United States v. Schulte

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$SSHOOHH    1R Y  !  .(11(7+ s 6&+8/7(  'HIHQGDQW$SSHOODQW  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG 1Rn3DXO50DWLD&KLHI'LVWULFWsXGJH $UJXHG$XJXVW 'HFLGHGDQG)LOHG6HSWHPEHU %HIRUH&/$<DQG*,/0$1&LUFXLWsXGJHV:,6(0$1 6HQLRU'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8('6SLURV3&RFRYHV7ROHGR2KLRIRU$SSHOODQW &KULVWLDQ + 6WLFNDQ $66,67$17 81,7(' 67$7(6 $77251(<&OHYHODQG2KLRIRU$SSHOOHH21%5,() 7KH +RQRUDEOH 7KRPDV $ :LVHPDQ sU 6HQLRU 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 0LGGOH 'LVWULFW RI 7HQQHVVHH VLWWLQJ E\ GHVLJQDWLRQ   8QLWHG6WDWHVY6FKXOWH 1R 6SLURV3&RFRYHV7ROHGR2KLRIRU$SSHOODQW&KULVWLDQ+ 6WLFNDQ $66,67$17 81,7(' 67$7(6 $77251(< &OHYHODQG2KLRIRU$SSHOOHH BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB :,6(0$1 6HQLRU 'LVWULFW sXGJH  .HQQHWK s 6FKXOWH m$SSHOODQWl DSSHDOVWKHVHQWHQFHHQWHUHGRQ0DUFK DJDLQVWKLPIRUZLUHIUDXGEDQNIUDXGDQGVHFXULWLHVIUDXG $SSHOODQWDUJXHVWKDWWKHGLVWULFWFRXUWVKRXOGKDYHGHSDUWHG DQRWKHUQLQHOHYHOVIRUIDPLO\UHVSRQVLELOLWLHVDQGIDLOHGWR GHSDUWWKRVHDGGLWLRQDOOHYHOVEHFDXVHLWGLGQRWXQGHUVWDQG WKDWLWSRVVHVVHGWKHDXWKRULW\WRGHSDUWWKDWIDU,QDGGLWLRQ $SSHOODQW DVVHUWV WKDW KLV VHQWHQFH YLRODWHV WKH 6XSUHPH &RXUWjV KROGLQJ LQ $SSUHQGL Y 1HZ sHUVH\  86   $SSHOODQWDOVRDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGE\ DSSO\LQJ WKH 0DQGDWRU\ 9LFWLPV 5HVWLWXWLRQ $FW RI  m095$l UDWKHUWKDQWKH9LFWLP:LWQHVV3URWHFWLRQ$FWRI  m9:3$l   LQ GHWHUPLQLQJ WKH DPRXQW RI UHVWLWXWLRQ RZHG  /DVWO\ WKH $SSHOODQW DUJXHV WKDW WKH GLVWULFW FRXUW HUUHGLQIDLOLQJWRRUGHUWKHSUHSDUDWLRQRIDQXSGDWHGSUH VHQWHQFLQJUHSRUWSULRUWRUHVHQWHQFLQJ7KH8QLWHG6WDWHV m$SSHOOHHlRUm*RYHUQPHQWl UHVSRQGVWKDWWKHGLVWULFWFRXUW GLG QRW HUU DQG UHTXHVWV WKDW WKH $SSHOODQWjV VHQWHQFH EH DIILUPHGRQDOOJURXQGV , $SSHOODQWZDVDQDFFRXQWUHSUHVHQWDWLYHDQGVWRFNEURNHU UHJLVWHUHG ZLWK WKH 6HFXULWLHV DQG ([FKDQJH &RPPLVVLRQ m6(&l DQGWKH1DWLRQDO$VVRFLDWLRQRI6HFXULWLHV'HDOHUV ,QF m1$6'l   $SSHOODQW VROG LQWHUHVWRQO\ m,2l  RU VWULSSHGPRUWJDJHEDFNHGVHFXULWLHVWRYDULRXVPXQLFLSDOLWLHV DQGVFKRROGLVWULFWVLQ2KLRWKURXJKUHSHDWHGDQGWHQDFLRXV mFROGFDOOLQJl7KHFKDUJHVLQKLVLQGLFWPHQWVWHPPHGIURP KLV PLVUHSUHVHQWLQJ WR WKH HQWLWLHVj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jVILUVWVHFRQGDQGIRXUWKDVVLJQPHQWVRIHUURU 8QLWHG6WDWHVY6FKXOWH)G WK&LU 8SRQ DUH$)),50('EXWLWVUHVWLWXWLRQRUGHULV9$&$7('DQG SHWLWLRQ IRU UHKHDULQJ HQ EDQF WKH VDPH SDQHO LVVXHG D WKHFDVHLV5(0$1'('WRGHWHUPLQHWKHSURSHUUHVWLWXWLRQ GHFLVLRQUHPDQGLQJWKHPDWWHUIRUUHVHQWHQFLQJLQOLJKWRIWKH XQGHUWKH9:3$ &RXUWj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jVGRZQZDUG GHSDUWXUH IRU H[WUDRUGLQDU\ IDPLO\ FLUFXPVWDQFHV ZDV  7ZHQW\IRXU FRXQWV RI EDQN IUDXG ZHUH GLVPLVVHG DW WULDO EHFDXVH WKH GLVWULFW FRXUW UXOHG WKDW WKH EDQNV ZHUH QRW YLFWLPV RI $SSHOODQWjV VFKHPH WR GHIUDXG  8QLWHG6WDWHVY6FKXOWH 1R 1R 8QLWHG6WDWHVY6FKXOWH  LQVXIILFLHQW IRU WKH UHDVRQ WKDW WKH GLVWULFW FRXUW FLUFXLWVDGRSWLQJWKHPLQRULW\DSSURDFKKDYHUHDVRQHGWKDW PLVXQGHUVWRRGLWVDELOLW\WRGHSDUWLQOLJKWRI&ROHPDQ UHVWLWXWLRQRUGHUVXQGHUWKH$FWDUHQRWSXQLVKPHQWIRUWKH SXUSRVHRI([3RVW)DFWR&ODXVHDQDO\VLV $GLVWULFWFRXUWjVGHFLVLRQWRGHSDUWIURPWKH6HQWHQFLQJ *XLGHOLQHV WKH m*XLGHOLQHVl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jV DSSHDO WKHUHIRUH LV OLPLWHG WR DSSURDFK7KXVZHKROGWKDWZKHUHDQDFWZDVFRPPLWWHG ZKHWKHUWKHGLVWULFWMXGJHSURSHUO\XQGHUVWRRGWKHVWDQGDUGWR SULRU WR WKH HIIHFWLYH GDWH RI WKH 095$ WKH UHWURDFWLYH EHDSSOLHGDQGGRHVQRWDOORZWKH&RXUWWRFRQVLGHUZKHWKHU DSSOLFDWLRQ RI WKH 095$ WR WKDW DFW YLRODWHV WKH ([ 3RVW WKHGLVWULFWMXGJHDEXVHGKLVGLVFUHWLRQLQQRWGHSDUWLQJPRUH )DFWR&ODXVH WKDQILYHOHYHOV :KLOH $SSHOODQWjV FRQYLFWLRQ RFFXUUHG RQ 0D\   ,QKLVEULHI$SSHOODQWFLWHVWZRVWDWHPHQWVE\WKHGLVWULFW ZKLFKLVDIWHUWKH095$jVHIIHFWLYHGDWHRI$SULO MXGJHWKDWKHDUJXHVGHPRQVWUDWHWKDWWKHGLVWULFWMXGJHIDLOHG KLVFULPLQDODFWLYLW\RFFXUUHGSULRUWRWKH$FWjVHIIHFWLYHGDWH WRFRPSUHKHQGWKHOLPLWVRIKLVDELOLW\WRGHSDUWGRZQZDUG %HFDXVHWKH095$KDGWKHSRWHQWLDOWRLQFUHDVHWKHDPRXQW )LUVW$SSHOODQWSRLQWVWRWKHIROORZLQJTXHVWLRQDVNHGE\WKH RI UHVWLWXWLRQ KH ZDV UHTXLUHG WR SD\ WKH GLVWULFW FRXUWjV FRXUWWRWKH$SSHOODQWjVDWWRUQH\ DSSOLFDWLRQRIWKH095$WR$SSHOODQWZDVUHWURDFWLYH$VD UHVXOWWKHGLVWULFWFRXUWFRPPLWWHGSODLQHUURULQDSSO\LQJWKH 0U'R\OHOHWPHDVN\RXWKLV,QRUGHUWROHWKLPVWD\ 095$WRWKHGHWHUPLQDWLRQRI$SSHOODQWjVUHVWLWXWLRQ7KH ZLWK KLV IDPLO\ , ZRXOG KDYH WR GHSDUW GRZQZDUG  UHVWLWXWLRQ RUGHU LV WKHUHIRUH 9$&$7(' DQG WKH LVVXH LV OHYHOV KDYH \RX HYHU IRXQG D &RXUW RI $SSHDOV FDVH 5(0$1'('WRWKHGLVWULFWFRXUWIRUFRQVLGHUDWLRQRIWKH ZKHUHWKH\VXVWDLQHGDOHYHOGRZQZDUGGHSDUWXUH" DSSURSULDWHIDFWRUVXQGHUWKH9:3$ 6HFRQGWKH$SSHOODQWFLWHVWKHGLVWULFWMXGJHjVODWHUVWDWHPHQW 9 WKDW $SSHOODQWjV ILQDO DUJXPHQW RQ DSSHDO LV WKDW WKH GLVWULFW ,W PD\ YHU\ ZHOO EH WUXH WKDW RWKHUV VKRXOG KDYH EHHQ FRXUWHUUHGE\IDLOLQJWRREWDLQDQXSGDWHGSUHVHQWHQFHUHSRUW SURVHFXWHG,FHUWDLQO\DPQRWLQDSRVLWLRQWRPDNHDQ\ m365l SULRUWRWKHUHVHQWHQFLQJ%HFDXVHWKH$SSHOODQW MXGJPHQWDVWRZKHWKHURUQRW0U6FKXOWHGLGRUGLGQRW IDLOHG WR UDLVH WKLV REMHFWLRQ DW WKH VHQWHQFLQJ KHDULQJ WKH RIIHUWRDVVLVWLQWKHSURVHFXWLRQRIRWKHUSHUVRQVLQWKH VWDQGDUGRIUHYLHZLVSODLQHUURU6HHHJ+DOO 'HVSLWH IHGHUDOV\VWHP%XWWKDWLVEHVLGHWKHIDFWDVIDUDVP\ $SSHOODQWjVFODLPRIHUURU$SSHOODQWKDVQRWGHPRQVWUDWHG UHDGLQJRIWKHJXLGHOLQHVLVFRQFHUQHG,GRQRWEHOLHYH KRZKHZDVSUHMXGLFHGLQDQ\ZD\E\WKHXVHRIWKHROG365 WKDW WKH IDFW WKDW KH LV WKH RQO\ RQH SURVHFXWHG LQ WKH DW WKH UHVHQWHQFLQJ  7KH $SSHOODQW KDV QRW RIIHUHG DQ\ IHGHUDO V\VWHP VKRXOG EH WDNHQ LQWR DFFRXQW LQ PDWHULDO HYLGHQFH WKDW ZRXOG VKRZ WKDW DQ XSGDWHG UHSRUW GHWHUPLQLQJ ZKHWKHU RU QRW D GHSDUWXUH VKRXOG EH ZRXOG KDYH DQ\ HIIHFW DW DOO RQ WKH GLVWULFW FRXUWjV UH JUDQWHG VHQWHQFLQJ  8QLWHG6WDWHVY6FKXOWH 1R 1R 8QLWHG6WDWHVY6FKXOWH  IXOO UHVWLWXWLRQ ZKLFK PXVW EH LPSRVHG mZLWKRXW $SSHOODQW UHDGV WKHVH VWDWHPHQWV DV LQGLFDWLQJ WKDW WKH FRQVLGHUDWLRQ RI WKH HFRQRPLF FLUFXPVWDQFHV RI WKH GLVWULFW FRXUW GLG QRW FRPSUHKHQG WKDW LW KDG WKH DELOLW\ WR GHIHQGDQWl86&††$ D  DQG I  $  GHSDUWGRZQZDUGDQ\IXUWKHUWKDQILYHOHYHOVIRUH[WUDRUGLQDU\ IDPLO\ FLUFXPVWDQFHV  7KH HYLGHQFH KRZHYHU VXJJHVWV 7KH UHPDLQLQJ TXHVWLRQ LV ZKHWKHU WKH 095$ RU WKH RWKHUZLVH%RWKRIWKHDERYHVWDWHPHQWVFOHDUO\GHPRQVWUDWH 9:3$ DSSOLHV WR WKH FULPHV FRPPLWWHG E\ WKH $SSHOODQW WKHGLVWULFWMXGJHjVFRJQL]DQFHRIWKHKLJKVWDQGDUGRISURRI 7KHVWDWXWRU\QRWHVXQGHU86&†SURYLGHWKDWWKH QHHGHGWRMXVWLI\VXFKDGUDVWLFGHSDUWXUHIURPWKH*XLGHOLQHV 095$LQFOXGLQJ†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mKHDUWODQGlRIWKH*XLGHOLQHVWKH HQDFWPHQWDQGLWPXVWGLVDGYDQWDJHWKHRIIHQGHUE\DOWHULQJ GLVWULFW MXGJH FKRVH WR GHSDUW GRZQZDUG ILYH OHYHOV IRU WKH GHILQLWLRQ RI FULPLQDO FRQGXFW RU LQFUHDVLQJ WKH H[WUDRUGLQDU\ IDPLO\ UHVSRQVLELOLWLHV  %HFDXVH WKHUH LV QR SXQLVKPHQWIRUWKHFULPH6HH/\QFHY0DWKLV86 HYLGHQFH WKDW WKH GLVWULFW MXGJH IDLOHG WR FRPSUHKHQG WKH   ,QDGGLWLRQDPDMRULW\RIIHGHUDOFRXUWVWKDWKDYH *XLGHOLQHVWKHUHLVQRPHULWWR$SSHOODQWjVFODLPRIHUURUIRU FRQVLGHUHGWKLVLVVXHKDYHKHOGWKDWUHWURDFWLYHDSSOLFDWLRQRI IDLOXUHWRGHSDUWDQDGGLWLRQDOQLQHOHYHOV WKH 095$ YLRODWHV WKH ([ 3RVW )DFWR &ODXVH  &RPSDUH 8QLWHG 6WDWHV Y 5LFKDUGV  )G   WK &LU ,,,  KROGLQJ WKDW DSSOLFDWLRQ RI WKH 095$ WR DQ LQGLYLGXDOj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jV DUJXPHQWLVZLWKRXWPHULW  7KH 8QLWHG 6WDWHV &RQVWLWXWLRQ SURYLGHV WKDW m>Q@R VWDWH VKDOO    SDVV DQ\    H[ SRVW IDFWR ODZl 86 &RQVW DUW , ††  FO   8QLWHG6WDWHVY6FKXOWH 1R 1R 8QLWHG6WDWHVY6FKXOWH  ,9 WK&LU  GLVFXVVLQJDWOHQJWKWKHSODLQHUURUGRFWULQH VHWIRUWKLQ8QLWHG6WDWHVY2ODQR86   $SSHOODQWQH[WDVVHUWVWKDWWKHGLVWULFWFRXUWHUUHGLQIDLOLQJ WRKROGDKHDULQJWRGHWHUPLQHWKHDPRXQWRIUHVWLWXWLRQWREH +HUH WKH $SSHOODQW FLWHV DV HUURU WKH GLVWULFW FRXUWjV SDLG WR WKH YLFWLPV RI WKH $SSHOODQWjV RIIHQVH  $SSHOODQW GHWHUPLQDWLRQ WKDW UHVWLWXWLRQ ZDV PDQGDWRU\ DQG WKDW WKH VSHFLILFDOO\DUJXHVWKDWWKHGLVWULFWFRXUWRSHUDWHGXQGHUWKH 095$DSSOLHGLQVWHDGRIWKH9:3$7KH$SSHOODQWQRWHV LQFRUUHFW XQGHUVWDQGLQJ WKDW UHVWLWXWLRQ ZDV PDQGDWRU\ WKDWDWWKHRULJLQDOVHQWHQFLQJKHDULQJWKHGLVWULFWFRXUWPDGH $SSHOODQWjV FODLP LV EDVHG RQ WKH SUHPLVH WKDW WKH GLVWULFW WKHIROORZLQJFRPPHQW FRXUW HUUHG EHFDXVH LW H[DPLQHG WKH TXHVWLRQ RI UHVWLWXWLRQ XQGHU WKH 0DQGDWRU\ 9LFWLPV 5HVWLWXWLRQ $FW RI  6HFRQGO\ZLWKUHVSHFWWRWKHUHVWLWXWLRQLQWKLVFDVHLILW m095$l UDWKHUWKDQWKH9LFWLP:LWQHVV3URWHFWLRQ$FWRI ZHUH ZLWKLQ P\ SRZHU WR GHQ\ UHVWLWXWLRQ RU SURYLGH  m9:3$l  RQO\KDOIUHVWLWXWLRQ,ZRXOGGRVREHFDXVHIUDQNO\, ZDVDSSDOOHGDWWKHWHVWLPRQ\,KHDUGIURPWKHDOOHJHG $SSHOODQW KRZHYHU GLG QRW UDLVH DQ\ TXHVWLRQ DV WR WKH YLFWLPVLQWKLVFDVH UHVWLWXWLRQ DVVLJQHG DW WKH RULJLQDO VHQWHQFLQJ DQG GLG QRW UDLVHLWRQDSSHDO$WWKHUHVHQWHQFLQJWKHGLVWULFWFRXUWJDYH s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† G  6WDWHV Y %DUDMDV1XQH]  )G   WK &LU IDLOXUHWRQRWLI\WKHGLVWULFWFRXUWRIDQ\FRQFHUQUHJDUGLQJ ,Q$SULO&RQJUHVVSDVVHGWKH$QWLWHUURULVPDQG'HDWK GRZQZDUG GHSDUWXUH FRQVWLWXWHG IRUIHLWXUH RI WKH LVVXH EXW 3HQDOW\$FWRI m$('3$l 3XE/1R SHUPLWWHGSODLQHUURUUHYLHZ 8QLWHG6WDWHVY7KRPDV 6WDW   7KH $('3$ LQFOXGHG WKH 095$ ZKLFK )G   WK &LU  SODLQ HUURU UHYLHZ ZKHQ DPHQGHG WKH 9:3$  7KH 095$ DGGHG 6HFWLRQ $ GHIHQGDQW IDLOHG WR REMHFW DW VHQWHQFLQJ KHDULQJ WR XSZDUG ZKLFKUHTXLUHVPDQGDWRU\UHVWLWXWLRQWRYLFWLPV RIFHUWDLQ GHSDUWXUH  FULPHVLQFOXGLQJRIIHQVHVDJDLQVWSURSHUW\XQGHU7LWOHDQG LQFOXGLQJDQ\RIIHQVHFRPPLWWHGE\IUDXGRUGHFHLW)RUWKH 7RHVWDEOLVKSODLQHUURUDGHIHQGDQWPXVWVKRZ  WKDWDQ FRYHUHGRIIHQVHVXQGHU†$DGLVWULFWFRXUWmVKDOORUGHUl HUURURFFXUUHGLQWKHGLVWULFWFRXUW  WKDWWKHHUURUZDVSODLQ LHREYLRXVRUFOHDU  WKDWWKHHUURUDIIHFWHGGHIHQGDQW V VXEVWDQWLDOULJKWVDQG  WKDWWKLVDGYHUVHLPSDFWVHULRXVO\  DIIHFWHG WKH IDLUQHVV LQWHJULW\ RU SXEOLF UHSXWDWLRQ RI WKH ,Q WKH OHJLVODWLYH KLVWRU\ RI WKH 095$ WKH 6HQDWH &RPPLWWHH VWDWHG MXGLFLDOSURFHHGLQJVsRKQVRQY8QLWHG6WDWHV86 EOXQWO\ m,W LV WKH FRPPLWWHHjV LQWHQW WKDW FRXUWV RUGHU IXOO UHVWLWXWLRQ WR DOO LGHQWLILDEOH YLFWLPV RI FRYHUHG RIIHQVHVl 6HQ 5HS 1R  WK   8QLWHG6WDWHVY7KRPDV)G &RQJ G 6HVV UHSULQWHG LQ  86&&$1