going to -- yeah, let's -- let's -- 2 let's do it this way. 3 evidence and a lot of cross examination on the economic factors 4 and the -- and the potential flight risk. 5 to consider -- I'm not going to make a decision one way or 6 another on any of -- any danger other than economic at this 7 time. I don't think I need So -- 8 9 At this point I've heard a lot of MR. GERAGOS: That's fine. I'll -- I -- then, I don't need to -- 10 BY MR. GERAGOS: 11 Q 12 130 million; is that correct? 13 A Over 130 million went to Turkey, yes. 14 Q Right. 15 the two gentlemen who were the co-defendants in Utah? 16 A 17 say, but I know that, you know, in -- in 2015 and '16, tens of 18 millions of dollars came from SBK USA or a related company. 19 Q Tens; not a hundred and thirty. 20 A No. 21 Q Correct. 22 Utah monies and you're lumping it in with Mr. Termendzhyan's 23 tens millions. 24 A 25 from SBK USA; or other money that we've uncovered that goes to But do you have -- the tracing that you've done involves And how much of that came from the gentleman -- or I -- without my spreadsheets in front of me it's hard to So, a hundred and thirty, you're just taking the Is that correct? Do I have that right? When I look at it, it's money from Washakie; it's money EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Cross / By Mr. Geragos 1 Turkey. 2 Q 3 tracing, all you've got coming from him going to Turkey is 4 roughly 10 million; isn't that correct? 5 A 6 sense that the fraud proceeds were all manufactured, if you 7 will, by joint ventures by both of them. 8 Q 9 the proceeds and the indictment -- you're aware of the Right. 55 What I am asking you, though, is, when you did the When you say "coming from him," that's difficult in the Well, where were the -- when you say the "fraud proceeds," 10 indictment, correct? 11 A I am. 12 Q Okay. 13 the Utah two defendants and Mr. Termendzhyan, does it? 14 A 15 to Turkey. 16 Q 17 $10 million, wasn't it? 18 A That's incorrect. 19 Q Well, it wasn't a hundred and thirty, was it? 20 A It's over $130 million. 21 Q From Mr. Termendzhyan? 22 A From all related parties. 23 A I'm not asking that question. The indictment doesn't allege a conspiracy between No, but you asked me what money from Mr. Termendzhyan went Right. That's what I'm saying. 24 THE COURT: 25 MR. GERAGOS: It was roughly Hold on a second. I'm asking specific -- EXCEPTIONAL REPORTING SERVICES, INC 56 Hatcher - Cross / By Mr. Geragos 1 THE COURT: Let me -- let me clear up, because my 2 understanding may be wrong and Mr. Geragos may be right, but my 3 understanding when the agent testified was that the 130 million 4 was traceable to -- either directly to the defendant or to 5 entities that are the defendant-controlled entities, as opposed 6 to Mr. Kingston or one of the others. 7 ventures, but -- so, SBK Holdings -- am I correct that that is 8 one of the entities that the Government alleges he has a direct 9 involvement in? 10 THE WITNESS: 11 THE COURT: So, they may be joint Correct. Okay. So, when you say $130 million 12 traceable, you're -- you are tying it to this defendant either 13 directly or through entities that you are saying he has a 14 direct participation in. 15 THE WITNESS: So, the -- it's more than 130. The 16 130 million is Washakie and SBK Entities. 17 spreadsheets in front of me, I -- just guessing, I think it's 18 in the neighborhood of 40 to 50 million if we just look at SBK 19 Holdings, USA. 20 THE COURT: And without my And your prior testimony was that those 21 are entities that are very directly connected to the defendant. 22 So, for that 40 million you're talking about this defendant, 23 not something that is, you know, connected only by a -- it was 24 Kingston and he -- we know he has a connection outside of 25 the -- the actual, like, corporate structure. EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Cross / By Mr. Geragos 1 THE WITNESS: 2 THE COURT: That's correct. Okay. 3 BY MR. GERAGOS: 4 Q But is Washa- -- is it pronounced Washakie? 5 A It's Washakie. 6 Q Yes. 7 that that's owned or controlled by Levon Termendzhyan? 8 A I don't. 9 Q It is not, correct? 10 A Correct. 11 Q Okay. 12 much of that is Washakie? 13 A I don't understand the question. 14 Q Well, you said there's 130 million that went out, right? 15 A Correct. 16 Q Okay. 17 A Maybe it will be -- maybe it will be better if I explain 18 how it comes in. 19 Washakie either sends it directly from Washakie to Turkey or 20 they send it to SBK USA and then it goes to Turkey. 21 Q How much did Washakie send to SBK? 22 A I believe it's 35 million, roughly. 23 Q Okay. 24 A Like I said, I think it's 30 to 40 million. 25 Q So, if it was 30 to 40 and they only received 35, you're That's correct. Washakie -- is there -- do you have any evidence He's not -- he doesn't have -- Out of the 130 million, how much is that -- how How much of that, of that 130, is Washakie? The U.S. Treasury pays money to Washakie; And how much did SBK send to Turkey? EXCEPTIONAL REPORTING SERVICES, INC 57 58 Hatcher - Cross / By Mr. Geragos 1 saying it doesn't tie in? 2 A 3 come from Washakie. 4 Q 5 Turkey that came from Washakie, if I understand correctly, is 6 roughly 35 million without your tracing charts in front of you. 7 A Correct. 8 Q Okay. 9 the 130 that you testified about to the U.S. Attorney came from No, I'm saying he sent some money on his own that didn't Okay. So, the only money that he's got that went to So, is it a fair statement that the remainder of 10 Washakie to Turkey? 11 A Correct. 12 Q Okay. 13 Washakie sends it to SBK, then Washakie is the one who actually 14 got the credits, correct? 15 A Are you talking about SBK Turkey or USA? 16 Q Well, first, when Washakie gets the money, how much do 17 you -- I've heard all these numbers bandied about. 18 got how much money? 19 A 20 no connect -- we have no evidence that that's connected to 21 Mr. Termendzhyan in terms of control, correct? 22 A Control over the funds? 23 Q Correct. 24 A At Washakie that's correct. 25 Q Okay. So, if we've got 35 million -- by the way, when Five hundred -- a little over $500 million. Washakie Washakie has Washakie then sends 35 million to SBK, correct? EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Cross / By Mr. Geragos 1 A That's my recollection, yes. 2 Q Washakie also sends other funds to other vendors in the 3 U.S., correct? 4 A In terms of -- 5 Q They pay other bills. 6 A Correct. 7 Q Okay. 8 other people in America, correct? 9 A Correct. 10 Q Okay. 11 America, they pay as much as 10 or 20 million to other people 12 in America, correct? 13 A Correct. 14 Q Because they're buying the component parts of what it 15 takes to either produce the 100 or the 99 fuel, correct? 16 A 17 did pay some bills, correct. 18 Q Correct. 19 A Correct. 20 Q Okay. 21 alleging that the vendors who are getting paid or that the 22 money that's coming from Washakie, you're not alleging that 23 they knew whether or not the tax credits that were received 24 were actually legitimate or illegitimate, are you? 25 A 59 Sure. They pay millions of dollars in other bills to They -- when they pay those bills to the others in In many cases they didn't even purchase product, but they Tens of millions of dollars, correct? Now, in that case, they don't know -- you're not That was a long question. I'm not sure where it started. EXCEPTIONAL REPORTING SERVICES, INC 60 Hatcher - Cross / By Mr. Geragos 1 2 THE COURT: it entirely irrelevant. 3 MR. GERAGOS: 4 THE COURT: 5 Yeah. No, and I -- and the Court finds What -Okay. Well, then the -- What's relevant to me, so far, is, you know -- 6 MR. GERAGOS: 7 THE COURT: Thirty million dollars. Thirty-five million dollars is a lot of 8 money to most people, and my understanding, at least -- and I 9 want to make sure that I'm clear about this -- is the -- the 10 allegation, you know, based on the -- the scheme that's set 11 forth in the indictment and the testimony I've had today is 12 that at least that 35 million is part of the scheme to defraud 13 and was knowingly funneled through Washakie to SBK and it wound 14 up -- whether or not it's the Government bought something or is 15 available to the defendant, it wound up in Turkey. 16 fair statement, or no? 17 THE WITNESS: Correct. Is that a And to continue on with that 18 theory, the total amount paid to Turkey was paid to SBK 19 Turkey -- or to SBK AS in Turkey or its affiliated investments, 20 which Mr. Termendzhyan has a business relationship with. 21 THE COURT: Okay. So, when you say total amount, 22 that's more than the 35 million? 23 THE WITNESS: 24 THE COURT: 25 That's the 130 plus. The 130 you're -- what you're saying is part of it went through an SBK United States entity and then EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Cross / By Mr. Geragos 1 went to Turkey, and the rest of the 130 million went from 2 something like Washakie -- 3 THE WITNESS: 4 THE COURT: 5 Directly to Turkey. -- directly to Turkey, but to a Turkish entity that the Government alleges he has an interest in. 6 THE WITNESS: 7 THE COURT: 8 BY MR. GERAGOS: 9 Q Correct. Okay. And you have documents to support that the Turkish entity 10 is controlled by Mr. Termendzhyan? 11 A We have a lot of witness statements. 12 Q You don't have any documents, do you? 13 14 THE COURT: Yeah, and we're not in a trial now, and we don't need to do that. 15 16 MR. GERAGOS: I understand. a long way from 500 million. 17 THE COURT: Okay. I -- they -- we've come I have no further questions. Very briefly, I would like 18 argument. 19 going to give everybody the opportunity to -- to put a circle 20 around things. 21 22 23 24 25 61 Actually, I don't know that I need it, but I am MR. ROLWING: Has -- can I ask just a few questions just to wrap it up? THE COURT: A few. A few. They're going to turn the air conditioning off soon -MR. ROLWING: Oh. EXCEPTIONAL REPORTING SERVICES, INC 62 Hatcher - Redirect / By Mr. Rolwing 1 THE COURT: -- and then you're going to want to be 2 gone, let me tell you. 3 MR. ROLWING: 4 That is bad news for me. I am a particularly hot individual. 5 REDIRECT EXAMINATION 6 BY MR. ROLWING: 7 Q 8 Government that Mr. Dermen has admitted to being a partner in 9 SBK AS in Turkey? Have -- has there -- have witnesses informed the 10 A That's correct. 11 Q And, so, money coming from Washakie from its fraud scheme 12 going to Turkey is going to his partnership in Turkey. 13 A 14 That's correct. MR. ROLWING: So, your Honor, it might just be 35 15 million that went through SBK. 16 Q 17 directly to SBK? 18 A I have. 19 Q Eleven-million-dollar wire in 2016? 20 A Correct. 21 Q So, there's not just the 130 million from Washakie that 22 was fraudulently obtained from the IRS, but 35 million and 23 other money that Mr. Termendzhyan has put into Turkey. 24 A 25 investigation of Mr. Termendzhyan himself. Have you seen other evidence of NOIL sending money Correct. And I'm not -- I'm not involved in the financial I was focused on EXCEPTIONAL REPORTING SERVICES, INC Hatcher - Redirect / By Mr. Rolwing 63 1 the fraud proceeds from the IRS through Washakie to either 2 Turkey or Mr. Termendzhyan himself. 3 Q 4 account at Guaranty Bank didn't go through SBK USA or SBK AS; 5 that was just for his -- the back tax on his mansion, according 6 to the wire, correct? 7 A Correct. 8 Q So, there's even more money than what you've described. 9 A Yes. And the 483,000 that Washakie paid to his Turkish bank 10 MR. ROLWING: Your Honor, whether it's 35 million, 11 165 million, or, as the press release, the Republic of Turkey 12 has announced, 500 million since 2013 with a pledge of another 13 450 million, coincidentally, when his co-defendants are 14 applying for another 600 million of tax credits, trying to 15 steal a billion dollars -- whether it's 35, 165, 500 or a 16 billion, it's enough for Mr. Termendzhyan to live the rest of 17 his life. 18 BY MR. ROLWING: 19 Q Did you hear any witness -- have you -- have you -- 20 21 22 23 MR. GERAGOS: I don't understand. Are we doing argument? THE COURT: I thought we were doing argument at this point myself. 24 MR. GERAGOS: 25 THE COURT: Or is this an interactive experience? Yeah. This is -- thank you, Mr. Geragos. EXCEPTIONAL REPORTING SERVICES, INC 64 1 I actually -- I think, unless Mr. Geragos has any follow-up 2 questions, since you had a few, I think we can have the agent 3 step down now. 4 Is there any -- 5 MR. ROLWING: 6 THE COURT: 7 MR. GERAGOS: No. 8 MR. ROLWING: Final -- 9 THE COURT: 10 Final question. -- anything you want to ask? I mean -- No, no; we're -- we're doing argument now. 11 MR. ROLWING: 12 THE COURT: 13 Thank you very much for your trademark. 14 THE WITNESS: 15 16 Oh. Okay. We're doing argument now. Thanks, your Honor. Do you want me to leave the things up here or take them? THE COURT: You -- you can just leave them there. 17 (Witness stepped down) 18 (Pause; voices and whispers off the record) 19 MR. ROLWING: There is no amount of money, no amount 20 of real estate, given these allegations, the evidence that's 21 uncovered, that would assure and should assure this Court that 22 Mr. Termendzhyan will appear. 23 warrant he fled to Turkey. 24 significant federal felonies and a continuing investigation, of 25 which he was not aware until Thursday, and he will flee, should He -- at the -- at the search Now he's been indicted and facing EXCEPTIONAL REPORTING SERVICES, INC 65 1 he be released, to Turkey and live the rest of his days there. 2 So, I submit that we've proved beyond a reasonable -- beyond a 3 preponderance -- I'm sorry; I get used to that -- that he is a 4 flight risk, and I ask this Court to detain him. 5 THE COURT: Mr. Geragos? 6 MR. GERAGOS: Thank you, your Honor. We've come a 7 long way in the 90 minutes. We started off with somewhere in 8 the neighborhood of a billion dollars; we then went to 500; we 9 then went to 130; then upon cross examination maybe it's 35, 10 and, by the way, I didn't do a financial investigation. 11 it. 12 THE COURT: 13 MR. GERAGOS: 14 THE COURT: 15 16 I get It's certainly -But that isn't the standard. It's certainly enough money that I -- I'd like to win it in Powerball, but -MR. GERAGOS: I -- I -- look, I -- and I think it was 17 Judge Damrell up in Sacramento who once said to me, you know, a 18 million here, a million there, you combine it, pretty soon it's 19 a lot of money. 20 and -- and I don't say this facetiously. 21 had cases like this. 22 understand, especially in cases that involve oil, gas, or 23 commodities and things like that, there is a very narrow margin 24 on these things. 25 and, you know, they can supersede if they want later on -- they But the fact of the matter remains; what -I say it because I've Government lawyers don't seem to I don't know, and they haven't alleged -- EXCEPTIONAL REPORTING SERVICES, INC 66 1 haven't alleged that he knew what they were doing with the 2 credits or anything else. 3 trying to get to towards the end, is that there was outflows 4 going to pay vendors. 5 wasn't -- if he wasn't Levon Termendzhyan and if this was the 6 refinery down in Torrance and they were writing a check because 7 he's the one who's supplying gas or oil to an FBO, they 8 wouldn't be making this -- this argument. 9 agent was candid -- they had two people in their sights. All they have alleged, as I was That's what the evidence shows. If it They had -- and the He 10 is -- I can't emphasize enough. 11 that his last misdemeanor trial that I tried was in front of 12 Judge Mader is -- is beyond ironic, but the -- the -- and was 13 acquitted on one of those counts and acquitted by a jury, he 14 doesn't -- this isn't a man -- he's got a track record of not 15 fleeing. 16 here. His daughter just got married this summer and is living 17 here. The idea that somehow he's going to flee for -- because 18 of 35 million that went to Turkey is -- is -- I realize it's a 19 lot of money, but we have offered to pledge 25 million in 20 addition to the four that's already sequestered by order of 21 Judge Ferrari. 22 that they need to prove, he's offering dollar for dollar for 23 bail. 24 you've got in front of you. 25 In fact, the irony of the fact He doesn't have any incentive to flee. His kids are So, whatever loss they have or claim to have I -- and I apologize; I'm not familiar with the form THE COURT: I'm at a disadvantage -- It's actually not in front of me. EXCEPTIONAL REPORTING SERVICES, INC It's 67 1 just a -- 2 MR. GERAGOS: Yeah. I'm at a disadvantage on the 3 form. I will tell you that I'm familiar with the Ninth Circuit 4 standards, as I'm sure you're -- you're much more familiar than 5 me. 6 them, just say you've got to have the least restrictive 7 possible. 8 clear. 9 when I spoke to the pretrial officer, that they have that, But the Ninth Circuit standards, at least when I look at I'm going to utter it again just so the record is He will wear a GPS device. They have already told me, 10 pretrial, available here in the Central District. 11 fact that they do because Navnoor Kang, who was a client of 12 mine, who has just self-surrendered in Morgantown day before 13 yesterday, was allowed by pretrial to travel on the airplane 14 with the GPS device. 15 accused of bribery in the New York state pension fund system. 16 17 18 19 20 I know for a That was a person who, by the way, was THE COURT: Yeah; that's some other judge. I don't -MR. GERAGOS: Well, I understand. terms of the GPS device. THE COURT: I'm just saying in We've also offered -- The GPS device, by the way, is not -- 21 it's not a real-time -- oh, suddenly it goes off and they're 22 there to get them right away. 23 MR. GERAGOS: That's why I'm offering -- that's 24 exactly why I'm offering to also -- we have -- we have 25 contacted and we will contract with, as a condition of bail, EXCEPTIONAL REPORTING SERVICES, INC 68 1 that before he's released, Guidepost -- it's Guidepost 2 Solutions, who are retired -- all retired law enforcement, FBI, 3 CIA -- will act as an intermediary to have real-time 4 supervision of him and report directly to the Court, not to me. 5 We -- we will have a bail package, as we've indicated to 6 pretrial, of both property and cash in -- close to $30 million 7 is what pretrial has -- with a GPS monitor, with an independent 8 third party whose first obligation is to report to the Court 9 and supervise. If the Court is in any way inclined, I would 10 ask the Court to allow me to present that package so that the 11 Court can see it. 12 jurisdictions, and they -- given the fact that he has shown up 13 and has been through this and it's not his first rodeo, and it 14 didn't take very long here to, frankly, damp down what the 15 original allegation that you heard was down to size, I would 16 submit to you that this is something -- not only does he want 17 to fight; I had to tell him to stop talking to me ten times 18 because all he wants to do is fight these allegations. It has worked innumerable times in other 19 The idea that he's going to flee is just -- I -- and 20 I apologize; I've -- if I'm -- you told me to calm down at one 21 point. 22 client not once, not twice, but three times, you know somebody 23 and you know whether they're going to flee. 24 of him fleeing. 25 a chance of him fleeing if we put up $30 million in property I have known this guy. None. When you try a case with a There is no chance And there is certainly not going to be EXCEPTIONAL REPORTING SERVICES, INC 69 1 and cash, if he's on a GPS, and if he's got 24/7 guards to 2 report to the Court if he so much as steps off of the property. 3 And there is virtually no way to prepare this case with him in 4 custody, with the kind of financial documents, with him getting 5 lost at the Rancho Cucamonga West Valley Detention Center on a 6 daily basis, which is why we're here today and not yesterday -- 7 I would submit to the Court all of those things augur for, 8 under the Ninth Circuit standards, bail on these conditions, 9 and I will -- I'd ask that the Court let me present those to 10 you in formalized fashion so that the Court can make what I 11 consider to be -- or comply with the Ninth Circuit law on this 12 matter. 13 THE COURT: 14 I mean, you know, you are one of the most eloquent 15 lawyers that I've, you know, had the -- the pleasure both to 16 litigate against many decades ago -- we haven't seen each other 17 in decades -- 18 MR. GERAGOS: 19 THE COURT: I don't need to hear from the Government. I've aged; you haven't, so -No, I have, but you're being nice. 20 But -- and you've incredibly eloquent here, and you do, of 21 course, have recourse both to the district court here or 22 perhaps the district of Utah if that's the way you want to go. 23 And you are absolutely correct about the standard. 24 the finding of the Court has to be that there are no conditions 25 or combination of conditions. That's why The issue I have even with the EXCEPTIONAL REPORTING SERVICES, INC 70 1 package you propose is, money wise, the -- the amount of money 2 even -- even the very reduced amount that's traceable with the 3 present allegations, even setting aside that there is any 4 continuing investigation going on, is -- you know, it's -- it's 5 sort of like -- sometimes we only need maybe to make a 6 defendant put up a thousand bucks because that thousand bucks 7 is going to, you know, kill their mom if they -- if she has to 8 pay it. 9 is concerning. Here the amount of money, the -- and the access is -And the fact is just the -- the fact that he's 10 lived in Turkey, he has said he was residing in Turkey; the 11 proffer, which I don't think was rebutted, was that he has -- 12 has not come back to participate in civil proceedings despite 13 court orders -- just on depositions; I'm not talking about 14 skipping on a criminal -- a criminal issue or anything. 15 timing of some of his travel is of concern, but not the primary 16 concern of the Court; but, you know, the -- the Government 17 standard is just a preponderance of the evidence here, and so I 18 do find that there are no condition or combination of 19 conditions that would adequately assure that he would, you 20 know, show up for further proceedings here or in Utah because 21 of those strong ties to Turkey, the admitted -- or the evidence 22 of a lot of money in Turkey, and the fact that the Court is 23 relatively certain that if he does manage to make it to Turkey 24 that he is not going to be able to be brought back for 25 proceedings here. EXCEPTIONAL REPORTING SERVICES, INC The 71 1 I am not going to make a finding on danger to the 2 community at this time. 3 hasn't met its burden on economic danger. 4 going to even consider the further allegations of -- of -- 5 regarding danger or witnesses. 6 Government to -- to carry its burden on if -- if for some 7 reason there is a need in the future. 8 the finding only on flight risk at this -- at this time. 9 I am not finding that the Government I told you I wasn't That would be up to the So, I am going to make So, the -- the question becomes -- I have a waiver of 10 identity in the file, but I don't take those waivers until 11 after I make a finding on detention or bail because sometimes 12 the counsel in the -- and client decide for some reason that 13 they want to put the Government through their paces on whatever 14 else they -- they have to. 15 16 MR. GERAGOS: for. 17 18 Which is what -- that's what we opt THE COURT: You opt for scheduling it for an identity hearing? 19 MR. GERAGOS: 20 THE COURT: Correct. Then, we'll go ahead and do that. I'm 21 going to tell you I'm out of pocket until after the holiday. 22 I'm here tomorrow, but we can't order a defendant back on that 23 quick notice, which -- so, there's going to be some kind of 24 burden on the Government; they're going to have to come back 25 out. So, we'll set it for an identity hearing. EXCEPTIONAL REPORTING SERVICES, INC I can do it 72 1 the -- August -- 2 3 MR. GERAGOS: week? 4 5 Did you say the week -- the following THE COURT: No, no, it's this -- the holiday is Monday. 6 MR. GERAGOS: 7 THE COURT: 8 MR. GERAGOS: 9 THE COURT: Right. So, which is -- So, I can --- the 3rd? We have to pull out the fancy -- we 10 shouldn’t have it in court -- iPhone here to look at my court 11 calendar. 12 the holiday, on the 4th. 13 we did it in the afternoon? 14 identity hearing. 15 that -- you know. 16 Yeah, so I am available to do it on the day after How bad is the -- the -- you know, if And, you know, again, it's an You can have it done by a local AUSA if MR. ROLWING: Special Agent Hatcher (phonetic) is 17 available to identify the defendant right now. 18 testified he just met him two months ago. 19 THE COURT: I think he It sounded -- it -- yeah, I mean, I -- 20 all I would actually need is about, you know, two questions on 21 his booking fingerprints versus, you know, some other case. 22 could put him back on right now. 23 I -- you know, I'm not going to make him -- make him waive, and 24 we didn't set this for an identity hearing, so -- 25 MR. GERAGOS: Correct. I It really does seem -- but, Why don't we just set it for EXCEPTIONAL REPORTING SERVICES, INC 73 1 the 4th. If I work something out with the U.S. Attorney in the 2 interim we can always take it off calendar, can we not? 3 4 THE COURT: If you can work something out, we'll -- we'll do that. 5 You know, I didn't -- there was one thing I had meant 6 to state and I didn't when I was making my -- my findings, is I 7 do appreciate the kind of package that you've offered, but 8 know -- I know the realities of what is, you know, actually 9 physically possible from many prior, you know, and -- and more 10 recent hearings, and there really is no real-time way even if 11 he's, you know -- so, what, you -- you would notify the Court 12 at 2:00 o'clock in the morning that, you know, something's 13 happened to his electronic monitoring? 14 time. 15 around, it's not -- It's just not real- And unless the Government itself is following him 16 MR. GERAGOS: 17 THE COURT: 18 MR. GERAGOS: They --- you know, it's -They have the ability. I -- I admit -- 19 readily admit I haven't done it in the Central District. I've 20 done it in the Southern District or co-counsel has done it in 21 the Southern District. 22 third-party -- it's called -- the entity is called Guidepost 23 Solutions. The -- they have the ability; there are They do that. 24 THE COURT: 25 MR. GERAGOS: Well -They do a 24/7 monitoring, and they not EXCEPTIONAL REPORTING SERVICES, INC 74 1 only notify the Court, they take -- they act as the same way as 2 a bail agent would. 3 that is the -- that's why I would ask that -- if you want to 4 set it for the identity hearing on the 4th, I'd ask you to 5 reserve your decision on detention and let me submit at least 6 that. 7 They've got the authority to do it. THE COURT: So, I'm not going to reserve my -- my 8 decision, because, as I said, you have the -- you know, 9 continuing to put that issue over to my calendar makes no 10 sense. If you want to -- we've got a more fulsome record than 11 I've had in any identity hearing in the three and a half years 12 I've been on the bench. 13 I've had a lot of -- I mean detention hearings. 14 of detention hearings. 15 going to make a difference -- I don't think it is -- then take 16 it to the duty district judge. 17 MR. GERAGOS: 18 THE COURT: I know that's not a long time, but I've had a lot If you think that's the thing that's I understand. So, I am going to order him detained, and 19 we'll -- you know, and we'll set it for an identity hearing on 20 the 4th. 21 I don't know, you know, Government, if you want to -- 22 MR. GERAGOS: 23 THE COURT: 24 MR. GERAGOS: 25 Like I said, I --- you know, pick a time. -- I'll talk with the Government tomorrow, and I'll talk with local counsel in Utah, as well. EXCEPTIONAL REPORTING SERVICES, INC 75 1 THE COURT: All right. So, let's go ahead and set 2 that for -- if I set it for 2:00 o'clock in the afternoon, you 3 actually could -- if you decide you want to come out, you could 4 come out and go back again on the same day. 5 a -- kind of a pain. 6 7 MR. GERAGOS: I think -- I hate to speak for the marshal -- 8 THE COURT: 9 MR. GERAGOS: 10 I realize that's Hold on. Hold on a second. -- but I think they prefer when he's housed at West Valley -- 11 THE COURT: 12 MR. GERAGOS: 13 THE COURT: Well, hold on a second. Hold on. -- that it's a 2:00 o'clock. Oh, Tuesday I have to do it after -- 14 after 3:00 p.m. because I -- we share courtrooms, which is why 15 my -- my chambers are on the other side of the -- 16 MR. GERAGOS: 17 THE COURT: Far, far away. So, we'd have to set it at 3:00 o'clock. 18 In fact, just to be -- well, he gets off the bench usually 19 earlier than he says he's going to, so we'll set it for 20 3:00 o'clock on -- on the 4th. 21 identity hearing isn't going to last more than 15 minutes, 22 though, so hopefully you'll either be able to work something 23 out or -- or I, frankly, think it's going to be -- since the 24 agent is here, it's -- I, frankly, think it's going to be a bit 25 of a waste of time and money. I can guarantee you that that EXCEPTIONAL REPORTING SERVICES, INC 76 1 MR. GERAGOS: That's why -- that's why I just -- I 2 ask that it be set as a placeholder. 3 medical order. 4 for the Court to order that, as well. He's having extreme medical issues, and I'd ask 5 THE COURT: 6 MR. GERAGOS: 7 facility, which does not have -- 8 I'd also ask for a THE COURT: Well -He's being housed at the county I need to -- because we have these 9 requests all the time and I can't control either the BOP or the 10 jail, I need a little more than "he's having extreme" -- if you 11 want to clear the courtroom -- 12 MR. GERAGOS: 13 THE COURT: 14 MR. GERAGOS: 15 THE COURT: 17 MR. GERAGOS: 18 THE COURT: MR. GERAGOS: 21 THE COURT: 22 MR. GERAGOS: 23 THE COURT: 25 And he's had a -- he's had a cardiac Okay. Then, I will -- He's got cardiac issues. I will order that he get seen by the medical staff within -- let's see; what is today? 20 24 If -- if -- that's indeed -- event within the last five years; he's had a stent implanted. 16 19 He's urinating blood. Today is -- Twenty-eighth. Yeah. I'm just trying to -- Tuesday. I'm going to order that he be seen by the medical personnel by the end of the week. And, Ms. Carson, let's make sure that we -- if we EXCEPTIONAL REPORTING SERVICES, INC 77 1 have to, we'll -- we'll talk to -- you know, contact 2 San Bernardino directly. 3 order if he's not being housed in MDC to get where it needs to 4 go. 5 Sometimes it takes a while for the And that that -- that's -- it's not a medical report 6 that you want the Government -- want the Court to see, right? 7 You just want it -- okay. 8 MR. GERAGOS: 9 THE COURT: No. Okay. I just want him examined. He -- he'll -- he is to be 10 examined based on the -- the proffer of what sounds like a 11 pretty severe medical condition by the end of the week. 12 All right. Given that we are perhaps going to see 13 each other again, the only other issue -- and, so, I am going 14 to order him, obviously, remanded at this time, but not to be 15 transported until after either an agreement of the parties 16 or -- or if -- if the Court indeed finds that he is the person 17 named in the indictment, then I don't think we have anything 18 left to do today. 19 MR. GERAGOS: 20 THE COURT: 21 MR. ROLWING: 22 THE COURT: No. Thank you, your Honor. All right. Thank you, your Honor. All right. And -- and I do want to thank 23 everybody both for their patience, and the argument was really 24 good today, and -- but I -- like I said, I'm not sure I've ever 25 had an almost two-hour detention hearing before in my EXCEPTIONAL REPORTING SERVICES, INC 78 existence. (Proceeding was adjourned at 6:16 p.m.) CERTIFICATION I certify that the foregoing is a correct transcript from the electronic sound recording of the proceedings in the aboveentitled matter. September 7, 2018 Signed Dated TONI HUDSON, TRANSCRIBER EXCEPTIONAL REPORTING SERVICES, INC