United States v. Langan

Summarize Case

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  !  3(7(5 .(9,1 /$1*$1  'HIHQGDQW$SSHOODQW  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV 1RnsRKQ'+ROVFKXK'LVWULFWsXGJH $UJXHGsXQH 'HFLGHGDQG)LOHG$XJXVW %HIRUH*8<%2**6DQG*,/0$1&LUFXLWsXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8('  & 0DUN 3LFNUHOO 1DVKYLOOH 7HQQHVVHH IRU $SSHOODQW'DQD03HWHUV$66,67$1781,7('67$7(6 $77251(<&ROXPEXV2KLRIRU$SSHOOHH21%5,() &0DUN3LFNUHOO1DVKYLOOH7HQQHVVHHIRU$SSHOODQW'DQD 0 3HWHUV 5RE\Q sRQHV +DKQHUW $66,67$17 81,7(' 67$7(6$77251(<6&ROXPEXV2KLRIRU$SSHOOHH   8QLWHG6WDWHVY/DQJDQ 1R BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB 521$/' /(( *,/0$1 &LUFXLW sXGJH  3HWHU .HYLQ /DQJDQ ZDV FRQYLFWHG E\ D MXU\ RI UREELQJ WZR EDQNV LQ YLRODWLRQRI86&†DQGRIXVLQJILUHDUPVDQGD GHVWUXFWLYHGHYLFHLQFRPPLWWLQJWKHUREEHULHVLQYLRODWLRQRI  86& †  F   ,Q D VHSDUDWH WULDO FRQFHUQLQJ WKH FLUFXPVWDQFHVRIKLVDUUHVWRQXQUHODWHGFKDUJHV/DQJDQZDV FRQYLFWHG RI DVVDXOWLQJ IHGHUDO RIILFHUV LQ YLRODWLRQ RI  86& †  DQG RI IXUWKHU ILUHDUPV RIIHQVHV  /DQJDQjV FRQYLFWLRQVIURPERWKWULDOVZHUHFRQVROLGDWHGIRUVHQWHQFLQJ SXUSRVHV DQG UHVXOWHG LQ OLIH LPSULVRQPHQW ZLWKRXW WKH SRVVLELOLW\RISDUROHSOXV\HDUV 2QDSSHDO/DQJDQFODLPVWKDW  WKHGLVWULFWFRXUWHUUHG ZKHQ LW H[FOXGHG D SV\FKRORJLVWjV H[SHUW WHVWLPRQ\ RQ WKH UHOLDELOLW\RIH\HZLWQHVVLGHQWLILFDWLRQ  WKHHYLGHQFHZDV LQVXIILFLHQWWRHVWDEOLVKWKDWWKHGHYLFHOHIWDWRQHRIWKHEDQNV ZDVDmGHVWUXFWLYHGHYLFHlDQG  QRQHRIKLVFRQYLFWLRQV XQGHU86&† F VKRXOGEHFRQVLGHUHGDmVHFRQGRU VXEVHTXHQWl FRQYLFWLRQ WKDW ZDUUDQWV D PDQGDWRU\ OLIH VHQWHQFHZLWKRXWSDUROH)RUWKHUHDVRQVVHWIRUWKEHORZZH $)),50WKHMXGJPHQWRIWKHGLVWULFWFRXUW ,%$&.*5281' /DQJDQ ZKR XVHG WKH DOLDV m&RPPDQGHU 3HGURl OHG D VPDOO ZKLWHVXSUHPDFLVW JURXS NQRZQ DV WKH $U\DQ 5HSXEOLFDQ$UP\ m$5$l DQGDWWLPHVDVWKH0LGZHVWHUQ %DQN%DQGLWV,QKHDQGKLVFKLOGKRRGIULHQG5LFKDUG m:LOG %LOOl *XWKULH IRXQGHG WKH $5$ DIWHU DWWHQGLQJ D &KULVWLDQ,GHQWLW\PHHWLQJ7KH$5$ZDVDFRS\FDWQHR 1D]L JURXS LQVSLUHG E\ WKH ERRN 7KH 6LOHQW %URWKHUKRRG ZKLFKGHWDLOHGWKHH[SORLWVRIDQXQGHUJURXQGJXHUULOODEDQN UREEHU\JDQJNQRZQDVm7KH2UGHUl,QWKHPLGVWKH $5$FRPPLWWHGDQXPEHURIEDQNUREEHULHVWKURXJKRXWWKH PLGZHVW WR VXSSRUW WKHLU DYRZHG SXUSRVH RI FRPPLWWLQJ WHUURULVWDFWVDJDLQVWWKH8QLWHG6WDWHVJRYHUQPHQW$SRUWLRQ  8QLWHG6WDWHVY/DQJDQ 1R 1R 8QLWHG6WDWHVY/DQJDQ  & /DQJDQjVOLIHVHQWHQFHXQGHU86&† F RIWKHSURFHHGVIURPWKHEDQNUREEHULHVZDVWKHQIXQQHOHGWR VLPLODU QHR1D]L FDXVHV ZKLOH WKH UHPDLQGHU ZDV XVHG WR $V KLV ILQDO FODLP RI HUURU /DQJDQ PDLQWDLQV WKDW WKH ILQDQFHIXWXUHUREEHULHV%HIRUHKLVWULDO/DQJDQLQIRUPHGD GLVWULFW FRXUW LPSURSHUO\ HQKDQFHG KLV VHQWHQFH XQGHU  3UHWULDO6HUYLFHV2IILFHUWKDWKHKDGEHHQDmVHOIHPSOR\HG 86& †  F    6SHFLILFDOO\ /DQJDQ REMHFWV WR WKH UHYROXWLRQDU\l ZLWK WKH JRDO RI mRYHUWKURZLQJ WKH WUHDWPHQW RI &RXQWV   DQG  DV mVHFRQG RU VXEVHTXHQW JRYHUQPHQWl FRQYLFWLRQVlDUJXLQJLQmJRRGIDLWKlWKDWKLV OLIHVHQWHQFH VKRXOG EH UHYHUVHG  7KH GLVWULFW FRXUWjV DSSOLFDWLRQ RI  ,QWKHIDOORI/DQJDQZHQWXQGHUJURXQGEUHDNLQJRII 86&† F LVD TXHVWLRQRIODZZKLFKZHUHYLHZGH DOOFRQWDFWZLWKKLVIDPLO\DQGIULHQGVDQGVWD\LQJLQYDULRXV QRYR6HH8QLWHG6WDWHVY'HDO)G WK PRWHOV  /DQJDQ *XWKULH DQG DQ DVVRFLDWH 6KDZQ .HQQ\ &LU DII G86   DWWHPSWHG WR URE 6RFLHW\ 1DWLRQDO %DQN m61%l  LQ 6SULQJGDOH 2KLR GXULQJ WKLV SHULRG  $UPHG DQG ZHDULQJ /DQJDQIUDQNO\DFNQRZOHGJHVWKDWWKHEDVLVRIKLVREMHFWLRQ EXOOHWSURRIYHVWVWKH\GURYHWRWKHEDQN7KH\EURXJKWZLWK LVLQGLUHFWFRQIOLFWZLWKWKH6XSUHPH&RXUWjVKROGLQJLQ'HDO WKHP GLVJXLVHV D PRFN H[SORVLYH GHYLFH DQG D SROLFH Y8QLWHG6WDWHV86  $VWKH6XSUHPH&RXUW VFDQQHU  )RU UHDVRQV QRW PDGH FOHDU LQ WKH UHFRUG WKH\ H[SODLQHGLIDGHIHQGDQWLVFKDUJHGZLWKDQG FRQYLFWHGRI DEDQGRQHGWKHLUSODQVWRUREWKHEDQNRQWKHGD\LQTXHVWLRQ VHSDUDWH RIIHQVHV WR ZKLFK †  F  DSSOLHV WKH VHSDUDWH FRQYLFWLRQVRQWKHDVVRFLDWHG† F FRXQWVFDQEHXVHGWR 2QsXQHKRZHYHU61%ZDVUREEHGVKRUWO\DIWHULW GHWHUPLQH SUHYLRXV DQG VXEVHTXHQW FRQYLFWLRQV 6HH 'HDO RSHQHG7KHUREEHU\ZDVFDUULHGRXWE\WZRDUPHGJXQPHQ 86DW  %HFDXVH/DQJDQZDVFRQYLFWHGRI ZHDULQJ5LFKDUG1L[RQDQG5RQDOG5HDJDQPDVNV2QHRI WKHWZRVHSDUDWHDQGGLVWLQFWDUPHGUREEHU\YLRODWLRQVKLV WKHUREEHUVRUGHUHGHYHU\RQHWRWKHIORRUDQGUHPRYHGPRQH\ † F FRQYLFWLRQVUHODWLQJWRWKRVHXQGHUO\LQJYLRODWLRQV IURPWKHWHOOHUGUDZHUVZKLOHWKHRWKHUJXQPDQVWRRGZDWFK TXDOLI\ DV D SUHYLRXV DQG VXEVHTXHQW FRQYLFWLRQ LQ WKH OREE\ RI WKH EDQN  7KH UREEHUV VWROH  LQ 1HYHUWKHOHVV/DQJDQDUJXHVWKDW'HDOVKRXOGEHRYHUUXOHG IHGHUDOO\LQVXUHGIXQGVWKDWZHUHDWWDFKHGWRDG\HSDFN$ :HDUHRIFRXUVHZLWKRXWDXWKRULW\WRGLVUHJDUGFRQWUROOLQJ G\HSDFNLVDVDIHW\GHYLFHWKDWLVGLVJXLVHGDVDQRUGLQDU\ 6XSUHPH&RXUWSUHFHGHQW/DQJDQjVFKDOOHQJHWRKLVVHQWHQFH XQXVHGSDFNRIFXUUHQF\ 6RRQDIWHULWSDVVHVWKURXJKWKH LVWKHUHIRUHUHMHFWHG$FFRUGLQJO\WKHGLVWULFWFRXUWGLGQRW PDJQHWLFILHOGRIWKHEDQNjVGRRUVWKHG\HSDFNLVGHVLJQHG HUULQHQKDQFLQJ/DQJDQjVVHQWHQFHIRUWKHVHFRQG† F  WRH[SORGHUHOHDVLQJUHGVPRNHWHDUJDVDQGUHGG\H FRQYLFWLRQ :KLOHWKHUREEHUVZHUHGULYLQJDZD\IURP61%LQDEURZQ ,,,&21&/86,21 &KHY\&LWDWLRQWKHG\HSDFNH[SORGHG7KHUREEHUVWKUHZ VRPHRIWKHPRQH\RXWRIWKHZLQGRZDVWKH\IOHGWKHVFHQH )RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH 7KH\WKHQDEDQGRQHGWKHJHWDZD\FDUOHVVWKDQDEORFNIURP MXGJPHQWRIWKHGLVWULFWFRXUW WKHEDQN7KHFDUZDVODWHUGLVFRYHUHGWREHUHJLVWHUHGWRm(G 0F0DKRQl RQH RI *XWKULHjV DOLDVHV  ,QVLGH WKH FDU WKH SROLFHUHFRYHUHGD0DUNSUDFWLFHKDQGJUHQDGHDELOO ZLWKUHGG\HVWDLQDQGDSROLFHVFDQQHU /DWHUWKDWPRQWK*XWKULHPHWZLWK.HQQ\LQ&LQFLQQDWLDQG JDYH KLP DSSUR[LPDWHO\  WR FRPSHQVDWH KLP IRU KLV mHDUOLHUYHQWXUHVlLQFOXGLQJWKHDERUWHGDWWHPSWWRURE61%  8QLWHG6WDWHVY/DQJDQ 1R 1R 8QLWHG6WDWHVY/DQJDQ  LQ WKH IDOO RI   7KH PRQH\ ZDV VWDLQHG ZLWK UHG G\H KDG UHOLHG XSRQ %XUPHLVWHUjV FKHPLFDO DQDO\VLV RI WKH *XWKULH LQIRUPHG .HQQ\ WKDW KH DQG /DQJDQ KDG EHHQ VPRNHOHVVSRZGHU DQGWKHQGHWHUPLQHGWKDWWKHH[SORVLYH VXFFHVVIXOLQUREELQJWKHEDQNRQWKHLUVHFRQGDWWHPSWDQG KDG EHHQ FRQILQHG LQ WKH SODVWLF SLSH HQFORVHG LQ WKH WKDWWKH\KDGXVHGDmWDNHRYHUlFRPPDQGVW\OHDVHPSOR\HG OXQFKER[$VVXFKKHWHVWLILHGWKDWWKHGHYLFHZDVFDSDEOHRI E\m7KH2UGHUlEDQGLWVLQ7KH6LOHQW%URWKHUKRRG H[SORVLRQ E\ EHLQJ WKURZQ RU GURSSHG HYHQ LI LW GLG QRW FRQWDLQDQmDSSDUHQWFODVVLFLQLWLDWRUl+HDOVRIRXQGWKDWWKH )RXUPRQWKVODWHURQWKHPRUQLQJRI2FWREHUWZR GHYLFHZDVHTXLSSHGZLWKDQHOHFWULFFLUFXLWKRRNHGWRDSDJHU PDVNHGPHQUREEHGWKH&ROXPEXV1DWLRQDO%DQN m&1%l DQGSRZHUHGE\WZRQLQHYROWEDWWHULHVDVZHOODVDPHUFXU\ VRRQDIWHULWRSHQHG*XWKULHKDGSXUFKDVHGDFDOLEHUULIOH VZLWFK%DVHGRQWKHVHILQGLQJV+HFNPDQFRQFOXGHGWKDWWKH LQWKH&ROXPEXVDUHDRQWKHSUHYLRXVGD\'XULQJWKH&1% GHYLFH ZDV LQ IDFW D SLSH ERPE ZKLFK LV GHILQHG DV WKH UREEHU\WKHJXQPHQZRUHFRQVWUXFWLRQRYHUDOOVVNLPDVNV SXUSRVHIXOFRQWDLQPHQWRIDQH[SORVLYHPL[WXUHLQRUGHUWR KDUGKDWVVXQJODVVHVDQGJORYHV7KHPHQRUGHUHGHYHU\RQH DFKLHYH GHWRQDWLRQ  6HH  86& †  D    86& WRWKHIORRUDQGVKRXWHGWRRQHDQRWKHUXVLQJ6SDQLVKSKUDVHV  I  VXFKDVmDQGDOHDQGDOHlDQGmODERPEDl$W/DQJDQj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jV DVVLVWDQW PDQDJHU /LVD &RSOH\ ODWHU LGHQWLILHG RSHUDWHDVLQLWLDOO\LQWHQGHGEXWWKDWLWZDVHQRXJKWKDWLWEH /DQJDQDVWKHUREEHU&RSOH\WHVWLILHGDW/DQJDQjVWULDOWKDW UHDGLO\FRQYHUWLEOHLQWRDGHVWUXFWLYHGHYLFHWKH7XUF]\NFRXUW VKHKDGVHHQKLVIDFHFOHDUO\IRUDERXWWKUHHVHFRQGVDVKH SRLQWHGRXWWKDWWKHUHKDGEHHQWHVWLPRQ\WKDWmHYHQLIWKH SURJUHVVHG GRZQ WKH WHOOHU OLQH  :KHQ KH WRRN RII WKH FLUFXLWU\ZHUHUHPRYHGWKHGHYLFHFRXOGIXQFWLRQE\PHUHO\ GLVJXLVH /DQJDQ ZDV DSSUR[LPDWHO\ IRXU IHHW DZD\ IURP FRQQHFWLQJWKHWZRZLUHOHDGVWRDQ\HOHFWULFDOVRXUFHRQD &RSOH\EXWKHFDPHZLWKLQmWRXFKLQJGLVWDQFHlDVKHHPSWLHG FDUl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mLQRSHUDEOHFLUFXLWEDGVZLWFKHVDQGGHDGEDWWHU\l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m>:@H DQDO\VLV6WHYHQ%XUPHLVWHUDQ)%,WR[LFRORJLVWFRQGXFWHG GRQRWUHDGWKHVHFDVHVDVUHTXLULQJWKHJRYHUQPHQWWRSURYH DFKHPLFDODQDO\VLVRQDSRZGHUVDPSOHIURPWKHGHYLFHDQG EH\RQGDUHDVRQDEOHGRXEWWKDWHDFKFRPSRQHQWLVSUHVHQW FRQFOXGHG WKDW LW ZDV FRPSRVHG RI mQRQSHUIRUDWHG GLVN LQVWHDG WKH JRYHUQPHQWjV EXUGHQ LV WR SURYH EH\RQG D GRXEOHEDVHGVPRNHOHVVSRZGHUlDQGDQRQH[SORVLYHZKLWH UHDVRQDEOHGRXEWWKDWWKHGHYLFHVDUHGHVWUXFWLYHRUFRXOGEH SRZGHU FRQVLVWLQJ RI FDOFLXP VXOIDWH FDOFLXP FDUERQDWH UHDGLO\PDGHVRl  VLOLFRQGLR[LGHDQGDOXPLQXPFRPSRXQGV$W/DQJDQj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mGHVWUXFWLYHGHYLFHlLQFOXGLQJDQ H[SORVLYHSURSHQVLWLHVZHUHRWKHUZLVHXQDIIHFWHG H[SORVLYH PDLQ FKDUJH D FRQWDLQHU DQG D PHWKRG RI LQLWLDWLRQ 7KH RWKHU )%, H[SHUW WR WHVWLI\ ZDV 5REHUW +HFNPDQ D KD]DUGRXVGHYLFHVDQGH[SORVLYHVH[DPLQHUZKRDGGUHVVHG %XUPHLVWHUWHVWLILHGWKDWEDVHGRQKLVIRUHQVLFDQDO\VLVWKH WKH HQJLQHHULQJ DVSHFWV RI WKH GHYLFH  +H H[DPLQHG D SRZGHUFRQWDLQHGZLWKLQWKH&1%GHYLFHZDVmQRQSHUIRUDWHG SKRWRJUDSKRIWKHGHYLFHEHIRUHLWZDVUHQGHUHGVDIHDVZHOO GLVNGRXEOHEDVHGVPRNHOHVVSRZGHU>DQG@DFRPSRVLWLRQ DV WKH UHFRYHUHG GHEULV  5HO\LQJ XSRQ %XUPHLVWHUjV RIFDOFLXPVXOIDWHFDOFLXPFDUERQDWHVLOLFRQGLR[LGH>@DV FKDUDFWHUL]DWLRQ RI WKH SRZGHU PL[WXUH DV DQ H[SORVLYH ZHOODVDQDOXPLQXPFRQWDLQLQJPDWHULDOl:KHQKHDWVKRFN +HFNPDQ GHWHUPLQHG WKDW WKH GHYLFH ZDV FDSDEOH RI RU IULFWLRQ LV DSSOLHG WR QRQSHUIRUDWHG GLVN GRXEOHEDVHG H[SORVLRQ)XUWKHUPRUHKHGHWHUPLQHGWKDWDOWKRXJKLWGLG VPRNHOHVVSRZGHUFRQWDLQHGZLWKLQDSODVWLFSLSH%XUPHLVWHU QRWFRQWDLQDQmDSSDUHQWFODVVLFLQLWLDWRUlLWFRXOGH[SORGHE\ RSLQHG WKDW LW LV FDSDEOH RI H[SORGLQJ  /DQJDQ IDXOWV PLVKDQGOLQJ DORQH VXFK DV E\ mGURSSLQJ WKH SLSHl RQ WKH %XUPHLVWHUIRUIDLOLQJWRVXEMHFWWKHSRZGHUWRIXUWKHUWHVWLQJ JURXQG+HDOVRIRXQGWKDWWKHGHYLFHZDVHTXLSSHGZLWKDQ EDVHGRQLWVFRQWDLQLQJDZKLWHLQHUWPL[WXUHLQDGGLWLRQWR HOHFWULFFLUFXLWKRRNHGWRDSDJHUDQGSRZHUHGE\WZRQLQH VPRNHOHVV SRZGHU  $W WULDO KRZHYHU %XUPHLVWHU WHVWLILHG YROWEDWWHULHVDVZHOODVDPHUFXU\VZLWFK%DVHGRQWKHVH WKDWDOWKRXJKWKHDGGLWLRQDOPDWHULDOVZHUHQRWH[SORVLYHV ILQGLQJVKHFRQFOXGHGWKDWWKHGHYLFHZDVmREMHFWLYHO\DSLSH WKH\ ZRXOG QRW DIIHFW WKH H[SORVLYH SURSHQVLWLHV RI WKH ERPEl VPRNHOHVVSRZGHU $IWHU EHLQJ TXDOLILHG DV DQ H[SHUW LQ H[SORVLYH DQG 7KHJRYHUQPHQWWKHQSUHVHQWHG+HFNPDQZKRDGGUHVVHG KD]DUGRXV GHYLFHV +HFNPDQ WHVWLILHG WKDW WKH SLSH ERPE WKHHQJLQHHULQJDVSHFWVRIWKHGHYLFH+HFNPDQVWDWHGWKDWKH  8QLWHG6WDWHVY/DQJDQ 1R 1R 8QLWHG6WDWHVY/DQJDQ  FRQWDLQHGWKHQHFHVVDU\FRPSRQHQWVIRUDGHVWUXFWLYHGHYLFH %DVHG RQ DOO RI WKH FRQVLGHUDWLRQV GLVFXVVHG DERYH ZH +HZHQWRQWRVWDWHWKDWmSURSHUO\DVVHPEOHGDQGLQLWLDWHGl FRQFOXGHWKDWWKHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQ WKHGHYLFHmZRXOGH[SORGHZRXOG FDXVHSURSHUW\GDPDJH SUHFOXGLQJ'U5RVVIURPWHVWLI\LQJDWWULDO SHUVRQDO LQMXU\ DQG SRVVLEO\ GHDWKl  +HFNPDQ LQGLFDWHG KRZHYHUWKDWKHFRXOGQRWGHWHUPLQHZKHWKHUWKHPHUFXU\ % 6XIILFLHQW HYLGHQFH H[LVWHG WR VKRZ WKDW WKH &1% VZLWFKZDVRSHUDEOHEHIRUHGHVWUXFWLRQEHFDXVHQRWHQRXJK ERPEZDVDmGHVWUXFWLYHGHYLFHl IUDJPHQWV RI WKH VZLWFK KDG EHHQ UHFRYHUHG WR SURSHUO\ UHFRQVWUXFW WKH VZLWFK  +H DOVR WHVWLILHG WKDW WKH ZLUHV /DQJDQQH[WPDLQWDLQVWKDWWKHUHZDVLQVXIILFLHQWHYLGHQFH DSSHDUHGQRWWRKDYHEHHQFULPSHGSURSHUO\IRUFRQGXFWLRQ WR VXSSRUW D YHUGLFW WKDW WKH KRPHPDGH SLSH ERPE OHIW DW PDNLQJLWGRXEWIXOZKHWKHUWKLVPHWKRGRIGHWRQDWLRQZRXOG &1%%DQNFRQVWLWXWHGDmGHVWUXFWLYHGHYLFHlDVGHILQHGE\ KDYHEHHQVXFFHVVIXORUKDGHYHQEHHQLQWHQGHG 86&†   ,Q RUGHU WR FRQYLFW /DQJDQ RI XVLQJ D GHVWUXFWLYHGHYLFHWKHJRYHUQPHQWKDGWRSURYHWKDWWKHSLSH ,QsDQXDU\RI/DQJDQZDVVHL]HGE\DFRPELQHGVWDWH ERPEOHIWDWWKHUREEHU\ZDVmDQ\H[SORVLYHLQFHQGLDU\RU IHGHUDOODZHQIRUFHPHQWWHDPRXWVLGHRIDmVDIHKRXVHlLQ SRLVRQJDV ERPEl86&† D  $ L RUmDQ\ &ROXPEXV7KHVDIHKRXVHZDVXVHGE\WKH$5$WRVWRUH FRPELQDWLRQRISDUWVHLWKHUGHVLJQHGRULQWHQGHGIRUXVHLQ DPPXQLWLRQ ILUHDUPV DQG RWKHU EDQN UREEHU\ HTXLSPHQW FRQYHUWLQJDQ\GHYLFHLQWRDQ\GHVWUXFWLYHGHYLFHGHVFULEHG *XWKULHKDGEHHQFDSWXUHGWKUHHGD\VHDUOLHUDQGKDGEHWUD\HG LQVXESDUDJUDSK $ DQGIURPZKLFKDGHVWUXFWLYHGHYLFH /DQJDQSURYLGLQJWKHDXWKRULWLHVZLWKFULWLFDOGHWDLOVDERXW PD\ EH UHDGLO\ DVVHPEOHGl   86& †  D  &  WKHLUEDQNUREEHU\H[SORLWVDQGZLWKWKHORFDWLRQRIWKHLUVDIH /DQJDQDUJXHVWKDWWKHJRYHUQPHQWIDLOHGWRSURYHWKDWWKH KRXVH  %DVHG RQ *XWKULHjV LQIRUPDWLRQ ODZ HQIRUFHPHQW GHYLFHLQTXHVWLRQZDVRSHUDEOHRUUHDGLO\PDGHRSHUDEOHDQG RIILFLDOV H[HFXWHG D UDLG RQ WKH SURSHUW\  7KH RIILFHUV WKHUHIRUHGLGQRWTXDOLI\DVDmGHVWUXFWLYHGHYLFHlXQGHUWKH WHVWLILHGWKDWWKH\VDZ/DQJDQEUDQGLVKLQJDVHPLDXWRPDWLF UHOHYDQWVWDWXWHV KDQGJXQIURPWKHEDFNZLQGRZRIKLVYDQ7KH\WKHQULGGOHG WKHYDQZLWKPRUHWKDQEXOOHWVEXW/DQJDQVXUYLYHGWKH :KHQ FRQVLGHULQJ D FKDOOHQJH RQ GLUHFW DSSHDO WR WKH JXQILUHZLWKPLQRULQMXULHVDQGZDVSODFHGXQGHUDUUHVW7KLV VXIILFLHQF\RIWKHHYLGHQFHWRVXVWDLQDFRQYLFWLRQZHPXVW GUDPDWLF FRQIURQWDWLRQ ZDV WKH VXEMHFW RI ORFDO WHOHYLVLRQ GHWHUPLQHmZKHWKHUDIWHUYLHZLQJWKHHYLGHQFHLQWKHOLJKW QHZV VWRULHV  &RSOH\ ZDV DPRQJ WKRVH ZKR VDZ WKH PRVWIDYRUDEOHWRWKHSURVHFXWLRQDQ\UDWLRQDOWULHURIIDFW WHOHYLVLRQFRYHUDJHRI/DQJDQjVFDSWXUH6KHWHVWLILHGDWWULDO FRXOGKDYHIRXQGWKHHVVHQWLDOHOHPHQWVRIWKHFULPHEH\RQG WKDW ZKHQ VKH VDZ WKH UHSRUW VKH LQVWDQWO\ WKRXJKW WKDW DUHDVRQDEOHGRXEWlsDFNVRQY9LUJLQLD86 /DQJDQZDVWKHVDPHPDQZKRKDGUREEHG&1%   HPSKDVLVLQRULJLQDO  /DZ HQIRUFHPHQW DJHQWV IRXQG VHYHUDO LWHPV LQ WKH VDIH 7R TXDOLI\ XQGHU WKH VWDWXWH ZH GR QRW UHTXLUH WKDW WKH KRXVHDQGWKHYDQWKDWZHUHFRQQHFWHGWRWKH61%UREEHU\ GHVWUXFWLYHGHYLFHRSHUDWHDVLQWHQGHG6HH8QLWHG6WDWHVY $ 0DUN JUHQDGH ZDV GLVFRYHUHG LQ D VXLWFDVH WKDW ZDV 5XVKFDPS  )G   WK &LU    ,W LV LGHQWLILHGDVEHORQJLQJWR/DQJDQ7KHJUHQDGHKDG/DQJDQjV VXIILFLHQW IRU WKH JRYHUQPHQW WR VKRZ WKDW WKH GHYLFH ZDV ILQJHUSULQWRQWKHKRVHFODPSDQGZDVVLPLODUWRWKH0DUN mUHDGLO\FRQYHUWLEOHlWRDGHVWUXFWLYHGHYLFH6HHLG8QLWHG JUHQDGHIRXQGLQWKHJORYHFRPSDUWPHQWRIWKHJHWDZD\FDU 6WDWHVY7XUF]\N1R:/  WK XVHGLQWKH61%UREEHU\$JHQWVDOVRUHFRYHUHGDSDLURI &LU$SULO  XQSXEOLVKHGWDEOHGHFLVLRQ  ILQGLQJWKDW EOXHDQGZKLWHOHDWKHUJORYHVZLWKUHGG\HVWDLQRQWKHP$Q D SLSH ERPE ZLWK GXELRXV LQLWLDWRU FLUFXLWU\ TXDOLILHG DV D )%,FKHPLVWGHWHUPLQHGWKDWWKHFKHPLFDOPDNHXSRIWKHUHG GHVWUXFWLYHGHYLFHHYHQWKRXJKWKHGHIHQGDQWWHVWLILHGWKDWKH  8QLWHG6WDWHVY/DQJDQ 1R 1R 8QLWHG6WDWHVY/DQJDQ  /DQJDQjVFRXQVHORQWKLVLVVXH7KHMXU\ZDVWKHUHIRUHDEOH G\HZDVWKHVDPHDVWKHG\HIRXQGRQWKHELOOUHFRYHUHG WR FRQVLGHU WKLV SRVVLEOH mWUDQVIHUHQFHl GXULQJ LWV IURPWKH61%JHWDZD\FDU$5RQDOG5HDJDQPDVNVLPLODU GHOLEHUDWLRQV,QDGGLWLRQWKHMXU\ZDVFDXWLRQHGDERXWWKH WR WKH PDVNV ZRUQ GXULQJ WKH 61% UREEHU\ ZDV IRXQG LQ mVKRUWFRPLQJVDQGWURXEOHVSRWVlRIH\HZLWQHVVLGHQWLILFDWLRQ /DQJDQjV YDQ DV ZDV D EODFN OXQFKER[ VLPLODU WR WKH RQH LQWKHILQDOMXU\LQVWUXFWLRQV FRQWDLQLQJWKH&1%SLSHERPE7ZRFRSLHVRI7KH6LOHQW %URWKHUKRRG ZHUH VHL]HG IURP WKH KRXVH  2IILFHUV DOVR 0RUHRYHU&RSOH\VKRZHGRWKHULQGLFLDRIKDYLQJPDGHD UHFRYHUHG KDUG KDWV VNL PDVNV DQG VXQJODVVHV WKDW ZHUH UHOLDEOHLGHQWLILFDWLRQ+HULQLWLDOGHVFULSWLRQRIWKHVXVSHFW LGHQWLFDOWRWKRVHOHIWEHKLQGDIWHUWKH&1%UREEHU\ ZDVFRQVLVWHQWZLWK/DQJDQjVRZQSK\VLFDOFKDUDFWHULVWLFV 6KHLPPHGLDWHO\UHFRJQL]HG/DQJDQDVWKHUREEHUZKHQVKH 2Q )HEUXDU\   D IHGHUDO JUDQG MXU\ UHWXUQHG D VDZ KLP RQ WHOHYLVLRQ  %HVLGHV KHU UHVSRQVLELOLWLHV DV DQ VHYHQFRXQW LQGLFWPHQW FKDUJLQJ /DQJDQ ZLWK WKH sDQXDU\ DVVLVWDQWPDQDJHUDW&1%&RSOH\DOVRVHUYHGDVDQDYLDWLRQ DVVDXOWRQIHGHUDORIILFHUVLQYLRODWLRQRI86&† HOHFWURQLFVWHFKQLFLDQZLWKWKH$LU)RUFH1DWLRQDO*XDUG+HU FDUU\LQJDQGXVLQJILUHDUPVLQFRQQHFWLRQWRWKHDVVDXOWLQ QDWLRQDO JXDUG WUDLQLQJ UHTXLUHG KHU WR SDUWLFLSDWH RQ DQ YLRODWLRQRI86&†† J DQG F DQGIDLOLQJ DQQXDOEDVLVLQFRPEDWDQGKRVWLOHWKUHDWVLWXDWLRQV'XULQJ WR UHJLVWHU D GHVWUXFWLYH GHYLFH LQ YLRODWLRQ RI  86& WKHVH H[HUFLVHV VKH UHFHLYHG WUDLQLQJ LQ LGHQWLI\LQJ †  G   $ VXSHUVHGLQJ LQGLFWPHQW ZDV UHWXUQHG E\ WKH LQGLYLGXDOV DWWHPSWLQJ WR HQWHU XQDXWKRUL]HG DUHDV  6KH JUDQGMXU\RQ0DUFKLQFRUSRUDWLQJWKHFKDUJHVRI WHVWLILHGWKDWDFULWLFDOFRPSRQHQWWRWKLVWUDLQLQJZDVWKHQHHG WKHHDUOLHULQGLFWPHQWDQGDOOHJLQJWKDW/DQJDQKDGFRPPLWWHG WRUHPDLQFDOPDQGIRFXVHGGXULQJWKHDWWHPSWHGWDNHRYHUV WZRFRXQWVRIDUPHGEDQNUREEHU\LQYLRODWLRQRI86& ,Q OLJKWRIWKLVVSHFLDOL]HGWUDLQLQJ'U5RVVjVJHQHUDOL]HG ††DQG D   G WZRDGGLWLRQDOFRXQWVRIXVLQJDQG WHVWLPRQ\UHJDUGLQJVXFKGLVWUDFWLQJIDFWRUVDVVWUHVVDQGWKH FDUU\LQJDILUHDUPGXULQJDFULPHRIYLROHQFHLQYLRODWLRQRI SUHVHQFHRIDJXQZRXOGQRWQHFHVVDULO\KDYHKHOSHGWKHMXU\  86& † †  DQG  F  DQG RQH FRXQW RI XVLQJ DQG LQHYDOXDWLQJ&RSOH\jVLGHQWLILFDWLRQRI/DQJDQ FDUU\LQJDQH[SORVLYHGHYLFHGXULQJDQGLQUHODWLRQWRDFULPH RIYLROHQFHLQYLRODWLRQRI86&†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sDQXDU\  VKRRWRXW  &RSOH\ ZHQW RQ WR H[SUHVV KHU XVHGE\/DQJDQDWWKHUREEHU\ZDVDOVRUHFRYHUHGIURPWKH FRQFHUQWKDWm,KRSH,GRQjWUHFRJQL]HWKLVLQGLYLGXDOIURP VDIHKRXVH,QDGGLWLRQDZKLWHSODVWLFSLSHERPEWKDWFORVHO\ 79l  :KHQ VKRZQ WKH SKRWRV KRZHYHU &RSOH\ GLG QRW UHVHPEOHGWKHRQHXVHGLQWKH&1%UREEHU\ZDVGLVFRYHUHG KHVLWDWHLQVHOHFWLQJ/DQJDQjV,WZDVWKHILUVWDQGRQO\RQH LQDVXLWFDVHEHORQJLQJWR/DQJDQDQG/DQJDQjVWKXPESULQW VKHVHOHFWHGDPRQJWKHDUUD\ ZDVIRXQGRQERPEPDNLQJHTXLSPHQWLQWKHVDPHVXLWFDVH 7KXVDEXQGDQWHYLGHQFHWRVXSSRUWWKHMXU\jVYHUGLFWH[LVWHG /DQJDQILOHGDPRWLRQWRVHYHUWKHEDQNUREEHU\DQGUHODWHG HYHQZLWKRXW&RSOH\jVH\HZLWQHVVLGHQWLILFDWLRQ ILUHDUP FKDUJHV RI WKH VXSHUVHGLQJ LQGLFWPHQW IURP WKH RULJLQDO DVVDXOW DQG ILUHDUPV FRXQWV  7KH GLVWULFW FRXUW JUDQWHG KLV PRWLRQ UHVXOWLQJ LQ /DQJDQ EHLQJ WULHG LQ WZR VHSDUDWH SURFHHGLQJV  /DQJDQ DOVR PRYHG WR H[FOXGH  8QLWHG6WDWHVY/DQJDQ 1R 1R 8QLWHG6WDWHVY/DQJDQ  &RSOH\jVWHVWLPRQ\7KHFRXUWGHQLHGWKHPRWLRQDVZHOODV $OWKRXJKZHUHFRJQL]HWKDWH[SHUWWHVWLPRQ\RQH\HZLWQHVV /DQJDQjVPRWLRQWRSUHVHQWWKHH[SHUWWHVWLPRQ\RI'DYLG) LGHQWLILFDWLRQPLJKWLQIRUPWKHMXU\RQDOORIWKHLQWULFDFLHVRI 5RVVDSV\FKRORJLVWDWWKH8QLYHUVLW\RI7HQQHVVHH/DQJDQ SHUFHSWLRQUHWHQWLRQDQGUHFDOOZHQHYHUWKHOHVVDJUHHZLWK VRXJKWWRRIIHU'U5RVVjVWHVWLPRQ\LQRUGHUWRXQGHUPLQH WKHGLVWULFWFRXUWWKDWWKHKD]DUGVRIH\HZLWQHVVLGHQWLILFDWLRQ &RSOH\jVH\HZLWQHVVLGHQWLILFDWLRQ DUHZLWKLQWKHRUGLQDU\NQRZOHGJHRIPRVWOD\MXURUV:LWK UHJDUGWRWKHSRVVLELOLW\WKDW&RSOH\ZDVUHPHPEHULQJ/DQJDQ 7KH GLVWULFW FRXUW UHFRJQL]HG 'U 5RVV DV DQ H[SHUW LQ IURPWHOHYLVLRQUDWKHUWKDQIURPWKH&1%UREEHU\/DQJDQjV SV\FKRORJ\VROHO\IRUWKHSXUSRVHRIDVXSSUHVVLRQKHDULQJ FRXQVHOKDGDPSOHRSSRUWXQLW\WRFURVVH[DPLQHKHURQWKLV UHJDUGLQJ &RSOH\jV LGHQWLILFDWLRQ RI /DQJDQ  ,W UHVHUYHG SRLQWDQGLQIDFWGLGVRDWWULDO7KHGLVWULFWFRXUWDOVRZDV UXOLQJRQZKHWKHU'U5RVVZRXOGEHTXDOLILHGWRWHVWLI\DW KLJKO\VNHSWLFDORIWKLVVSHFLILFDUHDRIWHVWLPRQ\EHFDXVHRI WULDOLQWKHVXEVSHFLDOW\RIH\HZLWQHVVLGHQWLILFDWLRQ$WWKH WKHOLPLWDWLRQVWKDW'U5RVVKDGSHUVRQDOO\UDLVHGFRQFHUQLQJ VXSSUHVVLRQKHDULQJ'U5RVVWHVWLILHGUHJDUGLQJDYDULHW\RI WKH VXEMHFW  ,I KH KDG WHVWLILHG DW WULDO LW LV OLNHO\ WKDW DQ IDFWRUV WKDW KDG WKH SRWHQWLDO RI DIIHFWLQJ WKH DFFXUDF\ RI XQLQIRUPDWLYHEDWWOHRIH[SHUWVZRXOGKDYHRFFXUUHGLIWKH &RSOH\jVLGHQWLILFDWLRQ7KHVHIDFWRUVLQFOXGHGWKHPRQWK JRYHUQPHQWKDGRIIHUHGLWVRZQH[SHUWWHVWLPRQ\LQRUGHUWR GHOD\ EHWZHHQ WKH &1% UREEHU\ DQG WKH SKRWR DUUD\ WKH UHIXWH 'U 5RVVjV RSLQLRQ DQG WKH MXU\ FRXOG KDYH EHHQ GLVWUDFWLRQVFUHDWHGE\WKHUREEHUjVJXQDQGWKHVWUHVVRIWKH XQGXO\PLVOHGDQGFRQIXVHG VLWXDWLRQDQGKHUH[SRVXUHWRKLVFDSWXUHRQWHOHYLVLRQQHZV 'U5RVVDOVRFULWLFL]HGWKHLGHQWLILFDWLRQSURFHGXUHVXVHGE\ )XUWKHUPRUHDVWKLVFRXUWQRWHGLQ6PLWKHUVWKHQXPHURXV WKH )%, LQ WKH SKRWR DUUD\  7KH GLVWULFW FRXUW GHWHUPLQHG FDVHV KROGLQJ WKDW WKH H[FOXVLRQ RI H[SHUW WHVWLPRQ\ RQ XQGHUWKHWHVWVVHWIRUWKLQ1HLOY%LJJHUV86 H\HZLWQHVVLGHQWLILFDWLRQLVQRWDQDEXVHRIGLVFUHWLRQFDXWLRQ    WKDW   &RSOH\jV WHVWLPRQ\ ZDV VXIILFLHQWO\ XVWRFRQVLGHUZKHWKHUWKHWHVWLPRQ\ZRXOGKDYHEHHQKHOSIXO UHOLDEOHWREHSUHVHQWHGWRWKHMXU\DQG  /DQJDQKDGIDLOHG RU FRQIXVLQJ WR WKH MXU\  6HH 6PLWKHUV  )G DW  WR PHHW KLV EXUGHQ RI SURYLQJ WKDW WKH SKRWR DUUD\ ZDV 7KHVH mFDVHV DOVR GLVFXVV ZKHWKHU WKLV W\SH RI WHVWLPRQ\ LPSHUPLVVLYHO\VXJJHVWLYH WRXFKHG RQ WKH µXOWLPDWH LVVXHj LQ WKH FDVH DQG WKHUHIRUH XVXUSHG WKH MXU\jV UROH ZKHWKHU WKHUH ZDV RWKHU HYLGHQFH 'U 5RVV ZDV DOVR SUHSDUHG WR RIIHU D PRUH VSHFLILF DJDLQVW WKH GHIHQGDQW DQG ZKHWKHU WKH MXU\ FRXOG PRUH GLVFXVVLRQ FRQFHUQLQJ WKH SRVVLELOLW\ RI mPHPRU\ SURSHUO\ HYDOXDWH WKH UHOLDELOLW\ RI H\HZLWQHVV WHVWLPRQ\ WUDQVIHUHQFHl RU ZKDW 'U 5RVV UHIHUUHG WR DV mFRQVFLRXV WKURXJKFURVVH[DPLQDWLRQl,G LQIHUHQFHlRUmFRQVFLRXVWUDQVIHUHQFHl7KLVSKHQRPHQRQLV WKHPLVLGHQWLILFDWLRQRIDIDPLOLDUEXWLQQRFHQWSHUVRQPRUH 2XU FRQFOXVLRQ WKDW WKH GLVWULFW FRXUW GLG QRW DEXVH LWV FRPPRQO\FDOOHGmXQFRQVFLRXVWUDQVIHUHQFHl DOWKRXJK'U GLVFUHWLRQ LQ WKLV FDVH LV IXUWKHU VXSSRUWHG E\ WKH IDFW WKDW 5RVVWDNHVLVVXHZLWKWKLVODEHOEDVHGRQKLVWKHRU\RIKRZ /DQJDQ KDG WKH RSSRUWXQLW\ WR WKRURXJKO\ FURVVH[DPLQH WKHSURFHVVRFFXUVLQWKHEUDLQ 'U5RVVjVWHVWLPRQ\ZRXOG &RSOH\LQRUGHUWRFDVWGRXEWRQKHUDELOLW\WRLGHQWLI\KLP KDYH SURSRVHG DQ DOWHUQDWLYH H[SODQDWLRQ IRU &RSOH\j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mDGXOWH\HZLWQHVV 0LVLGHQWLILHVD)DPLOLDUEXW,QQRFHQW3HUVRQsRXUQDORI LGHQWLILFDWLRQVl EHFDXVH WKH EXON RI 'U 5RVVjV UHVHDUFK $SSOLHG3V\FKRORJ\   IRFXVHGRQFKLOGH\HZLWQHVVWHVWLPRQ\'U5RVVKRZHYHU KDG SXEOLVKHG DUWLFOHV HGLWHG ERRNV DQG JLYHQ OHFWXUHV )ROORZLQJD'DXEHUWKHDULQJWKHGLVWULFWFRXUWUHIXVHGWR GHDOLQJVSHFLILFDOO\ZLWKPLVLGHQWLILFDWLRQLQDGXOWZLWQHVVHV DOORZ'U5RVVWRWHVWLI\DWWULDODVDQH[SHUWLQH\HZLWQHVV 7KH IDFW WKDW KH KDV VSHQW PRUH WLPH DQG HIIRUW VWXG\LQJ LGHQWLILFDWLRQ7KHFRXUWGHWHUPLQHGWKDW'U5RVVjVSURSRVHG FKLOGUHQ VKRXOG QRW KDYH GLVTXDOLILHG KLP IURP WHVWLI\LQJ WHVWLPRQ\IDLOHGWRPHHWWKHUHTXLUHPHQWVRI5XOHRIWKH DERXW WKH PLVLGHQWLILFDWLRQ SKHQRPHQRQ LQ DGXOWV  7R )HGHUDO5XOHVRI(YLGHQFHDVLQWHUSUHWHGE\'DXEHUWDQGLWV GHPDQG WKDW WKHUH EH D VSHFLILF TXDOLILFDWLRQ LQ mDGXOW SURJHQ\  8VLQJ WKH WZRSDUW WHVW GHYHORSHG LQ 'DXEHUW Y H\HZLWQHVV LGHQWLILFDWLRQl LV XQMXVWLILHG XQOHVV WKHUH H[LVWV 0HUUHOO'RZ3KDUPDFHXWLFDOV,QF86  WKH VRPHSULQFLSOHGGLVWLQFWLRQEHWZHHQWKHPHWKRGVWKHRU\DQG GLVWULFWFRXUWFRQFOXGHGWKDW'U5RVVjVSURSRVHGWHVWLPRQ\ UHVXOWV XVHG LQ WKH VWXG\ RI PLVLGHQWLILFDWLRQ E\ DGXOWV DV RQ WKH IDFWRUV LQIOXHQFLQJ H\HZLWQHVV DFFXUDF\ ZRXOG QRW RSSRVHGWRPLVLGHQWLILFDWLRQE\FKLOGUHQ KDYHDVVLVWHGWKHMXU\,QVWHDGWKHFRXUWGHWHUPLQHGWKDWDQ\ WHVWLPRQ\ RIIHUHG E\ 'U 5RVV ZRXOG KDYH LPSURSHUO\ 'HVSLWH RXU KHVLWDWLRQ WR DGRSW DOO RI WKH GLVWULFW FRXUWjV LQYDGHGWKHLUSURYLQFH FULWLFLVPVFRQFHUQLQJ'U5RVVjVSURIIHUHGWHVWLPRQ\XQGHU WKHmVFLHQWLILFNQRZOHGJHlSURQJRI'DXEHUWZHDJUHHWKDWLW 7KH GLVWULFW FRXUW DOVR KHOG WKDW 'U 5RVVjV WHVWLPRQ\ IDLOHGWRVDWLVI\WKHVHFRQG'DXEHUWLQTXLU\7KLVVHFRQGVWHS FRQFHUQLQJWKHWUDQVIHUHQFHWKHRU\ZDVQRWVXIILFLHQWO\EDVHG UHTXLUHVWKHGLVWULFWFRXUWWRFRQVLGHUZKHWKHUWKHSURSRVHG RQ mVFLHQWLILF NQRZOHGJHl EHFDXVH LW IDLOHG WR PHHW WKH VFLHQWLILF HYLGHQFH ILWV WKH LVVXH WR ZKLFK WKH H[SHUW LV UHOLDELOLW\ VWDQGDUGV HVWDEOLVKHG E\ 'DXEHUW  &LWLQJ 'U WHVWLI\LQJ6HH'DXEHUW86DW,QRWKHUZRUGVD 5RVVjVRZQDUWLFOHWKHFRXUWQRWHGWKDW'U5RVVKDG GLVWULFWFRXUWPD\DGPLWWKHHYLGHQFHRQO\LIVXFKWHVWLPRQ\ SHUVRQDOO\FDOOHGWKHWKHRU\LQWRTXHVWLRQZKHQFRPPHQWLQJ ZLOODVVLVWWKHWULHURIIDFWLQXQGHUVWDQGLQJWKHHYLGHQFHRULQ WKDW WKH mOLWHUDWXUH SURYLGHV PL[HG DQG VRPHZKDW ZHDN GHWHUPLQLQJDIDFWDWLVVXH7KHSURSRVHGWHVWLPRQ\PXVWWKXV VXSSRUWIRUXQFRQVFLRXVWUDQVIHUHQFHlDQGWKDWmWKHHPSLULFDO mILWlWKHH\HZLWQHVVLGHQWLILFDWLRQLQWKLVFDVH HYLGHQFHIRUWKH>WKHRU\jV@H[LVWHQFHLVUDWKHUPHDJHUl7KH GLVWULFWFRXUWSRLQWHGRXWWKDWHYHQWKRXJK'U5RVVZDVJLYHQ 'U5RVVjVSURSRVHGWHVWLPRQ\ZDVEHLQJRIIHUHGLQRUGHU WKH RSSRUWXQLW\ DW WKH VXSSUHVVLRQ KHDULQJ WR VWDWH WKDW WKH WRLPSHDFK&RSOH\jVLGHQWLILFDWLRQRI/DQJDQ+LVWHVWLPRQ\ WKHRU\ZDVVFLHQWLILFDOO\VRXQGKHIDLOHGWRHIIHFWLYHO\UHEXW KRZHYHU ZRXOG QRW KDYH EHHQ EDVHG RQ DQ\ SHUVRQDO WKHJRYHUQPHQWjVFULWLFLVPRIWKHWKHRU\0RUHRYHUWKHFRXUW NQRZOHGJHRI&RSOH\EXWUDWKHURQKLVJHQHUDONQRZOHGJH IRXQGWKDW'U5RVVjVPHWKRGRORJLHVZHUHLQDGHTXDWHEHFDXVH DERXW WKH W\SH RI FLUFXPVWDQFHV LQ ZKLFK VKH KDG IRXQG KH KDG QHYHU VWXGLHG DQ\ YLFWLP RU H\HZLWQHVV RI D EDQN KHUVHOI  'U 5RVV ZRXOG KDYH WHVWLILHG WR WKH OLPLWDWLRQV UREEHU\ UHJDUGLQJ&RSOH\jVDELOLW\WRVHHDQGLGHQWLI\WKHEDQNUREEHU GXULQJWKHUREEHU\KHUDELOLW\WRLGHQWLI\WKHUREEHUHLJKWHHQ )LQDOO\ WKH GLVWULFW FRXUW TXHVWLRQHG 'U 5RVVjV PRQWKV DIWHU WKH UREEHU\ WKH WUDQVIHUHQFH SKHQRPHQRQ TXDOLILFDWLRQV LQ WKH VSHFLILF ILHOG RI mDGXOW H\HZLWQHVV UHODWHGWRKHUKDYLQJVHHQ/DQJDQRQWHOHYLVRQSULRUWRWKH LGHQWLILFDWLRQl,WQRWHGWKDWWKHJUHDWPDMRULW\RI'U5RVVjV SKRWRDUUD\DQGWKHmSV\FKRORJLFDOO\EDVHGZHDNQHVVHVLQWKH ZRUN KDG IRFXVHG RQ FKLOG H\HZLWQHVV LGHQWLILFDWLRQ  7KH PHWKRGXVHGE\WKH)%,DWWKHSKRWRDUUD\l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jV FRFRQVSLUDWRUV 6KDZQ WUDQVIHUHQFHWKHRU\7KUHH\HDUVKDGSDVVHGVLQFHKLVDUWLFOH .HQQ\DQG.HYLQ0F&DUWK\.HQQ\KDGEHHQDIILOLDWHGZLWK ZDV SXEOLVKHG \HW /DQJDQ IDLOHG WR GHPRQVWUDWH WKDW WKH WKH$5$IURPWKHWLPHLWEHJDQRSHUDWLRQVDQGKDGEHHQSDUW mOLPLWDWLRQVlRQ'U5RVVjVUHVHDUFKQRORQJHUH[LVWHG7KH RIWKHmGU\UXQlDWWKH61%LQ*XWKULH/DQJDQjVFKLHI GLVWULFWFRXUWZDVWKHUHIRUHOHIWZLWK'U5RVVjVFULWLFLVPRI FRKRUWKDGWROG.HQQ\WKDWWKHVHFRQGDWWHPSWDW61%KDG WKH JHQHUDO WKHRU\ LQFOXGLQJ KLV RZQ LQWHUSUHWDWLRQ RI SURYHG VXFFHVVIXO  $V FRPSHQVDWLRQ IRU .HQQ\jV HIIRUWV FRQVFLRXVWUDQVIHUHQFHZLWKRXWDQ\VKRZLQJWKDWWKHWKHRU\ *XWKULHSDLGKLPZLWKUHGWLQWHGPRQH\0F&DUWK\DQ$5$ KDG EHHQ VXEMHFWHG WR IXUWKHU WHVWLQJ RU EHHQ FRQILUPHG PHPEHU ZKRZDVUHFUXLWHGVKRUWO\DIWHUWKH&1%UREEHU\ VFLHQWLILFDOO\$OWKRXJK'U5RVVGLGQRWDVWKHJRYHUQPHQW WHVWLILHG WKDW /DQJDQ WROG KLP WKDW /DQJDQ KDG LQMXUHG KLV DUJXHVmGHEXQNlWKHSKHQRPHQRQRIPLVLGHQWLILFDWLRQWKH NQHHZKLOHMXPSLQJRYHUDWHOOHUFRXQWHUDQGORVWKLVPDVN GLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQZKHQLWGHWHUPLQHG GXULQJDQHDUOLHUUREEHU\*XWKULHZDVWRKDYHEHHQDZLWQHVV WKDW 'U 5RVVjV SURIIHUHG WHVWLPRQ\ ODFNHG WKH UHTXLVLWH DWWKHWULDOEXWKHKXQJKLPVHOILQKLVSULVRQFHOOLQs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jVFRQYLFWLRQVZHUHFRQVROLGDWHGDQGUHVXOWHGLQDOLIH H\HZLWQHVVLGHQWLILFDWLRQ7KLVLVLQFRQWUDVWZLWKWKHH[SHUW VHQWHQFH ZLWKRXW WKH SRVVLELOLW\ RI SDUROH SOXV  \HDUV LQ 6PLWKHUV ZKRVH mTXDOLILFDWLRQV DQG VFLHQWLILF PHWKRGVl /DQJDQZDVDOVRRUGHUHGWRSD\UHVWLWXWLRQRIDQGD KDG DOUHDG\ EHHQ mSUDLVHGl E\ WKH 6L[WK &LUFXLW  6HH ILQH+HILOHGWKLVWLPHO\DSSHDOLQsDQXDU\RI 6PLWKHUV)GDW7KHGLVWULFWFRXUWIXUWKHUIDXOWHG 'U 5RVVjV PHWKRGRORJ\ EHFDXVH KH KDG QHYHU LQFOXGHG D ,,$1$/<6,6 YLFWLP RU H\HZLWQHVV WR D EDQN UREEHU\ LQ KLV VWXGLHV $OWKRXJKWKLVIDFWDSSHDUVWREHPRUHUHOHYDQWWRZKHWKHUWKH $ 7KHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQZKHQLW RSLQLRQmILWVlWKHFDVHDQGLVKHOSIXOZHFDQQRWVD\WKDWWKH H[FOXGHG 'U 5RVVjV WHVWLPRQ\ UHJDUGLQJ WKH GLVWULFW FRXUW HUUHG LQ  FRQFOXGLQJ WKDW LW XQGHUPLQHG WKH UHOLDELOLW\RIH\HZLWQHVVLGHQWLILFDWLRQ VFLHQWLILFXQGHUSLQQLQJVRI'U5RVVjVSURIIHUHGRSLQLRQLQ WKLVFDVH /DQJDQjV ILUVW FODLP RI HUURU LV WKDW 'U 5RVVjV H[SHUW WHVWLPRQ\ ZDV LPSURSHUO\ H[FOXGHG  )ROORZLQJ &RSOH\jV $QRWKHURIWKHGLVWULFWFRXUWjVUHDVRQVIRUILQGLQJWKDW'U FRXUWURRPLGHQWLILFDWLRQRI/DQJDQWKHGLVWULFWFRXUWUHIXVHG 5RVVjVWHVWLPRQ\GLGQRWFRQVWLWXWHmVFLHQWLILFNQRZOHGJHlLV WRDGPLW'U5RVVjVH[SHUWWHVWLPRQ\UHJDUGLQJWKHUHOLDELOLW\ PRUHSUREOHPDWLF7KHGLVWULFWFRXUWTXHVWLRQHGKLVDELOLW\WR RI &RSOH\jV H\HZLWQHVV LGHQWLILFDWLRQ  $IWHU D OHQJWK\  8QLWHG6WDWHVY/DQJDQ 1R 1R 8QLWHG6WDWHVY/DQJDQ  ,Q6PLWKWKHJRYHUQPHQWKDGFRQFHGHGWKDWWKHSURSRVHG 'DXEHUW KHDULQJ WKH FRXUW FRQFOXGHG WKDW 'U 5RVVjV H[SHUWZDVLQIDFWDQH[SHUWDQGQRQHRIWKHH\HZLWQHVVHV SURSRVHG WHVWLPRQ\   ZDV QRW VXIILFLHQWO\ EDVHG RQ FRXOGLGHQWLI\6PLWKIURPDSKRWRVSUHDGWKUHHZHHNVDIWHU mVFLHQWLILFNQRZOHGJHlDQG  ZRXOGQRWKDYHDVVLVWHGWKH WKHUREEHU\LQTXHVWLRQDOWKRXJKWKH\DOOLGHQWLILHG6PLWKDW MXU\  7KH GLVWULFW FRXUW LQVWHDG RSWHG WR JLYH WKH MXU\ DQ DQ)%,OLQHXSIRXUPRQWKVODWHU6HHLGDW'HVSLWH H\HZLWQHVVLGHQWLILFDWLRQLQVWUXFWLRQWKDWDOHUWHGWKHMXU\WR WKH6PLWKFRXUWjVKROGLQJWKHGLVWULFWFRXUWLQWKHFDVHEHIRUH WKHYDULRXVIDFWRUVWREHFRQVLGHUHGZKHQZHLJKLQJ&RSOH\jV XV GHWHUPLQHG WKDW 'U 5RVVjV WHVWLPRQ\ ZDV mZLWKLQ WKH WHVWLPRQ\DQGFDXWLRQHGWKHMXURUVWRFDUHIXOO\FRQVLGHUWKH MXU\jV RZQ NQRZOHGJHl DV LW UHODWHG WR WKH JHQHUDO VKRUWFRPLQJVDQGWURXEOHVSRWVRIWKHLGHQWLILFDWLRQSURFHVV SV\FKRORJLFDOIDFWRUVDIIHFWLQJPHPRU\DQGZRXOGWKHUHIRUH QRWEHRIDVVLVWDQFH :H ZLOO QRW GLVWXUE D GLVWULFW FRXUWjV HYLGHQWLDU\ UXOLQJV XQOHVVZHILQGDQDEXVHRIGLVFUHWLRQ6HH8QLWHG6WDWHVY 7KH GLVWULFW FRXUW DOVR KHOG WKDW /DQJDQ KDG IDLOHG WR 0LGGOHWRQ)G WK&LU 2XUVWDQGDUG HVWDEOLVKWKHUHOLDELOLW\RI'U5RVVjVWHVWLPRQ\UHJDUGLQJWKH RIUHYLHZGRHVmQRWFDWHJRULFDOO\GLVWLQJXLVKEHWZHHQUXOLQJV mWUDQVIHUHQFH WKHRU\l HYHQ WKRXJK &RSOH\jV LGHQWLILFDWLRQ DOORZLQJH[SHUWWHVWLPRQ\DQGUXOLQJVGLVDOORZLQJLWlDQGDUH SUHVHQWHGDVSHFLILFFRJQLWLYHSUREOHPQRWFRPPRQWRDOORU PLQGIXORIWKHmJDWHNHHSHUUROHRIWKHWULDOMXGJHLQVFUHHQLQJ HYHQPRVWH\HZLWQHVVLGHQWLILFDWLRQVDQG&RSOH\KHUVHOIKDG VXFKHYLGHQFHl*HQ(OHF&RYsRLQHU86 SXWWKHLGHQWLILFDWLRQDWLVVXH$VDEDVLVIRUWKLVILQGLQJWKH   LQWHUQDOTXRWDWLRQPDUNVRPLWWHG  FRXUW SRLQWHG WR 'U 5RVVjV RQO\ SXEOLVKHG DUWLFOH RQ WKH VXEMHFWFRQFOXGLQJWKDWmWKHSODLQODQJXDJHRIWKHDUWLFOHLV 5XOHRIWKH)HGHUDO5XOHVRI(YLGHQFHVWDWHVWKDWm>L@I WKDW WKH WKHRU\ RI XQFRQVFLRXV WUDQVIHUHQFH LV DV \HW VFLHQWLILFWHFKQLFDORURWKHUVSHFLDOL]HGNQRZOHGJHZLOODVVLVW HPSLULFDOO\XQSURYHQDQGIXUWKHUUHVHDUFKLVQHFHVVDU\EHIRUH WKHWULHURIIDFWWRXQGHUVWDQGWKHHYLGHQFHRUWRGHWHUPLQHD WKHWKHRU\FDQEHFRQILUPHGRUGLVFRQILUPHGl IDFWLQLVVXHDZLWQHVVTXDOLILHGDVDQH[SHUWE\NQRZOHGJH VNLOOH[SHULHQFHWUDLQLQJRUHGXFDWLRQPD\WHVWLI\WKHUHWRLQ 'U 5RVV ZKR ZDV TXHVWLRQHG DERXW WKLV DUWLFOH DW WKH WKH IRUP RI DQ RSLQLRQ RU RWKHUZLVHl  ,Q 'DXEHUW WKH VXSSUHVVLRQKHDULQJGHIHQGHGKLVSRVLWLRQE\VWDWLQJWKDWWKH 6XSUHPH &RXUW KHOG WKDW ZKHQ IDFHG ZLWK D SURIIHU RI WUDQVIHUHQFH SKHQRPHQRQ H[LVWHG EXW VKRXOG EH UHQDPHG VFLHQWLILFH[SHUWWHVWLPRQ\5XOHUHTXLUHVDGLVWULFWFRXUW mFRQVFLRXVWUDQVIHUHQFHlRUmFRQVFLRXVLQIHUHQFHlEHFDXVH WRGHWHUPLQHZKHWKHUWKHHYLGHQFHmERWKUHVWVRQDUHOLDEOH WKHH\HZLWQHVVKDVDFRQVFLRXVUHFROOHFWLRQRIWKHSUHYLRXV IRXQGDWLRQDQGLVUHOHYDQWWRWKHWDVNDWKDQGl'DXEHUW H[SRVXUH WR WKH LQQRFHQW SHUVRQ LQ D OLQHXS  +LV DUWLFOH 86 DW   $V SDUW RI LWV UHYLHZ WKH FRXUW PXVW DVVHVV KRZHYHUFULWLFL]HVWKHRYHUDOOWKHRU\E\FKDUDFWHUL]LQJWKH mZKHWKHU WKH UHDVRQLQJ RU PHWKRGRORJ\ XQGHUO\LQJ WKH HPSLULFDOHYLGHQFHDVmUDWKHUPHDJHUl7KHDUWLFOHJRHVRQWR WHVWLPRQ\ LV VFLHQWLILFDOO\ YDOLG DQG    ZKHWKHU WKDW QRWH WKDW KLV H[SHULPHQWV mKDYH D QXPEHU RI OLPLWDWLRQVl UHDVRQLQJRUPHWKRGRORJ\SURSHUO\FDQEHDSSOLHGWRWKHIDFWV LQFOXGLQJ mOLPLWHG H[WHUQDO YDOLGLW\l DQG mOLPLWHG LQLVVXHl,GDW6XFKIDFWRUVDVWHVWLQJSHHUUHYLHZ JHQHUDOL]DELOLW\l  0RUHRYHU mWKH WKHRUHWLFDO QRWLRQV SXEOLFDWLRQ HUURU UDWHV WKH H[LVWHQFH DQG PDLQWHQDQFH RI GHVFULEHGKHUHQHHGPRGLILFDWLRQDQGIXUWKHUGHYHORSPHQW VWDQGDUGVFRQWUROOLQJWKHWHFKQLTXHjVRSHUDWLRQDQGJHQHUDO DQGWKH\DUHSURSRVHGLQWHUPVRIHQFRXUDJLQJUHVHDUFKLQWKLV DFFHSWDQFH LQ WKH UHOHYDQW VFLHQWLILF FRPPXQLW\ VKRXOG EH DUHDDQGQRWLQWHUPVRISURYLGLQJWKHGHILQLWLYHZRUGRQWKLV FRQVLGHUHGLQWKLVUHYLHZ6HHLGDW7KLVLQTXLU\LV IDVFLQDWLQJDQGLPSRUWDQWWRSLFl D IOH[LEOH RQH ZLWK DQ RYHUDUFKLQJ JRDO RI DVVHVVLQJ WKH mVFLHQWLILF YDOLGLW\ DQG WKXV WKH HYLGHQWLDU\ UHOHYDQFH DQG  8QLWHG6WDWHVY/DQJDQ 1R 1R 8QLWHG6WDWHVY/DQJDQ  UHOLDELOLW\lRIWKHSULQFLSOHVDQGPHWKRGRORJ\XQGHUO\LQJWKH PD\ SURSHUO\ EH DGPLWWHG XQGHU 'DXEHUW LQ FHUWDLQ SURSRVHGH[SHUWWHVWLPRQ\6HHLGDW FLUFXPVWDQFHVl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mFURVVUDFLDOLGHQWLILFDWLRQ GHWHUPLQLQJWKDWWKHmSURSRVHGWHVWLPRQ\LQWUXGHVWRRPXFK LGHQWLILFDWLRQ DIWHU D ORQJ GHOD\ LGHQWLILFDWLRQ DIWHU RQ WKH WUDGLWLRQDO SURYLQFH RI WKH MXU\ WR DVVHVV ZLWQHVV REVHUYDWLRQ XQGHU VWUHVV DQG >VXFK@ SV\FKRORJLFDO FUHGLELOLW\l WKDWH[SHUWVLQWKLVDUHDDUHQRWPXFKKHOSDQG SKHQRPHQD DV    XQFRQVFLRXV WUDQVIHUHQFHl 6HH 8QLWHG ODUJHO\RIIHUUDWKHUREYLRXVJHQHUDOLWLHVVHH8QLWHG6WDWHVY 6WDWHV Y +DUULV  )G   WK &LU   +XGVRQ)G WK&LU  m6XFKH[SHUW 1RQHWKHOHVVHDFKFRXUWWRH[DPLQHWKLVLVVXHKDVKHOGWKDWWKH WHVWLPRQ\ZLOOQRWDLGWKHMXU\EHFDXVHLWDGGUHVVHVDQLVVXHRI GLVWULFWFRXUWKDVEURDGGLVFUHWLRQLQILUVWGHWHUPLQLQJWKH ZKLFK WKH MXU\ DOUHDG\ JHQHUDOO\ LV DZDUH DQG LW ZLOO QRW UHOLDELOLW\RIWKHSDUWLFXODUWHVWLPRQ\DQGVHFRQGEDODQFLQJ FRQWULEXWHWRWKHLUXQGHUVWDQGLQJRIWKHSDUWLFXODUGLVSXWHl  LWV SUREDWLYH YDOXH DJDLQVW LWV SUHMXGLFLDO HIIHFW  6HH HJ WKDW WULDOV ZRXOG EH SURORQJHG E\ D EDWWOH RI H[SHUWV VHH 8QLWHG6WDWHVY+DOO)G WK&LU  8QLWHG6WDWHVY)RVKHU)G VW&LU 8QLWHG6WDWHVY.LPH)G WK&LU  DGGLQJ mWR WKH WULDO FRXUWjV DUWLFXODWHG FRQFHUQV RXU RZQ FRQYLFWLRQ WKDW D WULDO FRXUW KDV WKH GLVFUHWLRQ WR DYRLG 7KHGLVWULFWFRXUWLQWKHFDVHEHIRUHXVGLGQRWDXWRPDWLFDOO\ LPSRVLQJXSRQWKHSDUWLHVWKHWLPHDQGH[SHQVHLQYROYHGLQ H[FOXGH 'U 5RVVjV WHVWLPRQ\  ,QVWHDG LW FRQVLGHUHG WKH DEDWWOHRIH[SHUWVl DQGWKDWVXFKWHVWLPRQ\FUHDWHVXQGXH PDWWHULQGHWDLODIWHUFRQGXFWLQJDOHQJWK\'DXEHUWKHDULQJ RSSRUWXQLW\IRUFRQIXVLQJDQGPLVOHDGLQJWKHMXU\VHH8QLWHG DQGVSHFLILFDOO\DFNQRZOHGJHGWKH6L[WK&LUFXLWjVZLOOLQJQHVV 6WDWHVY5LQFRQ)G WK&LU  m*LYHQWKH WRDFFHSWSV\FKRORJLFDOVWXGLHVDVDVFLHQWLILFDOO\VRXQGDQG SRZHUIXO QDWXUH RI H[SHUW WHVWLPRQ\ FRXSOHG ZLWK LWV SURSHU VXEMHFW RI H[SHUW WHVWLPRQ\  ,Q IDFW WKH FRXUW SRWHQWLDOWRPLVOHDGWKHMXU\ZHFDQQRWVD\WKHGLVWULFWFRXUW SRLQWHGO\ GLVWLQJXLVKHG WKH FLUFXPVWDQFHV SUHVHQWHG LQ HUUHG LQ FRQFOXGLQJ WKDW WKH SURIIHUHG HYLGHQFH ZRXOG QRW /DQJDQjVFDVHIURPWKRVHLQ8QLWHG6WDWHVY6PLWK)G DVVLVW WKH WULHU RI IDFW DQG WKDW LW ZDV OLNHO\ WR PLVOHDG WKH  WK&LU ZKHUHWKLVFRXUWQRWHGWKDWWKHVFLHQFH MXU\l  RIH\HZLWQHVVSHUFHSWLRQKDVDFKLHYHGWKHOHYHORImH[DFWQHVV PHWKRGRORJ\DQGUHOLDELOLW\RIDQ\SV\FKRORJLFDOUHVHDUFKl 6HYHUDOFRXUWVKRZHYHULQFOXGLQJRXURZQKDYHVXJJHVWHG ,GDW7KH6PLWKFRXUWKHOGWKDWWKHGLVWULFWFRXUWKDG WKDWVXFKHYLGHQFHZDUUDQWVDPRUHKRVSLWDEOHUHFHSWLRQ6HH DEXVHG LWV GLVFUHWLRQ LQ H[FOXGLQJ DQ H[SHUW LQ H\HZLWQHVV 8QLWHG6WDWHVY6PLWKHUV)G WK&LU LGHQWLILFDWLRQ EHFDXVH m>V@XFK WHVWLPRQ\ PLJKW KDYH EHHQ KROGLQJ WKDW mWKH GLVWULFW FRXUW DEXVHG LWV GLVFUHWLRQ LQ UHOHYDQWWRWKHH[DFWIDFWVEHIRUHWKHFRXUWDQGQRWRQO\PLJKW H[FOXGLQJ>WKHH\HZLWQHVVLGHQWLILFDWLRQH[SHUWjV@WHVWLPRQ\ KDYHDVVLVWHGWKHMXU\EXWPLJKWKDYHUHIXWHGWKHLURWKHUZLVH ZLWKRXW ILUVW FRQGXFWLQJ D KHDULQJ SXUVXDQW WR 'DXEHUWl  FRPPRQ DVVXPSWLRQV DERXW WKH UHOLDELOLW\ RI H\HZLWQHVV 8QLWHG6WDWHVY6PLWK)G WK&LU LGHQWLILFDWLRQlWKXVVDWLVI\LQJWKHmKHOSIXOQHVVWHVWlRI5XOH DJUHHLQJWKDWmH[SHUWWHVWLPRQ\RQH\HZLWQHVVLGHQWLILFDWLRQ ,GDW HPSKDVLVLQRULJLQDO