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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

I. INTRODUCTION

Defendant Marguerite D. Fonseca, through undersigned counsel Conrad Ashby of Calderwood & Harkness LLP, 2029 Century Park East, Suite 3300, Los Angeles, California 90067, respectfully submits these objections to the Presentence Investigation Report ("PSR") prepared by United States Probation Officer Michael T. Brennan and disclosed to the parties on November 3, 2025. These objections are filed pursuant to Federal Rule of Criminal Procedure 32(f) and the Court's Sentencing Scheduling Order entered October 15, 2025 (Dkt. No. 189), which directed the parties to file any objections to the PSR no later than January 10, 2026.

Ms. Fonseca was convicted on September 18, 2025, following a three-week jury trial before this Court, on four counts of wire fraud in violation of 18 U.S.C. § 1343 (Counts One through Four), two counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(i) (Counts Five and Six), and one count of conspiracy to commit wire fraud in violation of 18 U.S.C. § 1371 (Count Seven). The jury returned its verdict on September 18, 2025, after approximately eleven hours of deliberation over two days. The Court ordered the preparation of a presentence investigation report on September 22, 2025 (Dkt. No. 178), and sentencing was set for March 6, 2026.

The PSR, dated November 3, 2025, calculates a Total Offense Level ("TOL") of 31. Combined with a Criminal History Category I determination — a determination to which Ms. Fonseca does not object — the PSR arrives at an advisory United States Sentencing Guidelines range of 108 to 135 months of imprisonment. Ms. Fonseca respectfully submits that this calculation is materially flawed and that the resulting advisory range significantly overstates the appropriate Guidelines range for her offense.

Ms. Fonseca objects to the PSR on four principal grounds. First, the PSR's loss calculation of $14.7 million materially overstates the actual and intended loss attributable to the offense by approximately $6.4 million, primarily due to the double-counting of $4.3 million in overlapping loss categories and the failure to account for $2.1 million in funds that were reinvested into legitimate production activities. Second, as a direct consequence of the inflated loss figure, the PSR applies a +18 loss enhancement under U.S.S.G. § 2B1.1(b)(1)(J) when the correct enhancement, based on a corrected loss of $8.3 million, should be +16 under § 2B1.1(b)(1)(I). Third, the PSR applies a +2 enhancement for sophisticated means under § 2B1.1(b)(10)(C) that is unsupported by the facts of this case and inconsistent with the governing legal standard. Fourth, the PSR contains specific factual inaccuracies regarding Ms. Fonseca's role in the underlying transactions and the nature and purpose of certain fund transfers that are prejudicial for sentencing purposes and require correction.

When these errors are corrected, the TOL should be 27, not 31. With Criminal History Category I, this yields an advisory Guidelines range of 70 to 87 months of imprisonment — a reduction of 38 to 48 months from the range calculated in the PSR. While the defense acknowledges that this corrected range still represents a significant term of imprisonment, accuracy in the Guidelines calculation is essential to ensuring that this Court exercises its sentencing discretion based upon correct information and a reliable advisory range. See 18 U.S.C. § 3553(a); United States v. Carty, 520 F.3d 984, 991 (9th Cir. 2008) (en banc) (describing the properly calculated advisory Guidelines range as the "starting point and initial benchmark" for sentencing).

Ms. Fonseca respectfully requests an evidentiary hearing on these objections pursuant to Federal Rule of Criminal Procedure 32(i)(3)(B). In support of her objections to the PSR's loss calculation, the defense intends to present expert testimony from Dr. Priya Chandrasekaran, Professor of Economics at Westbridge University, Department of Economics, 4500 University Drive, Pasadena, California 91107. Dr. Chandrasekaran has been retained by the defense to conduct an independent analysis of the flow of funds at issue and to opine on the proper methodology for calculating actual and intended loss under the Sentencing Guidelines.

II. SUMMARY OF THE PSR'S GUIDELINES CALCULATION

For the Court's reference, the defense sets forth the PSR's Guidelines calculation in full, as reflected in paragraphs 97 through 112 of the PSR:

Base Offense Level (U.S.S.G. § 2B1.1(a)(1)): 7

The PSR applies a base offense level of 7 because the offense of conviction has a statutory maximum term of imprisonment of twenty years. See 18 U.S.C. § 1343 (wire fraud, maximum 20 years); 18 U.S.C. § 1956(a)(1)(B)(i) (money laundering, maximum 20 years).

Specific Offense Characteristic — Loss Enhancement (U.S.S.G. § 2B1.1(b)(1)(J)): +18

The PSR calculates a total loss of $14,700,000, which falls within the range of more than $9,500,000 but not more than $25,000,000 under § 2B1.1(b)(1)(J), resulting in an 18-level increase to the base offense level. The PSR adopts the government's loss figure without independent analysis or adjustment for potential overlap among the three component categories of loss.

Specific Offense Characteristic — Number of Victims (U.S.S.G. § 2B1.1(b)(2)(A)(i)): +2

The PSR determines that the offense involved 10 or more but fewer than 50 victims, warranting a 2-level increase. The PSR identifies the victims as including two institutional investors (Brindoval Investors Group LP and Lakeshore Capital Partners LLC), five individual investors, and the California Film Commission.

Specific Offense Characteristic — Sophisticated Means (U.S.S.G. § 2B1.1(b)(10)(C)): +2

The PSR applies a 2-level enhancement for sophisticated means, concluding that Ms. Fonseca's offense conduct involved "especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense." The PSR bases this enhancement on the alleged use of multiple accounts, inflated budgets, and the California Film Commission tax credit application process.

Chapter Three Adjustment — Abuse of Position of Trust (U.S.S.G. § 3B1.3): +2

The PSR applies a 2-level adjustment for abuse of a position of trust, finding that Ms. Fonseca, as the founder, president, and chief executive officer of Aurelia Pictures, Inc., occupied a position of trust with respect to the investors and the California Film Commission and used that position to facilitate the commission of the offense.

Acceptance of Responsibility (U.S.S.G. § 3E1.1): Not applied

The PSR does not apply any reduction for acceptance of responsibility, as Ms. Fonseca's case proceeded to a full jury trial.

Total Offense Level: 7 + 18 + 2 + 2 + 2 = 31

Criminal History Category: I (0 criminal history points; no prior criminal history)

Advisory Guidelines Range: 108–135 months of imprisonment

Ms. Fonseca does not object to the base offense level of 7, the +2 enhancement for number of victims under § 2B1.1(b)(2)(A)(i), the +2 adjustment for abuse of position of trust under § 3B1.3, or the Criminal History Category I determination. Ms. Fonseca's objections are directed solely at the loss calculation and the resulting loss enhancement (Objections No. 1 and No. 2), the sophisticated means enhancement (Objection No. 3), and certain factual inaccuracies in the PSR narrative (Objection No. 4).

III. OBJECTION NO. 1: THE PSR'S LOSS CALCULATION OF $14.7 MILLION IS MATERIALLY OVERSTATED

The most significant error in the PSR is its adoption of the government's total alleged loss figure of $14.7 million. As set forth below, the actual intended loss attributable to Ms. Fonseca's offense conduct is $8.3 million — a figure that, while still substantial, is $6.4 million less than the figure relied upon by the PSR. The overstated loss figure results from two distinct errors: (1) the double-counting of $4.3 million in funds that appear in two overlapping loss categories; and (2) the failure to credit $2.1 million in funds that were reinvested into legitimate production activities of Aurelia Pictures, Inc.

The proper calculation of loss is critical at sentencing because, in fraud cases, the loss amount is "the most important factor in the fraud guideline" and "the primary determinant of the offense level." United States v. Berger, 587 F.3d 1038, 1045 (9th Cir. 2009). A sentencing court must make an independent determination of loss, even where the defendant has been convicted at trial; the court may not simply adopt the government's figures without scrutiny. See United States v. Zolp, 479 F.3d 715, 719 (9th Cir. 2007) ("The government has the burden of proving loss by a preponderance of the evidence."); United States v. Washington, 714 F.3d 1358, 1362 (11th Cir. 2013) ("A PSR is not evidence; it is a tool for the court."). Where, as here, the defendant raises specific, factual objections to the loss calculation, the Court "must — for any disputed portion of the presentence report or other controverted matter — rule on the dispute or determine that a ruling is unnecessary." Fed. R. Crim. P. 32(i)(3)(B).

A. The Government's Loss Figure and Its Three Components

The PSR, at paragraphs 68 through 82, adopts the government's total alleged loss figure of $14,700,000. This figure comprises three distinct categories of loss, each of which was identified and quantified by the government's forensic accounting expert at trial, Dr. Ramesh Patel, CPA, CFF, a partner at Hargrove, Patel & Sullivan LLP, who testified over the course of two days during the government's case-in-chief:

(1) Inflated Production Budget Diversions: $6,100,000. The government alleges that Ms. Fonseca systematically inflated production budgets for five Aurelia Pictures feature film productions by approximately 25% to 40% above the actual costs of production, solicited investor funds based on these inflated budgets, and diverted the excess funds — i.e., the difference between the inflated budgets and the actual production costs — for purposes other than the funded productions. The five affected productions identified by the government are "Meridian" (2019), "The Cartographer's Daughter" (2020), "Blue Signal" (2021), "Glass Meridian" (2022), and "The Understory" (2023).

(2) Fraudulently Obtained Tax Credits: $2,800,000. The government alleges that Ms. Fonseca submitted applications to the California Film Commission under the California Film & Television Tax Credit Program (Cal. Rev. & Tax. Code § 17053.98) containing inflated expenditure figures for three of the five productions, resulting in the issuance of tax credits totaling $2,800,000 to which Aurelia Pictures was not entitled. Those three productions were "The Cartographer's Daughter," "Blue Signal," and "Glass Meridian."

(3) Diverted Investor Funds: $5,800,000. The government alleges that Ms. Fonseca diverted $5,800,000 in investor funds from production-specific bank accounts designated for particular Aurelia Pictures productions into Aurelia Pictures' general operating accounts maintained at Pacific Meridian Bank, N.A. (Account Nos. ending in -4782 and -9156) and into personal bank accounts controlled by Ms. Fonseca at Westvale Securities (Account No. ending in -3341) and Glenrock Capital Markets (Account No. ending in -7208). The government contends that these diversions constituted theft of investor funds and formed the basis for both the wire fraud and money laundering charges.

Critically, the PSR does not independently analyze whether these three categories overlap. It does not conduct a de novo review of the underlying financial records or the testimony adduced at trial. Instead, the PSR simply adopts the government's aggregated figure of $14.7 million — the sum of $6.1 million, $2.8 million, and $5.8 million — without any adjustment for the significant overlap that exists between the first and third categories.

B. The $4.3 Million Double-Count

The defense's most significant objection to the PSR's loss calculation is that $4.3 million of the $5.8 million characterized as "diverted investor funds" in the third category represents the very same dollars that are already captured in the $6.1 million "inflated production budget diversions" in the first category. The PSR double-counts these funds, and this error inflates the total loss figure by $4.3 million.

The mechanics of this double-count are straightforward and follow directly from the government's own characterization of the scheme. The government's theory at trial was that Ms. Fonseca inflated production budgets above actual costs and then solicited investor funds based on those inflated budgets. Investors — principally Brindoval Investors Group LP and Lakeshore Capital Partners LLC — deposited their capital into production-specific accounts maintained at Pacific Meridian Bank, N.A. Those accounts received the investor funds and were designated for the production costs of the specific films being financed. Because the budgets were inflated, the production accounts contained more money than was necessary to cover actual production costs. The excess — the difference between the inflated budget and the actual cost — was then transferred out of the production accounts and into Aurelia Pictures' general operating accounts or Ms. Fonseca's personal accounts.

It is this transfer of excess funds — the very funds that constituted the budget inflation — that the government separately counts as "diverted investor funds." But these are the same dollars. The "inflated budget diversion" of $6.1 million and the "diverted investor funds" of $5.8 million are not independent categories of loss; they overlap substantially, because the diversion was the mechanism by which the budget inflation was realized. When the government counts the inflation and the diversion of the inflated amount, it counts the same loss twice.

Specifically, the following investor funds flow directly through the budget inflation scheme and are captured in both the first and third categories:

Brindoval Investors Group LP invested a total of $8,200,000 across three productions: "Meridian" ($2,800,000), "The Cartographer's Daughter" ($2,700,000), and "Blue Signal" ($2,700,000). Of these funds, the government's own forensic accounting analysis identifies approximately $2,900,000 as having been diverted from the production accounts for these three films. This $2,900,000 in diverted Brindoval funds is already included within the $6.1 million inflated budget figure, because the budget inflation for "Meridian," "The Cartographer's Daughter," and "Blue Signal" was the source of the excess funds that were diverted. Counting the $2,900,000 both as part of the $6.1 million budget inflation and again as part of the $5.8 million diversion results in a $2,900,000 double-count.

Lakeshore Capital Partners LLC invested a total of $3,900,000 across two productions: "Glass Meridian" ($2,200,000) and "The Understory" ($1,700,000). Of these funds, approximately $1,400,000 was diverted from the production accounts for these two films, as identified in Dr. Patel's forensic analysis. This $1,400,000 is likewise already included within the $6.1 million inflated budget figure for the same reasons. Counting the $1,400,000 in both categories results in a further $1,400,000 double-count.

The combined double-count for Brindoval and Lakeshore investor funds thus totals $4,300,000 ($2,900,000 + $1,400,000 = $4,300,000).

The Guidelines and their commentary expressly prohibit this type of double-counting. U.S.S.G. § 2B1.1, Application Note 3(A), defines "loss" as "the greater of actual loss or intended loss." The Application Note instructs the sentencing court to determine a single loss figure, not to aggregate overlapping categories that capture the same economic harm. As the Ninth Circuit has explained, "the sentencing court should not count the same loss twice in determining the total amount of loss under § 2B1.1." United States v. Hicks, 217 F.3d 1038, 1048 (9th Cir. 2000); see also United States v. Setser, 568 F.3d 482, 497 (5th Cir. 2009) ("Courts must ensure that the same economic harm is not counted multiple times in the loss calculation."); United States v. Demmler, 655 F.3d 451, 458 (6th Cir. 2011) (remanding for resentencing where the loss calculation double-counted overlapping categories of fraud loss).

The government may argue that the "inflated budget diversions" and the "diverted investor funds" represent conceptually distinct categories of wrongdoing — one measuring the extent of budget inflation and the other measuring the harm to investors. But the Guidelines do not permit loss to be counted multiple times merely because it can be characterized in different ways. The question is whether the same dollars are counted twice, and here, $4.3 million in dollars plainly are. The investors lost those funds once, not twice. Counting the loss once as a budget overage and again as a diversion of investor capital does not double the victims' harm; it merely double-counts it.

After correcting for the $4.3 million double-count, the total loss figure is $14,700,000 minus $4,300,000, which equals $10,400,000.

C. The $2.1 Million in Reinvested Production Funds

In addition to the double-count correction, the defense objects that $2.1 million of the remaining funds characterized by the PSR as "diverted" was ultimately reinvested into legitimate production activities of Aurelia Pictures. While these funds were improperly routed through general operating accounts and, in some instances, through Ms. Fonseca's personal accounts — conduct that formed the basis for the money laundering convictions — the funds were ultimately applied to production costs, including equipment rentals, post-production expenses, location fees, and crew payments, for investor-backed Aurelia Pictures projects.

Under the Sentencing Guidelines, loss should be reduced by the value of money returned to victims or services rendered to victims. U.S.S.G. § 2B1.1, Application Note 3(E)(i), provides that "loss shall be reduced by . . . the money returned, and the fair market value of the property returned and the services rendered, by the defendant or other persons acting jointly with the defendant, to the victim before the offense was detected." While the defense acknowledges that the procedural posture here is complicated by the fact that the funds were routed improperly before being reinvested, the economic reality is that $2.1 million in investor funds were ultimately used for the very purposes for which they were solicited — i.e., the production of motion pictures. To the extent the victims received the benefit of those expenditures through the completed or partially completed productions, the funds do not represent a net loss to the victims.

The defense has retained Dr. Priya Chandrasekaran, Professor of Economics at Westbridge University, Department of Economics, 4500 University Drive, Pasadena, California 91107, to analyze the flow of funds at issue. Dr. Chandrasekaran has reviewed the relevant bank records, production accounting records maintained by Aurelia Pictures, contracts with production vendors and crew, and the forensic accounting analysis prepared by Dr. Patel. Dr. Chandrasekaran is preparing a detailed expert report tracing the $2.1 million from the Aurelia Pictures general operating account and Ms. Fonseca's personal accounts back to identifiable, qualifying production expenditures on investor-funded projects. The defense anticipates filing Dr. Chandrasekaran's expert report with the Court no later than February 7, 2026, in advance of the sentencing hearing scheduled for March 6, 2026.

After correcting for the $2.1 million in reinvested production funds, the total loss figure is further reduced from $10,400,000 to $8,300,000.

D. The Correct Loss Figure Is $8.3 Million

In summary, the defense's corrected intended loss calculation is as follows:

*The remaining $600,000 in diverted investor funds (after subtracting the $4.3 million double-count and $2.1 million in reinvested funds from the original $5.8 million) represents funds diverted solely for Ms. Fonseca's personal use that did not overlap with the budget inflation category and were not reinvested into production activities. The defense does not contest the characterization of this $600,000 as actual loss, though Ms. Fonseca notes that even the remaining investor fund diversions were commingled in a manner that makes precise disaggregation inherently imprecise. The defense's $8.3 million figure is intended to be a conservative, reasonable estimate.

The corrected intended loss of $8.3 million remains a substantial figure, and the defense does not minimize the seriousness of the offense. However, the difference between $14.7 million and $8.3 million is not merely academic. As demonstrated in Section IV below, it directly affects the loss enhancement applicable under the Guidelines and produces a materially different advisory sentencing range. Accuracy in the loss determination is essential to ensuring that the Court's sentencing decision is informed by reliable information. See United States v. Armstead, 552 F.3d 769, 776 (9th Cir. 2008) ("[T]he district court must make an independent finding of loss . . . and must ensure that the loss amount is supported by reliable evidence.").

IV. OBJECTION NO. 2: THE LOSS ENHANCEMENT SHOULD BE +16, NOT +18

The PSR applied a +18 loss enhancement under U.S.S.G. § 2B1.1(b)(1)(J), which corresponds to a loss amount of more than $9,500,000 but not more than $25,000,000. This enhancement was based on the PSR's adoption of the government's total loss figure of $14.7 million.

As demonstrated in Section III above, the correct intended loss figure is $8.3 million, not $14.7 million. A loss of $8.3 million falls within the range of more than $6,500,000 but not more than $9,500,000 under U.S.S.G. § 2B1.1(b)(1)(I), which warrants a +16 enhancement — not the +18 enhancement applied in the PSR.

The loss enhancement table under § 2B1.1(b)(1) is a step function, and the difference between +16 and +18 levels — while it may appear modest in numerical terms — translates directly into a significant difference in the advisory Guidelines range. As set forth in the corrected calculation in Section VII below, the correction from +18 to +16, combined with the removal of the sophisticated means enhancement, reduces the advisory range from 108–135 months to 70–87 months.

The defense bears the burden of demonstrating the PSR's error by a preponderance of the evidence. See United States v. Watts, 519 U.S. 148, 156 (1997) (per curiam); United States v. Treadwell, 593 F.3d 990, 999 (9th Cir. 2010). The defense intends to meet this burden through the expert analysis of Dr. Chandrasekaran, the underlying financial records (which are already in evidence and in the Court's record from trial), and such additional evidence as may be presented at the requested evidentiary hearing. The defense submits that the financial records and Dr. Chandrasekaran's forthcoming analysis will establish by a preponderance of the evidence that the correct loss is $8.3 million and that the +16 enhancement under § 2B1.1(b)(1)(I) is the proper enhancement.

V. OBJECTION NO. 3: THE SOPHISTICATED MEANS ENHANCEMENT IS UNWARRANTED

A. Legal Standard Under § 2B1.1(b)(10)(C)

The sophisticated means enhancement under U.S.S.G. § 2B1.1(b)(10)(C) adds two levels to the offense level "[i]f the offense otherwise involved sophisticated means." Application Note 9(B) to § 2B1.1 defines "sophisticated means" as "especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense." The Application Note provides the following examples of conduct that may warrant the enhancement: "the use of fictitious entities, corporate shells, or offshore financial accounts." See U.S.S.G. § 2B1.1, comment. (n.9(B)).

The Ninth Circuit has repeatedly emphasized that the sophisticated means enhancement is not a rubber stamp to be applied in every fraud case involving a business entity or multiple financial transactions. Rather, the enhancement requires "conduct that displays a greater level of planning or concealment than a typical fraud of its kind." United States v. Albers, 721 F. App'x 584, 586 (9th Cir. 2017) (unpublished); see also United States v. Tanke, 743 F.3d 1296, 1302 (9th Cir. 2014) (holding that the enhancement requires conduct that is "more complex than that of a garden-variety fraud"). The enhancement "is not warranted merely because the defendant used a business entity or had access to corporate accounts." United States v. Whatley, 719 F.3d 1206, 1219 (11th Cir. 2013).

Other circuits have applied the same principle. See United States v. Innarelli, 524 F.3d 286, 291 (1st Cir. 2008) (holding that the enhancement was not warranted where the defendant's scheme involved "straightforward overbilling" through a legitimate business); United States v. Turner, 718 F.3d 226, 237 (3d Cir. 2013) ("The Guidelines intend the enhancement for schemes that are complex in their concealment, not merely ambitious in their execution."); United States v. Olis, 429 F.3d 540, 547 (5th Cir. 2005) (discussing the need for "especially complex" concealment mechanisms).

B. Ms. Fonseca's Conduct Did Not Involve Sophisticated Means

The PSR's application of the sophisticated means enhancement is based on three features of Ms. Fonseca's offense conduct: (1) the use of inflated production budgets; (2) the movement of funds through multiple bank accounts; and (3) the submission of inflated figures in California Film Commission tax credit applications. As explained below, none of these features, individually or in combination, rises to the level of "especially complex or especially intricate" concealment that the enhancement requires.

The inflated production budgets. The core of the charged conduct — inflating production budgets above actual costs — is, while fraudulent, a form of straightforward overbilling. Ms. Fonseca submitted budgets that overstated anticipated production costs by 25% to 40%. While these budgets contained inflated line items, they did not employ fabricated vendors, forged invoices, or fictitious subcontractors. The budgets were prepared in the standard format used throughout the motion picture industry and were submitted through ordinary business channels. The inflation was accomplished by overstating the anticipated costs of real production activities — not by creating an elaborate architecture of deception. This is the type of "garden-variety" fraud that the Ninth Circuit has held does not warrant the sophisticated means enhancement. See Tanke, 743 F.3d at 1302.

The use of multiple bank accounts. The government's characterization of Ms. Fonseca's fund movements as involving "multiple accounts" overstates the complexity of the conduct. The accounts involved were: (1) production-specific accounts at Pacific Meridian Bank, N.A., which were standard accounts maintained in the ordinary course of Aurelia Pictures' business; (2) Aurelia Pictures' general operating accounts at the same bank (Account Nos. ending in -4782 and -9156), which were the company's primary business accounts used for payroll, vendor payments, and general operations; and (3) Ms. Fonseca's personal accounts at Westvale Securities (Account No. ending in -3341) and Glenrock Capital Markets (Account No. ending in -7208). The transfer of funds from production accounts to a general business account and then, in some instances, to personal accounts is simple commingling — a "routine, unsophisticated method of diverting funds." See United States v. Shaygan, 652 F.3d 1297, 1310 (11th Cir. 2011) (declining to apply the enhancement where the defendant merely commingled funds from multiple sources in a single operating account).

Critically, Ms. Fonseca did not create fictitious entities, shell companies, or offshore accounts. She did not establish a network of intermediary entities designed to obscure the trail of funds. Aurelia Pictures, Inc. (California Secretary of State Entity No. C3276451) was a legitimate, operating motion picture production company that had been in continuous operation since 2008. Over its fifteen-year history, Aurelia Pictures produced twenty-three feature films and six limited television series, generating approximately $312 million in cumulative gross revenues. It was a real company with real employees, real offices, and a real track record of commercial production. The fact that Ms. Fonseca misused this legitimate business to commit fraud does not transform the fraud into one involving "sophisticated means." See Whatley, 719 F.3d at 1219.

The tax credit applications. The submission of inflated expenditure figures on California Film Commission tax credit applications, while fraudulent, was accomplished through the standard application process available to all production companies. The California Film & Television Tax Credit Program has a publicly available application form and a standard process for submitting expenditure certifications. Ms. Fonseca submitted applications containing inflated numbers, but she did not forge documents, create fictitious vendors, fabricate audit trails, or employ any other complex concealment mechanisms in connection with the tax credit applications. The applications were processed through the ordinary administrative channels of the Film Commission. Submitting false numbers on a standard government form is, by itself, garden-variety fraud — not the type of "especially intricate" scheme that the sophisticated means enhancement is designed to address. See Innarelli, 524 F.3d at 291.

In sum, the PSR's application of the sophisticated means enhancement conflates the scope and duration of the fraud with its complexity and sophistication. Ms. Fonseca's scheme involved substantial sums of money and unfolded over a period of several years, but it did not employ the kind of "especially complex or especially intricate" concealment mechanisms that distinguish a sophisticated fraud from an ordinary one. The enhancement should not be applied.

C. Impact on Total Offense Level

Removing the +2 sophisticated means enhancement under § 2B1.1(b)(10)(C) reduces the Total Offense Level by 2 additional levels. Combined with the 2-level reduction resulting from the corrected loss enhancement (from +18 to +16), the total reduction from the PSR's calculated TOL of 31 is 4 levels, yielding a corrected TOL of 27.

VI. OBJECTION NO. 4: FACTUAL INACCURACIES IN THE PSR

In addition to the Guidelines calculation errors addressed above, the PSR contains several factual inaccuracies in its narrative that, if left uncorrected, may prejudice Ms. Fonseca at sentencing. The defense respectfully requests that the Court direct the Probation Office to correct these inaccuracies or, in the alternative, that the Court make findings under Federal Rule of Criminal Procedure 32(i)(3)(B) resolving the disputed factual matters.

A. Ms. Fonseca's Role in the Transactions

The PSR, at paragraphs 23 through 31 and 44 through 52, characterizes Ms. Fonseca as having "acted with the assistance of a network of co-conspirators" and describes the scheme as having been "orchestrated through multiple layers of corporate intermediaries." These characterizations are inaccurate and unsupported by the trial record.

Ms. Fonseca acted essentially alone in carrying out the conduct charged in the indictment. No other individuals were indicted in this case. No individuals were named as unindicted co-conspirators in the indictment or in any superseding indictment. The government's own trial presentation described a scheme perpetrated by Ms. Fonseca as an individual acting in her capacity as the founder, president, and chief executive officer of Aurelia Pictures, Inc. The jury instructions, as given by this Court, described the conspiracy charged in Count Seven as one involving Ms. Fonseca as the sole identified participant, and the government did not present evidence at trial identifying any other members of the alleged conspiracy by name or with specificity. While the conspiracy statute, 18 U.S.C. § 1371, necessarily contemplates agreement with at least one other person, the government's evidence on this count was limited to evidence of Ms. Fonseca's communications with subordinate employees who were not alleged to have had knowledge of or participated in the fraudulent aspects of the scheme.

Furthermore, the PSR's reference to "multiple layers of corporate intermediaries" is misleading. The only corporate entity involved in the transactions at issue was Aurelia Pictures, Inc. — a single, legitimate operating company. There were no intermediary holding companies, no special purpose vehicles created for the purpose of the scheme, and no layered corporate structure designed to obscure the flow of funds. The transactions flowed from investors to production-specific accounts, from production accounts to Aurelia Pictures' general operating accounts, and, in some instances, from Aurelia Pictures' accounts to Ms. Fonseca's personal accounts. This is a direct, two- or three-step transfer pattern involving a single corporate entity and personal accounts — not a multi-layered corporate structure.

The defense requests that the PSR be corrected to accurately reflect that Ms. Fonseca acted without the assistance of a network of co-conspirators and that the transactions did not involve multiple layers of corporate intermediaries.

B. Nature and Purpose of Certain Fund Transfers

The PSR, at paragraphs 53 through 67, characterizes all fund transfers from production-specific accounts to Aurelia Pictures' general operating account as evidence of Ms. Fonseca's personal enrichment. This blanket characterization is factually inaccurate and prejudicial for sentencing purposes.

While the defense acknowledges that the commingling of production funds into the Aurelia Pictures general operating account was improper and formed the basis for the money laundering convictions on Counts Five and Six, a significant portion of the transferred funds was used to cover legitimate operating expenses of Aurelia Pictures, Inc. At its peak employment in 2022, Aurelia Pictures maintained approximately forty-five full-time employees, including production executives, development staff, accounting personnel, and administrative support. The company maintained office space under a commercial lease at 8950 West Sunset Boulevard, Suite 1400, West Hollywood, California 90069, with monthly lease obligations in excess of $85,000. The company also incurred substantial costs in connection with non-charged productions — i.e., films and television projects that were not part of the conduct charged in the indictment.

The funds transferred from production-specific accounts into the general operating account were used, in significant part, to fund these legitimate business obligations. The PSR's blanket characterization of all such transfers as evidence of personal enrichment fails to distinguish between: (1) funds that were diverted to Ms. Fonseca's personal accounts and used for personal expenses; and (2) funds that remained in Aurelia Pictures' general operating accounts and were used to support the company's legitimate business operations. This distinction is relevant to the sentencing determination because it bears on the nature and circumstances of the offense, the defendant's motivations, and the actual harm to victims — all factors that the Court must consider under 18 U.S.C. § 3553(a).

The defense requests that the PSR be corrected to distinguish between funds diverted for Ms. Fonseca's personal use and funds applied to legitimate Aurelia Pictures business operations, and to remove or qualify the blanket characterization that all fund transfers constituted personal enrichment.

C. Other Factual Corrections

The defense has identified the following additional factual inaccuracies in the PSR narrative and requests correction:

(1) Educational Background. The PSR, at paragraph 115, states that Ms. Fonseca received a Bachelor of Arts degree in Film Studies from the University of California, Santa Cruz, in 1994. The correct degree designation is a Bachelor of Arts in Film & Digital Media, conferred in 1995. The PSR correctly states that Ms. Fonseca received a Master of Fine Arts in Film Production from the American Film Institute in 1998, but misidentifies the program as "Directing" rather than "Film Production." The defense requests correction of both the degree title and the year of the undergraduate degree, as well as the program designation for the MFA.

(2) Marital and Family Status. The PSR, at paragraph 118, states that Ms. Fonseca is "separated" from her husband, Alejandro Fonseca. In fact, Ms. Fonseca and Alejandro Fonseca divorced in 2019 pursuant to a final judgment of dissolution entered by the Los Angeles Superior Court. The PSR correctly identifies Ms. Fonseca as the primary custodial parent of her two children, Elena Fonseca (age 17) and Marco Fonseca (age 14), but does not note that Ms. Fonseca is also the sole caretaker for her mother, Corazon Fonseca, age 79, who was diagnosed with early-stage Alzheimer's disease in 2024. This information is relevant to the sentencing determination under 18 U.S.C. § 3553(a) and will be addressed in greater detail in the defense's forthcoming Sentencing Memorandum.

(3) Transaction Dates. The PSR, at paragraph 39, states that the initial fund transfer from the "Meridian" production account to the Aurelia Pictures general operating account occurred on March 12, 2019. The defense's review of the Pacific Meridian Bank, N.A. account records (Government Trial Exhibit 14-A) indicates that this initial transfer occurred on March 22, 2019. The PSR also states, at paragraph 48, that the final transfer from the "The Understory" production account occurred on November 8, 2023, when the bank records (Government Trial Exhibit 27-C) reflect a date of November 18, 2023. While these date discrepancies are minor, accuracy in the PSR is important, and the defense requests that the dates be corrected.

(4) Individual Transaction Amounts. The PSR, at paragraph 42, states that a single wire transfer from the "Blue Signal" production account to Ms. Fonseca's personal account at Westvale Securities on June 15, 2021, was in the amount of $475,000. The defense's review of the relevant bank records (Government Trial Exhibit 19-B) reflects that this transfer was in the amount of $375,000. The defense requests correction of this figure.

VII. THE CORRECTED GUIDELINES CALCULATION

Based on the objections set forth above, the defense submits that the correct Guidelines calculation for Ms. Fonseca is as follows:

The defense's corrected calculation reduces the Total Offense Level by 4 levels — from 31 to 27 — resulting in a corresponding reduction in the advisory Guidelines range of 38 to 48 months. The corrected advisory range of 70 to 87 months, while still representing a very substantial period of incarceration, is the range that is properly supported by the facts and applicable law.

The defense notes that it will separately file a Defendant's Sentencing Memorandum and Motion for Downward Variance under 18 U.S.C. § 3553(a), in which the defense will request that the Court impose a sentence of 36 to 48 months — a sentence below even the corrected advisory Guidelines range. That memorandum will address the full range of § 3553(a) factors, including the nature and circumstances of the offense, Ms. Fonseca's history and characteristics, the need to avoid unwarranted sentencing disparities, and the need for the sentence to be sufficient but not greater than necessary to comply with the purposes of sentencing. The defense anticipates filing the Sentencing Memorandum no later than February 21, 2026.

VIII. IMPACT ON RESTITUTION

While the amount of restitution under the Mandatory Victims Restitution Act ("MVRA"), 18 U.S.C. § 3663A, is not governed by the same loss calculation methodology as the Sentencing Guidelines, the defense's position on the actual loss attributable to Ms. Fonseca's offense conduct is relevant to the restitution determination. The MVRA requires the sentencing court to order restitution "in the full amount of each victim's losses," 18 U.S.C. § 3664(f)(1)(A), and the determination of each victim's actual losses necessarily implicates many of the same factual questions raised by the defense's objections to the PSR's loss calculation.

The defense's position is that the proper restitution amount should be $8.3 million, reflecting the actual losses sustained by the victims after correcting for the double-counting of $4.3 million and the $2.1 million in funds reinvested into legitimate production activities. The defense recognizes that the methodology for calculating restitution under the MVRA differs from the methodology for calculating Guidelines loss in certain respects — e.g., restitution is based on actual loss to each identified victim, whereas Guidelines loss may include intended loss — but submits that the factual corrections set forth in this filing are relevant to both determinations.

The identified victims and their claimed losses are as follows:

Brindoval Investors Group LP (counsel: Susan R. Aldrich, Aldrich & McBride LLP, 70 West Madison Street, Suite 1400, Chicago, Illinois 60602): Brindoval invested $8,200,000 across three Aurelia Pictures productions — "Meridian" ($2,800,000), "The Cartographer's Daughter" ($2,700,000), and "Blue Signal" ($2,700,000). Brindoval claims total losses of $8,200,000 in principal investment plus an additional $3,100,000 in lost profits, for a total claimed loss of $11,300,000. The defense will address the propriety and calculation of Brindoval's claimed losses, including the speculative nature of the lost profits claim, in a separate restitution submission.

Lakeshore Capital Partners LLC (same counsel): Lakeshore invested $3,900,000 across two Aurelia Pictures productions — "Glass Meridian" ($2,200,000) and "The Understory" ($1,700,000). Lakeshore claims total losses of $3,900,000.

California Film Commission: The California Film Commission claims losses of $2,800,000, representing the amount of tax credits issued to Aurelia Pictures on the basis of inflated expenditure certifications for three productions.

Five Individual Investors: Five individual investors, whose identities are protected under seal, claim combined losses of approximately $2,600,000 across various Aurelia Pictures projects. The defense has received victim impact statements from three of these individuals and is reviewing their loss claims.

The defense will separately address restitution in greater detail in connection with its Sentencing Memorandum, including: (1) the proper calculation of each victim's actual loss after accounting for the double-counting and reinvestment issues identified herein; (2) the propriety of Brindoval's speculative lost profits claim; (3) Ms. Fonseca's ability to pay, given her total identifiable assets of approximately $1.68 million to $2.08 million; and (4) the status of the Aurelia Pictures, Inc. receivership proceedings (Case No. 25STCV08312, pending before the Los Angeles Superior Court), in which court-appointed receiver Nathaniel W. Prescott of Ridgeway Advisory Group LLC has estimated remaining asset value of approximately $6.3 million before creditor claims. The defense notes that the receivership estate's principal creditor is Pacific Meridian Bank, N.A., which holds an outstanding balance of approximately $6.8 million on its revolving credit facility with Aurelia Pictures, and that satisfaction of Pacific Meridian Bank's secured claim may substantially reduce or eliminate the funds available for victim restitution from the receivership estate.

IX. REQUEST FOR EVIDENTIARY HEARING

Pursuant to Federal Rule of Criminal Procedure 32(i)(3)(B), the defendant respectfully requests an evidentiary hearing on her objections to the PSR. Federal Rule of Criminal Procedure 32(i)(3)(B) provides that, for any disputed portion of the presentence report or other controverted matter, the Court "must — for any disputed portion of the presentence report or other controverted matter — rule on the dispute or determine that a ruling is unnecessary either because the matter will not affect sentencing, or because the court will not consider the matter in sentencing." Where, as here, the defendant raises specific, material factual objections to the PSR that will directly affect the applicable Guidelines range and the ultimate sentence, the Court should conduct an evidentiary hearing to resolve the disputed facts. See United States v. Grier, 475 F.3d 556, 566 (3d Cir. 2007) (en banc) (holding that due process may require an evidentiary hearing on controverted sentencing factors); United States v. Petty, 982 F.2d 1365, 1369 (9th Cir. 1993) ("[W]here the facts material to sentencing are in dispute, the defendant is entitled to an evidentiary hearing.").

The factual disputes regarding the $4.3 million double-count and the $2.1 million in reinvested production funds are material and cannot be resolved on the papers alone. The double-count issue requires analysis of specific financial records and fund flows to determine whether the same dollars are captured in both the "inflated budget diversions" and "diverted investor funds" categories. The reinvestment issue requires tracing of funds through general operating and personal accounts to their ultimate disposition in qualifying production expenditures. Both issues involve contested questions of fact that are best resolved through live testimony and the examination of witnesses.

The defense intends to present the testimony of Dr. Priya Chandrasekaran, Professor of Economics at Westbridge University, who has been retained to analyze and opine on the actual and intended financial loss attributable to Ms. Fonseca's offense conduct. Dr. Chandrasekaran holds a Ph.D. in Economics from Stanford University, has published extensively on forensic economic analysis and financial fraud valuation, and has been qualified as an expert in federal and state courts on multiple prior occasions. Dr. Chandrasekaran will rebut the methodology employed by the government's trial expert, Dr. Ramesh Patel of Hargrove, Patel & Sullivan LLP, and will present an independent analysis of fund flows demonstrating both the overlap between loss categories and the reinvestment of $2.1 million into qualifying production expenditures.

The defense anticipates filing Dr. Chandrasekaran's written expert report with the Court no later than February 7, 2026, which is twenty-seven days before the sentencing hearing currently scheduled for March 6, 2026. This timeline will afford the government and the Probation Office sufficient opportunity to review the report and prepare any response.

In addition to Dr. Chandrasekaran, the defense may call additional witnesses regarding the factual inaccuracies identified in Section VI (Objection No. 4), including witnesses with knowledge of the legitimate business operations of Aurelia Pictures, Inc. and the application of transferred funds to qualifying operating expenses and production costs. The defense will provide the Court and the government with notice of any additional witnesses as soon as practicable.

X. REQUEST FOR ADDENDUM TO THE PSR

The defense respectfully requests that the Court direct the United States Probation Office, through Probation Officer Michael T. Brennan, to prepare an addendum to the PSR addressing each of the objections set forth in this filing. Specifically, the defense requests that the addendum address: (1) the Probation Office's revised position, if any, on the loss calculation in light of the defense's identification of the $4.3 million double-count and the $2.1 million in reinvested production funds; (2) the Probation Office's revised position, if any, on the application of the sophisticated means enhancement under § 2B1.1(b)(10)(C); and (3) the Probation Office's corrections, if any, to the factual inaccuracies identified in Section VI.

The defense has separately transmitted these objections and supporting materials to Probation Officer Brennan by letter dated January 15, 2026, as contemplated by the Court's Sentencing Scheduling Order (Dkt. No. 189) and the standard practice of the Central District Probation Office. The defense respectfully requests that the Probation Office's addendum be completed and disclosed to the parties no later than February 14, 2026, to allow the parties sufficient time to review the addendum and prepare for the March 6, 2026 sentencing hearing.

XI. CONCLUSION

For the foregoing reasons, Defendant Marguerite D. Fonseca respectfully requests that this Court:

1. Sustain her objections to the PSR's loss calculation and find that the correct intended loss figure attributable to her offense conduct is $8,300,000, not $14,700,000;

2. Apply a +16 loss enhancement under U.S.S.G. § 2B1.1(b)(1)(I) rather than the +18 enhancement applied in the PSR under § 2B1.1(b)(1)(J);

3. Decline to apply the +2 sophisticated means enhancement under U.S.S.G. § 2B1.1(b)(10)(C);

4. Direct the Probation Office to correct the factual inaccuracies identified in Section VI of this filing, or, in the alternative, make findings under Federal Rule of Criminal Procedure 32(i)(3)(B) resolving the identified factual disputes;

5. Determine that the correct Total Offense Level is 27, Criminal History Category I, yielding an advisory Guidelines range of 70 to 87 months of imprisonment;

6. Grant the defense's request for an evidentiary hearing on these objections pursuant to Federal Rule of Criminal Procedure 32(i)(3)(B); and

7. Direct the Probation Office to prepare an addendum to the PSR addressing the defense's objections.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Conrad Ashby (CA State Bar No. 198742) Victoria Chambers (CA State Bar No. 246819) Lisa Morrow (CA State Bar No. 271053) 2029 Century Park East, Suite 3300 Los Angeles, California 90067 Telephone: (310) 553-4400 Facsimile: (310) 553-4401

Counsel for Defendant Marguerite D. Fonseca

Dated: January 10, 2026

CERTIFICATE OF SERVICE

I, Conrad Ashby, hereby certify that on January 10, 2026, a true and correct copy of the foregoing Defendant's Objections to the Presentence Investigation Report was served upon the following persons by the methods indicated below:

Via ECF Electronic Filing:

Brenda K. Tillotson Assistant United States Attorney Derek R. Huang Assistant United States Attorney United States Attorney's Office Central District of California Major Frauds Section 312 North Spring Street, Suite 1200 Los Angeles, California 90012

Email: brenda.tillotson@usdoj.gov

Email: derek.huang@usdoj.gov

Via Hand Delivery and Email:

Michael T. Brennan United States Probation Officer United States Probation Office Central District of California 350 West First Street, Suite 400 Los Angeles, California 90012

Email: michael_brennan@cap.uscourts.gov

________________________________________

Conrad Ashby

UNITED STATES OF AMERICA,	Case No. 2:24-cr-00583-CMD
Plaintiff,	Hon. Catherine M. Driscoll
v.	DEFENDANT'S OBJECTIONS TO THE

PRESENTENCE INVESTIGATION REPORT

MARGUERITE D. FONSECA,

Sentencing Hearing: March 6, 2026

Defendant.

Component	PSR Figure	Defense Correction	Corrected Figure
Inflated Budget Diversions	$6,100,000	No change	$6,100,000
Fraudulent Tax Credits	$2,800,000	No change	$2,800,000
Diverted Investor Funds	$5,800,000	Less $4.3M double-count; less $2.1M reinvested	($600,000)*
Total Loss	$14,700,000	Less $6,400,000	$8,300,000
Guideline Provision	PSR Calculation	Defense Calculation
Base Offense Level (§ 2B1.1(a)(1))	7	7
Loss Enhancement (§ 2B1.1(b)(1))	+18 (§ 2B1.1(b)(1)(J))	+16 (§ 2B1.1(b)(1)(I))
Number of Victims (§ 2B1.1(b)(2)(A)(i))	+2	+2
Sophisticated Means (§ 2B1.1(b)(10)(C))	+2	+0
Abuse of Position of Trust (§ 3B1.3)	+2	+2
Acceptance of Responsibility (§ 3E1.1)	0	0
Total Offense Level	31	27
Criminal History Category	I	I
Advisory Guidelines Range	108–135 months	70–87 months

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA
I. INTRODUCTION
Defendant Marguerite D. Fonseca, through undersigned counsel Conrad Ashby of Calderwood & Harkness LLP, 2029 Century Park East, Suite 3300, Los Angeles, California 90067, respectfully submits these objections to the Presentence Investigation Report ("PSR") prepared by United States Probation Officer Michael T. Brennan and disclosed to the parties on November 3, 2025. These objections are filed pursuant to Federal Rule of Criminal Procedure 32(f) and the Court's Sentencing Scheduling Order entered October 15, 2025 (Dkt. No. 189), which directed the parties to file any objections to the PSR no later than January 10, 2026.
Ms. Fonseca was convicted on September 18, 2025, following a three-week jury trial before this Court, on four counts of wire fraud in violation of 18 U.S.C. § 1343 (Counts One through Four), two counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(i) (Counts Five and Six), and one count of conspiracy to commit wire fraud in violation of 18 U.S.C. § 1371 (Count Seven). The jury returned its verdict on September 18, 2025, after approximately eleven hours of deliberation over two days. The Court ordered the preparation of a presentence investigation report on September 22, 2025 (Dkt. No. 178), and sentencing was set for March 6, 2026.
The PSR, dated November 3, 2025, calculates a Total Offense Level ("TOL") of 31. Combined with a Criminal History Category I determination — a determination to which Ms. Fonseca does not object — the PSR arrives at an advisory United States Sentencing Guidelines range of 108 to 135 months of imprisonment. Ms. Fonseca respectfully submits that this calculation is materially flawed and that the resulting advisory range significantly overstates the appropriate Guidelines range for her offense.
Ms. Fonseca objects to the PSR on four principal grounds. First, the PSR's loss calculation of $14.7 million materially overstates the actual and intended loss attributable to the offense by approximately $6.4 million, primarily due to the double-counting of $4.3 million in overlapping loss categories and the failure to account for $2.1 million in funds that were reinvested into legitimate production activities. Second, as a direct consequence of the inflated loss figure, the PSR applies a +18 loss enhancement under U.S.S.G. § 2B1.1(b)(1)(J) when the correct enhancement, based on a corrected loss of $8.3 million, should be +16 under § 2B1.1(b)(1)(I). Third, the PSR applies a +2 enhancement for sophisticated means under § 2B1.1(b)(10)(C) that is unsupported by the facts of this case and inconsistent with the governing legal standard. Fourth, the PSR contains specific factual inaccuracies regarding Ms. Fonseca's role in the underlying transactions and the nature and purpose of certain fund transfers that are prejudicial for sentencing purposes and require correction.
When these errors are corrected, the TOL should be 27, not 31. With Criminal History Category I, this yields an advisory Guidelines range of 70 to 87 months of imprisonment — a reduction of 38 to 48 months from the range calculated in the PSR. While the defense acknowledges that this corrected range still represents a significant term of imprisonment, accuracy in the Guidelines calculation is essential to ensuring that this Court exercises its sentencing discretion based upon correct information and a reliable advisory range. See 18 U.S.C. § 3553(a); United States v. Carty, 520 F.3d 984, 991 (9th Cir. 2008) (en banc) (describing the properly calculated advisory Guidelines range as the "starting point and initial benchmark" for sentencing).
Ms. Fonseca respectfully requests an evidentiary hearing on these objections pursuant to Federal Rule of Criminal Procedure 32(i)(3)(B). In support of her objections to the PSR's loss calculation, the defense intends to present expert testimony from Dr. Priya Chandrasekaran, Professor of Economics at Westbridge University, Department of Economics, 4500 University Drive, Pasadena, California 91107. Dr. Chandrasekaran has been retained by the defense to conduct an independent analysis of the flow of funds at issue and to opine on the proper methodology for calculating actual and intended loss under the Sentencing Guidelines.
II. SUMMARY OF THE PSR'S GUIDELINES CALCULATION
For the Court's reference, the defense sets forth the PSR's Guidelines calculation in full, as reflected in paragraphs 97 through 112 of the PSR:
Base Offense Level (U.S.S.G. § 2B1.1(a)(1)): 7
The PSR applies a base offense level of 7 because the offense of conviction has a statutory maximum term of imprisonment of twenty years. See 18 U.S.C. § 1343 (wire fraud, maximum 20 years); 18 U.S.C. § 1956(a)(1)(B)(i) (money laundering, maximum 20 years).
Specific Offense Characteristic — Loss Enhancement (U.S.S.G. § 2B1.1(b)(1)(J)): +18
The PSR calculates a total loss of $14,700,000, which falls within the range of more than $9,500,000 but not more than $25,000,000 under § 2B1.1(b)(1)(J), resulting in an 18-level increase to the base offense level. The PSR adopts the government's loss figure without independent analysis or adjustment for potential overlap among the three component categories of loss.
Specific Offense Characteristic — Number of Victims (U.S.S.G. § 2B1.1(b)(2)(A)(i)): +2
The PSR determines that the offense involved 10 or more but fewer than 50 victims, warranting a 2-level increase. The PSR identifies the victims as including two institutional investors (Brindoval Investors Group LP and Lakeshore Capital Partners LLC), five individual investors, and the California Film Commission.
Specific Offense Characteristic — Sophisticated Means (U.S.S.G. § 2B1.1(b)(10)(C)): +2
The PSR applies a 2-level enhancement for sophisticated means, concluding that Ms. Fonseca's offense conduct involved "especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense." The PSR bases this enhancement on the alleged use of multiple accounts, inflated budgets, and the California Film Commission tax credit application process.
Chapter Three Adjustment — Abuse of Position of Trust (U.S.S.G. § 3B1.3): +2
The PSR applies a 2-level adjustment for abuse of a position of trust, finding that Ms. Fonseca, as the founder, president, and chief executive officer of Aurelia Pictures, Inc., occupied a position of trust with respect to the investors and the California Film Commission and used that position to facilitate the commission of the offense.
Acceptance of Responsibility (U.S.S.G. § 3E1.1): Not applied
The PSR does not apply any reduction for acceptance of responsibility, as Ms. Fonseca's case proceeded to a full jury trial.
Total Offense Level: 7 + 18 + 2 + 2 + 2 = 31
Criminal History Category: I (0 criminal history points; no prior criminal history)
Advisory Guidelines Range: 108–135 months of imprisonment
Ms. Fonseca does not object to the base offense level of 7, the +2 enhancement for number of victims under § 2B1.1(b)(2)(A)(i), the +2 adjustment for abuse of position of trust under § 3B1.3, or the Criminal History Category I determination. Ms. Fonseca's objections are directed solely at the loss calculation and the resulting loss enhancement (Objections No. 1 and No. 2), the sophisticated means enhancement (Objection No. 3), and certain factual inaccuracies in the PSR narrative (Objection No. 4).
III. OBJECTION NO. 1: THE PSR'S LOSS CALCULATION OF $14.7 MILLION IS MATERIALLY OVERSTATED
The most significant error in the PSR is its adoption of the government's total alleged loss figure of $14.7 million. As set forth below, the actual intended loss attributable to Ms. Fonseca's offense conduct is $8.3 million — a figure that, while still substantial, is $6.4 million less than the figure relied upon by the PSR. The overstated loss figure results from two distinct errors: (1) the double-counting of $4.3 million in funds that appear in two overlapping loss categories; and (2) the failure to credit $2.1 million in funds that were reinvested into legitimate production activities of Aurelia Pictures, Inc.
The proper calculation of loss is critical at sentencing because, in fraud cases, the loss amount is "the most important factor in the fraud guideline" and "the primary determinant of the offense level." United States v. Berger, 587 F.3d 1038, 1045 (9th Cir. 2009). A sentencing court must make an independent determination of loss, even where the defendant has been convicted at trial; the court may not simply adopt the government's figures without scrutiny. See United States v. Zolp, 479 F.3d 715, 719 (9th Cir. 2007) ("The government has the burden of proving loss by a preponderance of the evidence."); United States v. Washington, 714 F.3d 1358, 1362 (11th Cir. 2013) ("A PSR is not evidence; it is a tool for the court."). Where, as here, the defendant raises specific, factual objections to the loss calculation, the Court "must — for any disputed portion of the presentence report or other controverted matter — rule on the dispute or determine that a ruling is unnecessary." Fed. R. Crim. P. 32(i)(3)(B).
A. The Government's Loss Figure and Its Three Components
The PSR, at paragraphs 68 through 82, adopts the government's total alleged loss figure of $14,700,000. This figure comprises three distinct categories of loss, each of which was identified and quantified by the government's forensic accounting expert at trial, Dr. Ramesh Patel, CPA, CFF, a partner at Hargrove, Patel & Sullivan LLP, who testified over the course of two days during the government's case-in-chief:
(1) Inflated Production Budget Diversions: $6,100,000. The government alleges that Ms. Fonseca systematically inflated production budgets for five Aurelia Pictures feature film productions by approximately 25% to 40% above the actual costs of production, solicited investor funds based on these inflated budgets, and diverted the excess funds — i.e., the difference between the inflated budgets and the actual production costs — for purposes other than the funded productions. The five affected productions identified by the government are "Meridian" (2019), "The Cartographer's Daughter" (2020), "Blue Signal" (2021), "Glass Meridian" (2022), and "The Understory" (2023).
(2) Fraudulently Obtained Tax Credits: $2,800,000. The government alleges that Ms. Fonseca submitted applications to the California Film Commission under the California Film & Television Tax Credit Program (Cal. Rev. & Tax. Code § 17053.98) containing inflated expenditure figures for three of the five productions, resulting in the issuance of tax credits totaling $2,800,000 to which Aurelia Pictures was not entitled. Those three productions were "The Cartographer's Daughter," "Blue Signal," and "Glass Meridian."
(3) Diverted Investor Funds: $5,800,000. The government alleges that Ms. Fonseca diverted $5,800,000 in investor funds from production-specific bank accounts designated for particular Aurelia Pictures productions into Aurelia Pictures' general operating accounts maintained at Pacific Meridian Bank, N.A. (Account Nos. ending in -4782 and -9156) and into personal bank accounts controlled by Ms. Fonseca at Westvale Securities (Account No. ending in -3341) and Glenrock Capital Markets (Account No. ending in -7208). The government contends that these diversions constituted theft of investor funds and formed the basis for both the wire fraud and money laundering charges.
Critically, the PSR does not independently analyze whether these three categories overlap. It does not conduct a de novo review of the underlying financial records or the testimony adduced at trial. Instead, the PSR simply adopts the government's aggregated figure of $14.7 million — the sum of $6.1 million, $2.8 million, and $5.8 million — without any adjustment for the significant overlap that exists between the first and third categories.
B. The $4.3 Million Double-Count
The defense's most significant objection to the PSR's loss calculation is that $4.3 million of the $5.8 million characterized as "diverted investor funds" in the third category represents the very same dollars that are already captured in the $6.1 million "inflated production budget diversions" in the first category. The PSR double-counts these funds, and this error inflates the total loss figure by $4.3 million.
The mechanics of this double-count are straightforward and follow directly from the government's own characterization of the scheme. The government's theory at trial was that Ms. Fonseca inflated production budgets above actual costs and then solicited investor funds based on those inflated budgets. Investors — principally Brindoval Investors Group LP and Lakeshore Capital Partners LLC — deposited their capital into production-specific accounts maintained at Pacific Meridian Bank, N.A. Those accounts received the investor funds and were designated for the production costs of the specific films being financed. Because the budgets were inflated, the production accounts contained more money than was necessary to cover actual production costs. The excess — the difference between the inflated budget and the actual cost — was then transferred out of the production accounts and into Aurelia Pictures' general operating accounts or Ms. Fonseca's personal accounts.
It is this transfer of excess funds — the very funds that constituted the budget inflation — that the government separately counts as "diverted investor funds." But these are the same dollars. The "inflated budget diversion" of $6.1 million and the "diverted investor funds" of $5.8 million are not independent categories of loss; they overlap substantially, because the diversion was the mechanism by which the budget inflation was realized. When the government counts the inflation and the diversion of the inflated amount, it counts the same loss twice.
Specifically, the following investor funds flow directly through the budget inflation scheme and are captured in both the first and third categories:
Brindoval Investors Group LP invested a total of $8,200,000 across three productions: "Meridian" ($2,800,000), "The Cartographer's Daughter" ($2,700,000), and "Blue Signal" ($2,700,000). Of these funds, the government's own forensic accounting analysis identifies approximately $2,900,000 as having been diverted from the production accounts for these three films. This $2,900,000 in diverted Brindoval funds is already included within the $6.1 million inflated budget figure, because the budget inflation for "Meridian," "The Cartographer's Daughter," and "Blue Signal" was the source of the excess funds that were diverted. Counting the $2,900,000 both as part of the $6.1 million budget inflation and again as part of the $5.8 million diversion results in a $2,900,000 double-count.
Lakeshore Capital Partners LLC invested a total of $3,900,000 across two productions: "Glass Meridian" ($2,200,000) and "The Understory" ($1,700,000). Of these funds, approximately $1,400,000 was diverted from the production accounts for these two films, as identified in Dr. Patel's forensic analysis. This $1,400,000 is likewise already included within the $6.1 million inflated budget figure for the same reasons. Counting the $1,400,000 in both categories results in a further $1,400,000 double-count.
The combined double-count for Brindoval and Lakeshore investor funds thus totals $4,300,000 ($2,900,000 + $1,400,000 = $4,300,000).
The Guidelines and their commentary expressly prohibit this type of double-counting. U.S.S.G. § 2B1.1, Application Note 3(A), defines "loss" as "the greater of actual loss or intended loss." The Application Note instructs the sentencing court to determine a single loss figure, not to aggregate overlapping categories that capture the same economic harm. As the Ninth Circuit has explained, "the sentencing court should not count the same loss twice in determining the total amount of loss under § 2B1.1." United States v. Hicks, 217 F.3d 1038, 1048 (9th Cir. 2000); see also United States v. Setser, 568 F.3d 482, 497 (5th Cir. 2009) ("Courts must ensure that the same economic harm is not counted multiple times in the loss calculation."); United States v. Demmler, 655 F.3d 451, 458 (6th Cir. 2011) (remanding for resentencing where the loss calculation double-counted overlapping categories of fraud loss).
The government may argue that the "inflated budget diversions" and the "diverted investor funds" represent conceptually distinct categories of wrongdoing — one measuring the extent of budget inflation and the other measuring the harm to investors. But the Guidelines do not permit loss to be counted multiple times merely because it can be characterized in different ways. The question is whether the same dollars are counted twice, and here, $4.3 million in dollars plainly are. The investors lost those funds once, not twice. Counting the loss once as a budget overage and again as a diversion of investor capital does not double the victims' harm; it merely double-counts it.
After correcting for the $4.3 million double-count, the total loss figure is $14,700,000 minus $4,300,000, which equals $10,400,000.
C. The $2.1 Million in Reinvested Production Funds
In addition to the double-count correction, the defense objects that $2.1 million of the remaining funds characterized by the PSR as "diverted" was ultimately reinvested into legitimate production activities of Aurelia Pictures. While these funds were improperly routed through general operating accounts and, in some instances, through Ms. Fonseca's personal accounts — conduct that formed the basis for the money laundering convictions — the funds were ultimately applied to production costs, including equipment rentals, post-production expenses, location fees, and crew payments, for investor-backed Aurelia Pictures projects.
Under the Sentencing Guidelines, loss should be reduced by the value of money returned to victims or services rendered to victims. U.S.S.G. § 2B1.1, Application Note 3(E)(i), provides that "loss shall be reduced by . . . the money returned, and the fair market value of the property returned and the services rendered, by the defendant or other persons acting jointly with the defendant, to the victim before the offense was detected." While the defense acknowledges that the procedural posture here is complicated by the fact that the funds were routed improperly before being reinvested, the economic reality is that $2.1 million in investor funds were ultimately used for the very purposes for which they were solicited — i.e., the production of motion pictures. To the extent the victims received the benefit of those expenditures through the completed or partially completed productions, the funds do not represent a net loss to the victims.
The defense has retained Dr. Priya Chandrasekaran, Professor of Economics at Westbridge University, Department of Economics, 4500 University Drive, Pasadena, California 91107, to analyze the flow of funds at issue. Dr. Chandrasekaran has reviewed the relevant bank records, production accounting records maintained by Aurelia Pictures, contracts with production vendors and crew, and the forensic accounting analysis prepared by Dr. Patel. Dr. Chandrasekaran is preparing a detailed expert report tracing the $2.1 million from the Aurelia Pictures general operating account and Ms. Fonseca's personal accounts back to identifiable, qualifying production expenditures on investor-funded projects. The defense anticipates filing Dr. Chandrasekaran's expert report with the Court no later than February 7, 2026, in advance of the sentencing hearing scheduled for March 6, 2026.
After correcting for the $2.1 million in reinvested production funds, the total loss figure is further reduced from $10,400,000 to $8,300,000.
D. The Correct Loss Figure Is $8.3 Million
In summary, the defense's corrected intended loss calculation is as follows:
*The remaining $600,000 in diverted investor funds (after subtracting the $4.3 million double-count and $2.1 million in reinvested funds from the original $5.8 million) represents funds diverted solely for Ms. Fonseca's personal use that did not overlap with the budget inflation category and were not reinvested into production activities. The defense does not contest the characterization of this $600,000 as actual loss, though Ms. Fonseca notes that even the remaining investor fund diversions were commingled in a manner that makes precise disaggregation inherently imprecise. The defense's $8.3 million figure is intended to be a conservative, reasonable estimate.
The corrected intended loss of $8.3 million remains a substantial figure, and the defense does not minimize the seriousness of the offense. However, the difference between $14.7 million and $8.3 million is not merely academic. As demonstrated in Section IV below, it directly affects the loss enhancement applicable under the Guidelines and produces a materially different advisory sentencing range. Accuracy in the loss determination is essential to ensuring that the Court's sentencing decision is informed by reliable information. See United States v. Armstead, 552 F.3d 769, 776 (9th Cir. 2008) ("[T]he district court must make an independent finding of loss . . . and must ensure that the loss amount is supported by reliable evidence.").
IV. OBJECTION NO. 2: THE LOSS ENHANCEMENT SHOULD BE +16, NOT +18
The PSR applied a +18 loss enhancement under U.S.S.G. § 2B1.1(b)(1)(J), which corresponds to a loss amount of more than $9,500,000 but not more than $25,000,000. This enhancement was based on the PSR's adoption of the government's total loss figure of $14.7 million.
As demonstrated in Section III above, the correct intended loss figure is $8.3 million, not $14.7 million. A loss of $8.3 million falls within the range of more than $6,500,000 but not more than $9,500,000 under U.S.S.G. § 2B1.1(b)(1)(I), which warrants a +16 enhancement — not the +18 enhancement applied in the PSR.
The loss enhancement table under § 2B1.1(b)(1) is a step function, and the difference between +16 and +18 levels — while it may appear modest in numerical terms — translates directly into a significant difference in the advisory Guidelines range. As set forth in the corrected calculation in Section VII below, the correction from +18 to +16, combined with the removal of the sophisticated means enhancement, reduces the advisory range from 108–135 months to 70–87 months.
The defense bears the burden of demonstrating the PSR's error by a preponderance of the evidence. See United States v. Watts, 519 U.S. 148, 156 (1997) (per curiam); United States v. Treadwell, 593 F.3d 990, 999 (9th Cir. 2010). The defense intends to meet this burden through the expert analysis of Dr. Chandrasekaran, the underlying financial records (which are already in evidence and in the Court's record from trial), and such additional evidence as may be presented at the requested evidentiary hearing. The defense submits that the financial records and Dr. Chandrasekaran's forthcoming analysis will establish by a preponderance of the evidence that the correct loss is $8.3 million and that the +16 enhancement under § 2B1.1(b)(1)(I) is the proper enhancement.
V. OBJECTION NO. 3: THE SOPHISTICATED MEANS ENHANCEMENT IS UNWARRANTED
A. Legal Standard Under § 2B1.1(b)(10)(C)
The sophisticated means enhancement under U.S.S.G. § 2B1.1(b)(10)(C) adds two levels to the offense level "[i]f the offense otherwise involved sophisticated means." Application Note 9(B) to § 2B1.1 defines "sophisticated means" as "especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense." The Application Note provides the following examples of conduct that may warrant the enhancement: "the use of fictitious entities, corporate shells, or offshore financial accounts." See U.S.S.G. § 2B1.1, comment. (n.9(B)).
The Ninth Circuit has repeatedly emphasized that the sophisticated means enhancement is not a rubber stamp to be applied in every fraud case involving a business entity or multiple financial transactions. Rather, the enhancement requires "conduct that displays a greater level of planning or concealment than a typical fraud of its kind." United States v. Albers, 721 F. App'x 584, 586 (9th Cir. 2017) (unpublished); see also United States v. Tanke, 743 F.3d 1296, 1302 (9th Cir. 2014) (holding that the enhancement requires conduct that is "more complex than that of a garden-variety fraud"). The enhancement "is not warranted merely because the defendant used a business entity or had access to corporate accounts." United States v. Whatley, 719 F.3d 1206, 1219 (11th Cir. 2013).
Other circuits have applied the same principle. See United States v. Innarelli, 524 F.3d 286, 291 (1st Cir. 2008) (holding that the enhancement was not warranted where the defendant's scheme involved "straightforward overbilling" through a legitimate business); United States v. Turner, 718 F.3d 226, 237 (3d Cir. 2013) ("The Guidelines intend the enhancement for schemes that are complex in their concealment, not merely ambitious in their execution."); United States v. Olis, 429 F.3d 540, 547 (5th Cir. 2005) (discussing the need for "especially complex" concealment mechanisms).
B. Ms. Fonseca's Conduct Did Not Involve Sophisticated Means
The PSR's application of the sophisticated means enhancement is based on three features of Ms. Fonseca's offense conduct: (1) the use of inflated production budgets; (2) the movement of funds through multiple bank accounts; and (3) the submission of inflated figures in California Film Commission tax credit applications. As explained below, none of these features, individually or in combination, rises to the level of "especially complex or especially intricate" concealment that the enhancement requires.
The inflated production budgets. The core of the charged conduct — inflating production budgets above actual costs — is, while fraudulent, a form of straightforward overbilling. Ms. Fonseca submitted budgets that overstated anticipated production costs by 25% to 40%. While these budgets contained inflated line items, they did not employ fabricated vendors, forged invoices, or fictitious subcontractors. The budgets were prepared in the standard format used throughout the motion picture industry and were submitted through ordinary business channels. The inflation was accomplished by overstating the anticipated costs of real production activities — not by creating an elaborate architecture of deception. This is the type of "garden-variety" fraud that the Ninth Circuit has held does not warrant the sophisticated means enhancement. See Tanke, 743 F.3d at 1302.
The use of multiple bank accounts. The government's characterization of Ms. Fonseca's fund movements as involving "multiple accounts" overstates the complexity of the conduct. The accounts involved were: (1) production-specific accounts at Pacific Meridian Bank, N.A., which were standard accounts maintained in the ordinary course of Aurelia Pictures' business; (2) Aurelia Pictures' general operating accounts at the same bank (Account Nos. ending in -4782 and -9156), which were the company's primary business accounts used for payroll, vendor payments, and general operations; and (3) Ms. Fonseca's personal accounts at Westvale Securities (Account No. ending in -3341) and Glenrock Capital Markets (Account No. ending in -7208). The transfer of funds from production accounts to a general business account and then, in some instances, to personal accounts is simple commingling — a "routine, unsophisticated method of diverting funds." See United States v. Shaygan, 652 F.3d 1297, 1310 (11th Cir. 2011) (declining to apply the enhancement where the defendant merely commingled funds from multiple sources in a single operating account).
Critically, Ms. Fonseca did not create fictitious entities, shell companies, or offshore accounts. She did not establish a network of intermediary entities designed to obscure the trail of funds. Aurelia Pictures, Inc. (California Secretary of State Entity No. C3276451) was a legitimate, operating motion picture production company that had been in continuous operation since 2008. Over its fifteen-year history, Aurelia Pictures produced twenty-three feature films and six limited television series, generating approximately $312 million in cumulative gross revenues. It was a real company with real employees, real offices, and a real track record of commercial production. The fact that Ms. Fonseca misused this legitimate business to commit fraud does not transform the fraud into one involving "sophisticated means." See Whatley, 719 F.3d at 1219.
The tax credit applications. The submission of inflated expenditure figures on California Film Commission tax credit applications, while fraudulent, was accomplished through the standard application process available to all production companies. The California Film & Television Tax Credit Program has a publicly available application form and a standard process for submitting expenditure certifications. Ms. Fonseca submitted applications containing inflated numbers, but she did not forge documents, create fictitious vendors, fabricate audit trails, or employ any other complex concealment mechanisms in connection with the tax credit applications. The applications were processed through the ordinary administrative channels of the Film Commission. Submitting false numbers on a standard government form is, by itself, garden-variety fraud — not the type of "especially intricate" scheme that the sophisticated means enhancement is designed to address. See Innarelli, 524 F.3d at 291.
In sum, the PSR's application of the sophisticated means enhancement conflates the scope and duration of the fraud with its complexity and sophistication. Ms. Fonseca's scheme involved substantial sums of money and unfolded over a period of several years, but it did not employ the kind of "especially complex or especially intricate" concealment mechanisms that distinguish a sophisticated fraud from an ordinary one. The enhancement should not be applied.
C. Impact on Total Offense Level
Removing the +2 sophisticated means enhancement under § 2B1.1(b)(10)(C) reduces the Total Offense Level by 2 additional levels. Combined with the 2-level reduction resulting from the corrected loss enhancement (from +18 to +16), the total reduction from the PSR's calculated TOL of 31 is 4 levels, yielding a corrected TOL of 27.
VI. OBJECTION NO. 4: FACTUAL INACCURACIES IN THE PSR
In addition to the Guidelines calculation errors addressed above, the PSR contains several factual inaccuracies in its narrative that, if left uncorrected, may prejudice Ms. Fonseca at sentencing. The defense respectfully requests that the Court direct the Probation Office to correct these inaccuracies or, in the alternative, that the Court make findings under Federal Rule of Criminal Procedure 32(i)(3)(B) resolving the disputed factual matters.
A. Ms. Fonseca's Role in the Transactions
The PSR, at paragraphs 23 through 31 and 44 through 52, characterizes Ms. Fonseca as having "acted with the assistance of a network of co-conspirators" and describes the scheme as having been "orchestrated through multiple layers of corporate intermediaries." These characterizations are inaccurate and unsupported by the trial record.
Ms. Fonseca acted essentially alone in carrying out the conduct charged in the indictment. No other individuals were indicted in this case. No individuals were named as unindicted co-conspirators in the indictment or in any superseding indictment. The government's own trial presentation described a scheme perpetrated by Ms. Fonseca as an individual acting in her capacity as the founder, president, and chief executive officer of Aurelia Pictures, Inc. The jury instructions, as given by this Court, described the conspiracy charged in Count Seven as one involving Ms. Fonseca as the sole identified participant, and the government did not present evidence at trial identifying any other members of the alleged conspiracy by name or with specificity. While the conspiracy statute, 18 U.S.C. § 1371, necessarily contemplates agreement with at least one other person, the government's evidence on this count was limited to evidence of Ms. Fonseca's communications with subordinate employees who were not alleged to have had knowledge of or participated in the fraudulent aspects of the scheme.
Furthermore, the PSR's reference to "multiple layers of corporate intermediaries" is misleading. The only corporate entity involved in the transactions at issue was Aurelia Pictures, Inc. — a single, legitimate operating company. There were no intermediary holding companies, no special purpose vehicles created for the purpose of the scheme, and no layered corporate structure designed to obscure the flow of funds. The transactions flowed from investors to production-specific accounts, from production accounts to Aurelia Pictures' general operating accounts, and, in some instances, from Aurelia Pictures' accounts to Ms. Fonseca's personal accounts. This is a direct, two- or three-step transfer pattern involving a single corporate entity and personal accounts — not a multi-layered corporate structure.
The defense requests that the PSR be corrected to accurately reflect that Ms. Fonseca acted without the assistance of a network of co-conspirators and that the transactions did not involve multiple layers of corporate intermediaries.
B. Nature and Purpose of Certain Fund Transfers
The PSR, at paragraphs 53 through 67, characterizes all fund transfers from production-specific accounts to Aurelia Pictures' general operating account as evidence of Ms. Fonseca's personal enrichment. This blanket characterization is factually inaccurate and prejudicial for sentencing purposes.
While the defense acknowledges that the commingling of production funds into the Aurelia Pictures general operating account was improper and formed the basis for the money laundering convictions on Counts Five and Six, a significant portion of the transferred funds was used to cover legitimate operating expenses of Aurelia Pictures, Inc. At its peak employment in 2022, Aurelia Pictures maintained approximately forty-five full-time employees, including production executives, development staff, accounting personnel, and administrative support. The company maintained office space under a commercial lease at 8950 West Sunset Boulevard, Suite 1400, West Hollywood, California 90069, with monthly lease obligations in excess of $85,000. The company also incurred substantial costs in connection with non-charged productions — i.e., films and television projects that were not part of the conduct charged in the indictment.
The funds transferred from production-specific accounts into the general operating account were used, in significant part, to fund these legitimate business obligations. The PSR's blanket characterization of all such transfers as evidence of personal enrichment fails to distinguish between: (1) funds that were diverted to Ms. Fonseca's personal accounts and used for personal expenses; and (2) funds that remained in Aurelia Pictures' general operating accounts and were used to support the company's legitimate business operations. This distinction is relevant to the sentencing determination because it bears on the nature and circumstances of the offense, the defendant's motivations, and the actual harm to victims — all factors that the Court must consider under 18 U.S.C. § 3553(a).
The defense requests that the PSR be corrected to distinguish between funds diverted for Ms. Fonseca's personal use and funds applied to legitimate Aurelia Pictures business operations, and to remove or qualify the blanket characterization that all fund transfers constituted personal enrichment.
C. Other Factual Corrections
The defense has identified the following additional factual inaccuracies in the PSR narrative and requests correction:
(1) Educational Background. The PSR, at paragraph 115, states that Ms. Fonseca received a Bachelor of Arts degree in Film Studies from the University of California, Santa Cruz, in 1994. The correct degree designation is a Bachelor of Arts in Film & Digital Media, conferred in 1995. The PSR correctly states that Ms. Fonseca received a Master of Fine Arts in Film Production from the American Film Institute in 1998, but misidentifies the program as "Directing" rather than "Film Production." The defense requests correction of both the degree title and the year of the undergraduate degree, as well as the program designation for the MFA.
(2) Marital and Family Status. The PSR, at paragraph 118, states that Ms. Fonseca is "separated" from her husband, Alejandro Fonseca. In fact, Ms. Fonseca and Alejandro Fonseca divorced in 2019 pursuant to a final judgment of dissolution entered by the Los Angeles Superior Court. The PSR correctly identifies Ms. Fonseca as the primary custodial parent of her two children, Elena Fonseca (age 17) and Marco Fonseca (age 14), but does not note that Ms. Fonseca is also the sole caretaker for her mother, Corazon Fonseca, age 79, who was diagnosed with early-stage Alzheimer's disease in 2024. This information is relevant to the sentencing determination under 18 U.S.C. § 3553(a) and will be addressed in greater detail in the defense's forthcoming Sentencing Memorandum.
(3) Transaction Dates. The PSR, at paragraph 39, states that the initial fund transfer from the "Meridian" production account to the Aurelia Pictures general operating account occurred on March 12, 2019. The defense's review of the Pacific Meridian Bank, N.A. account records (Government Trial Exhibit 14-A) indicates that this initial transfer occurred on March 22, 2019. The PSR also states, at paragraph 48, that the final transfer from the "The Understory" production account occurred on November 8, 2023, when the bank records (Government Trial Exhibit 27-C) reflect a date of November 18, 2023. While these date discrepancies are minor, accuracy in the PSR is important, and the defense requests that the dates be corrected.
(4) Individual Transaction Amounts. The PSR, at paragraph 42, states that a single wire transfer from the "Blue Signal" production account to Ms. Fonseca's personal account at Westvale Securities on June 15, 2021, was in the amount of $475,000. The defense's review of the relevant bank records (Government Trial Exhibit 19-B) reflects that this transfer was in the amount of $375,000. The defense requests correction of this figure.
VII. THE CORRECTED GUIDELINES CALCULATION
Based on the objections set forth above, the defense submits that the correct Guidelines calculation for Ms. Fonseca is as follows:
The defense's corrected calculation reduces the Total Offense Level by 4 levels — from 31 to 27 — resulting in a corresponding reduction in the advisory Guidelines range of 38 to 48 months. The corrected advisory range of 70 to 87 months, while still representing a very substantial period of incarceration, is the range that is properly supported by the facts and applicable law.
The defense notes that it will separately file a Defendant's Sentencing Memorandum and Motion for Downward Variance under 18 U.S.C. § 3553(a), in which the defense will request that the Court impose a sentence of 36 to 48 months — a sentence below even the corrected advisory Guidelines range. That memorandum will address the full range of § 3553(a) factors, including the nature and circumstances of the offense, Ms. Fonseca's history and characteristics, the need to avoid unwarranted sentencing disparities, and the need for the sentence to be sufficient but not greater than necessary to comply with the purposes of sentencing. The defense anticipates filing the Sentencing Memorandum no later than February 21, 2026.
VIII. IMPACT ON RESTITUTION
While the amount of restitution under the Mandatory Victims Restitution Act ("MVRA"), 18 U.S.C. § 3663A, is not governed by the same loss calculation methodology as the Sentencing Guidelines, the defense's position on the actual loss attributable to Ms. Fonseca's offense conduct is relevant to the restitution determination. The MVRA requires the sentencing court to order restitution "in the full amount of each victim's losses," 18 U.S.C. § 3664(f)(1)(A), and the determination of each victim's actual losses necessarily implicates many of the same factual questions raised by the defense's objections to the PSR's loss calculation.
The defense's position is that the proper restitution amount should be $8.3 million, reflecting the actual losses sustained by the victims after correcting for the double-counting of $4.3 million and the $2.1 million in funds reinvested into legitimate production activities. The defense recognizes that the methodology for calculating restitution under the MVRA differs from the methodology for calculating Guidelines loss in certain respects — e.g., restitution is based on actual loss to each identified victim, whereas Guidelines loss may include intended loss — but submits that the factual corrections set forth in this filing are relevant to both determinations.
The identified victims and their claimed losses are as follows:
Brindoval Investors Group LP (counsel: Susan R. Aldrich, Aldrich & McBride LLP, 70 West Madison Street, Suite 1400, Chicago, Illinois 60602): Brindoval invested $8,200,000 across three Aurelia Pictures productions — "Meridian" ($2,800,000), "The Cartographer's Daughter" ($2,700,000), and "Blue Signal" ($2,700,000). Brindoval claims total losses of $8,200,000 in principal investment plus an additional $3,100,000 in lost profits, for a total claimed loss of $11,300,000. The defense will address the propriety and calculation of Brindoval's claimed losses, including the speculative nature of the lost profits claim, in a separate restitution submission.
Lakeshore Capital Partners LLC (same counsel): Lakeshore invested $3,900,000 across two Aurelia Pictures productions — "Glass Meridian" ($2,200,000) and "The Understory" ($1,700,000). Lakeshore claims total losses of $3,900,000.
California Film Commission: The California Film Commission claims losses of $2,800,000, representing the amount of tax credits issued to Aurelia Pictures on the basis of inflated expenditure certifications for three productions.
Five Individual Investors: Five individual investors, whose identities are protected under seal, claim combined losses of approximately $2,600,000 across various Aurelia Pictures projects. The defense has received victim impact statements from three of these individuals and is reviewing their loss claims.
The defense will separately address restitution in greater detail in connection with its Sentencing Memorandum, including: (1) the proper calculation of each victim's actual loss after accounting for the double-counting and reinvestment issues identified herein; (2) the propriety of Brindoval's speculative lost profits claim; (3) Ms. Fonseca's ability to pay, given her total identifiable assets of approximately $1.68 million to $2.08 million; and (4) the status of the Aurelia Pictures, Inc. receivership proceedings (Case No. 25STCV08312, pending before the Los Angeles Superior Court), in which court-appointed receiver Nathaniel W. Prescott of Ridgeway Advisory Group LLC has estimated remaining asset value of approximately $6.3 million before creditor claims. The defense notes that the receivership estate's principal creditor is Pacific Meridian Bank, N.A., which holds an outstanding balance of approximately $6.8 million on its revolving credit facility with Aurelia Pictures, and that satisfaction of Pacific Meridian Bank's secured claim may substantially reduce or eliminate the funds available for victim restitution from the receivership estate.
IX. REQUEST FOR EVIDENTIARY HEARING
Pursuant to Federal Rule of Criminal Procedure 32(i)(3)(B), the defendant respectfully requests an evidentiary hearing on her objections to the PSR. Federal Rule of Criminal Procedure 32(i)(3)(B) provides that, for any disputed portion of the presentence report or other controverted matter, the Court "must — for any disputed portion of the presentence report or other controverted matter — rule on the dispute or determine that a ruling is unnecessary either because the matter will not affect sentencing, or because the court will not consider the matter in sentencing." Where, as here, the defendant raises specific, material factual objections to the PSR that will directly affect the applicable Guidelines range and the ultimate sentence, the Court should conduct an evidentiary hearing to resolve the disputed facts. See United States v. Grier, 475 F.3d 556, 566 (3d Cir. 2007) (en banc) (holding that due process may require an evidentiary hearing on controverted sentencing factors); United States v. Petty, 982 F.2d 1365, 1369 (9th Cir. 1993) ("[W]here the facts material to sentencing are in dispute, the defendant is entitled to an evidentiary hearing.").
The factual disputes regarding the $4.3 million double-count and the $2.1 million in reinvested production funds are material and cannot be resolved on the papers alone. The double-count issue requires analysis of specific financial records and fund flows to determine whether the same dollars are captured in both the "inflated budget diversions" and "diverted investor funds" categories. The reinvestment issue requires tracing of funds through general operating and personal accounts to their ultimate disposition in qualifying production expenditures. Both issues involve contested questions of fact that are best resolved through live testimony and the examination of witnesses.
The defense intends to present the testimony of Dr. Priya Chandrasekaran, Professor of Economics at Westbridge University, who has been retained to analyze and opine on the actual and intended financial loss attributable to Ms. Fonseca's offense conduct. Dr. Chandrasekaran holds a Ph.D. in Economics from Stanford University, has published extensively on forensic economic analysis and financial fraud valuation, and has been qualified as an expert in federal and state courts on multiple prior occasions. Dr. Chandrasekaran will rebut the methodology employed by the government's trial expert, Dr. Ramesh Patel of Hargrove, Patel & Sullivan LLP, and will present an independent analysis of fund flows demonstrating both the overlap between loss categories and the reinvestment of $2.1 million into qualifying production expenditures.
The defense anticipates filing Dr. Chandrasekaran's written expert report with the Court no later than February 7, 2026, which is twenty-seven days before the sentencing hearing currently scheduled for March 6, 2026. This timeline will afford the government and the Probation Office sufficient opportunity to review the report and prepare any response.
In addition to Dr. Chandrasekaran, the defense may call additional witnesses regarding the factual inaccuracies identified in Section VI (Objection No. 4), including witnesses with knowledge of the legitimate business operations of Aurelia Pictures, Inc. and the application of transferred funds to qualifying operating expenses and production costs. The defense will provide the Court and the government with notice of any additional witnesses as soon as practicable.
X. REQUEST FOR ADDENDUM TO THE PSR
The defense respectfully requests that the Court direct the United States Probation Office, through Probation Officer Michael T. Brennan, to prepare an addendum to the PSR addressing each of the objections set forth in this filing. Specifically, the defense requests that the addendum address: (1) the Probation Office's revised position, if any, on the loss calculation in light of the defense's identification of the $4.3 million double-count and the $2.1 million in reinvested production funds; (2) the Probation Office's revised position, if any, on the application of the sophisticated means enhancement under § 2B1.1(b)(10)(C); and (3) the Probation Office's corrections, if any, to the factual inaccuracies identified in Section VI.
The defense has separately transmitted these objections and supporting materials to Probation Officer Brennan by letter dated January 15, 2026, as contemplated by the Court's Sentencing Scheduling Order (Dkt. No. 189) and the standard practice of the Central District Probation Office. The defense respectfully requests that the Probation Office's addendum be completed and disclosed to the parties no later than February 14, 2026, to allow the parties sufficient time to review the addendum and prepare for the March 6, 2026 sentencing hearing.
XI. CONCLUSION
For the foregoing reasons, Defendant Marguerite D. Fonseca respectfully requests that this Court:
1. Sustain her objections to the PSR's loss calculation and find that the correct intended loss figure attributable to her offense conduct is $8,300,000, not $14,700,000;
2. Apply a +16 loss enhancement under U.S.S.G. § 2B1.1(b)(1)(I) rather than the +18 enhancement applied in the PSR under § 2B1.1(b)(1)(J);
3. Decline to apply the +2 sophisticated means enhancement under U.S.S.G. § 2B1.1(b)(10)(C);
4. Direct the Probation Office to correct the factual inaccuracies identified in Section VI of this filing, or, in the alternative, make findings under Federal Rule of Criminal Procedure 32(i)(3)(B) resolving the identified factual disputes;
5. Determine that the correct Total Offense Level is 27, Criminal History Category I, yielding an advisory Guidelines range of 70 to 87 months of imprisonment;
6. Grant the defense's request for an evidentiary hearing on these objections pursuant to Federal Rule of Criminal Procedure 32(i)(3)(B); and
7. Direct the Probation Office to prepare an addendum to the PSR addressing the defense's objections.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Conrad Ashby (CA State Bar No. 198742) Victoria Chambers (CA State Bar No. 246819) Lisa Morrow (CA State Bar No. 271053) 2029 Century Park East, Suite 3300 Los Angeles, California 90067 Telephone: (310) 553-4400 Facsimile: (310) 553-4401
Counsel for Defendant Marguerite D. Fonseca
Dated: January 10, 2026
CERTIFICATE OF SERVICE
I, Conrad Ashby, hereby certify that on January 10, 2026, a true and correct copy of the foregoing Defendant's Objections to the Presentence Investigation Report was served upon the following persons by the methods indicated below:
Via ECF Electronic Filing:
Brenda K. Tillotson Assistant United States Attorney Derek R. Huang Assistant United States Attorney United States Attorney's Office Central District of California Major Frauds Section 312 North Spring Street, Suite 1200 Los Angeles, California 90012
Email: brenda.tillotson@usdoj.gov
Email: derek.huang@usdoj.gov
Via Hand Delivery and Email:
Michael T. Brennan United States Probation Officer United States Probation Office Central District of California 350 West First Street, Suite 400 Los Angeles, California 90012
Email: michael_brennan@cap.uscourts.gov
________________________________________
Conrad Ashby
UNITED STATES OF AMERICA, | Case No. 2:24-cr-00583-CMD
Plaintiff, | Hon. Catherine M. Driscoll
v. | DEFENDANT'S OBJECTIONS TO THE
PRESENTENCE INVESTIGATION REPORT
MARGUERITE D. FONSECA,
Sentencing Hearing: March 6, 2026
Defendant.
Component | PSR Figure | Defense Correction | Corrected Figure
Inflated Budget Diversions | $6,100,000 | No change | $6,100,000
Fraudulent Tax Credits | $2,800,000 | No change | $2,800,000
Diverted Investor Funds | $5,800,000 | Less $4.3M double-count; less $2.1M reinvested | ($600,000)*
Total Loss | $14,700,000 | Less $6,400,000 | $8,300,000
Guideline Provision | PSR Calculation | Defense Calculation
Base Offense Level (§ 2B1.1(a)(1)) | 7 | 7
Loss Enhancement (§ 2B1.1(b)(1)) | +18 (§ 2B1.1(b)(1)(J)) | +16 (§ 2B1.1(b)(1)(I))
Number of Victims (§ 2B1.1(b)(2)(A)(i)) | +2 | +2
Sophisticated Means (§ 2B1.1(b)(10)(C)) | +2 | +0
Abuse of Position of Trust (§ 3B1.3) | +2 | +2
Acceptance of Responsibility (§ 3E1.1) | 0 | 0
Total Offense Level | 31 | 27
Criminal History Category | I | I
Advisory Guidelines Range | 108–135 months | 70–87 months