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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

DEFENDANT'S SENTENCING MEMORANDUM

February 14, 2026

Conrad Ashby (SBN 187432) Responsible Partner Victoria Chambers (SBN 224871) Billing Partner Lisa Morrow (SBN 298156) Lead Associate

CALDERWOOD & HARKNESS LLP 2029 Century Park East, Suite 3300 Los Angeles, California 90067 Telephone: (310) 553-4000 Facsimile: (310) 553-4001

Counsel for Defendant Marguerite D. Fonseca

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TABLE OF AUTHORITIES

Federal Statutes

United States Sentencing Guidelines

United States Supreme Court Cases

United States Court of Appeals Cases

United States District Court Cases

PRELIMINARY STATEMENT

Marguerite D. Fonseca is a 52-year-old first-generation Filipino-American woman, a mother of two minor children, and the sole caregiver for her 79-year-old mother who suffers from early-stage Alzheimer's disease. She is the founder and former Chief Executive Officer of Aurelia Pictures, Inc., an independent film production company that she built from nothing over the course of fifteen years into an enterprise that produced twenty-three feature films and six limited television series, generated approximately $312 million in cumulative gross revenues, employed dozens of full-time staff, and provided creative opportunities for hundreds of cast and crew members. She is a woman who grew up in poverty in one of Sacramento's most disadvantaged neighborhoods, who was the first person in her family to attend college, and who dedicated substantial portions of her career and personal resources to ensuring that others from similar backgrounds would have the opportunities she fought to create for herself.

On September 18, 2025, following a three-week jury trial before this Court, Ms. Fonseca was convicted on all seven counts of the federal indictment: four counts of wire fraud in violation of 18 U.S.C. § 1343, two counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(i), and one count of conspiracy to commit wire fraud in violation of 18 U.S.C. § 1371.

Ms. Fonseca does not submit this memorandum to minimize the seriousness of her conduct. She accepts the jury's verdict. She takes full responsibility for the harm she has caused to the investors, to the California Film Commission, and to the many individuals whose trust she betrayed. She is deeply and genuinely remorseful, and she intends to express that remorse personally to this Court at the sentencing hearing.

On November 3, 2025, United States Probation Officer Michael T. Brennan disclosed the Presentence Investigation Report, which calculated an advisory Guidelines range of 108 to 135 months of imprisonment, based on a Total Offense Level of 31 and a Criminal History Category of I. As set forth in detail in Section V of this memorandum and in the Defendant's Objections to the PSR filed January 10, 2026, the defense respectfully submits that the PSR's Guidelines calculation contains significant errors, including the double-counting of approximately $4.3 million in loss and the improper application of a two-level enhancement for sophisticated means. The correctly calculated advisory Guidelines range is 70 to 87 months of imprisonment, based on a Total Offense Level of 27 and a Criminal History Category of I.

Even using the correctly calculated range of 70 to 87 months, however, the defense respectfully submits that such a sentence would be greater than necessary to comply with the purposes of sentencing set forth in 18 U.S.C. § 3553(a). This Court's obligation under the parsimony principle is to impose a sentence that is "sufficient, but not greater than necessary" to achieve the statutory objectives. A careful consideration of all § 3553(a) factors — including the nature and circumstances of the offense, the extraordinary history and characteristics of the defendant, the need for just punishment and adequate deterrence, the need to protect the public, and the need to provide restitution to victims — compels a sentence of 36 to 48 months of imprisonment, followed by three years of supervised release with appropriate conditions including restitution.

This memorandum will develop the following mitigation themes in support of that request:

• Ms. Fonseca's extraordinary personal history and characteristics, including her upbringing in poverty, her immigrant parents, her role as a childhood caregiver for her chronically ill mother, and her remarkable professional achievements as the founder and leader of Aurelia Pictures;

• Her significant and well-documented mental health conditions — Major Depressive Disorder and Generalized Anxiety Disorder — the onset of which coincided with the period of the charged conduct and which, as documented by forensic psychiatrist Dr. Kenneth Whitmore, materially impaired her judgment during the relevant period;

• Her critical caregiving responsibilities for her 79-year-old mother, Corazon Fonseca, who has been diagnosed with early-stage Alzheimer's disease and for whom Ms. Fonseca is the sole caretaker, as well as her two minor children, Elena (age 17) and Marco (age 14), for whom she is the primary custodial parent;

• Her decades of charitable and community service, including the founding of the Aurelia Foundation (which distributed $1.8 million in scholarships and grants to underrepresented filmmakers), her mentorship of over sixty young filmmakers through the Filipino-American Arts Coalition, and her service on the board of the Los Angeles Youth Media Project;

• Her complete lack of any prior criminal history — no arrests, no convictions, no civil regulatory actions — over the course of a 52-year life and a 25-year career;

• Her genuine remorse, her acceptance of the jury's verdict, and her full cooperation with the receivership of Aurelia Pictures; and

• The aberrant nature of the charged conduct when viewed in the context of her entire life.

In support of this memorandum, the defense has attached the comprehensive mitigation report of Dr. Sandra Oleander of Thornfield Mitigation Consulting LLC (Exhibit A), the forensic psychiatric evaluation of Dr. Kenneth Whitmore (Exhibit B), the expert report of Dr. Priya Chandrasekaran addressing the loss calculation (Exhibit C), and over forty character letters from industry colleagues, community members, mentees, and family members (Exhibit D).

I. PROCEDURAL HISTORY

A. Indictment and Trial

On April 10, 2024, a federal grand jury sitting in the Central District of California returned a seven-count indictment against Marguerite D. Fonseca, charging her with four counts of wire fraud in violation of 18 U.S.C. § 1343, two counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(i), and one count of conspiracy to commit wire fraud in violation of 18 U.S.C. § 1371. The case was assigned to the Honorable Catherine M. Driscoll and designated Case No. 2:24-cr-00583-CMD.

Ms. Fonseca was arraigned on April 24, 2024, and entered pleas of not guilty to all seven counts. She was released on a $2.5 million secured bond, subject to conditions including surrender of her passport, restrictions on travel, and regular reporting to the United States Probation Office.

The investigation that led to the indictment was conducted jointly by the Federal Bureau of Investigation, Los Angeles Field Office, and Internal Revenue Service Criminal Investigation, Los Angeles Division. The prosecution was handled by Assistant United States Attorney Brenda K. Tillotson, the lead prosecutor assigned from the Major Frauds Section of the United States Attorney's Office for the Central District of California, where she has served for fourteen years, and Assistant United States Attorney Derek R. Huang, who served as co-counsel and who has been with the office for seven years.

At trial, Ms. Fonseca was represented by Harrison J. Kerrigan of Kerrigan & Wolfe LLP, 444 South Flower Street, Suite 1800, Los Angeles, California 90071. The three-week jury trial commenced on August 25, 2025. The government presented testimony from seventeen witnesses, including the forensic accounting testimony of Dr. Ramesh Patel of Hargrove, Patel & Sullivan LLP, testimony from investor representatives, and testimony from current and former employees of Aurelia Pictures, Inc. The defense presented five witnesses and introduced sixty-two exhibits into evidence.

On September 18, 2025, the jury returned its verdict, finding Ms. Fonseca guilty on all seven counts.

B. Post-Trial Proceedings and Retention of Sentencing Counsel

On November 3, 2025, the Presentence Investigation Report prepared by United States Probation Officer Michael T. Brennan was disclosed to the parties. The PSR calculated an advisory Guidelines range of 108 to 135 months of imprisonment, based on a Total Offense Level of 31 and a Criminal History Category of I.

Following the conclusion of the trial, Ms. Fonseca engaged Calderwood & Harkness LLP on November 12, 2025, for representation in connection with sentencing proceedings. Present counsel was retained specifically for the purposes of sentencing advocacy, mitigation development, preparation and filing of objections to the PSR, engagement of forensic and mitigation experts, and restitution advocacy. The defense team has devoted the intervening months to a comprehensive investigation of Ms. Fonseca's background, history, and circumstances, and to the engagement of expert consultants whose reports are attached hereto.

On January 10, 2026, the defense filed its Objections to the Presentence Investigation Report, which set forth in detail the specific objections to the PSR's Guidelines calculation and factual findings. Those objections are incorporated by reference herein and will not be repeated in full, though the key objections bearing on the Guidelines calculation are summarized in Section V of this memorandum.

The sentencing hearing is scheduled for March 6, 2026. Ms. Fonseca remains released on the $2.5 million secured bond that has been in place since her arraignment. She resides at 1847 Mulholland Terrace, Los Angeles, California 90068, with her two minor children and her elderly mother. She has complied with all conditions of her release without incident.

C. The Charged Conduct

The government alleged that between approximately January 2018 and December 2022, Ms. Fonseca engaged in a scheme to defraud investors and the California Film Commission in connection with the film production activities of Aurelia Pictures, Inc. The government's allegations, as presented at trial, may be summarized as follows:

First, the government alleged that Ms. Fonseca inflated production budgets submitted to investors by approximately 25 to 40 percent above actual costs on five film productions, resulting in a total of approximately $9.3 million in inflated costs. Of that amount, the government alleged that approximately $6.1 million was diverted from the designated production accounts to Aurelia Pictures' general operating accounts and to Ms. Fonseca's personal accounts.

Second, the government alleged that Ms. Fonseca submitted fraudulent applications to the California Film Commission's Film & Television Tax Credit Program in connection with three productions, resulting in the improper obtainment of approximately $2.8 million in tax credits.

Third, the government alleged that Ms. Fonseca commingled and diverted investor funds that were designated for specific productions, transferring those funds into Aurelia Pictures' general operating accounts and personal accounts, in a total amount of approximately $5.8 million.

Based on these three categories, the government calculated a total alleged loss of $14.7 million. The five film productions referenced in the indictment are "Meridian," "The Cartographer's Daughter," "Blue Signal," "Glass Meridian," and "The Understory."

As set forth in Section V of this memorandum and in the separately filed Objections to the PSR, the defense contests the government's loss calculation on multiple grounds, including the double-counting of approximately $4.3 million and the failure to account for $2.1 million in funds that were reinvested into production activities. The defense submits that the correct intended loss figure is $8.3 million.

II. THE HISTORY AND CHARACTERISTICS OF MARGUERITE D. FONSECA

Section 3553(a)(1) directs the Court to consider "the history and characteristics of the defendant" in determining an appropriate sentence. The Supreme Court has emphasized that this inquiry is broad, encompassing "the defendant's 'personal history and characteristics' in the fullest sense, including her entire biography." Pepper v. United States, 562 U.S. 476, 488–89 (2011). Ms. Fonseca's personal history is extraordinary, and it provides essential context for understanding both the person who stands before this Court and the circumstances that led to the conduct at issue.

A. Early Life and Family Background

Marguerite Dolores Fonseca was born on June 7, 1973, in Sacramento, California, to Renato Fonseca and Corazon Fonseca, both immigrants from the Philippines. The family settled in the Del Paso Heights neighborhood of Sacramento, one of the city's most economically disadvantaged communities, characterized by high rates of poverty, crime, and limited access to educational and economic opportunities.

Ms. Fonseca is a first-generation Filipino-American. She grew up in a household defined by financial hardship and sacrifice. Her father, Renato Fonseca, worked two jobs throughout most of her childhood — as a maintenance worker at a Sacramento office complex during the day and as a janitor at a local elementary school in the evenings — to provide for the family. Her mother, Corazon Fonseca, suffered from chronic illness throughout Ms. Fonseca's childhood, including diabetes and recurring respiratory infections that frequently required hospitalization and prevented her from working outside the home.

From approximately the age of twelve, Ms. Fonseca assumed the role of primary caretaker for her mother during the long hours when her father was at work. She prepared meals, managed household chores, administered medications, and accompanied her mother to medical appointments. These were responsibilities far beyond what should be expected of a child, and they shaped Ms. Fonseca in profound ways. As documented in the comprehensive social history prepared by Dr. Sandra Oleander of Thornfield Mitigation Consulting LLC (Exhibit A), these formative experiences instilled in Ms. Fonseca a deep work ethic, an unwavering sense of obligation to family and community, and a fierce determination to build a better life for herself and her family. They also, however, created enduring patterns of self-reliance, stress internalization, and profound difficulty in seeking help from others — patterns that persisted into adulthood and that, as discussed in Section III, contributed to the deterioration of her mental health during the period of the charged conduct.

Despite the challenges of her upbringing, Ms. Fonseca excelled academically. She was the first person in her family to attend college, a milestone that carried enormous significance for her parents and for the broader Filipino-American community in Sacramento. Her father, Renato, spoke frequently of his dream that his daughter would have the opportunities that had been unavailable to him, and he encouraged her relentlessly to pursue her education. The close bond between Ms. Fonseca and her father — and the devastating impact of his death in 2016 — is addressed in Section II.E below.

B. Education and Early Career

Ms. Fonseca earned a full academic scholarship to the University of California, Santa Cruz, where she graduated in 1995 with a Bachelor of Arts degree in Film & Digital Media. Her undergraduate experience introduced her to the art and craft of filmmaking, and she discovered a passion and talent that would define the course of her professional life. She went on to earn a Master of Fine Arts degree in Film Production from the American Film Institute in 1998. Both degrees were obtained through a combination of academic scholarships and financial aid; Ms. Fonseca carried no family financial support and worked part-time throughout her education to cover living expenses.

Following her graduation from AFI, Ms. Fonseca spent approximately a decade working in various entry-level and mid-level positions in the entertainment industry in Los Angeles. She worked as a production assistant, a production coordinator, an associate producer, and eventually a line producer on independent and studio productions. These years were formative, as she developed both the creative vision and the business acumen that would ultimately enable her to found her own company. Throughout this period, she earned a reputation among colleagues for her work ethic, her creative judgment, and her commitment to telling stories that reflected the diversity of the American experience.

C. Building Aurelia Pictures, Inc.

On March 14, 2009, Ms. Fonseca founded Aurelia Pictures, Inc., a California corporation (Secretary of State Entity No. C3276451), with offices at 8950 West Sunset Boulevard, Suite 1400, West Hollywood, California 90069. The founding of Aurelia Pictures represented the culmination of a lifelong dream and more than a decade of industry experience.

Ms. Fonseca built the company from a one-person operation — with herself serving as sole employee, producer, and administrator — into a significant independent production company over the course of fifteen years. Under her leadership, Aurelia Pictures produced twenty-three feature films and six limited television series, generating cumulative gross revenues of approximately $312 million. The company's productions were distributed domestically and internationally, and several received critical acclaim and industry recognition.

At its peak in 2022, Aurelia Pictures employed approximately forty-five full-time staff members, including creative executives, development staff, production personnel, finance and accounting professionals, and administrative support. Beyond its full-time employees, each production engaged hundreds of additional cast and crew members, creating employment and creative opportunities across the entertainment industry.

Ms. Fonseca's entrepreneurial achievement is remarkable by any measure. As a first-generation Filipino-American woman from an impoverished background, building a major independent production company from nothing — without the benefit of family wealth, industry connections, or institutional backing — represents an extraordinary professional accomplishment. The company maintained a $10 million revolving production credit facility with Pacific Meridian Bank, N.A., reflecting the financial institution's confidence in the company's operations and management.

The significance of this achievement should not be diminished by the conduct that is the subject of these proceedings. For the vast majority of Aurelia Pictures' existence, the company operated legitimately, produced compelling work, employed scores of talented professionals, and generated substantial returns for investors. The charged conduct, which spanned approximately five years of the company's fifteen-year existence, was an aberration — not the defining characteristic of Ms. Fonseca's career.

D. Marriage and Children

Ms. Fonseca married Alejandro Fonseca, and the couple had two children: Elena Fonseca, now age seventeen, and Marco Fonseca, now age fourteen. The marriage was dissolved in a contentious divorce that was finalized in 2019. The divorce proceedings, which involved disputes over custody, property division, and support obligations, added significant emotional and financial stress to an already difficult period in Ms. Fonseca's life, coinciding with the deterioration of her mental health and the period of the charged conduct.

Ms. Fonseca is the primary custodial parent of both children. Elena and Marco reside with their mother at the family home at 1847 Mulholland Terrace, Los Angeles, California 90068. Elena is a high school junior who is actively preparing for college applications. Marco is in the eighth grade. Both children are thriving academically and socially, in large part because of Ms. Fonseca's dedicated and attentive parenting. The impact of incarceration on these minor children is addressed more fully in Section VII of this memorandum.

E. The Death of Renato Fonseca and Its Aftermath

In 2016, Ms. Fonseca's father, Renato Fonseca, died. The loss was devastating. Throughout her life, Ms. Fonseca had maintained an extraordinarily close relationship with her father. He was her primary source of emotional strength, moral guidance, and personal accountability. He was the person who had instilled in her the values of hard work, honesty, and service to others. He was the person who had dreamed of a better life for his daughter and who had sacrificed ceaselessly to make that dream possible. He was, in Ms. Fonseca's words, "the compass by which I navigated my life."

The death of Renato Fonseca occurred approximately one year before the earliest onset of the charged conduct in January 2018. This temporal proximity is not coincidental. As documented in the forensic psychiatric evaluation of Dr. Kenneth Whitmore (Exhibit B) and in the mitigation report of Dr. Sandra Oleander (Exhibit A), the loss of her father precipitated a significant and prolonged deterioration in Ms. Fonseca's mental health. She withdrew from social relationships. She struggled to maintain the boundaries between her personal financial pressures and her company's operations. She lost the person who had always served as her moral anchor, and in the absence of that anchor, she made decisions that she would not otherwise have made. The nexus between her father's death, her mental health deterioration, and the charged conduct is addressed in detail in Section III of this memorandum.

III. MENTAL HEALTH HISTORY AND MITIGATING CIRCUMSTANCES

The defense does not suggest — and has never suggested — that mental illness excuses criminal conduct. Ms. Fonseca accepts full responsibility for her actions. However, the law is clear that a defendant's mental health history is a relevant and important consideration under § 3553(a)(1), and that documented mental health conditions that contributed to the circumstances of the offense are among the most significant mitigating factors a court can consider at sentencing. See Pepper v. United States, 562 U.S. 476, 491 (2011); United States v. Soto-Olivas, 44 F.4th 1096, 1103 (9th Cir. 2022). Ms. Fonseca's mental health history provides essential context for understanding how a person with no prior criminal history and a twenty-five-year unblemished career came to engage in the conduct at issue.

A. Diagnoses

In 2017, approximately one year after the death of her father, Ms. Fonseca was diagnosed with Major Depressive Disorder by her treating psychiatrist, Dr. Elaine Varma, of Pacific Mind Health Associates, located at 1200 Wilshire Boulevard, Suite 300, Los Angeles, California 90017. The diagnosis was based on a clinical evaluation that documented persistent symptoms including depressed mood, anhedonia, insomnia, difficulty concentrating, feelings of worthlessness, and fatigue — symptoms that had been present and worsening over the preceding months.

In 2019, following the finalization of her divorce from Alejandro Fonseca, Dr. Varma diagnosed Ms. Fonseca with Generalized Anxiety Disorder, based on the emergence of additional symptoms including chronic worry, restlessness, irritability, and muscle tension that were not fully accounted for by the depression diagnosis alone.

Ms. Fonseca's treatment has included pharmacological management — specifically, sertraline (Zoloft) 100mg daily, prescribed by Dr. Varma — and weekly psychotherapy sessions. While the treatment has provided some stabilization, Dr. Varma's records reflect that Ms. Fonseca's conditions were undertreated during significant portions of the charged conduct period, in part because Ms. Fonseca's ingrained patterns of self-reliance and reluctance to seek help led her to minimize her symptoms and resist increases in treatment intensity.

These diagnoses and the associated treatment history are corroborated by Dr. Varma's treatment records (relevant excerpts submitted under seal) and by the independent forensic psychiatric evaluation conducted by Dr. Kenneth Whitmore (Exhibit B).

B. Contextual Stressors and the Nexus to Offending Conduct

The temporal overlap between Ms. Fonseca's mental health deterioration and the charged conduct is striking. The onset of the charged conduct in January 2018 coincided precisely with the period of Ms. Fonseca's most acute psychological distress following her father's death in 2016 and her diagnosis of Major Depressive Disorder in 2017. The contentious divorce from Alejandro Fonseca, which was finalized in 2019, compounded her psychological deterioration during the middle of the charged period. These personal crises occurred against the backdrop of escalating professional pressures associated with managing an independent production company in an industry characterized by intense competition, irregular cash flows, and high-stakes financing arrangements.

As documented by Dr. Whitmore in his forensic psychiatric evaluation, Ms. Fonseca's decision-making during the charged conduct period — January 2018 through December 2022 — was materially affected by her untreated and then undertreated mental health conditions. The clinical depression and anxiety impaired her judgment and impulse control, eroded her capacity for long-term planning and risk assessment, and fostered a cognitive pattern in which short-term crisis management displaced the ethical and rational decision-making that had characterized the first decade of her career.

Dr. Whitmore describes a constellation of factors — profound grief, marital dissolution, escalating professional pressures, clinical depression, and generalized anxiety — that converged during this period to create the conditions for what he characterizes as aberrant decision-making. He notes that this pattern is consistent with the clinical literature on the relationship between untreated depression and impaired executive function, and that it explains how an individual with no prior history of dishonesty or criminality came to engage in conduct that was fundamentally at odds with her established character and values.

To be clear, the defense does not offer this analysis as an excuse. Ms. Fonseca's mental health conditions did not prevent her from understanding that her conduct was wrong. She knew it was wrong, and she is profoundly ashamed. But the law recognizes that understanding why a person offended — and what circumstances contributed to the offense — is essential to determining the sentence that is "sufficient, but not greater than necessary" to achieve the purposes of sentencing. Ms. Fonseca's mental health history is a critical part of that understanding.

C. Dr. Kenneth Whitmore's Forensic Psychiatric Evaluation

Dr. Kenneth Whitmore is a board-certified forensic psychiatrist with offices at 9401 Wilshire Boulevard, Suite 760, Beverly Hills, California 90212. Dr. Whitmore has extensive experience conducting forensic evaluations in federal criminal cases and has been qualified as an expert in forensic psychiatry in numerous federal and state courts.

At the request of defense counsel, Dr. Whitmore conducted a comprehensive evaluation of Ms. Fonseca, which included multiple in-person clinical interviews totaling approximately twelve hours, the administration of standardized psychological testing instruments, a thorough review of treatment records from Dr. Varma, a review of medical records, and a review of relevant case materials and the PSR.

Dr. Whitmore's conclusions may be summarized as follows:

First, Ms. Fonseca meets the diagnostic criteria for Major Depressive Disorder and Generalized Anxiety Disorder, consistent with the diagnoses previously rendered by Dr. Varma. These are genuine, clinically significant conditions that substantially affected Ms. Fonseca's functioning during the relevant period.

Second, Ms. Fonseca's MDD and GAD significantly impaired her judgment and impulse control during the period of the charged conduct (January 2018 through December 2022). The impairment was particularly acute during the period immediately following her father's death and during the period of her divorce, but it persisted throughout the charged period due to the chronic and undertreated nature of her conditions.

Third, Ms. Fonseca's conditions are treatable, and with continued and appropriate treatment — including medication management and regular psychotherapy — she poses minimal risk of recidivism. Dr. Whitmore assessed her as a low risk for future criminal conduct based on her age, her lack of prior criminal history, the situational nature of the stressors that contributed to the offense, and her engagement with treatment.

Fourth, incarceration would severely disrupt Ms. Fonseca's existing treatment relationship with Dr. Varma and would exacerbate her conditions. While the Bureau of Prisons can provide some mental health services, the disruption to her established treatment regimen and the stress of incarceration itself would be counterproductive to her mental health recovery.

The full report of Dr. Whitmore is attached as Exhibit B.

D. Dr. Elaine Varma's Treatment Records

Corroborative records from Ms. Fonseca's treating psychiatrist, Dr. Elaine Varma, at Pacific Mind Health Associates have been provided to the Court under seal. These records document the progression of Ms. Fonseca's symptoms from 2017 to the present, including the initial diagnosis of MDD in 2017, the subsequent diagnosis of GAD in 2019, the management of her medication regimen, and the content and course of her psychotherapy sessions. The records corroborate the findings of Dr. Whitmore's independent evaluation and provide a contemporaneous clinical record of Ms. Fonseca's mental health trajectory during the period of the charged conduct. Relevant excerpts of Dr. Varma's records have been submitted under seal for the Court's review.

IV. CHARITABLE AND COMMUNITY CONTRIBUTIONS

Throughout her career, Ms. Fonseca has demonstrated a deep and sustained commitment to charitable and community service, with a particular focus on expanding opportunities for underrepresented communities in the entertainment industry. These contributions are not window dressing assembled for the purposes of sentencing; they represent decades of genuine, consistent, and substantial investment of time, resources, and personal energy.

A. The Aurelia Foundation

In 2014, Ms. Fonseca founded the Aurelia Foundation, a 501(c)(3) non-profit organization dedicated to supporting aspiring filmmakers from underserved communities. Between 2014 and 2023, the Foundation provided $1.8 million in scholarships and grants to underrepresented filmmakers, including tuition assistance for film school, production grants for short films and debut features, and travel grants to attend industry festivals and markets.

The Foundation focused specifically on supporting aspiring filmmakers from communities that have historically been underrepresented in the entertainment industry, with a particular emphasis on diversity and inclusion. It funded scholarship recipients from communities across the country, many of whom have gone on to successful careers in film and television. The Foundation's work reflected Ms. Fonseca's deeply held conviction — rooted in her own experience as a first-generation Filipino-American woman who built her career without the benefit of industry connections or family wealth — that the entertainment industry must be accessible to talented individuals regardless of their background.

Multiple recipients of Aurelia Foundation scholarships and grants have submitted character letters in support of Ms. Fonseca, describing the transformative impact of the Foundation's support on their careers and lives. These letters are included in Exhibit D.

B. Filipino-American Arts Coalition

Ms. Fonseca's commitment to mentorship extended beyond the Aurelia Foundation to hands-on, personal engagement with aspiring filmmakers. Through the Filipino-American Arts Coalition ("FAAC"), a community arts organization serving the Filipino-American community in Los Angeles, Ms. Fonseca personally mentored over sixty young filmmakers over the course of her career.

Her mentorship was not merely nominal. She provided hands-on training in filmmaking craft, offered professional development guidance, facilitated networking with industry professionals, and provided creative guidance on individual projects. She attended screenings, reviewed scripts, made introductions, and in numerous cases provided financial support from her own resources to enable mentees to complete their work.

Many of Ms. Fonseca's mentees have gone on to successful careers in the entertainment industry, and their letters — which are among the most powerful submissions in the record — describe a mentor who was generous, patient, demanding, and deeply invested in their success. The consistent theme across these letters is that Ms. Fonseca did not simply offer advice from a distance; she made herself available, invested her time, and treated each mentee's aspirations as worthy of the same dedication she brought to her own work. Character letters from FAAC mentees are included in Exhibit D.

C. Los Angeles Youth Media Project

From 2016 to 2023, Ms. Fonseca served on the board of directors of the Los Angeles Youth Media Project ("LAYMP"), a non-profit organization that provides media arts education to at-risk youth in the Los Angeles area. LAYMP operates after-school and summer programs that teach filmmaking, photography, digital storytelling, and media literacy to young people from underserved communities.

In her capacity as a board member, Ms. Fonseca contributed not only her time and expertise but also her resources and industry connections. She helped LAYMP secure equipment donations, organized industry mentorship events, and personally participated in workshops and classes. Fellow board members and LAYMP staff have submitted character letters attesting to Ms. Fonseca's dedication and the tangible impact of her contributions on the organization and the young people it serves.

D. Broader Industry and Community Impact

Beyond her formal charitable commitments, Ms. Fonseca's career at Aurelia Pictures itself constituted a form of community contribution. Over the course of her career, she created opportunities for hundreds of industry professionals — actors, writers, directors, cinematographers, editors, production designers, and crew members — many of whom were from underrepresented backgrounds. Her films highlighted diverse stories and underrepresented voices at a time when the entertainment industry was only beginning to grapple with its failures of inclusion and representation.

The over forty character letters submitted in Exhibit D — from industry colleagues, community members, mentees, scholarship recipients, family members, friends, and educators — paint a consistent portrait of a woman who was generous, dedicated, compassionate, and deeply committed to the well-being of those around her. The charged conduct is wholly inconsistent with the person described in these letters, and the letters provide powerful evidence that this conduct was aberrational — a departure from the character and values that have defined Ms. Fonseca's life.

V. THE ADVISORY GUIDELINES RANGE IS OVERSTATED

While the United States Sentencing Guidelines are advisory, United States v. Booker, 543 U.S. 220 (2005), they remain an important starting point for the Court's analysis under § 3553(a). It is therefore essential that the advisory Guidelines range be calculated correctly. The defense submits that the PSR's calculation of a Total Offense Level of 31, yielding an advisory range of 108 to 135 months, contains two significant errors that, when corrected, reduce the Total Offense Level to 27 and the advisory range to 70 to 87 months. The defense's objections are set forth in detail in the Defendant's Objections to the PSR filed January 10, 2026, and are summarized below.

A. Overview of the PSR's Guidelines Calculation

The PSR, prepared by United States Probation Officer Michael T. Brennan and disclosed on November 3, 2025, calculated the advisory Guidelines range as follows:

With a Criminal History Category of I — Ms. Fonseca has no prior criminal history whatsoever — the PSR calculated an advisory Guidelines range of 108 to 135 months of imprisonment.

The defense does not object to the base offense level of 7, the two-level enhancement for number of victims under § 2B1.1(b)(2)(A)(i), or the two-level enhancement for abuse of a position of trust under § 3B1.3. The defense does, however, object to the loss enhancement and the sophisticated means enhancement.

B. The Loss Calculation Is Overstated by at Least $6.4 Million

The single most significant driver of the PSR's Guidelines calculation is the loss enhancement. The government's total alleged loss of $14.7 million places the case in the $9.5 million to $25 million range under § 2B1.1(b)(1)(J), resulting in an 18-level enhancement. The defense submits that the correct loss figure is $8.3 million, which falls in the $6.5 million to $9.5 million range under § 2B1.1(b)(1)(I), resulting in a 16-level enhancement — a difference of two levels.

1. The Government's Loss Figure of $14.7 Million Contains $4.3 Million in Double-Counting

The government's total loss figure of $14.7 million is derived from three components:

(a) $6.1 million in inflated budget diversions on five productions ("Meridian," "The Cartographer's Daughter," "Blue Signal," "Glass Meridian," and "The Understory");

(b) $2.8 million in fraudulently obtained California Film Commission tax credits on three productions; and

The defense contends — and the expert analysis of Dr. Priya Chandrasekaran confirms — that approximately $4.3 million of the diverted investor funds (category (c)) are also counted in the inflated budget diversions (category (a)). These are the same dollars counted twice under two different labels. The mechanism is straightforward: investor funds were diverted through the mechanism of budget inflation. When an investor was told that a production cost $8 million when it actually cost $6 million, the $2 million difference represents both "inflated budget costs" and "diverted investor funds." Counting it in both categories is textbook double-counting.

Dr. Chandrasekaran's report (Exhibit C) traces each dollar through the relevant bank accounts, production accounts, and general operating accounts to demonstrate the overlap. Her analysis identifies specific transactions totaling $4.3 million that appear in both categories (a) and (c) of the government's loss calculation. The overlap is not a matter of characterization or accounting judgment; it is an arithmetic error that inflates the loss figure by $4.3 million.

This double-counting was acknowledged, at least implicitly, at trial. During cross-examination of the government's forensic accountant, Dr. Ramesh Patel of Hargrove, Patel & Sullivan LLP, Dr. Patel conceded that there were "overlapping categories" in his fund-tracing analysis and that certain transactions could be "classified under more than one heading." While Dr. Patel maintained that his total loss figure was accurate, his acknowledgment of overlapping categories is consistent with the defense's position that the same dollars have been counted twice.

Correcting for this double-counting reduces the actual loss from $14.7 million to $10.4 million.

2. An Additional $2.1 Million Was Reinvested in Production Activities

Of the remaining loss amount, an additional $2.1 million in funds characterized by the government as "diverted" were in fact reinvested into Aurelia Pictures' production activities. Dr. Chandrasekaran's analysis traces these funds to legitimate production expenditures, including payments to cast and crew, location fees, post-production costs, and other bona fide production expenses on the five films at issue.

While these funds were improperly commingled — transferred from designated production accounts into general operating accounts before being deployed for production purposes — they ultimately benefited the productions and, by extension, the investors whose funds were at issue. Several of the productions at issue generated revenue, and some of the investors received partial returns on their investments. Under the Sentencing Guidelines, intended loss should be reduced by amounts returned to or for the benefit of victims. See U.S.S.G. § 2B1.1, Application Note 3(E)(i); see also United States v. Rivernider, 828 F.3d 91, 106 (2d Cir. 2016) (discussing credits against loss for funds returned to victims); United States v. Zavala, 443 F.3d 1165, 1170 (9th Cir. 2006) (holding that loss calculation must account for amounts recovered or recoverable by victims).

Reducing the $10.4 million actual loss by $2.1 million in reinvested funds yields an intended loss of $8.3 million.

3. The Correct Loss Enhancement Is +16, Not +18

An intended loss of $8.3 million falls within the $6.5 million to $9.5 million range under § 2B1.1(b)(1)(I), yielding a loss enhancement of +16 rather than the +18 applied in the PSR under § 2B1.1(b)(1)(J).

This single correction — a reduction in the loss enhancement from +18 to +16 — reduces the Total Offense Level by two levels.

C. The Sophisticated Means Enhancement Is Unwarranted

The PSR applies a two-level enhancement for sophisticated means under § 2B1.1(b)(10)(C). The defense objects to this enhancement.

The sophisticated means enhancement is intended for fraud schemes that are "especially complex or especially intricate" and that involve "conduct that is more complex than that which is needed for the commission of the offense." U.S.S.G. § 2B1.1, Application Note 9(B). The Ninth Circuit has held that the enhancement requires conduct that is "notably more intricate" than the fraud itself. United States v. Stoterau, 524 F.3d 988, 1006 (9th Cir. 2008). Ordinary misrepresentations that are inherent in a fraud scheme do not, standing alone, justify the enhancement.

The conduct at issue in this case, while involving misrepresentations in financial documents, did not rise to the level of sophistication contemplated by the Guidelines. The scheme involved inflating production budgets — a relatively straightforward manipulation of cost estimates that, while dishonest, did not require elaborate financial engineering. The fund commingling involved transfers between bank accounts at the same institution. The conduct did not involve:

• Shell companies or nominee entities designed to conceal the flow of funds;

• Offshore bank accounts or foreign financial institutions;

• Encrypted communications or sophisticated efforts to conceal the fraud from detection;

• Nominee ownership structures or fictitious identities;

• Complex derivative instruments, synthetic transactions, or other hallmarks of truly sophisticated financial fraud; or

• Any of the other indicia of sophistication that courts have recognized as warranting the enhancement.

Indeed, the fraud was ultimately uncovered through standard audit procedures — an examination of Aurelia Pictures' financial records by investors' representatives that revealed discrepancies between budgeted and actual production costs. The fact that the scheme was detectable through ordinary diligence undermines the claim that it involved "sophisticated means." If the means had been truly sophisticated, the scheme would not have been discovered through routine financial review.

Removing the sophisticated means enhancement reduces the Total Offense Level by an additional two levels.

D. The Correctly Calculated Guidelines Range

The defense submits that the correctly calculated Total Offense Level is 27, as follows:

With a Criminal History Category of I, the correctly calculated advisory Guidelines range is 70 to 87 months of imprisonment. This represents a reduction of 38 to 48 months from the PSR's range of 108 to 135 months.

The defense's detailed analysis of these objections is set forth in the Defendant's Objections to the PSR filed January 10, 2026, and in the expert report of Dr. Priya Chandrasekaran (Exhibit C).

VI. A SENTENCE OF 36–48 MONTHS IS SUFFICIENT BUT NOT GREATER THAN NECESSARY UNDER 18 U.S.C. § 3553(a)

Even accepting the defense's correctly calculated advisory Guidelines range of 70 to 87 months, the defense respectfully submits that a sentence within that range would be greater than necessary to achieve the statutory purposes of sentencing. A careful, individualized analysis of all of the § 3553(a) factors demonstrates that a sentence of 36 to 48 months of imprisonment — a substantial and significant punishment — is "sufficient, but not greater than necessary" to comply with the purposes set forth in 18 U.S.C. § 3553(a).

A. The Parsimony Principle

The parsimony principle is the "overarching" instruction that Congress has given to sentencing courts. See 18 U.S.C. § 3553(a) (directing the court to "impose a sentence sufficient, but not greater than necessary, to comply with the purposes" of sentencing). The Supreme Court has made clear that the advisory Guidelines are but one factor among many that the court must consider, and that a district court may impose a sentence below the advisory range when, in the court's judgment, the § 3553(a) factors so warrant. Gall v. United States, 552 U.S. 38, 49–50 (2007); Kimbrough v. United States, 552 U.S. 85, 101 (2007); Rita v. United States, 551 U.S. 338, 351 (2007). The Ninth Circuit has likewise held that "nothing in Booker or its progeny establishes a presumption that a Guidelines sentence is reasonable." United States v. Carty, 520 F.3d 984, 991 (9th Cir. 2008) (en banc).

The advisory Guidelines range in this case — whether 108 to 135 months as calculated by the PSR or 70 to 87 months as calculated by the defense — substantially overstates the sentence necessary to achieve the statutory objectives. As Judge Weinstein observed in United States v. Emmenegger, 329 F. Supp. 2d 416, 427 (S.D.N.Y. 2004), the loss-driven fraud Guidelines "have been sharply criticized for their disproportionate severity" and for producing advisory ranges that "bear little relationship to the culpability of the individual defendant." This case is a paradigm of that criticism. The mechanical application of the loss enhancement produces an advisory range that, considered in the totality of the circumstances, would be greater than necessary to serve any legitimate sentencing purpose.

B. The Nature and Circumstances of the Offense — § 3553(a)(1)

While the offense involved a significant financial loss, several important features distinguish Ms. Fonseca's case from the most serious fraud cases.

First, the offense arose in the context of a legitimate, long-standing business. Aurelia Pictures was not a Ponzi scheme or a front for criminal activity. It was a real company that operated for over fifteen years, produced twenty-three feature films and six limited television series, generated approximately $312 million in cumulative gross revenues, and employed dozens of full-time staff and hundreds of production workers. The charged conduct occurred within the framework of an otherwise legitimate enterprise, not as part of a criminal enterprise designed from inception to defraud.

Second, a substantial portion of investor funds were used for their intended purpose — film production. The films at issue — "Meridian," "The Cartographer's Daughter," "Blue Signal," "Glass Meridian," and "The Understory" — were actually produced. They were completed, distributed, and in some cases generated revenue. This is not a case where investor money simply disappeared into the defendant's pocket. While funds were improperly diverted and budgets were inflated, a significant portion of the investors' capital was deployed in film production and created assets with real value.

Third, the victims of the scheme were not vulnerable individuals. The primary investor victims — Brindoval Investors Group LP and Lakeshore Capital Partners LLC — are sophisticated institutional investors with experience in entertainment industry investments. The individual investors were likewise sophisticated participants in the film financing market who invested with the benefit of legal counsel and financial advisors. While the fact that victims are sophisticated does not excuse fraud, it is a relevant consideration in assessing the nature and circumstances of the offense. See Gall, 552 U.S. at 52 (holding that district courts should engage in an individualized assessment of each case).

Fourth, Ms. Fonseca did not live an extravagant personal lifestyle funded by fraud proceeds. The evidence at trial demonstrated that much of the diverted money was used to keep Aurelia Pictures operational during periods of financial stress — to cover payroll, office rent, insurance, and other operating expenses. While some funds were transferred to personal accounts, the evidence did not reveal the hallmarks of personal enrichment that characterize the most egregious fraud cases — no luxury real estate purchases, no exotic vehicles, no offshore accounts, no lavish vacations funded by victim money.

Fifth, no violence, threats, or coercion of any kind were involved in the offense.

C. The History and Characteristics of the Defendant — § 3553(a)(1)

As set forth in Sections II, III, and IV of this memorandum, Ms. Fonseca's history and characteristics present an extraordinary mitigation case. She is a first-generation Filipino-American raised in poverty in one of Sacramento's most disadvantaged neighborhoods. She was the first person in her family to attend college. She built a remarkable career in the entertainment industry over twenty-five years, founding and leading an independent production company that produced twenty-three feature films and six television series. She has no prior criminal history of any kind — no arrests, no convictions, no civil regulatory actions — over the course of a fifty-two-year life.

Her mental health conditions — Major Depressive Disorder (diagnosed 2017) and Generalized Anxiety Disorder (diagnosed 2019) — are clinically significant and well-documented. They developed in the wake of devastating personal losses, including the death of her father in 2016 and a contentious divorce in 2019, and they materially impaired her judgment during the period of the charged conduct. These conditions are treatable, and with continued treatment, Dr. Whitmore assesses her as a low risk for recidivism.

Her charitable and community contributions are extensive and genuine — $1.8 million in scholarships and grants through the Aurelia Foundation, mentorship of over sixty filmmakers through the Filipino-American Arts Coalition, and years of board service at the Los Angeles Youth Media Project.

Over forty character letters from industry colleagues, community members, mentees, family members, and educators attest to Ms. Fonseca's character, generosity, and positive impact on the lives of others (Exhibit D).

D. The Need for the Sentence to Reflect the Seriousness of the Offense, Promote Respect for the Law, and Provide Just Punishment — § 3553(a)(2)(A)

A sentence of 36 to 48 months of imprisonment is a very significant punishment. It would deprive Ms. Fonseca of her liberty for three to four years. It would separate her from her two minor children and her elderly mother during a critical period in their lives. It would permanently destroy her career in the entertainment industry — a career she spent twenty-five years building and that represented her life's work.

Moreover, imprisonment is not the only punishment Ms. Fonseca will bear. The collateral consequences of her conviction are already severe and will persist for the rest of her life. She has lost her company. She has lost her professional reputation. She has been publicly identified as a convicted felon. She will carry the stigma of a federal felony conviction in every aspect of her life — personal, professional, and civic — for the remainder of her days. When combined with a substantial restitution obligation and the conditions of supervised release, the total punishment imposed by a sentence of 36 to 48 months is more than adequate to reflect the seriousness of the offense, promote respect for the law, and provide just punishment.

E. The Need for Adequate Deterrence — § 3553(a)(2)(B)

Specific deterrence. Ms. Fonseca's complete lack of prior criminal history, her age (52), her ongoing mental health treatment, and the devastating consequences she has already suffered make recidivism extremely unlikely. She has lost her company, her career, her reputation, and her financial security. Aurelia Pictures is in receivership. She no longer has access to the business structures through which the offense was committed. The factors that contributed to the offense — her father's death, her divorce, the peak of her untreated depression — are unique situational stressors that have either resolved or are being addressed through treatment. There is no meaningful risk that Ms. Fonseca will commit another offense.

General deterrence. The defense acknowledges that general deterrence is a legitimate consideration in white-collar cases. A multi-year prison sentence, combined with a substantial restitution order and supervised release, sends a clear message to others in the entertainment industry and in the broader business community that fraud will be met with serious consequences, including imprisonment. However, the incremental deterrence value of a sentence of 108 to 135 months versus 36 to 48 months is minimal. The empirical literature consistently demonstrates that the certainty of punishment, not its severity, is the primary driver of deterrence in white-collar cases. A sentence of 36 to 48 months is more than adequate to serve the deterrence function.

F. The Need to Protect the Public from Further Crimes of the Defendant — § 3553(a)(2)(C)

Ms. Fonseca poses virtually no risk of recidivism. She is a 52-year-old woman with zero prior criminal history. The conduct at issue was aberrant behavior — a departure from an otherwise law-abiding life, triggered by a confluence of devastating personal circumstances. Aurelia Pictures is in receivership under the supervision of Nathaniel W. Prescott of Ridgeway Advisory Group LLC. Ms. Fonseca no longer has access to the company, its accounts, or its operations. She no longer occupies a position that would afford the opportunity for similar conduct. With continued mental health treatment and the conditions of supervised release, the risk she poses to the public is negligible.

G. The Need to Provide the Defendant with Needed Educational or Vocational Training, Medical Care, or Other Correctional Treatment — § 3553(a)(2)(D)

Ms. Fonseca requires continued mental health treatment for Major Depressive Disorder and Generalized Anxiety Disorder, including medication management (sertraline 100mg daily) and regular psychotherapy. She has an established treatment relationship with Dr. Elaine Varma at Pacific Mind Health Associates that has been ongoing since 2017. This therapeutic relationship is clinically important, and its disruption would be detrimental to Ms. Fonseca's mental health.

While the Bureau of Prisons is capable of providing some mental health services, the disruption to Ms. Fonseca's existing treatment relationship and the limitations of BOP mental health care would be significant. A shorter sentence of imprisonment followed by supervised release with mandatory mental health treatment conditions would better serve this statutory objective. Specifically, a sentence of 36 to 48 months, followed by three years of supervised release with conditions requiring continued medication management and psychotherapy, would ensure that Ms. Fonseca receives the treatment she needs while minimizing the disruption to her established care.

H. Sentencing Disparities — § 3553(a)(6)

Section 3553(a)(6) directs the Court to consider "the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct." In fraud cases, courts throughout the Ninth Circuit and nationally have increasingly recognized that the loss-driven Guidelines frequently produce advisory ranges that are disproportionate to the defendant's actual culpability, and have imposed sentences well below those ranges.

The United States Sentencing Commission's own data confirms this trend. In fiscal year 2023, the national rate of below-Guidelines sentences in fraud cases exceeded 50 percent. In the Ninth Circuit, the rate was even higher. These are not isolated cases of judicial leniency; they reflect a broad and growing consensus among sentencing judges that the fraud Guidelines, as currently structured, systematically overstate the appropriate sentence in many cases.

In comparable cases involving entertainment industry fraud, investment fraud, and tax credit fraud, courts have imposed sentences of 24 to 60 months for conduct involving comparable or even greater loss amounts. See, e.g., United States v. Ovid, No. 2:17-cr-00412, 2019 WL 2330871 (C.D. Cal. May 31, 2019) (36-month sentence imposed where advisory range was 78–97 months in entertainment industry fraud involving loss of approximately $11 million); United States v. Adelson, 441 F. Supp. 2d 506 (S.D.N.Y. 2006) (42-month sentence imposed where advisory range was 188–235 months in securities fraud with loss of approximately $80 million; court finding Guidelines "simply do not adequately account for the factors that distinguish the many different white collar fraud cases"); United States v. Lauersen, No. 98 Cr. 1134, 2004 WL 1562904 (S.D.N.Y. July 14, 2004) (below-Guidelines sentence imposed in fraud case involving medical billing fraud with loss of approximately $5 million). See also United States v. Christensen, 828 F.3d 763, 789 (9th Cir. 2015) (affirming below-Guidelines variance where the district court found the Guidelines "dramatically overstated" the seriousness of the offense); United States v. Prosperi, 686 F.3d 1, 12 (1st Cir. 2012) (affirming below-Guidelines variance in fraud case and noting that "loss amount is a significant driver of sentences under the fraud guideline" and that "mechanical application" of the loss table can produce sentences that are "far greater than necessary"); United States v. Mueffelman, 372 F. Supp. 2d 1, 5 (D. Mass. 2005) (departing from Guidelines range in tax fraud case, noting the "increasingly harsh sentences mandated by the Guidelines" in white-collar cases).

A sentence of 36 to 48 months in this case would be consistent with the sentences imposed in comparable cases and would avoid the unwarranted disparity that would result from a sentence at or near the advisory Guidelines range.

I. The Need to Provide Restitution to Victims — § 3553(a)(7)

Section 3553(a)(7) directs the Court to consider the need to provide restitution to victims. Paradoxically, a lengthy sentence of imprisonment would undermine, not advance, this objective. During the period of incarceration, Ms. Fonseca will have no meaningful ability to earn income. Her earning capacity will be suspended entirely, and her ability to make restitution payments will be limited to whatever assets are available at the time of sentencing.

Upon release, however, Ms. Fonseca possesses the education, skills, industry knowledge, and professional ex

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA
DEFENDANT'S SENTENCING MEMORANDUM
February 14, 2026
Conrad Ashby (SBN 187432) Responsible Partner Victoria Chambers (SBN 224871) Billing Partner Lisa Morrow (SBN 298156) Lead Associate
CALDERWOOD & HARKNESS LLP 2029 Century Park East, Suite 3300 Los Angeles, California 90067 Telephone: (310) 553-4000 Facsimile: (310) 553-4001
Counsel for Defendant Marguerite D. Fonseca
TABLE OF CONTENTS
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TABLE OF AUTHORITIES
Federal Statutes
United States Sentencing Guidelines
United States Supreme Court Cases
United States Court of Appeals Cases
United States District Court Cases
PRELIMINARY STATEMENT
Marguerite D. Fonseca is a 52-year-old first-generation Filipino-American woman, a mother of two minor children, and the sole caregiver for her 79-year-old mother who suffers from early-stage Alzheimer's disease. She is the founder and former Chief Executive Officer of Aurelia Pictures, Inc., an independent film production company that she built from nothing over the course of fifteen years into an enterprise that produced twenty-three feature films and six limited television series, generated approximately $312 million in cumulative gross revenues, employed dozens of full-time staff, and provided creative opportunities for hundreds of cast and crew members. She is a woman who grew up in poverty in one of Sacramento's most disadvantaged neighborhoods, who was the first person in her family to attend college, and who dedicated substantial portions of her career and personal resources to ensuring that others from similar backgrounds would have the opportunities she fought to create for herself.
On September 18, 2025, following a three-week jury trial before this Court, Ms. Fonseca was convicted on all seven counts of the federal indictment: four counts of wire fraud in violation of 18 U.S.C. § 1343, two counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(i), and one count of conspiracy to commit wire fraud in violation of 18 U.S.C. § 1371.
Ms. Fonseca does not submit this memorandum to minimize the seriousness of her conduct. She accepts the jury's verdict. She takes full responsibility for the harm she has caused to the investors, to the California Film Commission, and to the many individuals whose trust she betrayed. She is deeply and genuinely remorseful, and she intends to express that remorse personally to this Court at the sentencing hearing.
On November 3, 2025, United States Probation Officer Michael T. Brennan disclosed the Presentence Investigation Report, which calculated an advisory Guidelines range of 108 to 135 months of imprisonment, based on a Total Offense Level of 31 and a Criminal History Category of I. As set forth in detail in Section V of this memorandum and in the Defendant's Objections to the PSR filed January 10, 2026, the defense respectfully submits that the PSR's Guidelines calculation contains significant errors, including the double-counting of approximately $4.3 million in loss and the improper application of a two-level enhancement for sophisticated means. The correctly calculated advisory Guidelines range is 70 to 87 months of imprisonment, based on a Total Offense Level of 27 and a Criminal History Category of I.
Even using the correctly calculated range of 70 to 87 months, however, the defense respectfully submits that such a sentence would be greater than necessary to comply with the purposes of sentencing set forth in 18 U.S.C. § 3553(a). This Court's obligation under the parsimony principle is to impose a sentence that is "sufficient, but not greater than necessary" to achieve the statutory objectives. A careful consideration of all § 3553(a) factors — including the nature and circumstances of the offense, the extraordinary history and characteristics of the defendant, the need for just punishment and adequate deterrence, the need to protect the public, and the need to provide restitution to victims — compels a sentence of 36 to 48 months of imprisonment, followed by three years of supervised release with appropriate conditions including restitution.
This memorandum will develop the following mitigation themes in support of that request:
• Ms. Fonseca's extraordinary personal history and characteristics, including her upbringing in poverty, her immigrant parents, her role as a childhood caregiver for her chronically ill mother, and her remarkable professional achievements as the founder and leader of Aurelia Pictures;
• Her significant and well-documented mental health conditions — Major Depressive Disorder and Generalized Anxiety Disorder — the onset of which coincided with the period of the charged conduct and which, as documented by forensic psychiatrist Dr. Kenneth Whitmore, materially impaired her judgment during the relevant period;
• Her critical caregiving responsibilities for her 79-year-old mother, Corazon Fonseca, who has been diagnosed with early-stage Alzheimer's disease and for whom Ms. Fonseca is the sole caretaker, as well as her two minor children, Elena (age 17) and Marco (age 14), for whom she is the primary custodial parent;
• Her decades of charitable and community service, including the founding of the Aurelia Foundation (which distributed $1.8 million in scholarships and grants to underrepresented filmmakers), her mentorship of over sixty young filmmakers through the Filipino-American Arts Coalition, and her service on the board of the Los Angeles Youth Media Project;
• Her complete lack of any prior criminal history — no arrests, no convictions, no civil regulatory actions — over the course of a 52-year life and a 25-year career;
• Her genuine remorse, her acceptance of the jury's verdict, and her full cooperation with the receivership of Aurelia Pictures; and
• The aberrant nature of the charged conduct when viewed in the context of her entire life.
In support of this memorandum, the defense has attached the comprehensive mitigation report of Dr. Sandra Oleander of Thornfield Mitigation Consulting LLC (Exhibit A), the forensic psychiatric evaluation of Dr. Kenneth Whitmore (Exhibit B), the expert report of Dr. Priya Chandrasekaran addressing the loss calculation (Exhibit C), and over forty character letters from industry colleagues, community members, mentees, and family members (Exhibit D).
I. PROCEDURAL HISTORY
A. Indictment and Trial
On April 10, 2024, a federal grand jury sitting in the Central District of California returned a seven-count indictment against Marguerite D. Fonseca, charging her with four counts of wire fraud in violation of 18 U.S.C. § 1343, two counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(i), and one count of conspiracy to commit wire fraud in violation of 18 U.S.C. § 1371. The case was assigned to the Honorable Catherine M. Driscoll and designated Case No. 2:24-cr-00583-CMD.
Ms. Fonseca was arraigned on April 24, 2024, and entered pleas of not guilty to all seven counts. She was released on a $2.5 million secured bond, subject to conditions including surrender of her passport, restrictions on travel, and regular reporting to the United States Probation Office.
The investigation that led to the indictment was conducted jointly by the Federal Bureau of Investigation, Los Angeles Field Office, and Internal Revenue Service Criminal Investigation, Los Angeles Division. The prosecution was handled by Assistant United States Attorney Brenda K. Tillotson, the lead prosecutor assigned from the Major Frauds Section of the United States Attorney's Office for the Central District of California, where she has served for fourteen years, and Assistant United States Attorney Derek R. Huang, who served as co-counsel and who has been with the office for seven years.
At trial, Ms. Fonseca was represented by Harrison J. Kerrigan of Kerrigan & Wolfe LLP, 444 South Flower Street, Suite 1800, Los Angeles, California 90071. The three-week jury trial commenced on August 25, 2025. The government presented testimony from seventeen witnesses, including the forensic accounting testimony of Dr. Ramesh Patel of Hargrove, Patel & Sullivan LLP, testimony from investor representatives, and testimony from current and former employees of Aurelia Pictures, Inc. The defense presented five witnesses and introduced sixty-two exhibits into evidence.
On September 18, 2025, the jury returned its verdict, finding Ms. Fonseca guilty on all seven counts.
B. Post-Trial Proceedings and Retention of Sentencing Counsel
On November 3, 2025, the Presentence Investigation Report prepared by United States Probation Officer Michael T. Brennan was disclosed to the parties. The PSR calculated an advisory Guidelines range of 108 to 135 months of imprisonment, based on a Total Offense Level of 31 and a Criminal History Category of I.
Following the conclusion of the trial, Ms. Fonseca engaged Calderwood & Harkness LLP on November 12, 2025, for representation in connection with sentencing proceedings. Present counsel was retained specifically for the purposes of sentencing advocacy, mitigation development, preparation and filing of objections to the PSR, engagement of forensic and mitigation experts, and restitution advocacy. The defense team has devoted the intervening months to a comprehensive investigation of Ms. Fonseca's background, history, and circumstances, and to the engagement of expert consultants whose reports are attached hereto.
On January 10, 2026, the defense filed its Objections to the Presentence Investigation Report, which set forth in detail the specific objections to the PSR's Guidelines calculation and factual findings. Those objections are incorporated by reference herein and will not be repeated in full, though the key objections bearing on the Guidelines calculation are summarized in Section V of this memorandum.
The sentencing hearing is scheduled for March 6, 2026. Ms. Fonseca remains released on the $2.5 million secured bond that has been in place since her arraignment. She resides at 1847 Mulholland Terrace, Los Angeles, California 90068, with her two minor children and her elderly mother. She has complied with all conditions of her release without incident.
C. The Charged Conduct
The government alleged that between approximately January 2018 and December 2022, Ms. Fonseca engaged in a scheme to defraud investors and the California Film Commission in connection with the film production activities of Aurelia Pictures, Inc. The government's allegations, as presented at trial, may be summarized as follows:
First, the government alleged that Ms. Fonseca inflated production budgets submitted to investors by approximately 25 to 40 percent above actual costs on five film productions, resulting in a total of approximately $9.3 million in inflated costs. Of that amount, the government alleged that approximately $6.1 million was diverted from the designated production accounts to Aurelia Pictures' general operating accounts and to Ms. Fonseca's personal accounts.
Second, the government alleged that Ms. Fonseca submitted fraudulent applications to the California Film Commission's Film & Television Tax Credit Program in connection with three productions, resulting in the improper obtainment of approximately $2.8 million in tax credits.
Third, the government alleged that Ms. Fonseca commingled and diverted investor funds that were designated for specific productions, transferring those funds into Aurelia Pictures' general operating accounts and personal accounts, in a total amount of approximately $5.8 million.
Based on these three categories, the government calculated a total alleged loss of $14.7 million. The five film productions referenced in the indictment are "Meridian," "The Cartographer's Daughter," "Blue Signal," "Glass Meridian," and "The Understory."
As set forth in Section V of this memorandum and in the separately filed Objections to the PSR, the defense contests the government's loss calculation on multiple grounds, including the double-counting of approximately $4.3 million and the failure to account for $2.1 million in funds that were reinvested into production activities. The defense submits that the correct intended loss figure is $8.3 million.
II. THE HISTORY AND CHARACTERISTICS OF MARGUERITE D. FONSECA
Section 3553(a)(1) directs the Court to consider "the history and characteristics of the defendant" in determining an appropriate sentence. The Supreme Court has emphasized that this inquiry is broad, encompassing "the defendant's 'personal history and characteristics' in the fullest sense, including her entire biography." Pepper v. United States, 562 U.S. 476, 488–89 (2011). Ms. Fonseca's personal history is extraordinary, and it provides essential context for understanding both the person who stands before this Court and the circumstances that led to the conduct at issue.
A. Early Life and Family Background
Marguerite Dolores Fonseca was born on June 7, 1973, in Sacramento, California, to Renato Fonseca and Corazon Fonseca, both immigrants from the Philippines. The family settled in the Del Paso Heights neighborhood of Sacramento, one of the city's most economically disadvantaged communities, characterized by high rates of poverty, crime, and limited access to educational and economic opportunities.
Ms. Fonseca is a first-generation Filipino-American. She grew up in a household defined by financial hardship and sacrifice. Her father, Renato Fonseca, worked two jobs throughout most of her childhood — as a maintenance worker at a Sacramento office complex during the day and as a janitor at a local elementary school in the evenings — to provide for the family. Her mother, Corazon Fonseca, suffered from chronic illness throughout Ms. Fonseca's childhood, including diabetes and recurring respiratory infections that frequently required hospitalization and prevented her from working outside the home.
From approximately the age of twelve, Ms. Fonseca assumed the role of primary caretaker for her mother during the long hours when her father was at work. She prepared meals, managed household chores, administered medications, and accompanied her mother to medical appointments. These were responsibilities far beyond what should be expected of a child, and they shaped Ms. Fonseca in profound ways. As documented in the comprehensive social history prepared by Dr. Sandra Oleander of Thornfield Mitigation Consulting LLC (Exhibit A), these formative experiences instilled in Ms. Fonseca a deep work ethic, an unwavering sense of obligation to family and community, and a fierce determination to build a better life for herself and her family. They also, however, created enduring patterns of self-reliance, stress internalization, and profound difficulty in seeking help from others — patterns that persisted into adulthood and that, as discussed in Section III, contributed to the deterioration of her mental health during the period of the charged conduct.
Despite the challenges of her upbringing, Ms. Fonseca excelled academically. She was the first person in her family to attend college, a milestone that carried enormous significance for her parents and for the broader Filipino-American community in Sacramento. Her father, Renato, spoke frequently of his dream that his daughter would have the opportunities that had been unavailable to him, and he encouraged her relentlessly to pursue her education. The close bond between Ms. Fonseca and her father — and the devastating impact of his death in 2016 — is addressed in Section II.E below.
B. Education and Early Career
Ms. Fonseca earned a full academic scholarship to the University of California, Santa Cruz, where she graduated in 1995 with a Bachelor of Arts degree in Film & Digital Media. Her undergraduate experience introduced her to the art and craft of filmmaking, and she discovered a passion and talent that would define the course of her professional life. She went on to earn a Master of Fine Arts degree in Film Production from the American Film Institute in 1998. Both degrees were obtained through a combination of academic scholarships and financial aid; Ms. Fonseca carried no family financial support and worked part-time throughout her education to cover living expenses.
Following her graduation from AFI, Ms. Fonseca spent approximately a decade working in various entry-level and mid-level positions in the entertainment industry in Los Angeles. She worked as a production assistant, a production coordinator, an associate producer, and eventually a line producer on independent and studio productions. These years were formative, as she developed both the creative vision and the business acumen that would ultimately enable her to found her own company. Throughout this period, she earned a reputation among colleagues for her work ethic, her creative judgment, and her commitment to telling stories that reflected the diversity of the American experience.
C. Building Aurelia Pictures, Inc.
On March 14, 2009, Ms. Fonseca founded Aurelia Pictures, Inc., a California corporation (Secretary of State Entity No. C3276451), with offices at 8950 West Sunset Boulevard, Suite 1400, West Hollywood, California 90069. The founding of Aurelia Pictures represented the culmination of a lifelong dream and more than a decade of industry experience.
Ms. Fonseca built the company from a one-person operation — with herself serving as sole employee, producer, and administrator — into a significant independent production company over the course of fifteen years. Under her leadership, Aurelia Pictures produced twenty-three feature films and six limited television series, generating cumulative gross revenues of approximately $312 million. The company's productions were distributed domestically and internationally, and several received critical acclaim and industry recognition.
At its peak in 2022, Aurelia Pictures employed approximately forty-five full-time staff members, including creative executives, development staff, production personnel, finance and accounting professionals, and administrative support. Beyond its full-time employees, each production engaged hundreds of additional cast and crew members, creating employment and creative opportunities across the entertainment industry.
Ms. Fonseca's entrepreneurial achievement is remarkable by any measure. As a first-generation Filipino-American woman from an impoverished background, building a major independent production company from nothing — without the benefit of family wealth, industry connections, or institutional backing — represents an extraordinary professional accomplishment. The company maintained a $10 million revolving production credit facility with Pacific Meridian Bank, N.A., reflecting the financial institution's confidence in the company's operations and management.
The significance of this achievement should not be diminished by the conduct that is the subject of these proceedings. For the vast majority of Aurelia Pictures' existence, the company operated legitimately, produced compelling work, employed scores of talented professionals, and generated substantial returns for investors. The charged conduct, which spanned approximately five years of the company's fifteen-year existence, was an aberration — not the defining characteristic of Ms. Fonseca's career.
D. Marriage and Children
Ms. Fonseca married Alejandro Fonseca, and the couple had two children: Elena Fonseca, now age seventeen, and Marco Fonseca, now age fourteen. The marriage was dissolved in a contentious divorce that was finalized in 2019. The divorce proceedings, which involved disputes over custody, property division, and support obligations, added significant emotional and financial stress to an already difficult period in Ms. Fonseca's life, coinciding with the deterioration of her mental health and the period of the charged conduct.
Ms. Fonseca is the primary custodial parent of both children. Elena and Marco reside with their mother at the family home at 1847 Mulholland Terrace, Los Angeles, California 90068. Elena is a high school junior who is actively preparing for college applications. Marco is in the eighth grade. Both children are thriving academically and socially, in large part because of Ms. Fonseca's dedicated and attentive parenting. The impact of incarceration on these minor children is addressed more fully in Section VII of this memorandum.
E. The Death of Renato Fonseca and Its Aftermath
In 2016, Ms. Fonseca's father, Renato Fonseca, died. The loss was devastating. Throughout her life, Ms. Fonseca had maintained an extraordinarily close relationship with her father. He was her primary source of emotional strength, moral guidance, and personal accountability. He was the person who had instilled in her the values of hard work, honesty, and service to others. He was the person who had dreamed of a better life for his daughter and who had sacrificed ceaselessly to make that dream possible. He was, in Ms. Fonseca's words, "the compass by which I navigated my life."
The death of Renato Fonseca occurred approximately one year before the earliest onset of the charged conduct in January 2018. This temporal proximity is not coincidental. As documented in the forensic psychiatric evaluation of Dr. Kenneth Whitmore (Exhibit B) and in the mitigation report of Dr. Sandra Oleander (Exhibit A), the loss of her father precipitated a significant and prolonged deterioration in Ms. Fonseca's mental health. She withdrew from social relationships. She struggled to maintain the boundaries between her personal financial pressures and her company's operations. She lost the person who had always served as her moral anchor, and in the absence of that anchor, she made decisions that she would not otherwise have made. The nexus between her father's death, her mental health deterioration, and the charged conduct is addressed in detail in Section III of this memorandum.
III. MENTAL HEALTH HISTORY AND MITIGATING CIRCUMSTANCES
The defense does not suggest — and has never suggested — that mental illness excuses criminal conduct. Ms. Fonseca accepts full responsibility for her actions. However, the law is clear that a defendant's mental health history is a relevant and important consideration under § 3553(a)(1), and that documented mental health conditions that contributed to the circumstances of the offense are among the most significant mitigating factors a court can consider at sentencing. See Pepper v. United States, 562 U.S. 476, 491 (2011); United States v. Soto-Olivas, 44 F.4th 1096, 1103 (9th Cir. 2022). Ms. Fonseca's mental health history provides essential context for understanding how a person with no prior criminal history and a twenty-five-year unblemished career came to engage in the conduct at issue.
A. Diagnoses
In 2017, approximately one year after the death of her father, Ms. Fonseca was diagnosed with Major Depressive Disorder by her treating psychiatrist, Dr. Elaine Varma, of Pacific Mind Health Associates, located at 1200 Wilshire Boulevard, Suite 300, Los Angeles, California 90017. The diagnosis was based on a clinical evaluation that documented persistent symptoms including depressed mood, anhedonia, insomnia, difficulty concentrating, feelings of worthlessness, and fatigue — symptoms that had been present and worsening over the preceding months.
In 2019, following the finalization of her divorce from Alejandro Fonseca, Dr. Varma diagnosed Ms. Fonseca with Generalized Anxiety Disorder, based on the emergence of additional symptoms including chronic worry, restlessness, irritability, and muscle tension that were not fully accounted for by the depression diagnosis alone.
Ms. Fonseca's treatment has included pharmacological management — specifically, sertraline (Zoloft) 100mg daily, prescribed by Dr. Varma — and weekly psychotherapy sessions. While the treatment has provided some stabilization, Dr. Varma's records reflect that Ms. Fonseca's conditions were undertreated during significant portions of the charged conduct period, in part because Ms. Fonseca's ingrained patterns of self-reliance and reluctance to seek help led her to minimize her symptoms and resist increases in treatment intensity.
These diagnoses and the associated treatment history are corroborated by Dr. Varma's treatment records (relevant excerpts submitted under seal) and by the independent forensic psychiatric evaluation conducted by Dr. Kenneth Whitmore (Exhibit B).
B. Contextual Stressors and the Nexus to Offending Conduct
The temporal overlap between Ms. Fonseca's mental health deterioration and the charged conduct is striking. The onset of the charged conduct in January 2018 coincided precisely with the period of Ms. Fonseca's most acute psychological distress following her father's death in 2016 and her diagnosis of Major Depressive Disorder in 2017. The contentious divorce from Alejandro Fonseca, which was finalized in 2019, compounded her psychological deterioration during the middle of the charged period. These personal crises occurred against the backdrop of escalating professional pressures associated with managing an independent production company in an industry characterized by intense competition, irregular cash flows, and high-stakes financing arrangements.
As documented by Dr. Whitmore in his forensic psychiatric evaluation, Ms. Fonseca's decision-making during the charged conduct period — January 2018 through December 2022 — was materially affected by her untreated and then undertreated mental health conditions. The clinical depression and anxiety impaired her judgment and impulse control, eroded her capacity for long-term planning and risk assessment, and fostered a cognitive pattern in which short-term crisis management displaced the ethical and rational decision-making that had characterized the first decade of her career.
Dr. Whitmore describes a constellation of factors — profound grief, marital dissolution, escalating professional pressures, clinical depression, and generalized anxiety — that converged during this period to create the conditions for what he characterizes as aberrant decision-making. He notes that this pattern is consistent with the clinical literature on the relationship between untreated depression and impaired executive function, and that it explains how an individual with no prior history of dishonesty or criminality came to engage in conduct that was fundamentally at odds with her established character and values.
To be clear, the defense does not offer this analysis as an excuse. Ms. Fonseca's mental health conditions did not prevent her from understanding that her conduct was wrong. She knew it was wrong, and she is profoundly ashamed. But the law recognizes that understanding why a person offended — and what circumstances contributed to the offense — is essential to determining the sentence that is "sufficient, but not greater than necessary" to achieve the purposes of sentencing. Ms. Fonseca's mental health history is a critical part of that understanding.
C. Dr. Kenneth Whitmore's Forensic Psychiatric Evaluation
Dr. Kenneth Whitmore is a board-certified forensic psychiatrist with offices at 9401 Wilshire Boulevard, Suite 760, Beverly Hills, California 90212. Dr. Whitmore has extensive experience conducting forensic evaluations in federal criminal cases and has been qualified as an expert in forensic psychiatry in numerous federal and state courts.
At the request of defense counsel, Dr. Whitmore conducted a comprehensive evaluation of Ms. Fonseca, which included multiple in-person clinical interviews totaling approximately twelve hours, the administration of standardized psychological testing instruments, a thorough review of treatment records from Dr. Varma, a review of medical records, and a review of relevant case materials and the PSR.
Dr. Whitmore's conclusions may be summarized as follows:
First, Ms. Fonseca meets the diagnostic criteria for Major Depressive Disorder and Generalized Anxiety Disorder, consistent with the diagnoses previously rendered by Dr. Varma. These are genuine, clinically significant conditions that substantially affected Ms. Fonseca's functioning during the relevant period.
Second, Ms. Fonseca's MDD and GAD significantly impaired her judgment and impulse control during the period of the charged conduct (January 2018 through December 2022). The impairment was particularly acute during the period immediately following her father's death and during the period of her divorce, but it persisted throughout the charged period due to the chronic and undertreated nature of her conditions.
Third, Ms. Fonseca's conditions are treatable, and with continued and appropriate treatment — including medication management and regular psychotherapy — she poses minimal risk of recidivism. Dr. Whitmore assessed her as a low risk for future criminal conduct based on her age, her lack of prior criminal history, the situational nature of the stressors that contributed to the offense, and her engagement with treatment.
Fourth, incarceration would severely disrupt Ms. Fonseca's existing treatment relationship with Dr. Varma and would exacerbate her conditions. While the Bureau of Prisons can provide some mental health services, the disruption to her established treatment regimen and the stress of incarceration itself would be counterproductive to her mental health recovery.
The full report of Dr. Whitmore is attached as Exhibit B.
D. Dr. Elaine Varma's Treatment Records
Corroborative records from Ms. Fonseca's treating psychiatrist, Dr. Elaine Varma, at Pacific Mind Health Associates have been provided to the Court under seal. These records document the progression of Ms. Fonseca's symptoms from 2017 to the present, including the initial diagnosis of MDD in 2017, the subsequent diagnosis of GAD in 2019, the management of her medication regimen, and the content and course of her psychotherapy sessions. The records corroborate the findings of Dr. Whitmore's independent evaluation and provide a contemporaneous clinical record of Ms. Fonseca's mental health trajectory during the period of the charged conduct. Relevant excerpts of Dr. Varma's records have been submitted under seal for the Court's review.
IV. CHARITABLE AND COMMUNITY CONTRIBUTIONS
Throughout her career, Ms. Fonseca has demonstrated a deep and sustained commitment to charitable and community service, with a particular focus on expanding opportunities for underrepresented communities in the entertainment industry. These contributions are not window dressing assembled for the purposes of sentencing; they represent decades of genuine, consistent, and substantial investment of time, resources, and personal energy.
A. The Aurelia Foundation
In 2014, Ms. Fonseca founded the Aurelia Foundation, a 501(c)(3) non-profit organization dedicated to supporting aspiring filmmakers from underserved communities. Between 2014 and 2023, the Foundation provided $1.8 million in scholarships and grants to underrepresented filmmakers, including tuition assistance for film school, production grants for short films and debut features, and travel grants to attend industry festivals and markets.
The Foundation focused specifically on supporting aspiring filmmakers from communities that have historically been underrepresented in the entertainment industry, with a particular emphasis on diversity and inclusion. It funded scholarship recipients from communities across the country, many of whom have gone on to successful careers in film and television. The Foundation's work reflected Ms. Fonseca's deeply held conviction — rooted in her own experience as a first-generation Filipino-American woman who built her career without the benefit of industry connections or family wealth — that the entertainment industry must be accessible to talented individuals regardless of their background.
Multiple recipients of Aurelia Foundation scholarships and grants have submitted character letters in support of Ms. Fonseca, describing the transformative impact of the Foundation's support on their careers and lives. These letters are included in Exhibit D.
B. Filipino-American Arts Coalition
Ms. Fonseca's commitment to mentorship extended beyond the Aurelia Foundation to hands-on, personal engagement with aspiring filmmakers. Through the Filipino-American Arts Coalition ("FAAC"), a community arts organization serving the Filipino-American community in Los Angeles, Ms. Fonseca personally mentored over sixty young filmmakers over the course of her career.
Her mentorship was not merely nominal. She provided hands-on training in filmmaking craft, offered professional development guidance, facilitated networking with industry professionals, and provided creative guidance on individual projects. She attended screenings, reviewed scripts, made introductions, and in numerous cases provided financial support from her own resources to enable mentees to complete their work.
Many of Ms. Fonseca's mentees have gone on to successful careers in the entertainment industry, and their letters — which are among the most powerful submissions in the record — describe a mentor who was generous, patient, demanding, and deeply invested in their success. The consistent theme across these letters is that Ms. Fonseca did not simply offer advice from a distance; she made herself available, invested her time, and treated each mentee's aspirations as worthy of the same dedication she brought to her own work. Character letters from FAAC mentees are included in Exhibit D.
C. Los Angeles Youth Media Project
From 2016 to 2023, Ms. Fonseca served on the board of directors of the Los Angeles Youth Media Project ("LAYMP"), a non-profit organization that provides media arts education to at-risk youth in the Los Angeles area. LAYMP operates after-school and summer programs that teach filmmaking, photography, digital storytelling, and media literacy to young people from underserved communities.
In her capacity as a board member, Ms. Fonseca contributed not only her time and expertise but also her resources and industry connections. She helped LAYMP secure equipment donations, organized industry mentorship events, and personally participated in workshops and classes. Fellow board members and LAYMP staff have submitted character letters attesting to Ms. Fonseca's dedication and the tangible impact of her contributions on the organization and the young people it serves.
D. Broader Industry and Community Impact
Beyond her formal charitable commitments, Ms. Fonseca's career at Aurelia Pictures itself constituted a form of community contribution. Over the course of her career, she created opportunities for hundreds of industry professionals — actors, writers, directors, cinematographers, editors, production designers, and crew members — many of whom were from underrepresented backgrounds. Her films highlighted diverse stories and underrepresented voices at a time when the entertainment industry was only beginning to grapple with its failures of inclusion and representation.
The over forty character letters submitted in Exhibit D — from industry colleagues, community members, mentees, scholarship recipients, family members, friends, and educators — paint a consistent portrait of a woman who was generous, dedicated, compassionate, and deeply committed to the well-being of those around her. The charged conduct is wholly inconsistent with the person described in these letters, and the letters provide powerful evidence that this conduct was aberrational — a departure from the character and values that have defined Ms. Fonseca's life.
V. THE ADVISORY GUIDELINES RANGE IS OVERSTATED
While the United States Sentencing Guidelines are advisory, United States v. Booker, 543 U.S. 220 (2005), they remain an important starting point for the Court's analysis under § 3553(a). It is therefore essential that the advisory Guidelines range be calculated correctly. The defense submits that the PSR's calculation of a Total Offense Level of 31, yielding an advisory range of 108 to 135 months, contains two significant errors that, when corrected, reduce the Total Offense Level to 27 and the advisory range to 70 to 87 months. The defense's objections are set forth in detail in the Defendant's Objections to the PSR filed January 10, 2026, and are summarized below.
A. Overview of the PSR's Guidelines Calculation
The PSR, prepared by United States Probation Officer Michael T. Brennan and disclosed on November 3, 2025, calculated the advisory Guidelines range as follows:
With a Criminal History Category of I — Ms. Fonseca has no prior criminal history whatsoever — the PSR calculated an advisory Guidelines range of 108 to 135 months of imprisonment.
The defense does not object to the base offense level of 7, the two-level enhancement for number of victims under § 2B1.1(b)(2)(A)(i), or the two-level enhancement for abuse of a position of trust under § 3B1.3. The defense does, however, object to the loss enhancement and the sophisticated means enhancement.
B. The Loss Calculation Is Overstated by at Least $6.4 Million
The single most significant driver of the PSR's Guidelines calculation is the loss enhancement. The government's total alleged loss of $14.7 million places the case in the $9.5 million to $25 million range under § 2B1.1(b)(1)(J), resulting in an 18-level enhancement. The defense submits that the correct loss figure is $8.3 million, which falls in the $6.5 million to $9.5 million range under § 2B1.1(b)(1)(I), resulting in a 16-level enhancement — a difference of two levels.
1. The Government's Loss Figure of $14.7 Million Contains $4.3 Million in Double-Counting
The government's total loss figure of $14.7 million is derived from three components:
(a) $6.1 million in inflated budget diversions on five productions ("Meridian," "The Cartographer's Daughter," "Blue Signal," "Glass Meridian," and "The Understory");
(b) $2.8 million in fraudulently obtained California Film Commission tax credits on three productions; and
(c) $5.8 million in diverted investor funds.
The defense contends — and the expert analysis of Dr. Priya Chandrasekaran confirms — that approximately $4.3 million of the diverted investor funds (category (c)) are also counted in the inflated budget diversions (category (a)). These are the same dollars counted twice under two different labels. The mechanism is straightforward: investor funds were diverted through the mechanism of budget inflation. When an investor was told that a production cost $8 million when it actually cost $6 million, the $2 million difference represents both "inflated budget costs" and "diverted investor funds." Counting it in both categories is textbook double-counting.
Dr. Chandrasekaran's report (Exhibit C) traces each dollar through the relevant bank accounts, production accounts, and general operating accounts to demonstrate the overlap. Her analysis identifies specific transactions totaling $4.3 million that appear in both categories (a) and (c) of the government's loss calculation. The overlap is not a matter of characterization or accounting judgment; it is an arithmetic error that inflates the loss figure by $4.3 million.
This double-counting was acknowledged, at least implicitly, at trial. During cross-examination of the government's forensic accountant, Dr. Ramesh Patel of Hargrove, Patel & Sullivan LLP, Dr. Patel conceded that there were "overlapping categories" in his fund-tracing analysis and that certain transactions could be "classified under more than one heading." While Dr. Patel maintained that his total loss figure was accurate, his acknowledgment of overlapping categories is consistent with the defense's position that the same dollars have been counted twice.
Correcting for this double-counting reduces the actual loss from $14.7 million to $10.4 million.
2. An Additional $2.1 Million Was Reinvested in Production Activities
Of the remaining loss amount, an additional $2.1 million in funds characterized by the government as "diverted" were in fact reinvested into Aurelia Pictures' production activities. Dr. Chandrasekaran's analysis traces these funds to legitimate production expenditures, including payments to cast and crew, location fees, post-production costs, and other bona fide production expenses on the five films at issue.
While these funds were improperly commingled — transferred from designated production accounts into general operating accounts before being deployed for production purposes — they ultimately benefited the productions and, by extension, the investors whose funds were at issue. Several of the productions at issue generated revenue, and some of the investors received partial returns on their investments. Under the Sentencing Guidelines, intended loss should be reduced by amounts returned to or for the benefit of victims. See U.S.S.G. § 2B1.1, Application Note 3(E)(i); see also United States v. Rivernider, 828 F.3d 91, 106 (2d Cir. 2016) (discussing credits against loss for funds returned to victims); United States v. Zavala, 443 F.3d 1165, 1170 (9th Cir. 2006) (holding that loss calculation must account for amounts recovered or recoverable by victims).
Reducing the $10.4 million actual loss by $2.1 million in reinvested funds yields an intended loss of $8.3 million.
3. The Correct Loss Enhancement Is +16, Not +18
An intended loss of $8.3 million falls within the $6.5 million to $9.5 million range under § 2B1.1(b)(1)(I), yielding a loss enhancement of +16 rather than the +18 applied in the PSR under § 2B1.1(b)(1)(J).
This single correction — a reduction in the loss enhancement from +18 to +16 — reduces the Total Offense Level by two levels.
C. The Sophisticated Means Enhancement Is Unwarranted
The PSR applies a two-level enhancement for sophisticated means under § 2B1.1(b)(10)(C). The defense objects to this enhancement.
The sophisticated means enhancement is intended for fraud schemes that are "especially complex or especially intricate" and that involve "conduct that is more complex than that which is needed for the commission of the offense." U.S.S.G. § 2B1.1, Application Note 9(B). The Ninth Circuit has held that the enhancement requires conduct that is "notably more intricate" than the fraud itself. United States v. Stoterau, 524 F.3d 988, 1006 (9th Cir. 2008). Ordinary misrepresentations that are inherent in a fraud scheme do not, standing alone, justify the enhancement.
The conduct at issue in this case, while involving misrepresentations in financial documents, did not rise to the level of sophistication contemplated by the Guidelines. The scheme involved inflating production budgets — a relatively straightforward manipulation of cost estimates that, while dishonest, did not require elaborate financial engineering. The fund commingling involved transfers between bank accounts at the same institution. The conduct did not involve:
• Shell companies or nominee entities designed to conceal the flow of funds;
• Offshore bank accounts or foreign financial institutions;
• Encrypted communications or sophisticated efforts to conceal the fraud from detection;
• Nominee ownership structures or fictitious identities;
• Complex derivative instruments, synthetic transactions, or other hallmarks of truly sophisticated financial fraud; or
• Any of the other indicia of sophistication that courts have recognized as warranting the enhancement.
Indeed, the fraud was ultimately uncovered through standard audit procedures — an examination of Aurelia Pictures' financial records by investors' representatives that revealed discrepancies between budgeted and actual production costs. The fact that the scheme was detectable through ordinary diligence undermines the claim that it involved "sophisticated means." If the means had been truly sophisticated, the scheme would not have been discovered through routine financial review.
Removing the sophisticated means enhancement reduces the Total Offense Level by an additional two levels.
D. The Correctly Calculated Guidelines Range
The defense submits that the correctly calculated Total Offense Level is 27, as follows:
With a Criminal History Category of I, the correctly calculated advisory Guidelines range is 70 to 87 months of imprisonment. This represents a reduction of 38 to 48 months from the PSR's range of 108 to 135 months.
The defense's detailed analysis of these objections is set forth in the Defendant's Objections to the PSR filed January 10, 2026, and in the expert report of Dr. Priya Chandrasekaran (Exhibit C).
VI. A SENTENCE OF 36–48 MONTHS IS SUFFICIENT BUT NOT GREATER THAN NECESSARY UNDER 18 U.S.C. § 3553(a)
Even accepting the defense's correctly calculated advisory Guidelines range of 70 to 87 months, the defense respectfully submits that a sentence within that range would be greater than necessary to achieve the statutory purposes of sentencing. A careful, individualized analysis of all of the § 3553(a) factors demonstrates that a sentence of 36 to 48 months of imprisonment — a substantial and significant punishment — is "sufficient, but not greater than necessary" to comply with the purposes set forth in 18 U.S.C. § 3553(a).
A. The Parsimony Principle
The parsimony principle is the "overarching" instruction that Congress has given to sentencing courts. See 18 U.S.C. § 3553(a) (directing the court to "impose a sentence sufficient, but not greater than necessary, to comply with the purposes" of sentencing). The Supreme Court has made clear that the advisory Guidelines are but one factor among many that the court must consider, and that a district court may impose a sentence below the advisory range when, in the court's judgment, the § 3553(a) factors so warrant. Gall v. United States, 552 U.S. 38, 49–50 (2007); Kimbrough v. United States, 552 U.S. 85, 101 (2007); Rita v. United States, 551 U.S. 338, 351 (2007). The Ninth Circuit has likewise held that "nothing in Booker or its progeny establishes a presumption that a Guidelines sentence is reasonable." United States v. Carty, 520 F.3d 984, 991 (9th Cir. 2008) (en banc).
The advisory Guidelines range in this case — whether 108 to 135 months as calculated by the PSR or 70 to 87 months as calculated by the defense — substantially overstates the sentence necessary to achieve the statutory objectives. As Judge Weinstein observed in United States v. Emmenegger, 329 F. Supp. 2d 416, 427 (S.D.N.Y. 2004), the loss-driven fraud Guidelines "have been sharply criticized for their disproportionate severity" and for producing advisory ranges that "bear little relationship to the culpability of the individual defendant." This case is a paradigm of that criticism. The mechanical application of the loss enhancement produces an advisory range that, considered in the totality of the circumstances, would be greater than necessary to serve any legitimate sentencing purpose.
B. The Nature and Circumstances of the Offense — § 3553(a)(1)
While the offense involved a significant financial loss, several important features distinguish Ms. Fonseca's case from the most serious fraud cases.
First, the offense arose in the context of a legitimate, long-standing business. Aurelia Pictures was not a Ponzi scheme or a front for criminal activity. It was a real company that operated for over fifteen years, produced twenty-three feature films and six limited television series, generated approximately $312 million in cumulative gross revenues, and employed dozens of full-time staff and hundreds of production workers. The charged conduct occurred within the framework of an otherwise legitimate enterprise, not as part of a criminal enterprise designed from inception to defraud.
Second, a substantial portion of investor funds were used for their intended purpose — film production. The films at issue — "Meridian," "The Cartographer's Daughter," "Blue Signal," "Glass Meridian," and "The Understory" — were actually produced. They were completed, distributed, and in some cases generated revenue. This is not a case where investor money simply disappeared into the defendant's pocket. While funds were improperly diverted and budgets were inflated, a significant portion of the investors' capital was deployed in film production and created assets with real value.
Third, the victims of the scheme were not vulnerable individuals. The primary investor victims — Brindoval Investors Group LP and Lakeshore Capital Partners LLC — are sophisticated institutional investors with experience in entertainment industry investments. The individual investors were likewise sophisticated participants in the film financing market who invested with the benefit of legal counsel and financial advisors. While the fact that victims are sophisticated does not excuse fraud, it is a relevant consideration in assessing the nature and circumstances of the offense. See Gall, 552 U.S. at 52 (holding that district courts should engage in an individualized assessment of each case).
Fourth, Ms. Fonseca did not live an extravagant personal lifestyle funded by fraud proceeds. The evidence at trial demonstrated that much of the diverted money was used to keep Aurelia Pictures operational during periods of financial stress — to cover payroll, office rent, insurance, and other operating expenses. While some funds were transferred to personal accounts, the evidence did not reveal the hallmarks of personal enrichment that characterize the most egregious fraud cases — no luxury real estate purchases, no exotic vehicles, no offshore accounts, no lavish vacations funded by victim money.
Fifth, no violence, threats, or coercion of any kind were involved in the offense.
C. The History and Characteristics of the Defendant — § 3553(a)(1)
As set forth in Sections II, III, and IV of this memorandum, Ms. Fonseca's history and characteristics present an extraordinary mitigation case. She is a first-generation Filipino-American raised in poverty in one of Sacramento's most disadvantaged neighborhoods. She was the first person in her family to attend college. She built a remarkable career in the entertainment industry over twenty-five years, founding and leading an independent production company that produced twenty-three feature films and six television series. She has no prior criminal history of any kind — no arrests, no convictions, no civil regulatory actions — over the course of a fifty-two-year life.
Her mental health conditions — Major Depressive Disorder (diagnosed 2017) and Generalized Anxiety Disorder (diagnosed 2019) — are clinically significant and well-documented. They developed in the wake of devastating personal losses, including the death of her father in 2016 and a contentious divorce in 2019, and they materially impaired her judgment during the period of the charged conduct. These conditions are treatable, and with continued treatment, Dr. Whitmore assesses her as a low risk for recidivism.
Her charitable and community contributions are extensive and genuine — $1.8 million in scholarships and grants through the Aurelia Foundation, mentorship of over sixty filmmakers through the Filipino-American Arts Coalition, and years of board service at the Los Angeles Youth Media Project.
Over forty character letters from industry colleagues, community members, mentees, family members, and educators attest to Ms. Fonseca's character, generosity, and positive impact on the lives of others (Exhibit D).
D. The Need for the Sentence to Reflect the Seriousness of the Offense, Promote Respect for the Law, and Provide Just Punishment — § 3553(a)(2)(A)
A sentence of 36 to 48 months of imprisonment is a very significant punishment. It would deprive Ms. Fonseca of her liberty for three to four years. It would separate her from her two minor children and her elderly mother during a critical period in their lives. It would permanently destroy her career in the entertainment industry — a career she spent twenty-five years building and that represented her life's work.
Moreover, imprisonment is not the only punishment Ms. Fonseca will bear. The collateral consequences of her conviction are already severe and will persist for the rest of her life. She has lost her company. She has lost her professional reputation. She has been publicly identified as a convicted felon. She will carry the stigma of a federal felony conviction in every aspect of her life — personal, professional, and civic — for the remainder of her days. When combined with a substantial restitution obligation and the conditions of supervised release, the total punishment imposed by a sentence of 36 to 48 months is more than adequate to reflect the seriousness of the offense, promote respect for the law, and provide just punishment.
E. The Need for Adequate Deterrence — § 3553(a)(2)(B)
Specific deterrence. Ms. Fonseca's complete lack of prior criminal history, her age (52), her ongoing mental health treatment, and the devastating consequences she has already suffered make recidivism extremely unlikely. She has lost her company, her career, her reputation, and her financial security. Aurelia Pictures is in receivership. She no longer has access to the business structures through which the offense was committed. The factors that contributed to the offense — her father's death, her divorce, the peak of her untreated depression — are unique situational stressors that have either resolved or are being addressed through treatment. There is no meaningful risk that Ms. Fonseca will commit another offense.
General deterrence. The defense acknowledges that general deterrence is a legitimate consideration in white-collar cases. A multi-year prison sentence, combined with a substantial restitution order and supervised release, sends a clear message to others in the entertainment industry and in the broader business community that fraud will be met with serious consequences, including imprisonment. However, the incremental deterrence value of a sentence of 108 to 135 months versus 36 to 48 months is minimal. The empirical literature consistently demonstrates that the certainty of punishment, not its severity, is the primary driver of deterrence in white-collar cases. A sentence of 36 to 48 months is more than adequate to serve the deterrence function.
F. The Need to Protect the Public from Further Crimes of the Defendant — § 3553(a)(2)(C)
Ms. Fonseca poses virtually no risk of recidivism. She is a 52-year-old woman with zero prior criminal history. The conduct at issue was aberrant behavior — a departure from an otherwise law-abiding life, triggered by a confluence of devastating personal circumstances. Aurelia Pictures is in receivership under the supervision of Nathaniel W. Prescott of Ridgeway Advisory Group LLC. Ms. Fonseca no longer has access to the company, its accounts, or its operations. She no longer occupies a position that would afford the opportunity for similar conduct. With continued mental health treatment and the conditions of supervised release, the risk she poses to the public is negligible.
G. The Need to Provide the Defendant with Needed Educational or Vocational Training, Medical Care, or Other Correctional Treatment — § 3553(a)(2)(D)
Ms. Fonseca requires continued mental health treatment for Major Depressive Disorder and Generalized Anxiety Disorder, including medication management (sertraline 100mg daily) and regular psychotherapy. She has an established treatment relationship with Dr. Elaine Varma at Pacific Mind Health Associates that has been ongoing since 2017. This therapeutic relationship is clinically important, and its disruption would be detrimental to Ms. Fonseca's mental health.
While the Bureau of Prisons is capable of providing some mental health services, the disruption to Ms. Fonseca's existing treatment relationship and the limitations of BOP mental health care would be significant. A shorter sentence of imprisonment followed by supervised release with mandatory mental health treatment conditions would better serve this statutory objective. Specifically, a sentence of 36 to 48 months, followed by three years of supervised release with conditions requiring continued medication management and psychotherapy, would ensure that Ms. Fonseca receives the treatment she needs while minimizing the disruption to her established care.
H. Sentencing Disparities — § 3553(a)(6)
Section 3553(a)(6) directs the Court to consider "the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct." In fraud cases, courts throughout the Ninth Circuit and nationally have increasingly recognized that the loss-driven Guidelines frequently produce advisory ranges that are disproportionate to the defendant's actual culpability, and have imposed sentences well below those ranges.
The United States Sentencing Commission's own data confirms this trend. In fiscal year 2023, the national rate of below-Guidelines sentences in fraud cases exceeded 50 percent. In the Ninth Circuit, the rate was even higher. These are not isolated cases of judicial leniency; they reflect a broad and growing consensus among sentencing judges that the fraud Guidelines, as currently structured, systematically overstate the appropriate sentence in many cases.
In comparable cases involving entertainment industry fraud, investment fraud, and tax credit fraud, courts have imposed sentences of 24 to 60 months for conduct involving comparable or even greater loss amounts. See, e.g., United States v. Ovid, No. 2:17-cr-00412, 2019 WL 2330871 (C.D. Cal. May 31, 2019) (36-month sentence imposed where advisory range was 78–97 months in entertainment industry fraud involving loss of approximately $11 million); United States v. Adelson, 441 F. Supp. 2d 506 (S.D.N.Y. 2006) (42-month sentence imposed where advisory range was 188–235 months in securities fraud with loss of approximately $80 million; court finding Guidelines "simply do not adequately account for the factors that distinguish the many different white collar fraud cases"); United States v. Lauersen, No. 98 Cr. 1134, 2004 WL 1562904 (S.D.N.Y. July 14, 2004) (below-Guidelines sentence imposed in fraud case involving medical billing fraud with loss of approximately $5 million). See also United States v. Christensen, 828 F.3d 763, 789 (9th Cir. 2015) (affirming below-Guidelines variance where the district court found the Guidelines "dramatically overstated" the seriousness of the offense); United States v. Prosperi, 686 F.3d 1, 12 (1st Cir. 2012) (affirming below-Guidelines variance in fraud case and noting that "loss amount is a significant driver of sentences under the fraud guideline" and that "mechanical application" of the loss table can produce sentences that are "far greater than necessary"); United States v. Mueffelman, 372 F. Supp. 2d 1, 5 (D. Mass. 2005) (departing from Guidelines range in tax fraud case, noting the "increasingly harsh sentences mandated by the Guidelines" in white-collar cases).
A sentence of 36 to 48 months in this case would be consistent with the sentences imposed in comparable cases and would avoid the unwarranted disparity that would result from a sentence at or near the advisory Guidelines range.
I. The Need to Provide Restitution to Victims — § 3553(a)(7)
Section 3553(a)(7) directs the Court to consider the need to provide restitution to victims. Paradoxically, a lengthy sentence of imprisonment would undermine, not advance, this objective. During the period of incarceration, Ms. Fonseca will have no meaningful ability to earn income. Her earning capacity will be suspended entirely, and her ability to make restitution payments will be limited to whatever assets are available at the time of sentencing.
Upon release, however, Ms. Fonseca possesses the education, skills, industry knowledge, and professional ex

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

DEFENDANT'S SENTENCING MEMORANDUM

TABLE OF CONTENTS

TABLE OF AUTHORITIES

PRELIMINARY STATEMENT

I. PROCEDURAL HISTORY

II. THE HISTORY AND CHARACTERISTICS OF MARGUERITE D. FONSECA

III. MENTAL HEALTH HISTORY AND MITIGATING CIRCUMSTANCES

IV. CHARITABLE AND COMMUNITY CONTRIBUTIONS

V. THE ADVISORY GUIDELINES RANGE IS OVERSTATED

Record

Parties

Dates

Amounts