United States v. Carmichael

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH  (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS 81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB 81,7(' 67$7(6 2) $0(5,&$ ; 3ODLQWLII$SSHOOHH    1R Y  !  /$:5(1&( 5$<  &$50,&+$(/  'HIHQGDQW$SSHOODQW   1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI.HQWXFN\DW/RQGRQ 1Rn.DUO6)RUHVWHU'LVWULFWsXGJH $UJXHGsXQH 'HFLGHGDQG)LOHG2FWREHU %HIRUH.(,7+'$8*+75(<DQG*,/0$1&LUFXLW sXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8('sRVHSK5/DQH3,//(56'25)'H5266(77  %$55(77 3UHVWRQVEXUJ .HQWXFN\ IRU $SSHOODQW &KDUOHV 3 :LVGRP sU $66,67$17 81,7(' 67$7(6 $77251(< /H[LQJWRQ .HQWXFN\ IRU $SSHOOHH 21 %5,()  sRVHSK 5 /DQH 1HG % 3LOOHUVGRUI   8QLWHG6WDWHVY&DUPLFKDHO 1R 3,//(56'25)'H5266(77 %$55(773UHVWRQVEXUJ .HQWXFN\ IRU $SSHOODQW  &KDUOHV 3 :LVGRP sU $66,67$1781,7('67$7(6$77251(</H[LQJWRQ .HQWXFN\ (GZLQ s :DOERXUQ ,,, 81,7(' 67$7(6 $77251(<&RYLQJWRQ.HQWXFN\IRU$SSHOOHH *,/0$1sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK '$8*+75(<sMRLQHG.(,7+s SS GHOLYHUHG DVHSDUDWHGLVVHQWLQJRSLQLRQ BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB 521$/'/((*,/0$1&LUFXLWsXGJH/DZUHQFH5D\ &DUPLFKDHO IRUPHUO\ D &RPPRQZHDOWK DWWRUQH\ IRU WKUHH FRXQWLHV LQ HDVWHUQ .HQWXFN\ ZDV FRQYLFWHG RI H[WRUWLQJ PRQH\IURPDORFDOERRNPDNHULQYLRODWLRQRIWKH+REEV$FW 86&†+HZDVVHQWHQFHGWRWZHQW\VHYHQPRQWKV RILQFDUFHUDWLRQDQGWZR\HDUVRIVXSHUYLVHGUHOHDVH)RUWKH UHDVRQV VHW IRUWK EHORZ ZH $)),50 &DUPLFKDHOjV FRQYLFWLRQ ,%$&.*5281' ,QODWH1RYHPEHURUHDUO\'HFHPEHURIDPDQQDPHG 5RGQH\$GDPVZDVFKDUJHGZLWKZDQWRQHQGDQJHUPHQWRU DVVDXOW WKHUHFRUGLVQRWFOHDURQWKLVSRLQW LQ.HQWXFN\VWDWH FRXUWLQRQHRIWKHFRXQWLHVZLWKLQ&DUPLFKDHOjVMXULVGLFWLRQ $GDPVRZQHGDSDZQVKRSDQGFRPPHUFLDOUHQWDOSURSHUW\LQ 6RPHUVHW .HQWXFN\  +H DOVR UDQ D WKULYLQJ DQG LOOHJDO ERRNPDNLQJRSHUDWLRQDQGSRNHUJDPHRXWRIKLVSDZQVKRS $GDPVj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jV RIILFH &DUPLFKDHO ZDV QRW DOORZHG WR XVH VWDWH IXQGV IRU WKH GHFRUDWLRQV   .QLJKW UHOD\HG WKH UHTXHVW WR $GDPV ZKR DJUHHGWRSD\RQWKHEDVLVWKDW&DUPLFKDHOZDVWKHKLJKHVW UDQNLQJ ODZ HQIRUFHPHQW RIILFHU LQ WKH FRXQW\ DQG WKDW LW ZRXOGEHIRROLVKWRmPDNHKLPPDGIRUl&DUPLFKDHO NQHZDERXW$GDPVjVLOOHJDOJDPEOLQJEXVLQHVVDQG$GDPV NQHZWKDW&DUPLFKDHOKDGWKHSRZHUWRVKXWLWGRZQDQGKDYH $GDPVDUUHVWHG8QGHUWKHFLUFXPVWDQFHV$GDPVWKRXJKWLW ZRXOGKDYHEHHQmYHU\VWXSLGlQRWWRSD\&DUPLFKDHO .QLJKW DVNHG &DUPLFKDHO IRU SXUFKDVH UHFHLSWV DQG &DUPLFKDHOREOLJHGJLYLQJ.QLJKWUHFHLSWVDFNQRZOHGJLQJ WKHSD\PHQWIRU&KULVWPDVGHFRUDWLRQVRIPRUHWKDQ $GDPV UHLPEXUVHG &DUPLFKDHO DOWKRXJK WKH DPRXQW ZDV PRUH WKDQ KH KDG H[SHFWHG  7KH FRXQW\ DWWRUQH\jV RIILFH VXEVHTXHQWO\DJUHHGWRGLVPLVVWKHSHQGLQJFKDUJHVDJDLQVW $GDPVDIWHUWKHSDVVDJHRIVL[W\GD\V$WWKHHQGRIWKHVL[W\ GD\VWKHFKDUJHVZHUHGLVPLVVHGZLWKSUHMXGLFH ,QsDQXDU\RI&DUPLFKDHODVNHG$GDPVWRDVVLVWKLP LQWKHLQYHVWLJDWLRQRIDQLQGLYLGXDOQDPHGs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mD ERRNLHl DOWKRXJK IDLUO\GXULQJDQH[SDUWHSURFHHGLQJWKHJRYHUQPHQWjV &DUPLFKDHOVDLGKHZDVQRWLQWHUHVWHGLQSURVHFXWLQJ$GDPV LQIRUPDWLRQLVOLNHO\WREHOHVVUHOLDEOHDQGWKHFRXUWjV &DUPLFKDHOSURPLVHG$GDPVWKDWKLVQDPHZRXOGQRWEHXVHG XOWLPDWHILQGLQJVOHVVDFFXUDWHWKDQLIWKHGHIHQGDQWKDG LQWKHLQYHVWLJDWLRQ$WWKLVSRLQW&DUPLFKDHOKDGDOUHDG\ EHHQ SHUPLWWHG WR SDUWLFLSDWH  +RZHYHU LPSDUWLDO D DFTXLUHGRQHRI0F.LQQH\jVVH[YLGHRVDQG$GDPVSURPLVHG SURVHFXWRU PD\ PHDQ WR EH KH LV DQ DGYRFDWH &DUPLFKDHOWKDWKHZRXOGEHDEOHWRREWDLQDVHFRQG$IWHUKH DFFXVWRPHGWRVWDWLQJRQO\RQHVLGHRIWKHFDVH$QH[ KDGGLVFXVVHGWKHLQYHVWLJDWLRQ RI0F.LQQH\ZLWK$GDPV SDUWHSURFHHGLQJSODFHVDVXEVWDQWLDOEXUGHQXSRQDWULDO 'HW 0LUXVOHDUQHGWKDW$GDPVjVQDPHKDGFRPHXSLQDQ MXGJH WR SHUIRUP ZKDW LV QDWXUDOO\ DQG SURSHUO\ D RQJRLQJGUXJLQYHVWLJDWLRQDOWKRXJKLWZDVODWHUGHWHUPLQHG IXQFWLRQRIDQDGYRFDWH WKDW WKH DOOHJDWLRQV UHJDUGLQJ $GDPVjV LQYROYHPHQW ZHUH mXQIRXQGHGl 8QLWHG 6WDWHV Y 1DSXH  )G   WK &LU   FLWDWLRQV RPLWWHG   DFFRUG ,Q UH 7D\ORU  )G 2Q0DUFK&DUPLFKDHOWROG.QLJKWWKDWKHKDG  G&LU +DOOHU)GDW0RUHRYHU mUHFHLYHGZRUGlWKDW$GDPVZDVLQWHUHVWHGLQPDNLQJDYHU\ H[SDUWHFRPPXQLFDWLRQVVXFKDVWKDWEHORZYLRODWHHWKLFDO ODUJHFDPSDLJQGRQDWLRQ&DUPLFKDHODOVRWROG.QLJKWWKDW JXLGHOLQHV&DQRQ $  RIWKH$PHULFDQ%DU$VVRFLDWLRQ $GDPVjV QDPH KDG FRPH XS LQ WKH FRXUVH RI D IHGHUDO &RGH RI sXGLFLDO &RQGXFW VWDWHV WKDW m>D@ MXGJH LQYHVWLJDWLRQDQGWKDWKHNQHZWKDW$GDPVKDGmEHHQZLULQJ VKRXOGQHLWKHU LQLWLDWH QRU FRQVLGHU H[ SDUWH RU RWKHU ODUJHVXPVRIPRQH\FDVKIURPDWUXFNVWRSLQWKH6RPHUVHW FRPPXQLFDWLRQV FRQFHUQLQJ D SHQGLQJ RU LPSHQGLQJ DUHDl'XULQJWKHFRQYHUVDWLRQ&DUPLFKDHODGGHGWKDWKHKDG SURFHHGLQJVl)XUWKHU&DQRQ $ SURYLGHVWKDWm>D@MXGJH mOLYHGXSWRKLVHQGRIWKHGHDORQWKH0F.LQQH\PDWWHUWKDW VKRXOGUHVSHFWDQGFRPSO\ZLWKWKHODZDQGVKRXOGFRQGXFW 5RGQH\jVQDPHKDGEHHQNHSWVHFUHWKDGQRWEHHQXVHG>DQG@ KLPVHOI DW DOO WLPHV LQ D PDQQHU WKDW SURPRWHV SXEOLF KDG QRW EHHQ PDGH SXEOLFl  )LQDOO\ &DUPLFKDHO VDLG WKDW FRQILGHQFHLQWKHLQWHJULW\DQGLPSDUWLDOLW\RIWKHMXGLFLDU\l $GDPVmKDGVWHSSHGRQVRPHRIWKHWRHVRIWKH)HGVLQ>WKH@ 7KH SURWHFWLRQ DIIRUGHG FULPLQDO GHIHQGDQWV IURPH[ SDUWH 0F.LQQH\LQYHVWLJDWLRQl&DUPLFKDHOVXJJHVWHGWKDW.QLJKW FRPPXQLFDWLRQVEHWZHHQWKHGLVWULFWFRXUWDQGWKHSURVHFXWRU DVNKLVFOLHQWIRULQFDVKZKLFKZRXOGJRLQWRD LVmQRWPHUHO\DPDWWHURIHWKLFVLWLVSDUWRIDGHIHQGDQWjV VOXVKIXQGRI&DUPLFKDHOjVFUHDWLRQWREHVSHQWRQSROLWLFDO ULJKWWR GXH SURFHVVDQGHIIHFWLYHUHSUHVHQWDWLRQl+DOOHU FDPSDLJQVRI&DUPLFKDHOjVFKRLFH7KHUHTXHVW&DUPLFKDHO )GDW WROG.QLJKWZDVEDVHGRQWKHUHDVRQLQJWKDWLI.QLJKWDVNHG IRU$GDPVPLJKWEHLQFOLQHGWRJLYH 2XU FULPLQDO MXGLFLDO V\VWHP LV SUHPLVHG XSRQ FHUWDLQ IXQGDPHQWDO ULJKWV o WKH ULJKW WR HIIHFWLYH DVVLVWDQFH RI 2Q 0DUFK   .QLJKW UHSRUWHG WR $GDPV WKDW FRXQVHOWKHULJKWWRDQLPSDUWLDOMXGJHDQGMXU\WKHULJKWWR &DUPLFKDHOKDGUHTXHVWHGIURPKLPmWRGLVWULEXWH WKHSUHVXPSWLRQRILQQRFHQFHWKHULJKWWRGXHSURFHVV7KH IRUFDPSDLJQIXQGVlEXWKRSHGWRJHWRU PDMRULW\RSLQLRQYLWLDWHVHDFKRIWKHVHEDVLFJXDUDQWHHV$V .QLJKWUHSHDWHGWR$GDPVZKDW&DUPLFKDHOKDGVDLGDERXW MXGJHVRIWKLV&RXUWZHKDYHVZRUQWRVHUYHDVSURWHFWRUVRI $GDPVjV QDPH mFRPLQJ XSl LQ WKH FRXUVH RI DQ RQJRLQJ WKH8QLWHG6WDWHV&RQVWLWXWLRQ7KHPDMRULW\GHVHFUDWHVWKDW IHGHUDOLQYHVWLJDWLRQ$GDPVmIUHDNHGRXWlDWWKLVQHZVDQG  8QLWHG6WDWHVY&DUPLFKDHO 1R 1R 8QLWHG6WDWHVY&DUPLFKDHO  'HIHQGDQW KLV ULJKW WR HIIHFWLYH DVVLVWDQFH RI FRXQVHO UHSRUWHG &DUPLFKDHOjV UHTXHVW WR &RXQW\ $WWRUQH\ )UHG $OORZLQJWKHJRYHUQPHQWXQIHWWHUHGDFFHVVWRWKHFRXUWjVHDU 1LHNLUN DQG 'HW 0LUXV LQ WKH EHOLHI WKDW &DUPLFKDHO ZDV XQGHUPLQHVWKHDGYHUVDULDOSURFHVVDQGWDLQWVWKHDSSHDUDQFH PDNLQJDQREOLTXHWKUHDWWKDW$GDPVZRXOGEHSURVHFXWHGLI RI MXGLFLDO LPSDUWLDOLW\  7KH GLVWULFW FRXUWjV UXOLQJ RQ WKH KHGLGQRWJLYH&DUPLFKDHORU7ZRGD\V %UDG\PDWHULDOmPD\ZHOOKDYHEHHQGXHQRWRQO\WRWKHIDFW ODWHU&DUPLFKDHOVXPPRQHG$GDPVWRKLVRIILFHH[SODLQLQJ WKDW WKH SURVHFXWRU JRW LQ KLV SLWFK ILUVW EXW HYHQ PRUH WKDWKHSUHIHUUHGQRWWRWDONRQWKHWHOHSKRQH$VUHTXHVWHG LQVLGLRXVO\WRWKHYHU\UHODWLRQVKLSLQQRFHQWDVLWPD\KDYH $GDPVZHQWWR&DUPLFKDHOjVRIILFHPHHWLQJZLWKKLPLQD EHHQWKRXJKWWREHWKDWSHUPLWWHGVXFKGLVFORVXUHVl+DOOHU FRQIHUHQFHURRP )GDW6LQFHWKHJRYHUQPHQWKDVQRWPHWLWV VXEVWDQWLDOEXUGHQRISURYLQJODFNRISUHMXGLFHWR&DUPLFKDHO &DUPLFKDHOVDLGWKDWKHDSSUHFLDWHG$GDPVjVKHOSDQGKDG DQGKDVIDLOHGWRGHPRQVWUDWHDFRPSHOOLQJVWDWHLQWHUHVWWKLV NHSW$GDPVjVQDPHRXWRIWKH0F.LQQH\LQYHVWLJDWLRQ+H H[ SDUWH FRPPXQLFDWLRQ GRHV QRW IDOO ZLWKLQ WKH QDUURZ DOVRWROG$GDPVWKDWKHKDGmDQLGHDlWKDWFRXOGKHOS$GDPV H[FHSWLRQVRXWOLQHGLQ0LQVN\ EXWZDQWHGWREHmYHU\FDUHIXOl$FFRUGLQJWR$GDPVWKH LGHD FRQVLVWHG RI $GDPV GHOLYHULQJ D PDQLOD HQYHORSH $Q H[ SDUWH FRPPXQLFDWLRQ EHWZHHQ WKH JRYHUQPHQWjV FRQWDLQLQJLQFDVKWR.QLJKWjVRIILFHZKHUHLWZRXOG FRXQVHODQGWKHWULDOFRXUWGHQLHVWKHGHIHQGDQWKLVULJKWWR EHSLFNHGXSE\.QLJKWjVVHFUHWDU\7KHPRQH\ZDVWREH GXHSURFHVVDQGHIIHFWLYHUHSUHVHQWDWLRQ)XUWKHUWKLV&RXUW XVHG WR KHOS VHYHUDO ORFDO RIILFLDOV LQFOXGLQJ WKH FRXQW\ FRQVLGHUV DQ H[ SDUWH FRQIHUHQFH D mJURVV EUHDFK RI WKH VKHULIIDQGHYHQWXDOO\&DUPLFKDHOKLPVHOIVHFXUHUHHOHFWLRQ DSSHDUDQFHRIMXVWLFHlWKDWGHSULYHVDGHIHQGDQWRIKLVULJKWWR &DUPLFKDHODQG$GDPVDJUHHGWRPHHWWKHQH[WGD\$GDPV DQ LPSDUWLDO MXULVW DQG SHUYHUWV WKH DGYHUVDULDO SURFHVV WKHQ OHIW &DUPLFKDHOj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jVVOXVK  IXQGEHFDXVHWKH\mZHUHQRWKXUWLQJQRERG\lDQGSUHIHUUHG 7KH PDMRULW\ RSLQLRQ FRQFOXGHV WKDW WKHUH LV mQR EDVLV WR EHOLHYH WKDW WKDW ORFDO ODZ HQIRUFHPHQW DXWKRULWLHV OHW WKHP JDPEOH LQ WKH GRFXPHQW LQ IDFW ZRXOG KDYH EHHQ RI DQ\ YDOXH WR &DUPLFKDHOl UHDFKLQJ WKLV FRQFOXVLRQ WKH PDMRULW\ UHOLHV RQ WKH JRYHUQPHQWjV DVVHUWLRQ ,Q SHDFH  &DUPLFKDHO UHSOLHG m, WKLQN ZH KDYH DQ WKDW WKH GRFXPHQWV ZHUH QRW RI DQ\ YDOXH WR &DUPLFKDHO +RZHYHU XQGHUVWDQGLQJl &DUPLFKDHO KDV SUHVHQWHG HYLGHQFH WKDW WKH SURVHFXWRU PDGH PLVOHDGLQJ VWDWHPHQWV WR WKH WULDO FRXUW XQGRXEWHGO\ WR DYRLG DQ LQ FDPHUD UHYLHZ 7ZR GD\V ODWHU &DUPLFKDHO FDOOHG $GDPV WR DUUDQJH D DQG SRWHQWLDO UHOLQTXLVKPHQW RI WKH GRFXPHQWV LQ LWV SRVVHVVLRQ WR PHHWLQJDWZKLFK$GDPVZRXOGPDNHWKHQH[WSD\PHQW7KH &DUPLFKDHO 7KH SURVHFXWRUjV PLVVWDWHPHQWV WR WKH GLVWULFW FRXUW SROLFHSODQQHGWRYLGHRWDSHWKLVPHHWLQJEXWWKHPHHWLQJZDV FRQVWLWXWH mDQ LQGLFDWLRQ RI PLVFRQGXFWl WKXV HOLPLQDWLQJ WKH SUHVXPSWLRQ RI WUXWK EHVWRZHG RQ WKH JRYHUQPHQW E\ +HUQDQGH]   )G DW  DERUWHGEHFDXVH&DUPLFKDHOGLVFRYHUHGWKDWWKHSROLFHZHUH $FFRUGLQJO\ WKH PDMRULW\jV UHOLDQFH RQ WKH JRYHUQPHQWjV DVVXUDQFHV LV ZDWFKLQJKLP$ERXWDQKRXUDIWHU&DUPLFKDHOGHWHFWHGWKH PLVSODFHG  8QLWHG6WDWHVY&DUPLFKDHO 1R 1R 8QLWHG6WDWHVY&DUPLFKDHO  VXUYHLOODQFH.HQWXFN\6WDWH3ROLFH/LHXWHQDQWs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jVRIILFHWRSLFNXS$GDPVjVDWWHPSWHGSD\RIIDQGWKHQ SDUWHGLVFXVVLRQVEHWZHHQWKHJRYHUQPHQWDQGWKHWULDOFRXUW WRWDNHLWKRPH$WWKDWSRLQW&DUPLFKDHOVDLGKHDQG'HW LVRXWZHLJKHGE\WKHUHVXOWLQJSUHMXGLFHWR&DUPLFKDHO *XII\ ZRXOG mILJXUH RXW ZKDW WR GR ZLWK LW QH[Wl &DUPLFKDHOKRZHYHUVXEVHTXHQWO\DGPLWWHGWKDWKHKDGRQO\ $V VWDWHG SUHYLRXVO\ mWKH EXUGHQ RI SURYLQJ ODFN RI WROG'HW*XII\WRSLFNXSDSDFNDJHDQGWKDWKHQHYHUWROG SUHMXGLFH LV RQ WKH >JRYHUQPHQW@ DQG LW LV D KHDY\ RQHl KLPWKDWWKHSDFNDJHZDVVXSSRVHGWRFRQWDLQEULEHPRQH\ 0LQVN\)GDW TXRWLQJ+DOOHU)GDW  WKDW ZDV HYLGHQFH LQ DQ RQJRLQJ RIILFLDOFRUUXSWLRQ &DUPLFKDHO DUJXHV WKDW WKH FRQIHUHQFH ZDV SUHMXGLFLDO DQG LQYHVWLJDWLRQ,QIDFWQRODZHQIRUFHPHQWRIILFHU RWKHUWKDQ DGYHUVHO\ DIIHFWHG KLV VXEVWDQWLDO ULJKWV EHFDXVH WKH &DUPLFKDHO DQG SRVVLEO\'HW*XII\ NQHZDQ\WKLQJDERXW JRYHUQPHQW PDGH PLVVWDWHPHQWV GXULQJ WKH H[ SDUWH &DUPLFKDHOjVVXSSRVHGLQYHVWLJDWLRQRI$GDPV FRPPXQLFDWLRQWKDWLIFRUUHFWHGZRXOGKDYHSURPSWHGWKH GLVWULFWFRXUWWRUHYLHZWKHGRFXPHQWVLQFDPHUD3XWWLQJWKH &DUPLFKDHOZDVLQGLFWHGDQGFKDUJHGZLWKWZRFRXQWVRI YHUDFLW\RI&DUPLFKDHOjVDVVHUWLRQVDVLGHWKHIDLOXUHRIWKH H[WRUWLRQ LQ YLRODWLRQ RI WKH +REEV $FW  &RXQW , RI WKH GLVWULFWFRXUWWRDIIRUGGHIHQVHFRXQVHODQRSSRUWXQLW\WRKHDU LQGLFWPHQW SHUWDLQHG WR WKH DOOHJHG H[WRUWLRQ RI  IRU DQG UHVSRQG WR WKH JRYHUQPHQWjV UHSUHVHQWDWLRQV GHQLHG &KULVWPDV GHFRUDWLRQV DW &DUPLFKDHOjV RIILFH  &RXQW ,, SHUWDLQHGWRWKHDOOHJHGH[WRUWLRQRIVOXVKIXQGFRQWULEXWLRQV $WWKHFORVHRIWKHJRYHUQPHQWjVFDVH&DUPLFKDHOPRYHGIRU DMXGJPHQWRIDFTXLWWDO7KHGLVWULFWFRXUWJUDQWHGWKHPRWLRQ DVWR&RXQW,RIWKHLQGLFWPHQWEXWGHQLHGWKHPRWLRQDVWR &RXQW,,&DUPLFKDHOZDVVXEVHTXHQWO\FRQYLFWHGRQ&RXQW ,,E\WKHMXU\DQGWKHQVHQWHQFHGE\WKHFRXUWWRWZHQW\VHYHQ  PRQWKV RI LQFDUFHUDWLRQ WR EH IROORZHG E\ WZR \HDUV RI 7KH PDMRULW\ DVVHUWV WKDW mWKH GLVVHQW DUJXHV WKDW &DUPLFKDHOjV VXSHUYLVHGUHOHDVH H[SDUWH VXEVWDQWLDO ULJKWV ZHUH DGYHUVHO\ DIIHFWHG µEHFDXVH WKH JRYHUQPHQW PDGH LQ FDPHUD PLVVWDWHPHQWV GXULQJ WKH FRPPXQLFDWLRQ WKDW LI FRUUHFWHG ZRXOG KDYH SURPSWHG WKH GLVWULFW FRXUW WR UHYLHZ WKH GRFXPHQWV jl 7KLV DVVHUWLRQ LV D GLVWRUWLRQ RI WKH WUXWK  8QLWHG6WDWHVY&DUPLFKDHO 1R 1R 8QLWHG6WDWHVY&DUPLFKDHO  WKHJRYHUQPHQWZKLOHH[FOXGLQJ'HIHQGDQW2QFHDQDIILQLW\ 2QDSSHDO&DUPLFKDHODUJXHVWKDW  KLVDOOHJHGFRQGXFW EHWZHHQ WKH GLVWULFW FRXUW DQG WKH JRYHUQPHQW KDV EHHQ ODFNHGWKHUHTXLVLWHFRQQHFWLRQZLWKLQWHUVWDWHFRPPHUFHWR HVWDEOLVKHGWKHGLVWULFWFRXUWjVDELOLW\WRVHUYHDVDQHXWUDO VXSSRUWD+REEV$FWFRQYLFWLRQ  WKHSURVHFXWLRQPD\KDYH DUELWHU LV VXVSHFW  7KLV DIILQLW\ SHUYHUWV WKH DGYHUVDULDO ZLWKKHOG HYLGHQFH WKDW PLJKW KDYH EHHQ XVHG WR LPSHDFK SURFHVV DQG FUHDWHV DQ LQWROHUDEOH DLU RI SDUWLDOLW\  7KH $GDPVWKHJRYHUQPHQWjVVWDUZLWQHVV  WKHHYLGHQFHZDV 6XSUHPH&RXUWIRXQGWKDWDWULDOFRQGXFWHGEHIRUHmDMXGJH LQVXIILFLHQW WR FRQYLFW   WKH GLVWULFW FRXUW LPSURSHUO\ ZKR>L@VQRWLPSDUWLDOlWREHDmVWUXFWXUDOGHIHFWDIIHFWLQJWKH H[FOXGHGWKHWHVWLPRQ\RIDSURVSHFWLYHGHIHQVHZLWQHVVDQG IUDPHZRUNZLWKLQZKLFKWKHWULDOSURFHHGVl,GDW  WKHGLVWULFWFRXUWLPSURSHUO\LQVWUXFWHGWKHMXU\ ,QOLJKWRIWKHIRUHJRLQJWKHPDMRULW\jVFRQFOXVLRQWKDWWKHH[ SDUWHFRPPXQLFDWLRQVGLGQRWDIIHFW&DUPLFKDHOjVVXEVWDQWLDO ,,$1$/<6,6 ULJKWVRIIHQGVWUDGLWLRQDO QRWLRQVRIIDLUQHVVDQGRSHQVWKH GRRUIRUSURVHFXWRULDODEXVH $ &RQQHFWLRQZLWKLQWHUVWDWHFRPPHUFH +DYLQJ FRQFOXGHG WKDW &DUPLFKDHOjV FODLP LV D m>S@ODLQ 7KH 8QLWHG 6WDWHV GRHV QRW KDYH WKH SRZHU XQGHU WKH HUURU>@DIIHFWLQJ>KLV@VXEVWDQWLDOULJKWVl)HG5&ULP3UR &RPPHUFH&ODXVHWRRXWODZSXUHO\LQWUDVWDWHFULPH6HHHJ  E  WKH DQDO\VLV WXUQV RQ ZKHWKHU WKLV &RXUW VKRXOG 8QLWHG6WDWHVY/RSH]86   UHIXVLQJWR H[HUFLVH LWV GLVFUHWLRQ WR FRUUHFW WKH HUURU  7KH 6XSUHPH mFRQYHUWFRQJUHVVLRQDODXWKRULW\XQGHUWKH&RPPHUFH&ODXVH &RXUWKDVVWDWHGWKDWm>W@KHFRXUWRIDSSHDOVVKRXOGFRUUHFWD WRDJHQHUDOSROLFHSRZHURIWKHVRUWUHWDLQHGE\WKH6WDWHVl  SODLQ IRUIHLWHG HUURU DIIHFWLQJ VXEVWDQWLDO ULJKWV LI WKH HUURU &RQVHTXHQWO\ DOOHJHG FULPLQDO FRQGXFW PXVW KDYH VRPH µVHULRXVO\DIIHFW>V@WKHIDLUQHVVLQWHJULW\RUSXEOLFUHSXWDWLRQ FRQQHFWLRQWRLQWHUVWDWHFRPPHUFHLQRUGHUWRVWDWHDQRIIHQVH RIMXGLFLDOSURFHHGLQJVjl2ODQR TXRWLQJ8QLWHG6WDWHVY XQGHUWKH+REEV$FW $WNLQVRQ  86      ,Q WKLV PDWWHU QR JHQXLQHGLVSXWHH[LVWVDVWRZKHWKHUWKHH[SDUWHFRQIHUHQFH 7KH +REEV $FWjV MXULVGLFWLRQDO SURYLVLRQ KRZHYHU LV EHORZ FRPSURPLVHG mWKH IDLUQHVV LQWHJULW\ DQG SXEOLF H[WUHPHO\EURDG6HH86&† E   SURYLGLQJWKDW UHSXWDWLRQ RI MXGLFLDO SURFHHGLQJVl  ,G    7KHUHIRUH WKLV mFRPPHUFHlIRUWKHSXUSRVHVRIWKH+REEV$FWLQFOXGHVmDOO &RXUWKDVWKHDXWKRULW\DQGLQGHHGWKHGXW\WRUHYLHZKLV FRPPHUFHRYHUZKLFKWKH8QLWHG6WDWHVKDVMXULVGLFWLRQl  FODLP 6WLURQH Y 8QLWHG 6WDWHV  86     m>7KH +REEV$FW@VSHDNVLQEURDGODQJXDJHPDQLIHVWLQJDSXUSRVH +DYLQJ IRXQG WKDW 'HIHQGDQW REMHFWHG WR WKH H[ SDUWH WR XVH DOO WKH FRQVWLWXWLRQDO SRZHU &RQJUHVV KDV WR SXQLVK SURFHHGLQJ DQG DOVR KDYLQJ IRXQG WKDW WKH FODLP GHVHUYHV LQWHUIHUHQFHZLWKLQWHUVWDWHFRPPHUFHE\H[WRUWLRQUREEHU\RU FRUUHFWLRQXQGHUDmSODLQHUURUlDQDO\VLVWKHVROHTXHVWLRQLV SK\VLFDOYLROHQFH7KH$FWRXWODZVVXFKLQWHUIHUHQFHµLQDQ\ ZKHWKHU WKH JRYHUQPHQW KDV PHW LWV EXUGHQ XQGHU0LQVN\ ZD\RUGHJUHHjl  FLWDWLRQRPLWWHG $VDUHVXOWHYHQDYHU\ )GDW8QGHU0LQVN\m>H@[SDUWHSURFHHGLQJVµFDQ PLQLPDO FRQQHFWLRQ WR LQWHUVWDWH FRPPHUFH LV VXIILFLHQW WR RQO\EHMXVWLILHGDQGDOORZHGE\FRPSHOOLQJVWDWHLQWHUHVWVjl VXVWDLQD+REEV$FWFKDUJH6HHHJ8QLWHG6WDWHVY0LOOV ,G  0RUHRYHU WKLV &RXUW FDQ RQO\ mRYHUORRNl DQH[ SDUWH )G WK&LU  m7KHPD[LPµGHPLQLPLV FRPPXQLFDWLRQLILWLVQRWSUHMXGLFLDOWRWKHGHIHQGDQW,G QRQFXUDWOH[jGRHVQRWDSSO\LQGHWHUPLQLQJZKHWKHUDQHIIHFW RQ FRPPHUFH LV VXIILFLHQW WR VDWLVI\ WKH MXULVGLFWLRQDO , FRQFOXGH WKDW WKH JRYHUQPHQW KDV IDLOHG WR SUHVHQW D SUHGLFDWH RI WKH +REEV $FW ,W KDV ORQJ EHHQ WKH FRPSHOOLQJ VWDWH LQWHUHVW WR MXVWLI\ WKH H[ SDUWH XQGHUVWDQGLQJLQWKLVFLUFXLWWKDWHYHQDµGHPLQLPLVjHIIHFWRQ FRPPXQLFDWLRQV$OWKRXJKWKHJRYHUQPHQWXQGRXEWHGO\KDV LQWHUVWDWHFRPPHUFHZLOOVXIILFHl VHHDOVR8QLWHG6WDWHVY $WFKHVRQ)G WK&LU  m7RHVWDEOLVK  8QLWHG6WDWHVY&DUPLFKDHO 1R 1R 8QLWHG6WDWHVY&DUPLFKDHO  DGHPLQLPLVHIIHFWRQLQWHUVWDWHFRPPHUFHWKH*RYHUQPHQW m7KHILUVWOLPLWDWLRQLVWKDWWKHHUURULQTXHVWLRQPXVWKDYH QHHG QRW VKRZ WKDW D GHIHQGDQWjV DFWV DFWXDOO\ DIIHFWHG RFFXUUHGLQWKHGLVWULFWFRXUWSURFHHGLQJVl,GDWDFFRUG LQWHUVWDWH FRPPHUFH  5DWKHU WKH MXULVGLFWLRQDO HOHPHQW LV 2ODQR86  ,Q7KRPDVWKLV&RXUWKHOG VDWLVILHGE\SURRIRIDSUREDEOHRUSRWHQWLDOLPSDFWl  FLWDWLRQ mWKDWDGHYLDWLRQIURPDOHJDOUXOHFRQVWLWXWHVDQHUURUZLWKLQ DQGLQWHUQDOTXRWDWLRQPDUNVRPLWWHG  WKHPHDQLQJRI5XOH E VRORQJDVWKHUXOHKDVQRWEHHQ ZDLYHGE\WKHGHIHQGDQWl)GDW7KH&RXUWQRWHG 7KLV FRXUW UHFHQWO\ FRQFOXGHG WKDW D ODZ HQIRUFHPHQW mWKDW WKH PHUH IDLOXUH RI D GHIHQGDQW WR PDNH D WLPHO\ RIILFHUjVH[WRUWLRQRISD\PHQWVRIHDFKLQH[FKDQJH DVVHUWLRQRIDULJKWGRHVQRWFRQVWLWXWHDZDLYHUEXWUDWKHU IRUDMREDVDVKHULIIjVGHSXW\KDGWKHUHTXLVLWHFRQQHFWLRQWR FRQVWLWXWHV D IRUIHLWXUH DQG WKDW LQ WKRVH FLUFXPVWDQFHV DQ LQWHUVWDWH FRPPHUFH EHFDXVH WKHUH ZDV D mUHDOLVWLF HUURUXQGHU5XOH E LVQRWH[WLQJXLVKHGl,G+HUHWKHH[ SUREDELOLW\lWKDWWKHSURVSHFWLYHVKHULIIVjGHSXWLHVZKRZHUH SDUWH FRPPXQLFDWLRQV ZHUH D GHYLDWLRQ IURP D ZHOO \RXQJDQGODFNHGVLJQLILFDQWILQDQFLDODVVHWVZRXOGWXUQWRDQ HVWDEOLVKHG OHJDO UXOH ZKLFK &DUPLFKDHO GLG QRW ZDLYH LQWHUVWDWHOHQGHUUHFRPPHQGHGE\WKHGHIHQGDQWLQRUGHUWR 7KHUHIRUH'HIHQGDQWKDVVDWLVILHGWKHILUVWUHTXLUHPHQW FRPHXSZLWKWKHPRQH\IRUWKHSD\PHQWV6HH0LOOV )GDW%XWFI8QLWHG6WDWHVY0LQ1DQ:DQJ)G m7KHVHFRQGOLPLWDWLRQRQDSSHOODWHDXWKRULW\XQGHU5XOH  WK&LU  FRQFOXGLQJWKDWDUHVLGHQWLDOUREEHU\GLG  E LVWKDWWKHHUURUEHµSODLQjl,GDW TXRWLQJ2ODQR QRWVDWLVI\WKHMXULVGLFWLRQDOHOHPHQWRIWKH+REEV$FW  86DW %HFDXVHH[SDUWHFRQIHUHQFHVDUHJHQHUDOO\ GLVDOORZHGXQGHUWKHODZRIWKLV&LUFXLWVHH0LQVN\)G %DVHGRQWKHHYLGHQFHSUHVHQWHGDW &DUPLFKDHOjVWULDOD DWWKHHUURULVmSODLQl UHDVRQDEOH MXU\ FRXOG KDYH FRQFOXGHG WKDW &DUPLFKDHO DWWHPSWHGWRH[WRUWPRQH\IURP$GDPVLQH[FKDQJHIRUQRW m7KH WKLUG OLPLWDWLRQ RQ DSSHOODWH DXWKRULW\ XQGHU 5XOH FUDFNLQJ GRZQ RQ $GDPVjV LOOHJDO SRNHU DQG ERRNPDNLQJ  E  µLV WKDW WKH SODLQ HUURU DIIHFW>V@ VXEVWDQWLDO ULJKWVjl RSHUDWLRQVDQGWKDWWKHUHZDVDUHDOLVWLFSUREDELOLW\WKDWVRPH 7KRPDV)GDW TXRWLQJ2ODQR86DW  RI WKH PRQH\ ZRXOG FRPH IURP WKH SURFHHGV RI LQWHUVWDWH *HQHUDOO\ mWKH SKUDVH µDIIHFW VXEVWDQWLDO ULJKWVj PHDQV JDPEOLQJ  :H WKXV FRQFOXGH WKDW WKH JRYHUQPHQW PHW LWV µSUHMXGLFLDOjLQWKHVHQVHWKDWWKHDVVHUWHGHUURUµPXVWKDYH EXUGHQ RI VKRZLQJ WKH UHTXLUHG FRQQHFWLRQ WR LQWHUVWDWH DIIHFWHG WKH RXWFRPH RI WKH GLVWULFW FRXUW SURFHHGLQJVjl FRPPHUFH 8QLWHG6WDWHVY +D\HV86 WK&LU TXRWLQJ2ODQR86DW  +RZHYHUWKH6XSUHPH % %UDG\PDWHULDOLQFDPHUDUHYLHZ &RXUWQRWHGDQGWKLV&LUFXLWUHFRJQL]HGWKDWm>W@KHUHPD\EH D VSHFLDO FDWHJRU\ RI IRUIHLWHG HUURUV WKDW FDQ EH FRUUHFWHG &DUPLFKDHO DUJXHV WKDW WKH GLVWULFW FRXUW DEXVHG LWV UHJDUGOHVV RI WKHLU DIIHFW RQ WKH RXWFRPHl DQG mHUURUV WKDW GLVFUHWLRQE\QRWUHYLHZLQJLQFDPHUDWUDQVFULSWVRI$GDPVjV VKRXOGEHSUHVXPHGSUHMXGLFLDOLIWKHGHIHQGDQWFDQQRWPDNH ZLUHWDSSHG WHOHSKRQH FRQYHUVDWLRQV  7KRVH FRQYHUVDWLRQV DVSHFLILFVKRZLQJRISUHMXGLFHl2ODQR86DWVHH ZHUHREWDLQHGDVSDUWRIDZLUHWDSSLQJRSHUDWLRQSXUVXDQWWR DOVR+D\HV)GDW7KH6XSUHPH&RXUWOLVWHGDV 7LWOH,,,RIWKH2PQLEXV&ULPH&RQWURODQG6DIH6WUHHWV$FW H[DPSOHVRIWKHVHW\SHVRIHUURUVLQVWDQFHVZKHUHmDFULPLQDO RI DWDWLPHZKHQWKH8QLWHG6WDWHV$WWRUQH\jV2IILFH WULDO FDQQRW UHOLDEO\ VHUYH LWV IXQFWLRQ DV D YHKLFOH IRU VXVSHFWHGWKDW$GDPVPLJKWEHHQJDJHGLQGUXJGHDOLQJ$W GHWHUPLQDWLRQ RI JXLOW RU LQQRFHQFHl  $UL]RQD Y WULDO DQG QRZ RQ DSSHDO WKH JRYHUQPHQW DVVHUWV WKDW WKH )XOPLQDQWH86  %\DOORZLQJH[SDUWH LQYHVWLJDWLRQIDLOHGWRXQFRYHUDQ\HYLGHQFHWKDWFRXOGKDYH FRQIHUHQFHV EHIRUH DQG GXULQJ WULDO WKH GLVWULFW FRXUW EHHQXVHGWRLPSHDFK$GDPVDQGWKDWUHYHDOLQJWKHH[LVWHQFH GHPRQVWUDWHGDZLOOLQJQHVVWRVKDUHLQWLPDWHGLVFRXUVHZLWK  8QLWHG6WDWHVY&DUPLFKDHO 1R 1R 8QLWHG6WDWHVY&DUPLFKDHO  'XULQJDGLVFXVVLRQLQRSHQFRXUWUHJDUGLQJ&DUPLFKDHOjV RI WKLV ZLUHWDS ZKLFK ZDV VWLOO RQJRLQJ DW WKH WLPH RI UHTXHVW IRU GLVFORVXUH RI sHQFNV DQG %UDG\ PDWHULDO WKH &DUPLFKDHOjVWULDO ZRXOGKDYHmEORZQlWKHLQYHVWLJDWLRQ GLVWULFWFRXUWMXGJHLQVWUXFWHGERWKGHIHQVHFRXQVHODQGWKH JRYHUQPHQW WR DSSURDFK WKH EHQFK  7KH JRYHUQPHQW WKHQ 7KH JRYHUQPHQW KDV ORQJ EHHQ XQGHU DQ REOLJDWLRQ WR VWDWHG WR WKH GLVWULFW MXGJH WKDW WKLV GLVFXVVLRQ VKRXOG EH GLVFORVHERWKH[FXOSDWRU\HYLGHQFHDQGHYLGHQFHWKDWPLJKW FRQGXFWHGmZLWKRXWWKHPlLHZLWKRXWGHIHQVHFRXQVHO,Q WHQGWRLPSHDFKWKHFUHGLELOLW\RIDNH\JRYHUQPHQWZLWQHVV UHVSRQVHWRGHIHQVHFRXQVHOj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jV DFFHSWDQFH RI WKH FRPSXOVRU\ GLVFORVXUH XQGHU %UDG\  6HH 8QLWHG 6WDWHV Y JRYHUQPHQWjVH[SDUWHUHSUHVHQWDWLRQVGHIHQVHFRXQVHOZDV +HUQDQGH])G WK&LU  KROGLQJWKDWLQ DVVXUHG E\ WKH GLVWULFW FRXUW WKDW KLV FRQFHUQV ZHUH WKH DEVHQFH RI mVRPH LQGLFDWLRQ RI PLVFRQGXFWl E\ WKH mVXIILFLHQWlIRUWKHUHFRUG JRYHUQPHQWWKHGLVWULFWFRXUWLVQRWUHTXLUHGWRFRQGXFWDQLQ FDPHUDUHYLHZWRYHULI\WKHJRYHUQPHQWjVDVVHUWLRQ  'HVSLWH GHIHQVH FRXQVHOjV FOHDU GLVVDWLVIDFWLRQ ZLWK WKH DFWLRQVRIWKHJRYHUQPHQWDQGWKHGLVWULFWFRXUWWKHPDMRULW\ $OWKRXJKZHGRQRWEHOLHYHWKDWLWZRXOGEHDVDWLVIDFWRU\ FRQFOXGHV WKDW m&DUPLFKDHOjV DWWRUQH\ GLG QRW REMHFWl VROXWLRQWRIRUFHGLVWULFWMXGJHVWRVFUXWLQL]HODUJHYROXPHVRI $FFRUGLQJO\ WKH PDMRULW\ DQDO\]HV &DUPLFKDHOjV FODLP VHDOHGPDWHULDOVZKHQHYHUGHIHQVHFRXQVHOUHTXHVWWKDWWKH\ SXUVXDQW WR )HGHUDO 5XOH RI &ULPLQDO 3URFHGXUH  E  GR VR ZH QHYHUWKHOHVV KDYH VHULRXV PLVJLYLQJV DERXW WKH +RZHYHUDWKRURXJKUHDGLQJRIWKHUHFRUGGHPRQVWUDWHVDQ EUHDGWKRIWKHUXOHDQQRXQFHGLQ+HUQDQGH]$IWHUDOOLWLV REMHFWLRQE\'HIHQGDQWUHQGHULQJWKLVDQDO\VLVXQQHFHVVDU\ GLIILFXOWWRFRQVFLHQWLRXVO\FRQFOXGHWKDWWKHJRYHUQPHQWKDV :KLOHPDLQWDLQLQJWKDWWKLVDQDO\VLVLVXQQHFHVVDU\,ILQG PHWLWVREOLJDWLRQVXQGHU%UDG\ZLWKRXWVHHLQJWKHPDWHULDOV &DUPLFKDHOjVFODLPPHHWVWKHKHLJKWHQHGVFUXWLQ\UHTXLUHGE\ WKDW WKH JRYHUQPHQW FRQFHGHGO\ GLG QRW GLVFORVH 5XOH E  1HYHUWKHOHVV+HUQDQGH]LVDSXEOLVKHGRSLQLRQDQGLVWKHODZ RIWKLVFLUFXLW6HH6DOPLY6HFUHWDU\RI+HDOWKDQG+XPDQ :KHUHDGHIHQGDQWIDLOVWRREMHFWGXULQJDIHGHUDOFULPLQDO 6HUYV)G WK&LU  QRWLQJWKDWDSDQHO SURVHFXWLRQ 5XOH  E  YHVWV DSSHOODWH FRXUWV ZLWK WKH RIWKLVFRXUWmFDQQRWRYHUUXOHWKHGHFLVLRQRIDQRWKHUSDQHOl GLVFUHWLRQWRUHYLHZWKHVHFODLPVIRUSODLQHUURU7KHPDMRULW\ DQGWKDWm>W@KHSULRUGHFLVLRQUHPDLQVFRQWUROOLQJDXWKRULW\ FRUUHFWO\VWDWHVWKDWWKLV&RXUWFDQKHDU&DUPLFKDHOjVFODLP XQOHVVDQLQFRQVLVWHQWGHFLVLRQRIWKH8QLWHG6WDWHV6XSUHPH UHJDUGOHVVRIZKHWKHULWZDVUDLVHGLQWKHGLVWULFWFRXUW,Q &RXUW UHTXLUHV PRGLILFDWLRQ RI WKH GHFLVLRQ RU WKLV &RXUW 8QLWHG6WDWHVY7KRPDV)G WK&LU  VLWWLQJ HQ EDQF RYHUUXOHV WKH SULRU GHFLVLRQl   &I 8QLWHG WKLV&RXUWRXWOLQHGWKHUHTXLUHPHQWVIRUDSSHOODWHUHYLHZIRU 6WDWHVY/HXQJ)G G&LU  m>,@QVRPH SODLQ HUURU  :KLOH m>S@ODLQ HUURUV RU GHIHFWV DIIHFWLQJ FLUFXPVWDQFHV WKH WULDO FRXUW VKRXOG QRW UHO\ RQ WKH VXEVWDQWLDO ULJKWV PD\ EH QRWLFHG DOWKRXJK WKH\ ZHUH QRW *RYHUQPHQWjV UHSUHVHQWDWLRQV DV WR WKH PDWHULDOLW\ RI EURXJKW WR WKH DWWHQWLRQ RI WKH FRXUWl )HG 5 &ULP 3UR SRWHQWLDOLPSHDFKPHQWHYLGHQFHEXWVKRXOGLQVWHDGXQGHUWDNH  E m>W@KH&RXUWRI$SSHDOVjSRZHUXQGHU5XOH E LV DQLQGHSHQGHQWLQFDPHUDUHYLHZRIUHOHYDQW*RYHUQPHQWILOHV OLPLWHGLQWKUHHVLJQLILFDQWUHVSHFWVl,G WRGHWHUPLQHPDWHULDOLW\l &RXQVHOIRUWKHJRYHUQPHQWKDV  8QLWHG6WDWHVY&DUPLFKDHO 1R 1R 8QLWHG6WDWHVY&DUPLFKDHO  UHSUHVHQWHGXQDPELJXRXVO\WKDWDOOPDWHULDOWKDWZDVWKHQLQ DQHIIRUWWRFLUFXPYHQWWKHWHDFKLQJVRI0LQVN\,VWURQJO\ LWVSRVVHVVLRQWKDWPLJKWKDYHEHHQXVHGWRLPSHDFK$GDPV REMHFW ZDVGLVFORVHG ,QLWLDOO\WKHPDMRULW\FRUUHFWO\GHPRQVWUDWHVWKLV&RXUWjV 'XULQJ &DUPLFKDHOjV WULDO FRXQVHO IRU WKH JRYHUQPHQW VWURQJSUHIHUHQFHWRGLVFRXUDJHH[SDUWHFRQIHUHQFHV7KH WZLFH DVNHG DQG UHFHLYHG SHUPLVVLRQ IURP WKH FRXUW WR PDMRULW\DFNQRZOHGJHVWKDWmLQDOOEXWWKHPRVWH[FHSWLRQDO DSSURDFK WKH EHQFK DORQH LQ RUGHU WR H[SODLQ WR WKH FLUFXPVWDQFHVH[SDUWHFRPPXQLFDWLRQVZLWKWKHFRXUWDUHDQ MXGJHnRXW RI WKH HDUVKRW RI &DUPLFKDHO DQG KLV H[WUDRUGLQDULO\EDGLGHDl)XUWKHUPRUHWKHPDMRULW\QRWHV DWWRUQH\nZKDWZDVRQWKHZLUHWDSUHFRUGLQJVDQGZK\QRQH WKDWWKLV&RXUWKDVKHOGWKDWH[SDUWHFRPPXQLFDWLRQVDUHmD RI LW LPSOLFDWHG $GDPV LQ GUXJ GHDOLQJ RU RWKHU LOOHJDO JURVV EUHDFK RI WKH DSSHDUDQFH RI MXVWLFHl  )LQDOO\ WKH DFWLYLWLHV'HVSLWHWKHKLJKO\XQXVXDOQDWXUHRIWKLVUHTXHVWE\ PDMRULW\ UHFRJQL]HV WKDW mWKH JRYHUQPHQWjV EXUGHQ RI FRXQVHOIRUWKHJRYHUQPHQW&DUPLFKDHOjVDWWRUQH\ GLG QRW GHPRQVWUDWLQJWKDWWKHGHIHQGDQWZDVQRWSUHMXGLFHGE\DQH[ REMHFW&DUPLFKDHOQRZDUJXHVWKDWKLV6L[WK$PHQGPHQW SDUWHFRPPXQLFDWLRQLVµDKHDY\RQHjl$IWHUDUWLFXODWLQJWKLV ULJKWVZHUHYLRODWHGE\WKHVHWZRH[SDUWHGLVFXVVLRQVDQG &RXUWjVSURIRXQGGLVWDVWHIRUH[SDUWHFRPPXQLFDWLRQVDQG WKDW WKLV DOOHJHG YLRODWLRQ DORQJ ZLWK WKH GLVWULFW FRXUWjV DFNQRZOHGJLQJ WKH &RXUWjV MXULVGLFWLRQ WR FRQVLGHU UHIXVDO WR UHYLHZ WKH VHDOHG WUDQVFULSWV WKDW &DUPLFKDHO &DUPLFKDHOjV 6L[WK $PHQGPHQW FODLP WKH PDMRULW\ WKHQ VXVSHFWHGPLJKWFRQWDLQ%UDG\PDWHULDOFRQVWLWXWHVUHYHUVLEOH HQJDJHV LQ FXUVRU\ DQDO\VLV EHIRUH VXPPDULO\ UHMHFWLQJ HUURU &DUPLFKDHOj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mDJURVVEUHDFKRIWKHDSSHDUDQFHRI D FRPSHOOLQJ VWDWH LQWHUHVW DQG ODFN RI SUHMXGLFH WR WKH MXVWLFHlEXWDOVRDmGDQJHURXVSURFHGXUHl8QLWHG6WDWHVY GHIHQGDQW  6HH 0LQVN\  )G DW   $IWHU D FDUHIXO 0LQVN\)G WK&LU  FLWDWLRQRPLWWHG  UHYLHZ RI WKH UHFRUG , ILQG WKDW &DUPLFKDHO VXIILFLHQWO\ VHHDOVR8QLWHG6WDWHVY(DUOH\)G WK&LU SUHVHUYHGWKLVLVVXHIRUUHYLHZE\WKLV&RXUW   VXJJHVWLQJWKDWH[SDUWHFRPPXQLFDWLRQVVKRXOGEH VWURQJO\ GLVFRXUDJHG m>U@HJDUGOHVV RI WKH SURSULHW\ RI WKH FRXUWjV PRWLYHVl EHFDXVH DOORZLQJ H[ SDUWH DSSURDFKHV XQGHUPLQHVFRQILGHQFHLQWKHFRXUWjVLPSDUWLDOLW\ ([SDUWH DSSURDFKHVmFDQRQO\EHMXVWLILHGDQGDOORZHGE\FRPSHOOLQJ  0LQVN\ 7KH PDMRULW\ PLVFKDUDFWHUL]HV DQG GLOXWHV WKH UHTXLUHPHQWV RI VWDWHLQWHUHVWVl0LQVN\)GDW6XIILFHLWWRVD\ H[ SDUWH  FRQFOXGLQJ WKDW WKH JRYHUQPHQW QHHG RQO\ mDUWLFXODWHl D WKDWWKHJRYHUQPHQWEHDUVWKHEXUGHQRIGHPRQVWUDWLQJWKDW mUHDVRQDEOH MXVWLILFDWLRQl IRU WKH FRQIHUHQFH 7KH PDMRULW\ WKH GHIHQGDQW ZDV QRW SUHMXGLFHG E\ DQ H[ SDUWH PDQXIDFWXUHV LWV RZQ mUHDVRQDEOH MXVWLILFDWLRQl VWDQGDUG DQG VXEVWLWXWHV FRPPXQLFDWLRQDQGLWVEXUGHQLVmDKHDY\RQHl,G FLWDWLRQ 0LQVN\ WKLV VWDQGDUG IRU WKH mFRPSHOOLQJ VWDWH LQWHUHVWl VWDQGDUG LPSRVHG E\ RPLWWHG  VWDQGDUG  7KHVH VWDQGDUGV DUH OHJDOO\ GLVWLQFW 7KH PDMRULW\jV LQYHQWHG LPSURSHUO\ ORZHUV WKH JRYHUQPHQWjV mKHDY\l EXUGHQ WR GHPRQVWUDWH D FRPSHOOLQJ VWDWH LQWHUHVW 0RUHRYHU WKLV VWDQGDUG LV ZKROO\ XQVXSSRUWHG E\ WKH ODZ RI WKLV &LUFXLW , UHVSHFWIXOO\ UHMHFW WKH PDMRULW\jV SURSRVHG VWDQGDUG  8QLWHG6WDWHVY&DUPLFKDHO 1R 1R 8QLWHG6WDWHVY&DUPLFKDHO  SULRU VWDWHPHQWV PDGH E\ WKH ZLWQHVVHV 6HH LG DW  ,QUHVSRQVHWR&DUPLFKDHOjVDUJXPHQWWKHJRYHUQPHQWILUVW 6SHFLILFDOO\ 0LQVN\ UHTXHVWHG )HGHUDO %XUHDX RI DVVHUWV WKDW WKLV FRXUW ODFNV MXULVGLFWLRQ WR FRQVLGHU ,QYHVWLJDWLRQIRUPVFRQWDLQLQJWKHZLWQHVVHVjVWDWHPHQWVEXW &DUPLFKDHOjV 6L[WK $PHQGPHQW FODLP EHFDXVH KH GLG QRW WKHSURVHFXWLRQREMHFWHG6HHLG,QUHVROYLQJWKHVLWXDWLRQ UDLVHLWLQWKHGLVWULFWFRXUW7KLVDVVHUWLRQLVLQFRUUHFWDQGDV WKH GLVWULFW FRXUW KHOG DQ LQ FDPHUD UHYLHZ RI WKH IRUPV WKH JRYHUQPHQW SURSHUO\ DFNQRZOHGJHG LQ LWV SRVWKHDULQJ IROORZHGE\DSULYDWHFRQYHUVDWLRQZLWKWKHSURVHFXWLRQ6HH QRWLFHRIVXSSOHPHQWDODXWKRULW\KDVEHHQVTXDUHO\UHMHFWHG LG2QDSSHDO0LQVN\FKDOOHQJHGKLVFRQYLFWLRQDUJXLQJWKDW E\WKLVFRXUW6HH8QLWHG6WDWHVY+D\HV)G WKHH[SDUWHFRQIHUHQFHSHUYHUWHGKLVWULDO6HHLGDW  WK &LU   H[SODLQLQJ WKDW DOWKRXJK WKH FRXUWV RI DSSHDOVRUGLQDULO\GRQRWHQWHUWDLQDUJXPHQWVWKDWZHUHQRW 8OWLPDWHO\ sXGJH 7LPEHUV VSHDNLQJ RQ EHKDOI RI WKLV DGYDQFHG LQ WKH GLVWULFW FRXUW WKH UXOH LV RQH RI SUXGHQFH &RXUWKHOGWKDWWKHGLVWULFWFRXUWjVH[SDUWHFRQIHUHQFHZLWK UDWKHUWKDQRQHRIMXULVGLFWLRQ  WKHSURVHFXWLRQZDVLQGHHGJURXQGVIRUUHYHUVDO6HHLGDW 7KH&RXUWGLGQRWVRIWSHGDOWKHLVVXH,QVWHDGLW 2QWKHRWKHUKDQGWKHJRYHUQPHQWLVFRUUHFWLQSRLQWLQJRXW UDLOHG DJDLQVW WKH H[FOXVLRQ RI D FULPLQDO GHIHQGDQW IURP WKHXQIDLUQHVVRIDOORZLQJ&DUPLFKDHOWRUDLVHIRUWKHILUVW SURFHHGLQJVFUXFLDOWRKLVWULDO7KH&RXUWUHVROXWHO\GHFODUHG WLPHRQDSSHDOFRQGXFWWKDWKHDFTXLHVFHGLQEHORZ  6HH WKDW m>W@KH FRQVWLWXWLRQ UHTXLUHV WKDW D GHIHQGDQW EH 8QLWHG 6WDWHV Y 7RUUHV  )G  G &LU  UHSUHVHQWHGDWHYHU\FULWLFDOVWDJHRIKLVWULDOl,GDW7KH XQSXEOLVKHGWDEOHGHFLVLRQ  ILQGLQJWKDWWKHGHIHQGDQWKDG &RXUW FRQWLQXHG mQRW RQO\ LV LW D JURVV EUHDFK RI WKH ZDLYHGKLVULJKWWREHSUHVHQWDWDVLGHEDUZKHQKLVDWWRUQH\ DSSHDUDQFH RI MXVWLFH ZKHQ WKH GHIHQGDQWjV SULQFLSDO IDLOHG WR FRQWHPSRUDQHRXVO\ REMHFW   6XFK DFTXLHVFHQFH DGYHUVDU\LVJLYHQSULYDWHDFFHVVWRWKHHDURIWKHFRXUWLWLV OXOOHGWKHGLVWULFWFRXUWLQWREHOLHYLQJWKDW&DUPLFKDHOKDGQR DGDQJHURXVSURFHGXUHl,G TXRWLQJ+DOOHUY5REELQV REMHFWLRQWRWKHJRYHUQPHQWjVXQXVXDOUHTXHVW7RQRZDOORZ )G VW&LU  WKHH[SDUWHFRPPXQLFDWLRQVWREHREMHFWHGWRDIWHUWKHIDFW LV D IRUP RI mVDQGEDJJLQJl WKDW ZH ZLOO QRW SHUPLW LQ WKH ,QGHHGLWLVDGDQJHURXVSURFHGXUH([SDUWHFRQIHUHQFHV DEVHQFH RI SURRI WKDW WKH FRQWHQW RI ZKDW ZDV LQ IDFW WHDUDWWKHYHU\KHDUWRIDGHIHQGDQWjVIDLUWULDODQGVHYHUHO\ FRPPXQLFDWHG DGYHUVHO\ DIIHFWHG &DUPLFKDHOjV VXEVWDQWLDO XQGHUPLQHFRQILGHQFHLQRXUMXGLFLDOSURFHVV$VVXFKWKLV ULJKWV6HH8QLWHG6WDWHVY7KURFNPRUWRQ)G WK &RXUW RQO\ DOORZV IRU H[ SDUWH FRQIHUHQFHV XQGHU WKH &LU ZKHUHWKHGLVWULFWFRXUWZDVIRXQGWRKDYHHUUHGLQ QDUURZHVWRIFLUFXPVWDQFHV,Q0LQVN\WKLV&RXUWQRWHGWKDW LWVH[SDUWHFRPPXQLFDWLRQZLWKWKHMXU\EXWWKHHUURUGLGQRW m>H@[SDUWHSURFHHGLQJVµFDQRQO\EHMXVWLILHGDQGDOORZHGE\ UHTXLUHUHYHUVDOEHFDXVHWKHGHIHQGDQWjVmVXEVWDQWLDOULJKWVl FRPSHOOLQJVWDWHLQWHUHVWVjl,GDW TXRWLQJ,QUH7D\ORU ZHUHQRWDIIHFWHG,GDW7KH1LQWK&LUFXLWQRWHGWKDW )G G&LU 7KH&RXUWVWDWHGWKDW WKHGLVWULFWFRXUWMXGJHmGLVFORVHGLQRSHQFRXUWDQGRQWKH m>D@OWKRXJK WKHUH DUH FLUFXPVWDQFHV ZKHUH DQ H[ SDUWH UHFRUGWKDWKHKDGFRPPXQLFDWHGH[SDUWHZLWKWKHMXU\,I FRPPXQLFDWLRQPLJKWEHµRYHUORRNHGjµWKHEXUGHQRISURYLQJ FRXQVHOKDGEHHQFRQFHUQHGDERXWWKLVWKH\FRXOGKDYHYRLFHG ODFNRISUHMXGLFHLVRQWKH>JRYHUQPHQW@ DQGLWLVDKHDY\ WKHLUFRQFHUQWRWKHGLVWULFWFRXUWDQGDQDSSURSULDWHUHFRUG RQHjl ,G TXRWLQJ +DOOHU  )G DW    7R P\ FRXOGKDYHEHHQPDGHl,G EHZLOGHUPHQWWKHPDMRULW\GLVWRUWV6L[WK&LUFXLWSUHFHGHQWLQ 7KHFRQWHQWVRIWKHFROORTX\EHWZHHQWKHGLVWULFWFRXUWDQG WKH JRYHUQPHQW KDYH QRZ EHHQ PDGH DYDLODEOH WR ERWK &DUPLFKDHOjVDSSHOODWHFRXQVHODQGWRWKLVFRXUW:HILQG QRWKLQJLQWKHFRQWHQWRIZKDWZDVDFWXDOO\FRPPXQLFDWHG  8QLWHG6WDWHVY&DUPLFKDHO 1R 1R 8QLWHG6WDWHVY&DUPLFKDHO  WKDWDGYHUVHO\DIIHFWHG&DUPLFKDHOjVVXEVWDQWLDOULJKWVDQG BBBBBBBBBBBBBBB WKHUHIRUHFRQFOXGHWKDWKHKDVZDLYHGKLVULJKWWRUDLVHWKLV LVVXHRQDSSHDO7KLVEULQJVXVEDFNIXOOFLUFOHWRWKHUXOHRI ',66(17 +HUQDQGH]E\ZKLFKZHDUHERXQG:HWKHUHIRUHILQGQR BBBBBBBBBBBBBBB PHULWLQ&DUPLFKDHOjVDUJXPHQWVUHODWLQJWRWKHIDLOXUHRIWKH GLVWULFWFRXUWWRUHYLHZWKHWUDQVFULSWVRI$GDPVjVZLUHWDSSHG '$021 s .(,7+ &LUFXLW sXGJH GLVVHQWLQJ  7KH WHOHSKRQHFRQYHUVDWLRQV PDMRULW\RSLQLRQLVDGLVWUHVVLQJDQGWRWDOGLVUHJDUGIRUWKH PHDQLQJ RI WKH 6L[WK $PHQGPHQW WR WKH 8QLWHG 6WDWHV 7KH GLVVHQW FODLPV WKDW ZH KDYH GLVWRUWHG 6L[WK &LUFXLW &RQVWLWXWLRQDQGWKHODZRIWKLV&LUFXLW7KHULJKWWRHIIHFWLYH SUHFHGHQWLQDQHIIRUWWRFLUFXPYHQWWKHWHDFKLQJVRI8QLWHG DVVLVWDQFH RI FRXQVHO DV DVVXUHG E\ WKH &RQVWLWXWLRQ 6WDWHVY0LQVN\)G WK&LU 'LV2SDW mUHTXLUHV WKDW D GHIHQGDQW EH UHSUHVHQWHG DW HYHU\ FULWLFDO   0LQVN\ KRZHYHU GRHV QRW IODWO\ EDQ H[ SDUWH VWDJHRIKLVWULDOl8QLWHG6WDWHVY0LQVN\)G FRPPXQLFDWLRQV  7KH 0LQVN\ FRXUW QRWHG WKDW LI WKH WK&LU  FLWLQJ8QLWHG6WDWHVY&URQLF86 JRYHUQPHQWLVDEOHWRPHHWLWVKHDY\EXUGHQRISURYLQJDODFN Q  7KLVFRQVWLWXWLRQDOJXDUDQWHHVWDQGVDVD RISUHMXGLFHWRWKHGHIHQGDQWmWKHUHDUHFLUFXPVWDQFHVZKHUH QHDUDEVROXWHSURKLELWLRQWRH[SDUWHFRQIHUHQFHVEHWZHHQWKH DQH[SDUWHFRPPXQLFDWLRQPLJKWEHµRYHUORRNHGjl)G JRYHUQPHQW DQG WKH GLVWULFW FRXUW  ,Q NHHSLQJ ZLWK WKLV DW6XFKLVWKHFDVHKHUH7KHJRYHUQPHQWLQ0LQVN\ZDV IXQGDPHQWDO JXDUDQWHH , PXVW H[SUHVV P\ GHHS XQDEOH WR DUWLFXODWH DQ\ MXVWLILFDWLRQ IRU GHQ\LQJ GHIHQVH GLVDSSRLQWPHQW DQG RXWUDJH ZLWK WKH PDMRULW\jV GHFLVLRQ FRXQVHOWKHRSSRUWXQLW\WRSDUWLFLSDWHLQWKHFRQIHUHQFHDQG &RQGRQLQJH[SDUWHGLVFXVVLRQVEHWZHHQWKHWULDOFRXUWDQG WKHLQIRUPDWLRQGLVFXVVHGLQWKHH[SDUWHFRPPXQLFDWLRQZDV JRYHUQPHQWFDQQRWEHWROHUDWHGDQG,ZLOOQRWEHDSDUW\WR IRXQGWRFRQVWLWXWHD%UDG\YLRODWLRQ,GDW+HUHLQ WKLV PLVFDUULDJH RI MXVWLFH  $FFRUGLQJO\ ,  UHVSHFWIXOO\ FRQWUDVWWKHJRYHUQPHQWSURYLGHGDUHDVRQDEOHMXVWLILFDWLRQ GLVVHQW IRULWVUHTXHVWGHIHQVHFRXQVHOGLGQRWREMHFWDQGZHILQG QRWKLQJ LQ WKH H[ SDUWH FRPPXQLFDWLRQV WKDW DGYHUVHO\ m7KHYDOXHRIDMXGLFLDOSURFHHGLQJLVVXEVWDQWLDOO\GLOXWHG DIIHFWHG&DUPLFKDHOjVVXEVWDQWLDOULJKWV ZKHUHWKHSURFHVVLVH[SDUWHEHFDXVHWKHFRXUWGRHVQRWKDYH DYDLODEOHWKHIXQGDPHQWDOLQVWUXPHQWIRUMXGLFLDOMXGJPHQW 7KH GLVVHQW DOVR DVVHUWV WKDW D mWKRURXJK UHDGLQJ RI WKH DQ DGYHUVDU\ SURFHHGLQJ LQ ZKLFK ERWK SDUWLHV PD\ UHFRUGGHPRQVWUDWHVDQREMHFWLRQE\'HIHQGDQWl'LV2SDW SDUWLFLSDWHl &DUUROO Y 3UHVLGHQW  &RPPjUV RI 3ULQFHVV $WKRURXJKUHDGLQJRIWKHUHFRUGKRZHYHUHVWDEOLVKHV $QQH86  7KLVVWDWHPHQWDUWLFXODWHG MXVWWKHRSSRVLWH:KLOHFRXQVHOIRUERWKWKHJRYHUQPHQWDQG E\WKH6XSUHPH&RXUWLQLVQROHVVWUXHWRGD\,QGHHG WKHGHIHQVHZHUHDWWKHEHQFKWKHJRYHUQPHQWDWWRUQH\DVNHG WKLV &RXUW DGRSWHG WKH 6XSUHPH &RXUWjV YHU\ ZRUGV LQ WRGLVFXVVWKHPDWWHUSULYDWHO\ZLWKWKHMXGJH,QUHVSRQVH HVSRXVLQJRXUGLVWDVWHIRUH[SDUWHSURFHHGLQJV6HH0LQVN\ &DUPLFKDHOjVODZ\HUUHSOLHGm:HOOsXGJHWKDWjV\RXUFDOOl )GDW FLWLQJ&DUUROO86DW  7KHQ ZKHQ WKH MXGJH VWDWHG WKDW KH ZRXOG VHH ZKDW WKH SURVHFXWLRQZDVUHIHUULQJWRGHIHQVHFRXQVHODQVZHUHGmLRQ@lRIWKHRDWKmWRVHUYHDVSURWHFWRUV RIWKH8QLWHG6WDWHV&RQVWLWXWLRQl'LV2S DWDQGWKH ,Q WKH SUHVHQW FDVH WKH LQGLFWPHQW FRQWDLQHG RQO\ WZR GLVVHQWjVXQZLOOLQJQHVVWRmEHDSDUW\WRWKLVPLVFDUULDJHRI FRXQWVDQGWKHUHLVQRTXHVWLRQWKDWWKHMXU\DOUHDG\NQHZ MXVWLFHl'LV2SDW:HILQGVXFKUKHWRULFWRVKHGPRUH ZKLFK FRXQW SHUWDLQHG WR ZKLFK FRQGXFW  5HJDUGLQJ WKH KHDW WKDQ OLJKW RQ WKH LVVXH EHIRUH XV DQG ZH UHVSHFWIXOO\ SURSRVHG DGGLWLRQDO LQVWUXFWLRQ WKDW WKH MXU\ QRW VSHFXODWH VXJJHVWWKDWQRQHRIWKHVHDFFXVDWLRQVLVMXVWLILHG,QWKHHQG DERXW mWKH HYLGHQFH SHUWDLQLQJ WR &RXQW 2QHl ZH ILQG LW WKHRQO\WKLQJmGHVHFUDWHGlE\VXFKODQJXDJHLVFROOHJLDOLW\ GLIILFXOW WR XQGHUVWDQG KRZ &DUPLFKDHOjV SURSRVDO ZRXOG KDYHFODULILHGZKDWKHFODLPVZDVDQXQFOHDULQVWUXFWLRQ:H & 6XIILFLHQF\RIWKHHYLGHQFH WKHUHIRUHFRQFOXGHWKDW&DUPLFKDHOKDVIDLOHGWRSUHVHUYHKLV REMHFWLRQVWRWKHMXU\LQVWUXFWLRQVDQGZHILQGQRSODLQHUURU ,QRUGHUWRFRQYLFW&DUPLFKDHORIYLRODWLQJWKH+REEV$FW RIWKH W\SH WKDWZRXOGDXWKRUL]HXVWRRYHUWXUQWKHGLVWULFW WKH JRYHUQPHQW KDG WR SURYH WKDW &DUPLFKDHO ZURQJIXOO\ FRXUWjV UXOLQJ LQ WKH DEVHQFH RI D SURSHU REMHFWLRQ  6HH REWDLQHGRUDWWHPSWHGWRREWDLQSURSHUW\IURP$GDPVDQG 8QLWHG6WDWHVY2ODQR86   H[SODLQLQJWKH WKDWKHGLGVR HLWKHU XQGHUmFRORURIRIILFLDOULJKWlRUmE\ SURSHU IXQFWLRQ RI WKH mSODLQ HUURUl UXOH XQGHU WKH )HGHUDO ZURQJIXOXVHRIDFWXDORUWKUHDWHQHGIRUFHYLROHQFHRUIHDUl 5XOHVRI&ULPLQDO3URFHGXUH  6HH  86& †  E    &DUPLFKDHO DUJXHV WKDW WKH JRYHUQPHQWIDLOHGWRSURYHHLWKHURIWKHVHHOHPHQWVEH\RQGD ,,,&21&/86,21 UHDVRQDEOH GRXEW  ,Q UHYLHZLQJ FKDOOHQJHV UHJDUGLQJ WKH VXIILFLHQF\ RI WKH HYLGHQFH SUHVHQWHG WR WKH MXU\ ZH DUH )RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 OLPLWHGWRDVFHUWDLQLQJZKHWKHUYLHZLQJWKHHYLGHQFHLQWKH &DUPLFKDHOjVFRQYLFWLRQ OLJKWPRVWIDYRUDEOHWRWKHJRYHUQPHQWVHH8QLWHG6WDWHVY 7DOOH\)G WK&LU FHUWGHQLHG86   mDQ\UDWLRQDOWULHURIIDFWFRXOGKDYHIRXQGWKH HVVHQWLDOHOHPHQWVRIWKHFULPHEH\RQGDUHDVRQDEOHGRXEWl  8QLWHG6WDWHVY&DUPLFKDHO 1R 1R 8QLWHG6WDWHVY&DUPLFKDHO  sDFNVRQY9LUJLQLD86   HPSKDVLVLQ DEVHQWIURPWKH+REEV$FWWKHRUGLQDU\FULPLQDOODZUXOHWKDW RULJLQDO  mLJQRUDQFHRIWKHODZLVQRH[FXVHlDSSOLHV DIIjG)G  G&LU VHHDOVR(YDQVY8QLWHG6WDWHV86 &DUPLFKDHODUJXHVWKDWWKHUHZDVLQVXIILFLHQWHYLGHQFHIRU    m:HKROGWRGD\WKDWWKH*RYHUQPHQWQHHG DMXU\WRFRQFOXGHWKDWKHDWWHPSWHGWRREWDLQSURSHUW\IURP RQO\VKRZWKDWDSXEOLFRIILFLDOKDVREWDLQHGDSD\PHQWWR $GDPV XQGHU FRORU RI RIILFLDO ULJKW EHFDXVH WKHUH LV QR ZKLFK KH ZDV QRW HQWLWOHG NQRZLQJ WKDW WKH SD\PHQW ZDV HYLGHQFHWKDW&DUPLFKDHOHYHUH[SOLFLWO\WROG$GDPVZRUGVWR PDGH LQ UHWXUQ IRU RIILFLDO DFWVl   7R WKH H[WHQW WKDW WKHHIIHFWWKDWmLI\RXGRQRWJLYHPHPRQH\,ZLOOVHHWRLW &DUPLFKDHOLVDUJXLQJWKDWWKHGLVWULFWFRXUWZDVUHTXLUHGWR WKDW\RXDUHSURVHFXWHGl7KHVKRUWDQVZHULVWKDWXQGHUWKH LQVWUXFWWKHMXU\WKDWLQRUGHUWRFRQYLFW&DUPLFKDHOLWKDGWR +REEV$FWm>W@KHRIILFLDODQGWKHSD\RUQHHGQRWVWDWHWKH FRQFOXGHWKDW&DUPLFKDHOLQWHQGHGWRYLRODWHWKH+REEV$FW TXLG SUR TXR LQ H[SUHVV WHUPV     >2@WKHUZLVH WKH ODZjV ZHUHMHFWWKHDUJXPHQWDVXQVXSSRUWHGE\WKHODZ HIIHFWFRXOGEHIUXVWUDWHGE\NQRZLQJZLQNVDQGQRGVl6HH (YDQVY8QLWHG6WDWHV86   .HQQHG\ &DUPLFKDHODOVRDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGE\RQO\ sFRQFXUULQJ $MXU\FRXOGUHDVRQDEO\KDYHIRXQGWKDWWKH UHTXLULQJWKDWWKHMXU\ILQGWKDW&DUPLFKDHOjVEHKDYLRUPDGH mXQGHUVWDQGLQJl&DUPLFKDHOKDGZLWK$GDPVZDVWKDW$GDPV $GDPVIHDUIXODQGQRWWKDW&DUPLFKDHOLQWHQGHGKLVEHKDYLRU ZRXOG PDNH VXEVWDQWLDO FDVK SD\PHQWV WR &DUPLFKDHO LQ WRLQVSLUHWKLVIHDU7KLVDUJXPHQWLVQRWVXSSRUWHGE\WKH H[FKDQJHIRU&DUPLFKDHOFRQWLQXLQJWROHW$GDPVFRQGXFWKLV UHFRUG7KHGLVWULFWFRXUWLQVWUXFWHGWKHMXU\WKDWmLWLVHQRXJK LOOHJDO JDPEOLQJ RSHUDWLRQV ZLWKRXW WKH ULVN RI EHLQJ LIWKHSXEOLFRIILFLDONQHZWKDWWKHSHUVRQJLYLQJKLPWKHWKLQJ SURVHFXWHGE\&DUPLFKDHO RI YDOXH KDGWKHH[SHFWDWLRQWKDWWKHSXEOLFRIILFLDOZRXOG H[WHQGVRPHEHQHILWRUUHIUDLQIURPVRPHKDUPIXODFWLRQLQ &DUPLFKDHODOVRDVVHUWVWKDWmQRQHRIWKH>SROLFH@RIILFHUV UHWXUQIRUWKHWKLQJRIYDOXHl:HILQGWKHLQVWUXFWLRQWREHD LQYROYHGWHVWLILHGWKDWWKH'HIHQGDQWSURKLELWHGGLVFRXUDJHG FRUUHFWVWDWHPHQWRIZKDW&DUPLFKDHOPXVWKDYHNQRZQLQ RURWKHUZLVHVWDONHG>VLF@DQ\DWWHPSWE\DQ\DJHQF\WRSXUVXH RUGHUWREHJXLOW\RIH[WRUWLRQXQGHUWKH+REEV$FW FULPLQDOFKDUJHVDJDLQVW$GDPVIRUKLVLOOHJDOJDPEOLQJRU DQ\WKLQJ HOVHl  )URP WKHUH &DUPLFKDHO UHDVRQV WKDW ,Q DGGLWLRQ &DUPLFKDHO DVVHUWV WKDW WKH GLVWULFW FRXUWjV m>F@OHDUO\LIWKHUHKDGEHHQDGHDORIDQ\NLQGWKHLQYROYHG LQVWUXFWLRQWRWKHMXU\UHJDUGLQJWKHGLVPLVVHGFRXQWRIWKH RIILFHUV ZRXOGKDYHQRWHGVXFKGHDOVLQWKHLULQYHVWLJDWLYH LQGLFWPHQWZDVGHIHFWLYH7KHGLVWULFWFRXUWLQVWUXFWHGWKH UHSRUWVl  7KLV DUJXPHQW LV PHULWOHVV IRU VHYHUDO UHDVRQV MXU\ WKDW &DUPLFKDHO ZDV mRQO\ RQ WULDO IRU WKH SDUWLFXODU :LWKRXW EHLQJ H[KDXVWLYH RQH RI WKRVH UHDVRQV LV WKDW FULPHFKDUJHGLQWKHLQGLFWPHQWlDQGWKDWWKHMXU\jVMREZDV &DUPLFKDHODQGQRWDQ\RIWKHSROLFHRIILFHUVZDVWKHSXEOLF mOLPLWHGWRGHFLGLQJZKHWKHUWKHJRYHUQPHQWKDVSURYHGWKH RIILFLDO ZKR ZRXOG XOWLPDWHO\ KDYH EHHQ UHVSRQVLEOH IRU FULPH FKDUJHGl  ,Q DGGLWLRQ WKH GLVWULFW FRXUW JDYH WKH SURVHFXWLQJ RUQRWSURVHFXWLQJ $GDPV$QRWKHUUHDVRQLV LQVWUXFWLRQWKDWmIRUUHDVRQVWKDW\RXVKRXOGQRWFRQVLGHU>RU@ WKDWXQGHUWKH+REEV$FWDSXEOLFRIILFLDOZKRKDVGHPDQGHG VSHFXODWHDERXW&RXQW2QHRIWKHLQGLFWPHQWLVQRORQJHUIRU IXQGV LQ H[FKDQJH IRU RIILFLDO DFWLRQ RU LQDFWLRQ QHHG QRW \RXUFRQVLGHUDWLRQl&DUPLFKDHOUHTXHVWHGWKDWWKHGLVWULFW PDNHJRRGRQKLVHQGRIWKHTXLGSURTXRLQRUGHUIRUKLV FRXUW DOVR LQVWUXFW WKH MXU\ WKDW WKH GLVPLVVHG FRXQW RI WKH GHPDQG WR EH FRQVLGHUHG H[WRUWLRQ  6HH (YDQV Y 8QLWHG LQGLFWPHQWmLQYROYHGWKHWHVWLPRQ\UHJDUGLQJWKH&KULVWPDV 6WDWHV86   m>7@KHRIIHQVHLVFRPSOHWHG GHFRUDWLRQVlDQGWKDWWKHMXU\mVKRXOGQRWVSHFXODWHUHJDUGLQJ DW WKH WLPH ZKHQ WKH SXEOLF RIILFLDO UHFHLYHV D SD\PHQW LQ WKH HYLGHQFH SHUWDLQLQJ WR &RXQW 2QHl  7KH GLVWULFW FRXUW UHWXUQ IRU KLV DJUHHPHQW WR SHUIRUP VSHFLILF RIILFLDO DFWV UHMHFWHGERWKUHTXHVWV7KHUHZDVQRDWWHPSWE\FRXQVHOWR H[SODLQ ZKDW LQ KLV RSLQLRQ ZDV ZURQJ ZLWK WKH FRXUWjV  8QLWHG6WDWHVY&DUPLFKDHO 1R 1R 8QLWHG6WDWHVY&DUPLFKDHO  ([SUHVV ,QF  )G   WK &LU  IXOILOOPHQW RI WKH TXLG SUR TXR LV QRW DQ HOHPHQW RI WKH FRQFOXGLQJ WKDW WKH 6XSUHPH &RXUWjV GHFLVLRQ LQ *HQHUDO RIIHQVHl  (OHFWULF&RYsRLQHU86  VLOHQWO\RYHUUXOHG WKLV FRXUWjV mKHUHWRIRUH ZHOOVHWWOHG SUHFHGHQW WKDW KHDUVD\ &DUPLFKDHODOVRSRLQWVRXWWKDWm>W@KHWDSHGFRQYHUVDWLRQV HYLGHQWLDU\UXOLQJVDUHUHYLHZHGGHQRYRlDQGUHTXLUHVDEXVH DUH GHYRLG RI UHIHUHQFHV E\ WKH 'HIHQGDQW WR KLV HOHFWHG RIGLVFUHWLRQUHYLHZ :HFRQFOXGHKRZHYHUWKDWWKHGLVWULFW SRVLWLRQKLVODZHQIRUFHPHQWVWDWXVKLVSRZHUWRSURVHFXWH FRXUWjV UXOLQJ RQ WKLV LVVXH VKRXOG QRW EH GLVWXUEHG XQGHU RUDQ\RWKHUDXWKRULW\l+HDSSHDUVWREHVXJJHVWLQJWKDWLQ HLWKHUVWDQGDUG RUGHU IRU D SXEOLF RIILFLDO WR H[WRUW PRQH\ IURP VRPHRQH XQGHU FRORU RI RIILFLDO ULJKW WKH RIILFLDO PXVW H[SOLFLWO\ (sXU\LQVWUXFWLRQV UHPLQGWKHYLFWLPWKDWKHLVDSXEOLFRIILFLDODQGWKDWKHKDV WKHSRZHUWRPDNHEDGWKLQJVKDSSHQWRWKHYLFWLPLIKHGRHV &DUPLFKDHODUJXHVWKDWWKHGLVWULFWFRXUWjVLQVWUXFWLRQVWR QRWDFFHGHWRWKHRIILFLDOjVH[SOLFLWRULPSOLFLWGHPDQG IRU WKHMXU\ZHUHIDXOW\LQWZRUHVSHFWV)LUVWKHDVVHUWVWKDWWKH SD\PHQW&DUPLFKDHOFLWHVQRDXWKRULW\WRVXSSRUWVXFKDQ GLVWULFW FRXUWjV LQVWUXFWLRQV UHJDUGLQJ VSHFLILF LQWHQW ZHUH DUJXPHQW DQG ZH UHMHFW LW  ,Q DQ\ HYHQW WKHUH FDQ EH QR GHIHFWLYH6HFRQGKHFRQWHQGVWKDWWKHGLVWULFWFRXUWDIWHU TXHVWLRQLQWKHFDVHEHIRUHXVWKDW$GDPVZDVZHOODZDUHRI GLUHFWLQJDMXGJPHQWRIDFTXLWWDORQ&RXQW,RIWKHLQGLFWPHQW &DUPLFKDHOjV SRVLWLRQ DQG KLV SRZHU WR SURVHFXWH $GDPV IDLOHG WR DSSURSULDWHO\ LQVWUXFW WKH MXU\ QRW WR FRQVLGHU ,QGHHGWKLVZDVWKHYHU\UHDVRQWKDW$GDPVKDGKLVDWWRUQH\ HYLGHQFH WKDW UHODWHG WR WKH GLVPLVVHG FRXQW GXULQJ LWV FRQWDFW&DUPLFKDHOVKRUWO\DIWHU$GDPVZDVFKDUJHGZLWKD GHOLEHUDWLRQVRQ&RXQW,, QHZRIIHQVHLQODWH &DUPLFKDHOjV DUJXPHQW UHJDUGLQJ WKH ODFN RI D VSHFLILF &DUPLFKDHO DOVR DVVHUWV WKDW WKHUH ZDV QR HYLGHQFH WKDW LQWHQW LQVWUXFWLRQ DSSHDUV WR EH EDVHG RQ 8QLWHG 6WDWHV Y &DUPLFKDHO DWWHPSWHG WR REWDLQ SURSHUW\ IURP $GDPV E\ &ROOLQV)G Q WK&LU ZKLFKKH mZURQJIXOXVHRIDFWXDORUWKUHDWHQHGIRUFHYLROHQFHRUIHDU." FLWHVIRUWKHSURSRVLWLRQWKDWWKHGLVWULFWFRXUWZDVUHTXLUHGWR 7KH MXU\ KRZHYHU FRXOG UHDVRQDEO\ KDYH IRXQG WKDW WKH LQVWUXFWWKHMXU\WKDWLQRUGHUWRFRQYLFW&DUPLFKDHOLWKDGWR LQWHQGHGLPSOLFDWLRQRI&DUPLFKDHOjVUHTXHVWIRUDYHU\ODUJH FRQFOXGH WKDW KH LQWHQGHG WR YLRODWH WKH ODZ  ,Q &ROOLQV FDVKFRQWULEXWLRQZDVWKDWLI$GDPVGLGQRWSD\&DUPLFKDHO ZKLFKZDVD+REEV$FWFDVHWKLVFRXUWREVHUYHGLQDIRRWQRWH ZRXOGFDXVH$GDPVWREHDUUHVWHGDQGSURVHFXWHGRUZRXOG WKDW WKH MXU\ KDG UHFHLYHG mWKH VWDQGDUG LQVWUXFWLRQl RQ DVVLVWIHGHUDODXWKRULWLHVLQSURVHFXWLQJ$GDPV:HWKHUHIRUH VSHFLILFLQWHQWLHWKDWmWKHJRYHUQPHQWPXVWSURYHEH\RQG FRQFOXGHWKDWWKHJRYHUQPHQWSURGXFHGVXIILFLHQWHYLGHQFH DUHDVRQDEOHGRXEWWKDWWKHGHIHQGDQWNQRZLQJO\GLGDQDFW IRU D UDWLRQDO MXU\ WR FRQYLFW &DUPLFKDHO RI YLRODWLQJ WKH ZKLFKWKHODZIRUELGVRUNQRZLQJO\IDLOHGWRGRDQDFWZKLFK +REEV$FW WKHODZUHTXLUHVSXUSRVHO\LQWHQGLQJWRYLRODWHWKHODZl,G ' &KDOOHQJHWRWKHH[FOXVLRQRIDGHIHQVHZLWQHVV 7KH &ROOLQV FRXUW GLG QRW KROG WKDW WKLV LQVWUXFWLRQ ZDV UHTXLUHG,QIDFWDQXPEHURIRWKHUFRXUWVKDYHFRQFOXGHGLQ &DUPLFKDHO SURIIHUHG WKH WHVWLPRQ\ RI 'DYLG *XII\ WKH +REEV $FW FDVHV WKDW LW LV QRW  6HH HJ 8QLWHG 6WDWHV Y GHWHFWLYH DVVLJQHG WR &DUPLFKDHOjV RIILFH  ,I FDOOHG WR WKH $UHQD)6XSS 1'1<  FRQFOXGLQJ VWDQG &DUPLFKDHO DUJXHV 'HW *XII\ ZRXOG KDYH WHVWLILHG WKDWDFRQYLFWLRQIRU+REEV$FWH[WRUWLRQGRHVQRWUHTXLUHD WKDW&DUPLFKDHOKDGVDLGWKDWKHZDVWU\LQJWRVHW$GDPVXS ILQGLQJ RI VSHFLILF LQWHQW  8QLWHG 6WDWHV Y )XUH\  ) IRU PDNLQJ LOOHJDO FDPSDLJQ FRQWULEXWLRQV  %HFDXVH 6XSS   (' 3D  FRQFOXGLQJ WKDW EHFDXVH &DUPLFKDHO DOOHJHGO\ WROG WKLV WR 'HW *XII\ EHIRUH ZRUGVVXFKDVmNQRZLQJO\lRUmZLOOIXOO\lDUHFRQVSLFXRXVO\ &DUPLFKDHO KDG DQ\ UHDVRQ WR NQRZ WKDW ODZ HQIRUFHPHQW  8QLWHG6WDWHVY&DUPLFKDHO 1R 1R 8QLWHG6WDWHVY&DUPLFKDHO  RIILFLDOVZHUHLQYHVWLJDWLQJKLP&DUPLFKDHOFODLPVWKDW'HW '& &LU  ("7KH SXUSRVH RI WKH KHDUVD\ UXOH LV WR *XII\jV WHVWLPRQ\ ZRXOG KDYH PDGH WKH MXU\ PRUH DSW WR SURKLELWWKHXVHRIXQVZRUQXQFURVVH[DPLQHGWHVWLPRQ\ EHOLHYH&DUPLFKDHOjVH[SODQDWLRQWKDWKLVDSSDUHQWH[WRUWLRQ DVVXEVWDQWLYHHYLGHQFHLQDFDVH"). RI$GDPVZDVLQUHDOLW\DQDWWHPSWWRFRQGXFWDOHJLWLPDWH FRYHUWLQYHVWLJDWLRQRI$GDPV7KHGLVWULFWFRXUWIROORZLQJ :KHWKHU 'HW *XII\jV WHVWLPRQ\ PLJKW DOVR KDYH EHHQ D FROORTX\ ZLWK FRXQVHO DERXW 'HW *XII\jV SURSRVHG DGPLVVLEOHDV&DUPLFKDHOQRZDUJXHVXQGHUWKHH[FHSWLRQWR WHVWLPRQ\FRQFOXGHGWKDWLWZRXOGEHLQDGPLVVLEOHKHDUVD\ WKH KHDUVD\ UXOH WKDW SHUPLWV WKH DGPLVVLRQ RI VWDWHPHQWV %HFDXVHRIWKLVUXOLQJ&DUPLFKDHOGLGQRWFDOO'HW*XII\WR UHJDUGLQJ D GHFODUDQWjV mWKHQ H[LVWLQJ VWDWH RI PLQG >RU@ WHVWLI\ HPRWLRQl )(' 5 (9,'    ZRXOG DSSHDU WR EH D UHDVRQDEO\FORVHTXHVWLRQ$GPLVVLELOLW\XQGHU5XOH  :HDJUHHZLWKWKHGLVWULFWFRXUWWKDW'HW*XII\jVWHVWLPRQ\ GRHVQRWGHSHQGRQZKHWKHU&DUPLFKDHOZDVDYDLODEOHDVD ZRXOGKDYHEHHQKHDUVD\6HH)(' 5 (9,' F  GHILQLQJ ZLWQHVV  6HH )(' 5 (9,'   7KH DUJXPHQW WKDW 'HW mKHDUVD\l DV mD VWDWHPHQW RWKHU WKDQ RQH PDGH E\ WKH *XII\jV WHVWLPRQ\ ZDV DGPLVVLEOH XQGHU 5XOH    GHFODUDQWZKLOHWHVWLI\LQJDWWKHWULDORUKHDULQJ RIIHUHGLQ KRZHYHUZDVQRWDGYDQFHGLQWKHGLVWULFWFRXUW6HH3LQQH\ HYLGHQFH WR SURYH WKH WUXWK RI WKH PDWWHU DVVHUWHGl  'RFN 7UDQVSRUW&RY3HQQ&HQWUDO&RUS)G &DUPLFKDHOLQIDFWFRQFHGHVWKDW'HW*XII\jVWHVWLPRQ\ZDV  WK&LU  mµ,WLVWKHJHQHUDOUXOHWKDWDIHGHUDO LQWHQGHGWRVKRZQRWMXVWWKDW&DUPLFKDHOWROG'HW*XII\WKDW DSSHOODWHFRXUWGRHVQRWFRQVLGHUDQLVVXHQRWSDVVHGXSRQ KHZDVLQYHVWLJDWLQJ$GDPVEXWmWKDW>&DUPLFKDHODFWXDOO\@ EHORZjl  TXRWLQJ 6LQJOHWRQ Y :XOII   86   ZDVFRQGXFWLQJKLVRZQLQYHVWLJDWLRQRI$GDPVl   +DG&DUPLFKDHOWDNHQWKHVWDQG'HW*XII\jVWHVWLPRQ\ ,QDQ\HYHQWHYHQLI&DUPLFKDHOKDGUDLVHGWKLVDUJXPHQW PLJKWKDYHEHHQDGPLVVLEOHDVDVWDWHPHQWFRQVLVWHQWZLWK LQ WKH GLVWULFW FRXUW ZH KDYH GRXEWV ZKHWKHU 'HW *XII\jV &DUPLFKDHOjV WHVWLPRQ\ DQG RIIHUHG WR UHEXW D FKDUJH WKDW WHVWLPRQ\ ZRXOG KDYH EHHQ DGPLVVLEOH XQGHU 5XOH    &DUPLFKDHOKDGRQO\UHFHQWO\IDEULFDWHGWKHLGHDWKDWKHZDV 6HH8QLWHG6WDWHVY/H0DVWHU)G WK&LU LQYHVWLJDWLQJ$GDPV6HH)(' 5 (9,' G   SURYLGLQJ   REVHUYLQJWKDWLQRUGHUIRUDVWDWHPHQWWREHDGPLVVLEOH WKDW D ZLWQHVVjV VWDWHPHQW WKDW LV mFRQVLVWHQW ZLWK WKH XQGHU 5XOH    mWKH GHFODUDQW PXVW QRW KDYH KDG DQ GHFODUDQWjVWHVWLPRQ\DQGRIIHUHGWRUHEXWDQH[SUHVVRU RSSRUWXQLW\WRUHIOHFWDQGSRVVLEO\IDEULFDWHRUPLVUHSUHVHQW LPSOLHGFKDUJHDJDLQVWWKHGHFODUDQWRIUHFHQWIDEULFDWLRQRU KLVWKRXJKWVl ,WLVQRWEH\RQGWKHUHDOPRISRVVLELOLW\WKDW LPSURSHULQIOXHQFHRUPRWLYHl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m7KH SULPDU\ KHDUVD\HYLGHQFHDSSHDUVWREHVRPHZKDWXQVHWWOHGZLWKLQWKH MXVWLILFDWLRQIRUWKHH[FOXVLRQRIKHDUVD\LVWKHODFNRIDQ\ FLUFXLW&RPSDUH6WDOERVN\Y%HOHZ)G WK RSSRUWXQLW\ IRU WKH DGYHUVDU\ WR FURVVH[DPLQH WKH DEVHQW &LU   REVHUYLQJ WKDW WKLV FRXUW KDV WUDGLWLRQDOO\ GHFODUDQW ZKRVH RXWRIFRXUW VWDWHPHQW LV LQWURGXFHG LQWR UHYLHZHGGHQRYRGLVWULFWFRXUWFRQFOXVLRQVDERXWZKHWKHU HYLGHQFHl  &DQQDG\ Y 8QLWHG 6WDWHV  )G   SURIIHUHG HYLGHQFH LV KHDUVD\  ZLWK 7UHSHO Y 5RDGZD\