United States v. Munoz

Summarize
Check Treatment

Related Cases

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$SSHOOHH    1R Y  !  =$)(5,12 48,17(/$ 0812=  'HIHQGDQW$SSHOODQW  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW&KDWWDQRRJD 1Rn&XUWLV/&ROOLHU'LVWULFWsXGJH $UJXHG6HSWHPEHU 'HFLGHGDQG)LOHG1RYHPEHU %HIRUH0(55,77.(11('<DQG*,/0$1&LUFXLW sXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8('  'DYLG ) 1HVV )('(5$/ '()(1'(5 6(59,&(6 2) ($67(51 7(11(66(( ,1& &KDWWDQRRJD7HQQHVVHHIRU$SSHOODQW*UHJJ/6XOOLYDQ $66,67$1781,7('67$7(6$77251(<&KDWWDQRRJD 7HQQHVVHH IRU $SSHOOHH  21 %5,()  'DYLG ) 1HVV )('(5$/ '()(1'(5 6(59,&(6 2) ($67(51 7(11(66((,1&&KDWWDQRRJD7HQQHVVHHIRU$SSHOODQW   8QLWHG6WDWHVY0XQR] 1R 3DXO : /D\PRQ sU $66,67$17 81,7(' 67$7(6 $77251(<&KDWWDQRRJD7HQQHVVHHIRU$SSHOOHH .(11('<sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK 0(55,77sMRLQHG*,/0$1s SS GHOLYHUHGD VHSDUDWHFRQFXUULQJRSLQLRQ BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB .(11('< &LUFXLW sXGJH  'HIHQGDQW =DIHULQR 0XQR] ZDV DUUHVWHG DQG LQGLFWHG RQ RQH FRXQW RI FRQVSLUDF\ WR GLVWULEXWH FRFDLQH DQG PHWKDPSKHWDPLQH 'HIHQGDQW SOHG JXLOW\WRWKHLQGLFWPHQWZLWKWKHH[SOLFLWUHVHUYDWLRQWKDWKH GLGQRWDGPLWWRFRQVSLULQJWRGHOLYHUPHWKDPSKHWDPLQHEXW RQO\ DGPLWWHG WR WKH FRFDLQH DQG DPSKHWDPLQH WKDW ZDV DFWXDOO\GHOLYHUHG7KHGLVWULFWMXGJHVHQWHQFHGGHIHQGDQWWR PRQWKVLQSULVRQEDVHGLQSDUWRQKLVFRQFOXVLRQWKDW GHIHQGDQWGLGFRQVSLUHWRGLVWULEXWHPHWKDPSKHWDPLQH7KLV FRXUWUHYLHZVWKHYDOLGLW\RIGHIHQGDQWjVJXLOW\SOHDDQGKLV VHQWHQFH)RUWKHUHDVRQVVHWIRUWKEHORZZH$)),50WKH GLVWULFWFRXUWjVVHQWHQFHHQKDQFHPHQWEDVHGRQGHIHQGDQWjV UROH LQ WKH FRQVSLUDF\ EXW 5(9(56( WKH GLVWULFW FRXUWjV GHWHUPLQDWLRQ WKDW WKH VHQWHQFH VKRXOG EH EDVHG RQ PHWKDPSKHWDPLQH:H5(0$1'WRWKHGLVWULFWFRXUWIRU GHWHUPLQDWLRQRIDQHZVHQWHQFHFRQVLVWHQWZLWKWKLVRSLQLRQ , 'HIHQGDQWjV DUUHVW RQ $XJXVW   UHVXOWHG IURP DQ LQYHVWLJDWLRQ XQGHUWDNHQ E\ WKH 7HQQHVVHH %XUHDX RI ,QYHVWLJDWLRQ DQG WKH &OHYHODQG 7HQQHVVHH 3ROLFH 'HSDUWPHQW7KHLQYHVWLJDWLRQSURGXFHGWDSHGFRQYHUVDWLRQV EHWZHHQGHIHQGDQWDQGDFRQILGHQWLDOLQIRUPDQWDQGEHWZHHQ GHIHQGDQWKLVFRFRQVSLUDWRUVDQGWKHLQIRUPDQW'XULQJWKHVH FRQWDFWVGHIHQGDQWWROGWKHLQIRUPDQWWKDWKHFRXOGGHOLYHU WHQSRXQGVRImFU\VWDOlDQGWKH\GLVFXVVHGWKHVDOHRIWZR SRXQGVRImFU\VWDOlDWDQDJUHHGSULFHRISHUSRXQG 'HIHQGDQWUHIHUUHGWRWKHQHHGWRFRQIHUZLWKKLVmERVVHVl 1R 8QLWHG6WDWHVY0XQR]  UHJDUGLQJWKHWHUPVRIWKHWUDQVDFWLRQ'HIHQGDQWHYHQWXDOO\ WROGWKHLQIRUPDQWWKDWDWKLUGSDUW\s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mFU\VWDOl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mFU\VWDOl +H ZDV QRW LQYROYHG LQ WKH GUXJ WUDGH SULRU WR KLV HPSOR\PHQW ZLWK &LVQHURV 2Q2FWREHUDQLQGLFWPHQWZDVILOHGLQWKH(DVWHUQ 'LVWULFW RI 7HQQHVVHH FKDUJLQJ WKDW IURP 2FWREHU  WKURXJK $XJXVW  GHIHQGDQW DQG RWKHUV FRQVSLUHG WR FRPPLW YLRODWLRQV RI  86& †  D   E\ XQODZIXOO\ GLVWULEXWLQJFRFDLQHDQGPHWKDPSKHWDPLQHLQYLRODWLRQRI 86&†2Q'HFHPEHUGHIHQGDQWSOHGJXLOW\ WRFRQVSLULQJWRGHOLYHUFRFDLQHDQGDFRQWUROOHGVXEVWDQFHEXW LQIRUPHG WKH FRXUW WKDW KH GHQLHG GLVWULEXWLQJ PHWKDPSKHWDPLQH ,W LV XQGLVSXWHG WKDW WKH GUXJ DFWXDOO\ GLVWULEXWHGZDVDPSKHWDPLQHQRW PHWKDPSKHWDPLQH7KH  8QLWHG6WDWHVY0XQR] 1R 1R 8QLWHG6WDWHVY0XQR]  GHWHUPLQDWLRQRIWKHW\SHRIGUXJVWREHXVHGLQFDOFXODWLQJ WKDQ WKH W\SH RI GUXJ LQWHQGHG WR EH GHOLYHUHG  ,Q RWKHU WKHSHQDOW\ZDVUHVHUYHGIRUVHQWHQFLQJ ZRUGV QR PDWWHU KRZ FOHDU 0XQR]jV LQWHQW ZDV WR GHOLYHU PHWKDPSKHWDPLQH WKH SULQFLSOH XSRQ ZKLFK $SSOLFDWLRQ $SUHVHQWHQFHUHSRUWZDVSUHSDUHGE\WKHSUREDWLRQRIILFHU 1RWH  LV EDVHG GLFWDWHV WKDW WKH DPSKHWDPLQH DFWXDOO\ UHFRPPHQGLQJ WKDW GHIHQGDQW EH VHQWHQFHG EDVHG RQ WKH GHOLYHUHGVKRXOGFRQWUROKLVVHQWHQFLQJ PHWKDPSKHWDPLQH KH LQWHQGHG WR GHOLYHU UDWKHU WKDQ WKH DPSKHWDPLQH WKDW ZDV DFWXDOO\ GHOLYHUHG  7KH SUREDWLRQ 7KLV FRQFOXVLRQ LV VXSSRUWHG E\ WKH ODZ DV JHQHUDOO\ RIILFHU IRXQG WKDW GHIHQGDQW VKRXOG UHFHLYH D WKUHHOHYHO DSSOLHGWRVHQWHQFLQJIRUmDWWHPSWFULPHVl6HH$$0 s85 HQKDQFHPHQW XQGHU 866* † % E  IRU SOD\LQJ D &5,0 /† GHG  UHIHUULQJWRVWDWHVWDWXWHVWKDW PDQDJHULDOUROHLQWKHRIIHQVHDQGDQDGMXVWPHQWGRZQZDUG SURYLGHmWKDWRQHFRQYLFWHGRIDQDWWHPSWPD\EHVHQWHQFHG IRUDFFHSWDQFHRIUHVSRQVLELOLW\'HIHQGDQWjVDGMXVWHGRIIHQVH WRDWHUPRILPSULVRQPHQWQRWH[FHHGLQJKDOIWKHOHQJWKRIWKH OHYHOZDVOHYHO'HIHQGDQWKDGQRFULPLQDOKLVWRU\EXW ORQJHVWWHUPWRZKLFKKHFRXOGKDYHEHHQVHQWHQFHGKDGKH ZDV IRXQG LQHOLJLEOH GXH WR KLV PDQDJHULDO UROH LQ WKH VXFFHHGHG LQ KLV DWWHPSWl   7KXV GHVSLWH WKH IDFW WKDW D FRQVSLUDF\IRUDSSOLFDWLRQRIWKHVDIHW\YDOYHSURYLVLRQVRI GHIHQGDQWjV mPRUDO WXUSLWXGHl LV MXVW DV EDG ZKHWKHU KLV 866*†&ZKLFKPLJKWKDYHUHGXFHGKLVVHQWHQFLQJ LQWHQGHG FULPLQDO DFW VXFFHHGV RU QRW WKH ODZ GRHV QRW OHYHOE\WZR+LVJXLGHOLQHVHQWHQFLQJUDQJHZDVWKXVWR JHQHUDOO\ SXQLVK KLP DV VHYHUHO\ LI KLV DWWHPSW IDLOV  , PRQWKV WKHUHIRUHGLVDJUHHZLWKWKHUHDVRQLQJLQ8QLWHG6WDWHY/RSH] )G WK&LU WKDWUHVXOWHGLQ/RSH]UHFHLYLQJ ,, DVWLIIHUVHQWHQFHRQWKHEDVLVWKDWLWmZDVPHUHO\IRUWXLWRXVl WKDWDPSKHWDPLQHUDWKHUWKDQPHWKDPSKHWDPLQHZDVDFWXDOO\ 7KH RQH FRXQW LQGLFWPHQW DJDLQVW GHIHQGDQW FKDUJHG GHOLYHUHG,GDW7KHODZKDVORQJVLQFHPDGHDPDMRU VSHFLILFDOO\ WKDW GHIHQGDQW mGLG FRPELQH FRQVSLUH GLVWLQFWLRQ EHWZHHQ FRPSOHWHG FULPHV YHUVXV DWWHPSWHG FRQIHGHUDWH DQG DJUHH WR FRPPLW YLRODWLRQV RI 7LWOH  FULPHV EDVHG RQ ZKDW /RSH] GLVPLVVLYHO\ FKDUDFWHUL]HV DV 8QLWHG6WDWHV&RGH6HFWLRQ D  WKDWLVWRXQODZIXOO\ mPHUHO\IRUWXLWRXVl NQRZLQJO\ LQWHQWLRQDOO\ DQG ZLWKRXW DXWKRULW\ GLVWULEXWH FRFDLQH DQG PHWKDPSKHWDPLQH 6FKHGXOH ,, FRQWUROOHG )RUWKHDERYHUHDVRQVLQDGGLWLRQWRWKRVHVHWIRUWKE\WKH VXEVWDQFHVDOOLQYLRODWLRQRI7LWOH8QLWHG6WDWHV&RGH FRXUW , DJUHH WKDW WKH GLVWULFW FRXUW HUUHG LQ XVLQJ 6HFWLRQl'HIHQGDQWSOHGJXLOW\WRWKLVLQGLFWPHQWEXW PHWKDPSKHWDPLQHWRFDOFXODWH0XQR]jVVHQWHQFH,WKHUHIRUH ZLWKWKHH[SOLFLWUHVHUYDWLRQPDGHE\KLVDWWRUQH\WKDWm0U FRQFXULQWKHUHPDQGWRGHWHUPLQHDQHZVHQWHQFHEDVHGRQ 0XQR]VWDQGVZLOOLQJWRDGPLWWKDWKHGLVWULEXWHGFRFDLQH WKHDFWXDOGHOLYHU\RIDPSKHWDPLQH DQGDPSKHWDPLQH+RZHYHUKHFDQQRWDQGZLOOQRWDGPLWWKDW KH FRQVSLUHG WR GLVWULEXWH PHWKDPSKHWDPLQHl 1RWLFH RI ,QWHQWWR3OHDG*XLOW\7ULDO5(QWU\1R $IWHUDWWRUQH\V IRUERWKVLGHVVWDWHGDW5HDUUDLJQPHQWWKDWWKHW\SHRIGUXJ LQYROYHGZDVDVHQWHQFLQJIDFWRUDQGVKRXOGQRWDIIHFWWKH SOHD WKH MXGJH DFFHSWHG GHIHQGDQWjV JXLOW\ SOHD ZLWK WKH VWDWHGUHVHUYDWLRQ $OWKRXJKWKHLQGLFWPHQWFKDUJHGFRQVSLUDF\WRGLVWULEXWH WKHVHWZRGUXJVLQWKHFRQMXQFWLYHE\VWDWLQJmFRFDLQHDQG PHWKDPSKHWDPLQHlGHIHQGDQWRQO\DGPLWWHGKLVLQYROYHPHQW  8QLWHG6WDWHVY0XQR] 1R 1R 8QLWHG6WDWHVY0XQR]  BBBBBBBBBBBBBBBBBBBBB LQDFRQVSLUDF\UHJDUGLQJWKHFRFDLQH7KHODFNRIDJXLOW\ SOHD RU MXU\ YHUGLFW DV WR WKH PHWKDPSKHWDPLQH GRHV QRW &21&855(1&( LQYDOLGDWHWKHHQWLUHJXLOW\SOHDKRZHYHU,Q7XUQHUY8QLWHG BBBBBBBBBBBBBBBBBBBBB 6WDWHV  86    WKH 6XSUHPH &RXUW KHOG WKDW m>W@KHJHQHUDOUXOHLVWKDWZKHQDMXU\UHWXUQVDJXLOW\YHUGLFW 521$/' /(( *,/0$1 &LUFXLW sXGJH FRQFXUULQJ  , RQDQLQGLFWPHQWFKDUJLQJVHYHUDODFWVLQWKHFRQMXQFWLYH FRQFXULQWKHMXGJPHQWDQGWKHUHDVRQLQJRIWKHFRXUWEXW WKHYHUGLFWVWDQGVLIWKHHYLGHQFHLVVXIILFLHQWZLWKUHVSHFWWR ZULWHVHSDUDWHO\EHFDXVH,ZRXOGUHYHUVHWKHGLVWULFWFRXUWjV DQ\RQHRIWKHDFWVFKDUJHGl,GDW7KXVGHIHQGDQWjV XVHRIPHWKDPSKHWDPLQHWRFDOFXODWH0XQR]jVVHQWHQFHIRU JXLOW\SOHDLVIDFLDOO\YDOLGDVWRWKHFRQVSLUDF\WRGLVWULEXWH DQDGGLWLRQDOUHDVRQQRWH[SUHVVHGLQ3DUW,9$RIWKHFRXUWjV FRFDLQH RSLQLRQ7KHFRXUWUHOLHVRQ$SSOLFDWLRQ1RWHWRKROGWKDW PHWKDPSKHWDPLQH VKRXOG QRW KDYH EHHQ XVHG WR FDOFXODWH ,,, 0XQR]jVVHQWHQFHEHFDXVHmWKHGHIHQGDQWZDVLQFDSDEOHRI GHOLYHULQJ PHWKDPSKHWDPLQHl  , ZRXOG KROG WKDW 'HIHQGDQWUHFHLYHGDSULVRQVHQWHQFHRIPRQWKVEDVHG PHWKDPSKHWDPLQH VKRXOG QRW KDYH EHHQ XVHG WR FDOFXODWH LQ SDUW RQ WKH VHQWHQFLQJ MXGJHjV GHWHUPLQDWLRQ E\ D 0XQR]jVVHQWHQFHHYHQLIKHZDVFDSDEOHRIGHOLYHULQJWKDW SUHSRQGHUDQFH RI WKH HYLGHQFH WKDW GHIHQGDQW FRQVSLUHG WR GUXJEHFDXVHLWLVXQGLVSXWHGWKDWWKHGUXJDFWXDOO\GHOLYHUHG GLVWULEXWH PHWKDPSKHWDPLQH LQ DGGLWLRQ WR FRFDLQH   7KH ZDVDPSKHWDPLQHQRWPHWKDPSKHWDPLQH VHQWHQFLQJMXGJHWUHDWHGWKHGHWHUPLQDWLRQRIWKHW\SHRIGUXJ LQYROYHGDVDVHQWHQFLQJIDFWRUWREHGHFLGHGE\WKHMXGJH ,EDVHP\UHDVRQLQJLQSDUWRQWKHSRUWLRQRI$SSOLFDWLRQ 1RWHWKDWUHDGVDVIROORZV 7KH6XSUHPH&RXUWKDVUHFHQWO\OLPLWHGDMXGJHjVDELOLW\WR PDNHVXFKIDFWXDOILQGLQJVDIIHFWLQJDGHIHQGDQWjVVHQWHQFH ,QDQRIIHQVHLQYROYLQJDQDJUHHPHQWWRVHOODFRQWUROOHG ,Q $SSUHQGL Y 1HZ sHUVH\  6 &W     WKH VXEVWDQFH WKH DJUHHGXSRQ TXDQWLW\ RI WKH FRQWUROOHG 6XSUHPH &RXUW KHOG WKDW m>R@WKHU WKDQ WKH IDFW RI D SULRU VXEVWDQFH VKDOO EH XVHG WR GHWHUPLQH WKH RIIHQVH OHYHO FRQYLFWLRQ DQ\ IDFW WKDW LQFUHDVHV WKH SHQDOW\ IRU D FULPH XQOHVVWKHVDOHLVFRPSOHWHGDQGWKHDPRXQWGHOLYHUHG EH\RQGWKHSUHVFULEHGVWDWXWRU\PD[LPXPPXVWEHVXEPLWWHG PRUH DFFXUDWHO\ UHIOHFWV WKH VFDOH RI WKH RIIHQVH  )RU WRDMXU\DQGSURYHGEH\RQGDUHDVRQDEOHGRXEWl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jVEDVH RIIHQVHOHYHODIWHUFRQFOXGLQJWKDWPXUGHUKDGEHHQRQHRIWKH 866* † ' $SSOLFDWLRQ 1RWH   HPSKDVLV DGGHG  REMHFWLYHVRIWKHFRQVSLUDF\'LVWLQJXLVKLQJ$SSUHQGLWKH %HFDXVHWKHFRPPHQWDU\WRWKHJXLGHOLQHSURYLGHVWKDWmWKH 6L[WK&LUFXLWXSKHOGWKHVHQWHQFLQJH[SODLQLQJWKDW DPRXQW GHOLYHUHG PRUH DFFXUDWHO\ UHIOHFWV WKH VFDOH RI WKH RIIHQVHlWKDQWKHDPRXQWLQWHQGHGWREHGHOLYHUHGSDUDOOHO 7KH6XSUHPH&RXUWjVUHFHQWGHFLVLRQLQ$SSUHQGL ORJLF ZRXOG VHHP WR UHTXLUH WKDW WKH W\SH RI GUXJ DFWXDOO\ GRHV QRW PDQGDWH D GLIIHUHQW UHVXOW    ,Q WKLV FDVH GHOLYHUHGmPRUHDFFXUDWHO\UHIOHFWVWKHVFDOHRIWKHRIIHQVHl >GHIHQGDQWV@IDFHGDPD[LPXPVHQWHQFHRIWZHQW\\HDUV RQWKH5,&2FRQVSLUDF\FRXQWVGLVUHJDUGLQJWKHPXUGHU  8QLWHG6WDWHVY0XQR] 1R 1R 8QLWHG6WDWHVY0XQR]  FRQVSLUDF\    %HFDXVH WKH GLVWULFW FRXUW GLG QRW 'HIHQGDQWDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQILQGLQJKLP VHQWHQFHHLWKHUGHIHQGDQWWRDWHUPRIPRUHWKDQWZHQW\ WREHDPDQDJHURUVXSHUYLVRUEHFDXVHGHIHQGDQWZDVZRUNLQJ \HDUVRQWKH5,&2FRXQWV$SSUHQGLLVQRWWULJJHUHGDQG IRU&LVQHURVZKRZDVWKHmNLQJSLQlRIWKHFRQVSLUDF\DQG WKHH[LVWHQFHRIDPXUGHUFRQVSLUDF\GLGQRWKDYHWREH EHFDXVH &LVQHURV GLUHFWHG GHIHQGDQW WR FRQWDFW WKH GHFLGHGE\DMXU\XQGHUWKHUHDVRQDEOHGRXEWVWDQGDUG FRQILGHQWLDO LQIRUPDQW DV D UHVXOW RI GHIHQGDQWjV SULRU DFTXDLQWDQFH ZLWK WKH LQIRUPDQW )XUWKHU WKH GHIHQVH ,GDW 6LPLODUO\LQWKHSUHVHQWFDVHGHIHQGDQWjVVHQWHQFH FRQWHQGVWKDWGHIHQGDQWDFWHGRQO\DVDPLGGOHPDQEHWZHHQ LVLQYDOLGXQGHU$SSUHQGLRQO\LIWKHGLVWULFWFRXUWjVILQGLQJ &LVQHURVDQGWKHLQIRUPDQWDQGSRLQWVWRUHFRUGHGVWDWHPHQWV WKDW GHIHQGDQW FRQVSLUHG WR GLVWULEXWH PHWKDPSKHWDPLQH PDGHE\GHIHQGDQWWKDWKHKDGWRFRQIHUZLWKKLVmERVVHVlWR UHVXOWHGLQGHIHQGDQWUHFHLYLQJDVHQWHQFHLQH[FHVVRIWKH FRQILUP WKH WHUPV RI WKH WUDQVDFWLRQ DV HYLGHQFH WKDW PD[LPXP VWDWXWRU\ SHQDOW\ IRU FRQVSLUDF\ WR GLVWULEXWH GHIHQGDQWZDVQRWPDQDJLQJWKHGHDO FRFDLQHWKHFULPHWRZKLFKGHIHQGDQWSOHGJXLOW\ :KLOHWKHGHIHQVHPD\KDYHUDLVHGOHJLWLPDWHDUJXPHQWV 7KLVFDVHLQYROYHVJUDPVRIFRFDLQHDQGJUDPV DJDLQVWDILQGLQJRIPDQDJHULDOVWDWXVWKHGLVWULFWFRXUWZDV RIHLWKHUDPSKHWDPLQHRIPHWKDPSKHWDPLQH7LWOH86& QRW FOHDUO\ HUURQHRXV LQ ILQGLQJ WKDW GHIHQGDQW VXSHUYLVHG †SURYLGHVWKDWWKHSHQDOW\IRUFRQVSLUDF\WRGLVWULEXWH )ORUHV7KHSURVHFXWLRQHPSKDVL]HVWKDWGHIHQGDQWZRUNHG DQ\ GUXJ ZLOO EH LGHQWLFDO WR WKH SHQDOWLHV IRU GLVWULEXWLRQ RXWWKHGHDOZLWKWKHLQIRUPDQWPDGHDUUDQJHPHQWVIRUWKH 8QGHU  86& †  E  &  WKH VWDWXWRU\ SHQDOW\ IRU FRXULHU WR GHOLYHU WKH GUXJV DQG WKDW WKH FRXULHU )ORUHV GLVWULEXWLRQRIJUDPVRIFRFDLQHUDQJHVIURP]HURWR LQVWUXFWHG WKH LQIRUPDQW WR ZLUH D SRUWLRQ RI WKH PRQH\ WZHQW\ \HDUV LPSULVRQPHQW 7KH VWDWXWRU\ SHQDOW\ IRU GLUHFWO\WRGHIHQGDQW'HIHQGDQWZDVLQUHSHDWHGFRQWDFWZLWK GLVWULEXWLRQRIJUDPVRIPHWKDPSKHWDPLQHXQGHU WKH LQIRUPDQW DQG SOD\HG D UROH LQ FRRUGLQDWLQJ ERWK WKH 86&† E  % LVILYHWRIRUW\\HDUVLPSULVRQPHQW GHOLYHU\ RI DQG SD\PHQW IRU WKH DPSKHWDPLQH  7KXV WKH 7KH VWDWXWRU\ SHQDOW\ IRU GLVWULEXWLRQ RI  JUDPV RI GLVWULFW FRXUWjV ILQGLQJ WKDW GHIHQGDQW PDQDJHG )ORUHV LQ D DPSKHWDPLQH D6FKHGXOH,,,GUXJLV]HURWRWZHQW\\HDUV FRQVSLUDF\LQYROYLQJDWOHDVWILYHSHRSOHDQGWKDWKHVDWLVILHV XQGHU  86& †  E  &   'HIHQGDQW SOHG JXLOW\ WR WKHUHTXLUHPHQWVIRUVHQWHQFLQJHQKDQFHPHQWXQGHU866* FRQVSLUDF\WRGHOLYHUWKHVSHFLILHGDPRXQWRIFRFDLQH)RUWKH † % LV QRW FOHDUO\ HUURQHRXV  :H WKHUHIRUH DIILUP WKH FRFDLQHDORQHWKHVWDWXWHDXWKRUL]HVDPD[LPXPVHQWHQFHRI VHQWHQFLQJHQKDQFHPHQW WZHQW\\HDUV'HIHQGDQWZDVDFWXDOO\VHQWHQFHGWRVHUYH PRQWKVDSSUR[LPDWHO\WHQ\HDUV'HIHQGDQWjVVHQWHQFHGLG 9 QRW H[FHHG WKH VWDWXWRU\ PD[LPXP IRU WKH SRUWLRQ RI WKH LQGLFWPHQWWRZKLFKKHYDOLGO\SOHGJXLOW\7KHVHQWHQFLQJ )RUWKHUHDVRQVVWDWHGDERYHZH$)),50WKHVHQWHQFLQJ MXGJHjVGHWHUPLQDWLRQE\DSUHSRQGHUDQFHRIWKHHYLGHQFHWKDW HQKDQFHPHQWEDVHGRQGHIHQGDQWjVUROHLQWKHFRQVSLUDF\EXW GHIHQGDQWFRQVSLUHGWRGLVWULEXWHPHWKDPSKHWDPLQHUDWKHU ZH5(9(56(WKHGLVWULFWFRXUWjVXVHRIPHWKDPSKHWDPLQHWR WKDQDPSKHWDPLQHGLGQRWLQFUHDVHKLVSHQDOW\EH\RQGWKH FDOFXODWHGHIHQGDQWjVVHQWHQFH:H5(0$1'WRWKHGLVWULFW SUHVFULEHG VWDWXWRU\ PD[LPXP IRU FRQVSLUDF\ WR GLVWULEXWH FRXUWIRUWKHGHWHUPLQDWLRQRIDQHZVHQWHQFHFRQVLVWHQWZLWK WKLVRSLQLRQ  $  DPHQGPHQW WR  86& † ZRXOG PDNH WKH FXUUHQW †  E  $ DSSOLFDEOH ZLWK D SHQDOW\ RI WHQ \HDUV WR OLIH LPSULVRQPHQW EXW XQGHU WKH  VWDWXWH DSSOLFDEOH LQ WKLV FDVH  JUDPV RI PHWKDPSKHWDPLQH IHOO ZLWKLQ †  E  %   8QLWHG6WDWHVY0XQR] 1R 1R 8QLWHG6WDWHVY0XQR]  FDSDEOH RI GHOLYHULQJ PHWKDPSKHWDPLQH WR WKH XQGHUFRYHU  JUDPV RI FRFDLQH 7KXV WKH $SSUHQGL UXOLQJ LV QRW DJHQWEHFDXVHKHKDGQRQHl)GDW,QWKHSUHVHQW DSSOLFDEOHKHUHDQGGRHVQRWLPSDFWGHIHQGDQWjVVHQWHQFH FDVHEDVHGRQDOOWKHHYLGHQFHLQWKHUHFRUGGHIHQGDQWVLPSO\ WRRN WKH GUXJV SURYLGHG E\ KLV RQO\ VRXUFH :H FRQFOXGH ,9 WKHUHIRUH WKDW GHIHQGDQW ZDV QRW FDSDEOH RI GHOLYHULQJ PHWKDPSKHWDPLQH ,Q DGGLWLRQ KRZHYHU GHIHQGDQW DOOHJHV WKDW WKH GLVWULFW FRXUW HUUHG RQ WZR JURXQGV LQGHSHQGHQW RI WKH LVVXHV $VGHVFULEHGDERYHGHIHQGDQWjVVHQWHQFHFDQQRWH[FHHG DGGUHVVHG DERYH LQ FDOFXODWLQJ GHIHQGDQWjV VHQWHQFH WKH WZHQW\ \HDU VWDWXWRU\ PD[LPXP IRU FRQVSLUDF\ WR 'HIHQGDQWFODLPV $ WKDWXQGHUWKH6HQWHQFLQJ*XLGHOLQHV GLVWULEXWHJUDPVRIFRFDLQHEHFDXVHKLVJXLOW\SOHDLV KLV VHQWHQFH FDQ EH LQIOXHQFHG RQO\ E\ WKH DPSKHWDPLQH YDOLG RQO\ DV WR WKH FRFDLQH FKDUJH  8QGHU WKH DPHQGHG DFWXDOO\ GHOLYHUHG DQG QRW WKH PHWKDPSKHWDPLQH WKDW GLVMXQFWLYHODQJXDJHRI866*†'DSSOLFDWLRQQRWH GHIHQGDQW WKRXJKW ZDV EHLQJ GHOLYHUHG DQG %  WKDW WKH WKHGLVWULFWFRXUWPXVWH[FOXGHPHWKDPSKHWDPLQHIURPWKH GLVWULFW FRXUW HUUHG LQ ILQGLQJ DV D IDFWXDO PDWWHU WKDW VHQWHQFLQJFDOFXODWLRQEHFDXVHGHIHQGDQWZDVLQFDSDEOHRI GHIHQGDQW SOD\HG D PDQDJHULDO UROH LQ WKH FRQVSLUDF\ WR GHOLYHULQJ PHWKDPSKHWDPLQH   $SSOLFDWLRQ QRWH  WR GLVWULEXWH 866*†'QRWHVKRZHYHUWKDWmW\SHVDQGTXDQWLWLHV RI GUXJV QRW VSHFLILHG LQ WKH FRXQW RI FRQYLFWLRQ PD\ EH $ FRQVLGHUHGLQGHWHUPLQLQJWKHRIIHQVHOHYHOl7KXVZLWKLQ WKHSHUPLVVLEOHVWDWXWRU\UDQJHWKHFRXUWLVIUHHWRFRQVLGHUWKH 'HIHQGDQWDUJXHVWKDWKHVKRXOGEHSXQLVKHGRQO\IRUWKH DPSKHWDPLQHDVUHOHYDQWFRQGXFWIRUVHQWHQFLQJ GUXJKHDFWXDOO\GHOLYHUHGDVRSSRVHGWRWKHGUXJWKDWKHPD\ KDYHLQWHQGHGDQGFRQVSLUHGWRGHOLYHU7KHUHVROXWLRQRIWKLV % LVVXH WXUQV RQ  WKH DSSOLFDELOLW\ RI WKH ILQDO VHQWHQFH RI 866* † ' DSSOLFDWLRQ QRWH  WR WKLV FDVH  86 7KH GLVWULFW FRXUWjV ILQGLQJ WKDW GHIHQGDQW SOD\HG D 6HQWHQFLQJ*XLGHOLQH†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†% E  XQOHVVWKHVDOHLVFRPSOHWHGDQGWKHDPRXQWGHOLYHUHG DSSOLFDWLRQQRWH,QRUGHUIRUWKHWKUHHOHYHOHQKDQFHPHQW PRUHDFFXUDWHO\UHIOHFWVWKHVFDOHRIWKHRIIHQVH,I WRDSSO\WKHUHPXVWDWOHDVWILYHSDUWLFLSDQWVLQWKHFULPLQDO KRZHYHUWKHGHIHQGDQWHVWDEOLVKHVWKDWKHRUVKHGLGQRW DFWLYLW\6HH8QLWHG6WDWHVY:DUG)G WK&LU LQWHQG WR SURYLGH RU ZDV QRW UHDVRQDEO\ FDSDEOH RI  $QLQFUHDVHXQGHU866*†%LVDSSURSULDWHIRU SURYLGLQJ WKH DJUHHGXSRQ TXDQWLW\ RI WKH FRQWUROOHG WKRVH GHIHQGDQWV ZKRVH mUHODWLYH UHVSRQVLELOLW\l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m+RZHYHUZKHUHWKHFRXUWILQGVWKDWWKHGHIHQGDQWGLGQRW  EHIRUH WKH DPHQGPHQW WR 866* † ' DQG WKH LQWHQG WR SURGXFH DQG ZDV QRW UHDVRQDEO\ FDSDEOH RI 6WHZDUG FRXUW H[SOLFLWO\ UHOLHG RQ WKH RULJLQDO FRQMXQFWLYH SURGXFLQJWKHQHJRWLDWHGDPRXQWWKHFRXUWVKDOOH[FOXGHIURP ODQJXDJHRIDSSOLFDWLRQQRWHWKDWKDVQRZEHHQPRGLILHG WKH JXLGHOLQH FDOFXODWLRQ WKH DPRXQW WKDW LW ILQGV WKH 8QGHUWKHFXUUHQWYHUVLRQRI866*†'DSSOLFDWLRQ GHIHQGDQWGLGQRWLQWHQGWRSURGXFHDQGZDVQRWUHDVRQDEO\ QRWH  WKH GHIHQGDQW LV RQO\ UHTXLUHG WR VKRZ D ODFN RI FDSDEOHRISURGXFLQJl HPSKDVLVDGGHG  LQWHQWRUDODFNRIFDSDELOLW\ ,Q8QLWHG6WDWHVY&UX]0HQGR]D)G $W WKH VHQWHQFLQJ KHDULQJ LQ WKLV FDVH WKH GLVWULFW FRXUW WK&LU WKH1LQWK&LUFXLWDGGUHVVHGWKLVDPHQGPHQW VWDWHGWKDWm>W@KH&RXUWEHOLHYHVWKDWWKHFRUUHFW1LQWK&LUFXLW WR866*†'VWDWLQJWKDWGHVSLWHFDVHVSULRUWRWKH ODZ LV IRXQG LQ8QLWHG 6WDWHV Y 6WHZDUG ZKHUH WKH 1LQWK DPHQGPHQW KROGLQJ WKDW mDSSOLFDWLRQ QRWH  ZDV &LUFXLW VDLG WKDW D PLVWDNH RI IDFW DV WR WKH FRQWUROOHG µFRQMXQFWLYHQRWGLVMXQFWLYHjDQGWKHUHIRUHWKHGHIHQGDQW VXEVWDQFHFDUULHGZDVQRWDGHIHQVHWRNQRZLQJSRVVHVVLRQl KDGWRVKRZERWKODFNRILQWHQWDQGODFNRIFDSDELOLW\lWKH 7U6HQWHQFLQJ+UjJS %XWEHFDXVHWKH6WHZDUGFRXUW DPHQGPHQWmVXEVWLWXWH>G@WKHZRUGµRUjIRUWKHZRUGµDQGj UHOLHGH[SOLFLWO\RQWKHSUHDPHQGPHQWFRQMXQFWLYHODQJXDJH >DQGWKXVFRQVWLWXWHG@DVXEVWDQWLYHFKDQJHl,G7KHFRXUW RIDSSOLFDWLRQQRWHDWOHDVWWKDWSRUWLRQRILWVUXOLQJLVQR FRQFOXGHGWKDWXQGHUWKHDPHQGHGDSSOLFDWLRQQRWHWKH ORQJHUDSSOLFDEOH7KHGLVWULFWFRXUWjVUHOLDQFHRQ6WHZDUG FRXUWZRXOGEHmIUHHWRFRQFOXGHWKDWWKHFRQVSLUDF\FKDUJHG ZDVWKXVLPSURSHUWRWKHH[WHQWWKDW6WHZDUGUHOLHGRQWKH ZDVQRWUHDVRQDEO\FDSDEOHRISURYLGLQJ>WKHDJUHHGXSRQ SUHDPHQGPHQWODQJXDJHRIDSSOLFDWLRQQRWH GUXJV@lDQGWKHEDVHRIIHQVHOHYHOZRXOGEHUHGXFHG,G7KH 1LQWK&LUFXLWjVUHDVRQLQJLQ&UX]0HQGR]DLVORJLFDOJLYHQ 7KH SURVHFXWLRQ SRLQWV RXW LQ LWV EULHI WKDW WKH (LJKWK WKHFXUUHQWODQJXDJHRI866*†',IGHIHQGDQWFDQ &LUFXLW LQ 8QLWHG 6WDWHV Y /RSH]  )G  WK &LU GHPRQVWUDWHWKDWKHZDVQRWUHDVRQDEO\FDSDEOHRISURGXFLQJ  KHOGWKDWWKHGHIHQGDQWVKRXOGEHVHQWHQFHGEDVHGRQ WKHPHWKDPSKHWDPLQHKLVVHQWHQFHVKRXOGEHEDVHGRQWKH PHWKDPSKHWDPLQHEHFDXVHm>W@KHIDFWWKDWWKHVXEVWDQFH DFWXDOGUXJVGHOLYHUHG GHOLYHUHGZDVDPSKHWDPLQHDQGQRWPHWKDPSKHWDPLQHZDV PHUHO\IRUWXLWRXVl,GDW$OWKRXJKWKH/RSH]KROGLQJ 7KHSURVHFXWLRQUHOLHVRQ8QLWHG6WDWHVY6WHZDUG)G ZRXOGVXSSRUWWKHSURVHFXWLRQWKHIRXQGDWLRQRIWKHRSLQLRQ  WK&LU LQZKLFKWKH 1LQWK&LUFXLWXSKHOGD LVXQSHUVXDVLYHEHFDXVHWKH/RSH]FRXUW UHOLHGRQ6WHZDUG GHIHQGDQWjVDWWHPSWFRQYLFWLRQIRUPHWKDPSKHWDPLQHHYHQ ZLWKRXWDFNQRZOHGJLQJWKHSRVW6WHZDUGDPHQGHGODQJXDJH LQ866*†'DSSOLFDWLRQQRWH  7KHEXUGHQRISURRILPSRVHGE\DSSOLFDWLRQQRWHLVRQ WKH GHIHQGDQW  7KH 6L[WK &LUFXLW KDV KHOG WKDW mRQFH WKH 7KH FRQFXUULQJ RSLQLRQ FLWHV D GLIIHUHQW SRUWLRQ RI DSSOLFDWLRQ QRWH  IRU WKH SURSRVLWLRQ WKDW WKH VHQWHQFH VKRXOG EH EDVHG RQ DPSKHWDPLQH VROHO\ EHFDXVH DPSKHWDPLQH ZDV WKH GUXJ GHOLYHUHG $OWKRXJK WKH JRYHUQPHQWVDWLVILHVLWVEXUGHQLQHVWDEOLVKLQJDQHJRWLDWHG FRQFXUUHQFH UHDGV DSSOLFDWLRQ QRWH  WR VWDWH WKDW mWKH DPRXQW GHOLYHUHG DPRXQWWKHGHIHQGDQWVKDYHWKHEXUGHQRISURYLQJWKH\ZHUH PRUH DFFXUDWHO\ UHIOHFWV WKH VFDOH RI WKH RIIHQVHl WKDW SRUWLRQ RI WKH QRWH QRW FDSDEOH RI SURGXFLQJ WKDW DPRXQWl 8QLWHG 6WDWHV Y DFWXDOO\ VD\V m XQOHVV    WKH DPRXQW GHOLYHUHG PRUH DFFXUDWHO\ UHIOHFWV WKH &KULVWLDQ)G WK&LU  FLWLQJ8QLWHG VFDOH RI WKH RIIHQVHl %HFDXVH WKH GHOLYHU\ RI DPSKHWDPLQH UDWKHU WKDQ WKH LQWHQGHG PHWKDPSKHWDPLQH LQ WKLV FDVH ZDV PHUHO\ IRUWXLWRXV DQG QRW 6WDWHVY5RGULJXH])G WK&LU  D UHVXOW RI PRGLILHG LQWHQWLRQV ZH KROG WKDW WKH ODWWHU SRUWLRQ RI 7KH1LQWK&LUFXLWLQ6WHZDUGKHOGWKDWWKHGHIHQGDQWmZDVQRW DSSOLFDWLRQ QRWH  UHTXLUHV WKH DQDO\VLV FRQGXFWHG KHUH