United States v. Turnage

5(&200(1'(' )25 3$57,$/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    1RV Y   !  s())5(< 5,''/(    /$9$1&( 7851$*(   %(51$5'  $/76+8/(5    'HIHQGDQWV$SSHOODQWV   1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG 1Rn.DWKOHHQ0F'RQDOG2j0DOOH\ 'LVWULFWsXGJH $UJXHG)HEUXDU\ 'HFLGHGDQG)LOHG0D\ %HIRUH*8<1255,6DQG6,/(5&LUFXLWsXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8('  $OEHUW $ *LXOLDQL &OHYHODQG 2KLR sRKQ 3DWULFN 3DUNHU &OHYHODQG 2KLR 7LPRWK\ ) 6ZHHQH\ &OHYHODQG2KLRIRU$SSHOODQWVsXOLDs6WLOOHU81,7('   8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5LGGOHHWDO 5LGGOHHWDO 67$7(6 '(3$570(17 2) s867,&( 25*$1,=(' %LRQGLOORjVPXUGHUDQGWKH6WUROORHQWHUSULVHDQGZHKDYH &5,0( 5$&.(7((5,1*6(&7,21:DVKLQJWRQ'& GHWHUPLQHG DERYH WKDW WKH HQWHUSULVH VXIILFLHQWO\ DIIHFWHG IRU$SSHOOHH21%5,()$OEHUW$*LXOLDQL&OHYHODQG LQWHUVWDWHFRPPHUFH 2KLR sRKQ 3DWULFN 3DUNHU &OHYHODQG 2KLR 7LPRWK\ ) 6ZHHQH\&OHYHODQG2KLRIRU$SSHOODQWVsXOLDs6WLOOHU   86& †  ,OOHJDO *DPEOLQJ %XVLQHVV )UDQN s 0DULQH 81,7(' 67$7(6 '(3$570(17 2) $OWVKXOHUDQG5LGGOH s867,&( 25*$1,=(' &5,0(  5$&.(7((5,1* 6(&7,21 :DVKLQJWRQ '& &UDLJ 6 0RUIRUG 7KLVFRXUWKDVH[DPLQHG86&†DIWHU/RSH]DQG $66,67$1781,7('67$7(6$77251(<&OHYHODQG IRXQGLWWREHDYDOLGH[HUFLVHRIFRQJUHVVLRQDO&RPPHUFH 2KLRIRU$SSHOOHH &ODXVHSRZHU8QLWHG6WDWHVY:DOO)G WK &LU    ,Q :DOO ZH QRWHG WKDW DOWKRXJK WKH JDPEOLQJ BBBBBBBBBBBBBBBBB VWDWXWHGRHVQRWFRQWDLQDMXULVGLFWLRQDOHOHPHQWLWDGGUHVVHV D FRPPHUFLDO DFWLYLW\ XQOLNH WKH /RSH] VWDWXWH  23,1,21 )XUWKHUPRUH LWV OHJLVODWLYH KLVWRU\ SURYLGHV FRQJUHVVLRQDO BBBBBBBBBBBBBBBBB ILQGLQJVRILOOHJDOJDPEOLQJjVHIIHFWRQLQWHUVWDWHFRPPHUFH ILQGLQJVWKDWZHUHODFNLQJLQWKH*XQ)UHH6FKRRO=RQHV$FW $/$1 ( 1255,6 &LUFXLW sXGJH  'HIHQGDQWV %HUQDUG ,G DW   'HIHQGDQWV UHFRJQL]H WKH IXWLOLW\ RI WKHLU $OWVKXOHU sHIIUH\ 5LGGOH DQG /DYDQFH 7XUQDJH ZHUH FKDOOHQJHLQOLJKWRI:DOOEXWXUJHWKHFRXUWWRUHFRQVLGHU FRQYLFWHGE\DMXU\RI5,&25,&2FRQVSLUDF\ 86& :DOOWKLVZHFDQQRWGRDEVHQWDQHQEDQFUHKHDULQJ8QLWHG † F   G DQGFRQGXFWLQJDQLOOHJDOJDPEOLQJEXVLQHVV 6WDWHVY6PLWK)G WK&LU $Q\DV 86&† DQG5LGGOHDQG7XUQDJHRIFRPPLWWLQJD DSSOLHGFKDOOHQJHLVLUUHOHYDQWVLQFH†GRHVQRWFRQWDLQ YLROHQW FULPH LQ IXUWKHUDQFH RI UDFNHWHHULQJ  86& DMXULVGLFWLRQDOHOHPHQWDQGWKHSURVHFXWLRQQHHGQRWSXWRQ † 7KH\DSSHDORQVHYHUDOJURXQGV7KH\DUJXHWKDWWKH HYLGHQFHRIDSDUWLFXODUFRQQHFWLRQZLWKLQWHUVWDWHFRPPHUFH GLVWULFWFRXUWHUUHGZKHQLWSHUPLWWHGWKHPWREHDEVHQWGXULQJ 6HH$EOHV)GDW UHMHFWLQJD†GHIHQGDQWjV YRLU GLUH DQG WKH\ DWWDFN WKHLU 5,&2 DQG YLROHQW FULPH SUHPLVHWKDWDmFULPLQDOVWDWXWHFRQVWLWXWLQJDYDOLGH[HUFLVH FRQYLFWLRQV RQ WKH JURXQGV WKDW WKHUH ZDV DQ LQVXIILFLHQW RIFRQJUHVVLRQDODXWKRULW\XQGHUWKH&RPPHUFH&ODXVHPD\ FRQQHFWLRQZLWKLQWHUVWDWHFRPPHUFH7KH\DOVRFODLPWKDW QHYHUWKHOHVV EH XQFRQVWLWXWLRQDO DV DSSOLHG WR D SDUWLFXODU WKHHYLGHQFHZDVLQVXIILFLHQWWRVXSSRUWFHUWDLQFRXQWVDJDLQVW GHIHQGDQWZKHQWKHVWDWXWHjVMXULVGLFWLRQDOUHTXLUHPHQWVKDYH WKHP DQG WKDW WKH GLVWULFW FRXUW HUUHG ZKHQ LW DOORZHG WKH EHHQPHWl  WHVWLPRQ\RIDZLWQHVVDIWHUWKHJRYHUQPHQWKDGFRQFOXGHGD SOHD EDUJDLQ ZLWK KLP ZKHQ LW GLG QRW JLYH D FRQVSLUDF\ ,,, ZLWKGUDZDO MXU\ LQVWUXFWLRQ DQG ZKHQ LW VHQWHQFHG WKHP ZLWKRXWSUHVHQWHQFHUHSRUWV:HDIILUPWKHGLVWULFWFRXUW )RUWKHIRUHJRLQJUHDVRQVWKHUXOLQJVRIWKHGLVWULFWFRXUW ZLWKUHVSHFWWRGHIHQGDQWVjYRLUGLUHDEVHQFHDQGWKHLQWHUVWDWH %HFDXVHUHVROXWLRQRIGHIHQGDQWVjLVVXHVFRQFHUQLQJWKHLU FRPPHUFHHOHPHQWVRI86&††DQGDUH YRLUGLUHDEVHQFHDQGWKHLQWHUVWDWHFRPPHUFHUHTXLUHPHQWV DIILUPHG PD\KDYHSUHFHGHQWLDOYDOXHWKRVHLVVXHVZLOOEHDGGUHVVHG EHORZ  7KH UHPDLQLQJ LVVXHV UDLVHG E\ GHIHQGDQWV DUH DGGUHVVHGLQDQXQSXEOLVKHGDSSHQGL[WRWKLVRSLQLRQ  8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5LGGOHHWDO 5LGGOHHWDO 86&† D 7KHVWDWXWHGHILQHVmHQWHUSULVHlDVDQ , HQWLW\ZKLFKLVmHQJDJHGLQRUWKHDFWLYLWLHVRIZKLFKDIIHFW LQWHUVWDWHRUIRUHLJQFRPPHUFHl86&† E   7KLV LV D FDVH DERXW WKUHH DFWRUV LQ WKH /HQLQH 6WUROOR EUDQFK RI /D &RVD 1RVWUD /&1  LQ @l8QLWHG6WDWHVY0DSS)G G :KLOH6WUROOREXLOWKLVEXVLQHVV(UQLH%LRQGLOORDVDVHOI &LU FHUWGHQLHG86  7KHFRXUWIRXQGWKDW GHVLJQDWHG VXFFHVVRU WR 6WUROORjV PXUGHUHG ULYDO EHJDQ WR WKH PXUGHUV IXUWKHUHG D UDFNHWHHULQJ HQWHUSULVH ZKLFK ZDV FRQGXFWJDPLQJHYHQWV6WUROORIHOWWKDWKHZDVQRWJHWWLQJ LQYROYHG LQ UREELQJ D EXVLQHVV mHQJDJHG LQ LQWHUVWDWH KLVIDLUVKDUHDQGKHGHFLGHGWRNLOO%LRQGLOORGHOHJDWLQJWKH FRPPHUFHE\VHOOLQJJRRGVWKDWKDGEHHQREWDLQHGIURPRXW WDVNWR*DURQRDQGWKHQWR$OWVKXOHU ZKR JDYHWKHMREWR RI VWDWHl  ,G   7KLV FRQQHFWLRQ WR LQWHUVWDWH FRPPHUFH 5LGGOH5LGGOHLQWXUQLQYROYHG7XUQDJH5LGGOH7XUQDJH VXIILFHG:HDJUHHZLWKWKH&RXUWVRI$SSHDOVIRUWKH6HFRQG DQGDQRWKHUDVVRFLDWH*HRUJH:LONLQVVXUYHLOOHG%LRQGLOOR DQGWKH)RXUWK&LUFXLWVWKDW†jVUHTXLUHPHQWVDUHPHWLI DQGVHWRXWRQHGD\ZLWKJXQVWRNLOOKLPWKHLUHIIRUWVFDPH WKHJRYHUQPHQWHVWDEOLVKHVDFRQQHFWLRQEHWZHHQWKH† WR QDXJKW ZKHQ WKH\ FRXOG QRW ILQG %LRQGLOOR  5LGGOH DFWRIYLROHQFHDQGD5,&2HQWHUSULVHZKLFKKDVDGHPLQLPLV VXEVHTXHQWO\GHFLGHGKHVKRXOGQRWEHSUHVHQWDWWKHVKRRWLQJ LQWHUVWDWHFRPPHUFHFRQQHFWLRQ7KHJRYHUQPHQWKDVGRQH DQGIRXQGDVXEVWLWXWH7XUQDJH:LONLQVDQGWKHVXEVWLWXWH VR KHUH 5LGGOH GRHV QRW FRQWHVW WKH FRQQHFWLRQ EHWZHHQ  8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5LGGOHHWDO 5LGGOHHWDO PHWRQsXQHEORFNHGRII%LRQGLOORjVFDUDQGVKRWDQG WKH DFFRUGLQJWRWKHVHQWHQFHVWKDWIROORZ@ GHIHQGDQWVjLQWHUHVWWRZDLYHWKHLUULJKWWREHSUHVHQWLQRUGHU  8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5LGGOHHWDO 5LGGOHHWDO EXWRWKHUFRXUWVKDYHFRQILUPHGWKDWDGHPLQLPLVFRQQHFWLRQ WRSUHVHUYHWKHEHQHILWRILQGLYLGXDOTXHVWLRQLQJZLWKRXWWKH LVVWLOOVXIILFLHQW6HHHJ8QLWHG6WDWHVYsXYHQLOH0DOH SRWHQWLDO SUHMXGLFH RI WKH 0DUVKDOVj VHFXULW\  7KH FRXUW )G WK&LU  mZHFRQFOXGHWKDWDOO DJUHHGDQGLQVWUXFWHGWKHODZ\HUVWRWHOOWKHFRXUWLQZULWLQJ WKDW LV UHTXLUHG WR HVWDEOLVK IHGHUDO MXULVGLFWLRQ LQ D 5,&2 E\ sDQXDU\   LI WKH GHIHQGDQWV REMHFWHG WR WKLV SURVHFXWLRQ LV D VKRZLQJ WKDW WKH LQGLYLGXDO SUHGLFDWH SURFHGXUH7KHUHZHUHQRREMHFWLRQVDQGDWD)HEUXDU\ UDFNHWHHULQJ DFWV KDYH D GH PLQLPLV LPSDFW RQ LQWHUVWDWH PHHWLQJGHIHQVHFRXQVHOGLVFXVVHGWKHSURSRVHGYRLU FRPPHUFHl 8QLWHG6WDWHVY0LOOHU)G G GLUHSURFHGXUHZLWKWKHLUFOLHQWVDWWKHFRXUWj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† DYDLODEOHWRGHIHQGDQWVGXULQJWKHVFUHHQLQJSURFHVV PRQH\ ODXQGHULQJ  ZKLFK LQYROYHV ILQDQFLDO WUDQVDFWLRQV WKDW mLQ DQ\ ZD\ RU GHJUHH DIIHFW>@ LQWHUVWDWH RU IRUHLJQ 2Q )HEUXDU\   WKH FRXUW EHJDQ LQGLYLGXDOO\ FRPPHUFHlRULQYROYHmWKHXVHRIDILQDQFLDOLQVWLWXWLRQZKLFK TXHVWLRQLQJ WKH UHPDLQLQJ MXURUV LQ FKDPEHUV RQH E\ RQH LVHQJDJHGLQRUWKHDFWLYLWLHVRIZKLFKDIIHFWLQWHUVWDWHRU ZLWKGHIHQVHFRXQVHOSUHVHQWWKHLQGLYLGXDOYRLUGLUHSURFHVV IRUHLJQFRPPHUFHLQDQ\ZD\RUGHJUHHl 8QLWHG6WDWHVY ODVWHG IRU WKUHH GD\V  'HIHQGDQWV ZHUH SUHVHQW LQ WKH :DOO)GQ QRWLQJLQGLFWDWKDWVWDWXWHV FRXUWKRXVHRQWKHPRUQLQJRI)HEUXDU\EXWDWWKHVWDUWRI OLNH WKH FDUMDFNLQJ VWDWXWH ZKLFK mUHTXLUH>V@ WKDW WKH WKHDIWHUQRRQVHVVLRQRQWKDWGD\GHIHQVHFRXQVHOLQGLFDWHG JRYHUQPHQW SURYH WKDW WKH DFWLYLWLHV DW KDQG VXEVWDQWLDOO\ WRWKHFRXUWWKDWGHIHQGDQWVUHTXHVWHGSHUPLVVLRQWRUHWXUQWR UHODWHWRLQWHUVWDWHFRPPHUFHlFDOOIRUDmORZWKUHVKROGRI MDLOXQWLOWKHILQDOVWDJHVRIWKHMXU\VHOHFWLRQSURFHVV7KH SURRIRILQWHUVWDWHUHODWLRQl 8QLWHG6WDWHVY6PLWK)G FRXUWDIWHUFRQILUPLQJ ZLWKFRXQVHOGHIHQGDQWVjZDLYHURI  WK&LU  VWDWLQJDGHPLQLPLVVWDQGDUGIRU WKHLU ULJKW WR EH LQ WKH FRXUWKRXVH JUDQWHG GHIHQGDQWVj YLRODWLRQVRIWKH+REEV$FW86&†ZKLFKUHTXLUHV UHTXHVW2Q0DUFKGHIHQGDQWVUHWXUQHGWRWKHFRXUWURRP UREEHULHVWRmDIIHFW>@FRPPHUFHl EXWVHH8QLWHG6WDWHVY IRUWKHH[HUFLVHRISHUHPSWRU\FKDOOHQJHV7KHVHFKDOOHQJHV :DQJ  )G   WK &LU   UHTXLULQJ D ZHUHH[HUFLVHGLQVLGHEDUFRQIHUHQFHVLQWKHRSHQFRXUWURRP mVXEVWDQWLDOl FRQQHFWLRQ LQ +REEV $FW FDVHV ZKHQ DQ ZKHUHGHIHQGDQWVZHUHSUHVHQW LQGLYLGXDOUDWKHUWKDQDEXVLQHVVLVWKHYLFWLP  'XULQJ WKH VFUHHQLQJ RI WKH MXURUV WKH JRYHUQPHQW KDG :HKROGWKDWDGHPLQLPLVFRQQHFWLRQVXIILFHVIRUD5,&2 FRQFOXGHGDSOHDDJUHHPHQWZLWK6WUROORWKDWJDYHKLPWZHOYH HQWHUSULVHWKDWmDIIHFWVl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† 5,&2  $OWVKXOHUDQG5LGGOH LPSULVRQPHQW$IWHUWKHMXU\YHUGLFWWKHFRXUWGLGQRWRUGHU DSUHVHQWHQFHUHSRUWVWDWLQJWKDWLWKDGDGHTXDWHLQIRUPDWLRQ $OWVKXOHU DQG 5LGGOH DUJXH WKDW WKHLU 5,&2 FRQYLFWLRQV DOUHDG\ IURP SUHYLRXV SURFHHGLQJV  7KH FRXUW RIIHUHG WR XQGHU86&† F DQG G ZHUHLQYDOLGEHFDXVHWKH VHQWHQFH WKH GHIHQGDQWV WKH IROORZLQJ ZHHN EXW GHIHQVH JRYHUQPHQWZDVREOLJHGXQGHU/RSH]WRVKRZDVXEVWDQWLDO FRXQVHODJUHHGWRGRWKHVHQWHQFLQJWKDWGD\7KHFRXUWJDYH HIIHFWRQLQWHUVWDWHFRPPHUFHDQGLWIDLOHGWRGRVRDOOHJLQJ WKH FRXQVHO WLPH WR JHW WKH GHIHQGDQWVj FRQVHQW WR WKH RQO\DQLQWUDVWDWHHQWHUSULVH6HFWLRQ F VWDWHVWKDW VHQWHQFLQJ SURFHGXUH DQG FRXQVHO PDGH QR REMHFWLRQV 'HIHQGDQWV ZHUH VHQWHQFHG WR OLIH LPSULVRQPHQW ZLWKRXW >L@W VKDOO EH XQODZIXO IRU DQ\ SHUVRQ HPSOR\HG E\ RU UHOHDVHZLWKDILYH\HDUVHQWHQFHIRULOOHJDOJDPEOLQJWRUXQ DVVRFLDWHG ZLWK DQ\ HQWHUSULVH HQJDJHG LQ RU WKH FRQFXUUHQWO\  'HIHQGDQWV DSSHDO WKHLU FRQYLFWLRQV DQG DFWLYLWLHVRIZKLFKDIIHFWLQWHUVWDWHRUIRUHLJQFRPPHUFH VHQWHQFHV WR FRQGXFW RU SDUWLFLSDWH GLUHFWO\ RU LQGLUHFWO\ LQ WKH FRQGXFWRIVXFKHQWHUSULVHjVDIIDLUVWKURXJKDSDWWHUQRI ,, UDFNHWHHULQJDFWLYLW\RUFROOHFWLRQRIXQODZIXOGHEW $9RLU'LUH  86& †  F   6XEVHFWLRQ G  PDNHV LW D FULPH WR FRQVSLUH WR YLRODWH F   %HFDXVH WKH VWDWXWH FRQWDLQV D 'HIHQGDQWVDUJXHWKDWWKH\GLGQRWHIIHFWLYHO\ZDLYHWKHLU MXULVGLFWLRQDOUHTXLUHPHQW WKHHQWHUSULVHPXVWEHHQJDJHGLQ ULJKWWREHSUHVHQWGXULQJYRLUGLUHEHFDXVHWKH\GLGQRWZDLYH RU DIIHFW FRPPHUFH  LW LV QRW FRQWUROOHG E\ /RSH] DQG WKH ULJKW LQ SHUVRQ EHIRUH WKH WULDO FRXUW  'HIHQGDQWV DUH DFFRUGLQJWRWKH6XSUHPH&RXUWZKHQD5,&2HQWHUSULVHLV HVVHQWLDOO\DVVHUWLQJWKDWDWULDOFRXUWPXVWHQJDJHDGHIHQGDQW mHQJDJHGLQlLQWHUVWDWHFRPPHUFHWKHJRYHUQPHQWGRHVQRW LQDQRQWKHUHFRUGFROORTX\EHIRUHDOORZLQJWKHGHIHQGDQWWR QHHG WR VKRZ WKDW WKH HQWHUSULVHjV HIIHFW RQ FRPPHUFH LV DEVHQWKLPVHOIIURPYRLUGLUHDQGWKDWIDLOXUHWRGRVRLVD mVXEVWDQWLDOl8QLWHG6WDWHVY5REHUWVRQ86 IXQGDPHQWDOVWUXFWXUDOHUURU:HGHFOLQHWRVRKROG   5REHUWVRQDIILUPHGD5,&2FRQYLFWLRQEDVHGRQ WKHRSHUDWLRQVRIDQ$ODVNDJROGPLQHZKLFKXVHGRXWRI $ FULPLQDO GHIHQGDQW KDV D FRQVWLWXWLRQDO ULJKW WR EH VWDWHZRUNHUVDQGVHQWJROGRXWRI$ODVNDDQGWKXVHQJDJHG mSUHVHQW DW DOO VWDJHV RI WKH WULDO ZKHUH KLV DEVHQFH PLJKW LQLQWHUVWDWHFRPPHUFH,G7KH&RXUWLQ5REHUWVRQUHVHUYHG IUXVWUDWH WKH IDLUQHVV RI WKH SURFHHGLQJV>@l  )DUHWWD Y WKH TXHVWLRQ RI ZKHWKHU D 5,&2 SURVHFXWLRQ EDVHG RQ DQ &DOLIRUQLD86Q  8QLWHG6WDWHVY HQWHUSULVH WKDW mDIIHFWVl LQWHUVWDWH FRPPHUFH PXVW VKRZ D *LEEV)G WK&LU )HGHUDO5XOHRI mVXEVWDQWLDOlHIIHFW,G &ULPLQDO3URFHGXUHEXLOGVRQWKLVULJKWDQGPDQGDWHVWKDW m>W@KHGHIHQGDQWVKDOOEHSUHVHQWDWHYHU\VWDJHRIWKHWULDO 6LQFH WKH DFWLYLW\@LQTXHVWLRQDIIHFWVLQWHUVWDWH DOVR8QLWHG6WDWHVY+RO\ILHOG)G WK&LU FRPPHUFHl,GDW   DIILUPLQJ D FRQYLFWLRQ ZKHQ WKH MXGJH DQG FRXQVHO  8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5LGGOHHWDO 5LGGOHHWDO FRQIHUHQFHFDOOHGWKHKRVSLWDOL]HGGHIHQGDQWZKRFRQYHUVHG GHQLDORIWKHULJKWWRDSXEOLFWULDOLVQRWVXEMHFWWRKDUPOHVV ZLWKKLVODZ\HUDQGDXWKRUL]HGKLVODZ\HUDQGWKHFRXUWWR HUURUDQDO\VLV 7RFUHDWHDQDXWRPDWLFUHYHUVDOUXOHIRUYRLU SURFHHGLQKLVDEVHQFH  GLUHDEVHQFHVZRXOGEHWRULVNLQWHUIHUHQFHZLWKWKHFKRLFHV PDGHE\FRXQVHODQGGHIHQGDQWIRUWKHGHIHQGDQWjVEHQHILW ,QWKLVFDVHGHIHQVHFRXQVHOVXJJHVWHGGHIHQGDQWVjDEVHQFH +HUHIRULQVWDQFHGHIHQGDQWVjDEVHQFHZDVSDUWRIDGHIHQVH DQG WKH FRXUW DOORZHG WKH ZDLYHU RQO\ DIWHU LW LQVWUXFWHG VWUDWHJ\WRDYRLGDQ\SUHMXGLFHUHVXOWLQJIURPWKHDSSHDUDQFH GHIHQVH FRXQVHO WR FRQVXOW ZLWK WKHLU FOLHQWV DQG  WKHQ RI KHDY\ VHFXULW\ GXULQJ WKH TXHVWLRQLQJ RI WKH SRWHQWLDO UHFHLYHGDVVXUDQFHIURPGHIHQVHFRXQVHOWKDWWKHGHIHQGDQWV MXURUV  1R SXUSRVH ZRXOG EH VHUYHG E\ D SHU VH UXOH WKDW ZDLYHGWKHLUULJKWWREHSUHVHQW7RKROGWKDWVXFKDZDLYHU HOLPLQDWHGWKLVVROXWLRQWRGHIHQGDQWVjGLOHPPD6XFKDUXOH RIDGHIHQGDQWjVYRLUGLUHSUHVHQFHZRXOGEHHIIHFWLYHRQO\ ZRXOGDOVRLQYLWHmVDQGEDJJLQJlE\GHIHQGDQWVVHHNLQJWRZLQ DIWHU DQ RQWKHUHFRUG FROORTX\ ZLWK WKH GHIHQGDQW ZRXOG DUHYHUVDORQLVVXHVQHYHUSUHVHQWHGWRWKHWULDOFRXUW:H FUHDWHDEXUGHQVRPHDQGLPSUDFWLFDOUXOH,QGHHGVXFKDUXOH GHFOLQHWRH[SDQGWKHOLPLWHGOLVWRIVWUXFWXUDOULJKWVZKRVH ZRXOGHIIHFWLYHO\VWRSWKHSURFHHGLQJVZKHQHYHUDGHIHQGDQW YLRODWLRQFRQVWLWXWHVSHUVHHUURUE\DGGLQJWKHGHIHQGDQWjV UHIXVHGWRUHWXUQWRFRXUW:HKROGWKDWGHIHQGDQWVj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† 5,&2 RI GHIHQGDQWV IURP D SRUWLRQ RI YRLU GLUH DQG SODLQ HUURU DQG86&† JDPEOLQJ DQG5LGGOHXQGHU86& UHYLHZWRGHIHQGDQWVjH[FOXVLRQIURPSHUHPSWRU\FKDOOHQJHV  † YLROHQFHLQIXUWKHUDQFHRIUDFNHWHHULQJ EHFDXVHWKH $Q\HUURULQDGHIHQGDQWjVYRLUGLUHDEVHQFHLVQRWDmGHIHFW JRYHUQPHQW GLG QRW VKRZ D VXEVWDQWLDO HIIHFW RQ LQWHUVWDWH DIIHFWLQJ WKH IUDPHZRUN ZLWKLQ ZKLFK WKH WULDO SURFHHGVl FRPPHUFH  'HIHQGDQWV UDLVH WKHLU LQWHUVWDWH FRPPHUFH $UL]RQDY)XOPLQDQWH86  QRULVLWRQH DUJXPHQWIRUWKHILUVWWLPHRQDSSHDO7KHFODLPPD\RQO\EH RI WKRVH HUURUV WKDW mQHFHVVDULO\ UHQGHU>V@ D WULDO UHYLHZHGIRUSODLQHUURU6HH8QLWHG6WDWHVY*D\GRV IXQGDPHQWDOO\ XQIDLUl 5RVH Y &ODUN  86   )G G&LU  UHYLHZLQJIRUSODLQHUURUWKH  FRPSDUH*LGHRQY:DLQZULJKW86  FODLP WKDW WKH HYLGHQFH ZDV LQVXIILFLHQW WR HVWDEOLVK D UHYHUVDOUHTXLUHGIRUWKHFRPSOHWHGHQLDORIWULDOFRXQVHO  FRQQHFWLRQWRLQWHUVWDWHFRPPHUFHLQDQH[SORVLYHVFDVH  7XPH\Y2KLR86   UHYHUVDOUHTXLUHG ZKHQDMXGJHKDVDILQDQFLDOLQWHUHVWLQFRQYLFWLRQGHVSLWHD 'HIHQGDQWV HUU LQ DVVHUWLQJ WKDW WKH LQWHUVWDWH FRPPHUFH ODFNRILQGLFDWLRQWKDWELDVLQIOXHQFHGGHFLVLRQV 9DVTXH]Y DUJXPHQWJRHVWRWKHFRXUWjVVXEMHFWPDWWHUMXULVGLFWLRQ7KLV +LOOHU\86   GLVFULPLQDWLRQLQWKH FRXUWKDVH[SODLQHGWKDWWKHLQWHUVWDWHFRPPHUFHUHTXLUHPHQW JUDQGMXU\LVQRWVXEMHFWWRKDUPOHVVHUURUUHYLHZ 0F.DVNOH ZKLOHUHIHUUHGWRDVDmMXULVGLFWLRQDOlHOHPHQWGRHVQRWDIIHFW Y:LJJLQV86Q   GHQLDORIWKH ULJKWWRVHOIUHSUHVHQWDWLRQDWWULDOLVQRWVXEMHFWWRKDUPOHVV HUURUUHYLHZ :DOOHUY*HRUJLD86Q   $OWVKXOHU ZDV QRW FRQYLFWHG XQGHU  86& †