Peveler v. United States

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 7(55< / 3(9(/(5 ; 3HWLWLRQHU$SSHOODQW    1R Y  !  81,7(' 67$7(6 2) $0(5,&$  5HVSRQGHQW$SSHOOHH  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH:HVWHUQ'LVWULFWRI.HQWXFN\DW2ZHQVERUR 1RVnsHQQLIHU%&RIIPDQ 'LVWULFWsXGJH 6XEPLWWHG6HSWHPEHU 'HFLGHGDQG)LOHG2FWREHU %HIRUH'$8*+75(<*,/0$1DQG*,%621&LUFXLW sXGJHV 7KH +RQRUDEOH sRKQ 5 *LEVRQ 6HQLRU &LUFXLW sXGJH RI WKH 8QLWHG 6WDWHV &RXUW RI $SSHDOV IRU WKH (LJKWK &LUFXLW VLWWLQJ E\ GHVLJQDWLRQ   3HYHOHUY8QLWHG6WDWHV 1R 1R 3HYHOHUY8QLWHG6WDWHV  BBBBBBBBBBBBBBBBB  DQG 'HFHPEHU    %ODFNOHGJH Y $OOLVRQ  86   m6ROHPQGHFODUDWLRQVLQRSHQFRXUWFDUU\ &2816(/ D VWURQJ SUHVXPSWLRQ RI YHULW\l   3HYHOHU FRXQWHUV E\ DUJXLQJWKDWKHGLGQRWSOHDGJXLOW\WRWKHVHWZRFRXQWVEXW 21%5,()3DWULFNs%RXOGLQ$66,67$17)('(5$/ LQVWHDGDWWHPSWHGWRHQWHUDQ$OIRUGSOHD6XFKDSOHDDOORZV 38%/,&'()(1'(5/RXLVYLOOH.HQWXFN\IRU$SSHOODQW WKH GHIHQGDQW WR PDLQWDLQ KLV LQQRFHQFH ZKLOH DJUHHLQJ WR 7HUU\ 0 &XVKLQJ 0DULVD s )RUG $66,67$17 81,7(' IRUHJRKLVULJKWWRDWULDO1RUWK&DUROLQDY$OIRUG86 67$7(6$77251(<6/RXLVYLOOH.HQWXFN\IRU$SSHOOHH     m$Q LQGLYLGXDO DFFXVHG RI FULPH PD\ YROXQWDULO\NQRZLQJO\DQGXQGHUVWDQGLQJO\FRQVHQWWRWKH BBBBBBBBBBBBBBBBB LPSRVLWLRQ RI D SULVRQ VHQWHQFH HYHQ LI KH LV XQZLOOLQJ RU XQDEOHWRDGPLWKLVSDUWLFLSDWLRQLQWKHDFWVFRQVWLWXWLQJWKH 23,1,21 FULPHl   7KH UHFRUG KRZHYHU SURYLGHV QR VXSSRUW IRU BBBBBBBBBBBBBBBBB 3HYHOHUjVFRQWHQWLRQWKDWKHDWWHPSWHGWRHQWHUDQ$OIRUGSOHD 521$/'/((*,/0$1&LUFXLW sXGJH7HUU\3HYHOHU ,,,&21&/86,21 SOHGJXLOW\LQWRILYHFRXQWVRILOOHJDOGUXJWUDIILFNLQJ DQGRQHFRXQWRIXVLQJRUFDUU\LQJDILUHDUPLQUHODWLRQWRD )RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH GUXJWUDIILFNLQJFULPH$IWHUH[KDXVWLQJKLVGLUHFWDSSHDOV MXGJPHQWRIWKHGLVWULFWFRXUW 3HYHOHUILOHGDSHWLWLRQXQGHU86&†WRVHHNUHOLHI IURPKLVFRQYLFWLRQDQGVHQWHQFHLQWKH8QLWHG6WDWHV'LVWULFW &RXUWIRUWKH:HVWHUQ'LVWULFWRI.HQWXFN\+HDUJXHGLQKLV SHWLWLRQ WKDW KLV JXLOW\ SOHD WR WKH ILUHDUP FRXQW ZDV QRW HQWHUHG LQWR YROXQWDULO\ DQG LQWHOOLJHQWO\ VR WKDW KLV VXEVHTXHQWFRQYLFWLRQDQGVHQWHQFHYLRODWHGKLVULJKWVXQGHU WKH'XH3URFHVV&ODXVHRIWKH)LIWK$PHQGPHQW+ROGLQJ WKDW3HYHOHUKDGSURFHGXUDOO\GHIDXOWHGKLVGXHSURFHVVFODLP WKHGLVWULFWFRXUWGHQLHG3HYHOHUj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l  FLWLQJ)HG5&LY3 :HVWHUQ.HQWXFN\  D ,QWKHSUHVHQWFDVHZHILQGQRFRPSHOOLQJUHDVRQWR VHFRQGJXHVV WKH PDJLVWUDWH MXGJHjV GHFLVLRQ WR FUHGLW $W DSSUR[LPDWHO\ WKH VDPH WLPH DV WKH LQYHVWLJDWLRQ RI %ODQIRUGj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jVWUDLOHU8QLWHG6WDWHV SXUFKDVHGPDULMXDQDIURP3HYHOHURQ1RYHPEHUDQG Y+HQGULFNV1R:/DW  WK&LU DJDLQRQ'HFHPEHUDQGWKDWKHVDZ3HYHOHUZHLJK 0DU  XQSXEOLVKHGWDEOHGHFLVLRQ  KROGLQJWKDWWKH DQG SDFNDJH YDULRXV TXDQWLWLHV RI FRFDLQH RQ sDQXDU\  GLVWULFWFRXUWGLGQRWFOHDUO\HUULQFUHGLWLQJWKHWHVWLPRQ\RI %ODQIRUGUHSRUWHGVHHLQJILUHDUPVRSHQO\GLVSOD\HGLQ DFRRSHUDWLQJJRYHUQPHQWZLWQHVVZKHUHKLVWHVWLPRQ\ZDV WKHURRPVRI3HYHOHUjVWUDLOHUKRPHZKHUHWKHPDULMXDQDVDOHV VXEVWDQWLDWHG DW OHDVW LQ SDUW E\ RWKHU HYLGHQFH   7KH WRRNSODFHLQDQGIXUWKHUVWDWHGWKDWKHVDZILUHDUPVLQ PDJLVWUDWHMXGJHIXUWKHUDFNQRZOHGJHGWKDW%ODQIRUGGLGQRW WKHFORVHWRI3HYHOHUjVEHGURRPZKHUHWKHFRFDLQHSDFNDJLQJ LQLWLDOO\JLYH&REEDQG%URZQGDFRPSOHWHO\DFFXUDWHDFFRXQW RFFXUUHG LQ   %DVHG RQ WKH LQIRUPDWLRQ SURYLGHG E\ RI3HYHOHUjVFRFDLQHSDFNDJLQJDFWLYLWLHVRQsDQXDU\ %ODQIRUGZDUUDQWVZHUHLVVXHGWRDUUHVW3HYHOHUDQGVHDUFK EXWSRLQWHGRXWWKDW%ODQIRUGODWHUFDPHIRUZDUGRQKLVRZQ KLVWUDLOHU7KHVHDUFKUHVXOWHGLQWKHUHFRYHU\RISRXQGV DQGFRUUHFWHGKLVHDUOLHULQDFFXUDWHVWDWHPHQW0RUHRYHUWKH RIFRFDLQHSRXQGVRIPDULMXDQDDQGILUHDUPV PDJLVWUDWH MXGJH UHFRJQL]HG WKDW mWKHUH DUH VRPH PLQRU LQFRQVLVWHQFLHVLQ%ODQIRUGjVWHVWLPRQ\ZKHQLWLVFRPSDUHG % 3URFHGXUDOEDFNJURXQG WR HDUOLHU WHVWLPRQ\ JLYHQ E\ >&REE DQG %URZQG@l  7KH PDJLVWUDWH MXGJH KRZHYHU UHDVRQDEO\ DWWULEXWHG WKHVH $IHGHUDOJUDQGMXU\UHWXUQHGDQHOHYHQFRXQWLQGLFWPHQW LQFRQVLVWHQFLHVWRWKHIDFWWKDW&REEDQG%URZQGJDYHWKHLU DJDLQVW3HYHOHUDQGKLVFRGHIHQGDQWVLQ$SULORI7KH WHVWLPRQ\LQDSSUR[LPDWHO\ILYH\HDUVEHIRUH%ODQIRUG LQGLFWPHQW QDPHG 3HYHOHU LQ VHYHQ RI WKH FRXQWV  )LYH RI WHVWLILHGDWWKHKHDULQJRQZKHWKHU3HYHOHUFRXOGHVWDEOLVKKLV WKHVHFRXQWVFKDUJHG3HYHOHUZLWKGUXJWUDIILFNLQJLQYLRODWLRQ DFWXDOLQQRFHQFH RI  86& †  D    7KH RWKHU WZR FRXQWV FKDUJHG 3HYHOHUZLWKYLRODWLQJ86&† F E\XVLQJRUFDUU\LQJ 3HYHOHUILQDOO\DUJXHVWKDWWKHPDJLVWUDWHMXGJHVKRXOGKDYH D ILUHDUP LQ UHODWLRQ WR GUXJ WUDIILFNLQJ FULPHV RQ JLYHQPRUHZHLJKWWR3HYHOHUjVRZQWHVWLPRQ\DQGWKDWRIKLV 1RYHPEHUDQG'HFHPEHU3HYHOHUSOHG FRGHIHQGDQW *URVV ZKHQ WKH\ WHVWLILHG WKDW 3HYHOHU QHLWKHU QRWJXLOW\WRDOOVHYHQFRXQWV VROGGUXJVWR%ODQIRUGQRUSRVVHVVHGDQ\ILUHDUPV%XWWKH PDJLVWUDWHMXGJHGLGQRWFOHDUO\HUULQGLVFUHGLWLQJ3HYHOHUjV 6KRUWO\WKHUHDIWHU3HYHOHUILOHGDPRWLRQWRVXSSUHVVWKH DQG*URVVjVWHVWLPRQ\%RWK3HYHOHUDQG*URVVDUHFRQYLFWHG HYLGHQFHUHFRYHUHGIURPKLVWUDLOHUFRQWHVWLQJDPRQJRWKHU IHORQVDQG3HYHOHUjVWHVWLPRQ\LVFRQWUDGLFWHGE\KLVJXLOW\ WKLQJVZKHWKHUWKHVHDUFKZDVVXSSRUWHGE\SUREDEOHFDXVH SOHDWRWKHWZRFRXQWVRIGUXJWUDIILFNLQJRQ1RYHPEHU 7KHGLVWULFWFRXUWUHIHUUHGWKHPRWLRQWRDPDJLVWUDWHMXGJHIRU DUHSRUWDQGUHFRPPHQGDWLRQ$IWHUDKHDULQJWKHPDJLVWUDWH  3HYHOHUY8QLWHG6WDWHV 1R 1R 3HYHOHUY8QLWHG6WDWHV  MXGJHUHFRPPHQGHGWKDW3HYHOHUjVPRWLRQEHGHQLHG7KLV FDOLEHUSLVWROO\LQJRQDWDEOHLQWKHOLYLQJURRPGXULQJ UHFRPPHQGDWLRQZDVDGRSWHGE\WKHGLVWULFWFRXUW WKHVDOH7KH'HFHPEHUVDOHRQWKHRWKHU KDQG RFFXUUHGLQ3HYHOHUjVEHGURRP%ODQIRUGVDLGWKDWGXULQJWKH 3HYHOHUVXEVHTXHQWO\HQWHUHGLQWRDSOHDDJUHHPHQWZLWKWKH VDOH KH VDZ D  FDOLEHU SLVWRO RQ WKH KHDGERDUG RI JRYHUQPHQW7KHDJUHHPHQWUHTXLUHG3HYHOHUWRSOHDGJXLOW\ 3HYHOHUjVZDWHUEHGDVKRWJXQOHDQLQJDJDLQVWWKHZDOODQGD WRDVL[FRXQWVXSHUVHGLQJLQIRUPDWLRQWKDWFKDUJHGKLPZLWK PLOOLPHWHUSLVWROVLWWLQJRQDGUHVVHU WKHVDPHILYHGUXJWUDIILFNLQJFRXQWVLQFOXGHGLQWKHRULJLQDO LQGLFWPHQWEXWZLWKRQO\RQHFRXQWRIYLRODWLQJ† F E\ :H DJUHH ZLWK WKH PDJLVWUDWH MXGJH WKDW %ODQIRUGjV XVLQJRUFDUU\LQJDILUHDUPLQUHODWLRQWRDGUXJWUDIILFNLQJ WHVWLPRQ\ ZDV VXIILFLHQW WR HVWDEOLVK WKDW 3HYHOHU XVHG D FULPH RQ sDQXDU\    ,Q UHWXUQ WKH JRYHUQPHQW ILUHDUP LQ FRQQHFWLRQ ZLWK GUXJ WUDIILFNLQJ FULPHV RQ GLVPLVVHG WKH FRXQWV UHODWLQJ WR WKH ILUHDUP FKDUJHV RQ 1RYHPEHUDQG'HFHPEHUDVFKDUJHGLQ 1RYHPEHU   DQG 'HFHPEHU   DQG IXUWKHU WKHWZRILUHDUPFRXQWVRIWKHRULJLQDOLQGLFWPHQW8QGHUWKH DJUHHGWRUHFRPPHQGDSULVRQVHQWHQFHDQGILQHDWWKHORZ mDFWLYHHPSOR\PHQWlLQWHUSUHWDWLRQRImXVLQJlDILUHDUPDVVHW HQGRIWKHDSSOLFDEOHUDQJH3HYHOHUHQWHUHGKLVJXLOW\SOHDLQ IRUWKLQ%DLOH\mDILUHDUPFDQEHXVHGZLWKRXWEHLQJFDUULHG 6HSWHPEHU RI  EXW SUHVHUYHG KLV ULJKW WR DSSHDO WKH HJ ZKHQ DQ RIIHQGHU KDV D JXQ RQ GLVSOD\ GXULQJ D GLVWULFWFRXUWjVGHQLDORIKLVPRWLRQWRVXSSUHVV WUDQVDFWLRQl86DW7KH&RXUWIXUWKHUVWDWHG WKDWmWKHVLOHQWEXWREYLRXVDQGIRUFHIXOSUHVHQFHRIDJXQRQ ,Q'HFHPEHURI3HYHOHUUHFHLYHGDPRQWKSULVRQ DWDEOHFDQEHDµXVHjl,GDW7KXVGLVSOD\LQJILUHDUPV VHQWHQFH EDVHG RQ WKH VL[ FRXQWV RI WKH VXSHUVHGLQJ ZKLOHVHOOLQJPDULMXDQDTXDOLILHVDVXVLQJDILUHDUPLQUHODWLRQ LQIRUPDWLRQ7KHILYHGUXJWUDIILFNLQJFRXQWVDFFRXQWHGIRU WRDGUXJWUDIILFNLQJFULPH  RI WKHVH PRQWKV ZLWK WKH DGGLWLRQDO  PRQWKV DWWULEXWDEOHWRWKHILUHDUPFRXQW 3HYHOHUDUJXHVKRZHYHUWKDWWKHPDJLVWUDWHMXGJHVKRXOG QRW KDYH FUHGLWHG %ODQIRUGjV WHVWLPRQ\  $FFRUGLQJ WR 3HYHOHUWKHQDSSHDOHGWKHGHQLDORIKLVPRWLRQWRVXSSUHVV 3HYHOHU %ODQIRUG ODFNV FUHGLELOLW\ EHFDXVH   KH UHFHLYHG 7KLV FRXUW DIILUPHG WKH GLVWULFW FRXUWjV MXGJPHQW GHQ\LQJ ERWKFDVKSD\PHQWVDQGWKHGLVPLVVDORIDFULPLQDOFKDUJHLQ 3HYHOHUjV PRWLRQ  8QLWHG 6WDWHV Y 3HYHOHU 1R  H[FKDQJHIRUKLVFRRSHUDWLRQZLWKWKHJRYHUQPHQW  KHOLHG :/ WK&LU2FW  XQSXEOLVKHGWDEOH WR&REEDQG%URZQGDERXWWKHWLPLQJRI3HYHOHUjVFRFDLQH GHFLVLRQ 7KH6XSUHPH&RXUWGHQLHG3HYHOHUjVVXEVHTXHQW SDFNDJLQJ DFWLYLWLHV RQ sDQXDU\   DQG   KLV SHWLWLRQIRUDZULWRIFHUWLRUDUL3HYHOHUY8QLWHG6WDWHV WHVWLPRQ\FRQIOLFWVZLWK&REEDQG%URZQGjVHDUOLHUWHVWLPRQ\ 86   DWWKHKHDULQJRQ3HYHOHUjVPRWLRQWRVXSSUHVV 3URFHHGLQJSURVH3HYHOHUWKHQILOHGDSHWLWLRQXQGHU :H DUH JHQHUDOO\ UHOXFWDQW WR VHW DVLGH FUHGLELOLW\ 86&†IRUUHOLHIIURPKLVFRQYLFWLRQDQGVHQWHQFHRQ GHWHUPLQDWLRQV PDGH E\ WKH WULHU RI IDFW ZKR KDV KDG WKH sXO\    7KH SHWLWLRQ FRQWDLQV YDULRXV JURXQGV IRU RSSRUWXQLW\WRYLHZWKHZLWQHVVRQWKHVWDQGDQGDVVHVVKLV UHOLHI EXW WKH SUHVHQW DSSHDO FRQFHUQV RQO\ 3HYHOHUjV GHPHDQRU5DPVH\Y8QLWHG0LQH:RUNHUVRI$P)G FKDOOHQJHWRKLVFRQYLFWLRQDQGVHQWHQFHRQWKHILUHDUPFRXQW   WK &LU   m7KXV KRZHYHU ZH PLJKW 3HYHOHUDUJXHVLQKLVSHWLWLRQWKDWKHSOHGJXLOW\WRWKHILUHDUP LQGLYLGXDOO\YLHZWKHHYLGHQFHLIZHZHUHWKHWULHUVRIIDFWLW FRXQWEHFDXVHKHEHOLHYHGWKDWKHFRXOGEHFRQYLFWHGXQGHU LV FOHDU WKDW ZH DUH UHTXLUHG WR JLYH JUHDW ZHLJKW WR WKH †  F  IRU VWRULQJ ILUHDUPV LQ FORVH SUR[LPLW\ WR LOOHJDO ILQGLQJVRIWKHWULDOFRXUWZKLFKKDGWKHRSSRUWXQLW\WRVHHWKH GUXJV%XWIROORZLQJKLVJXLOW\SOHDWKH6XSUHPH&RXUWKHOG ZLWQHVVHVWRZHLJKWKHLUHYLGHQFHDVLWZDVSUHVHQWHGWRYLHZ LQ%DLOH\Y8QLWHG6WDWHV86  WKDWD  3HYHOHUY8QLWHG6WDWHV 1R 1R 3HYHOHUY8QLWHG6WDWHV  3HYHOHUQH[WFRQWHQGVWKDWWKH'RXEOHsHRSDUG\&ODXVHRI FRQYLFWLRQIRUXVLQJDILUHDUPLQUHODWLRQWRDGUXJWUDIILFNLQJ WKH)LIWK$PHQGPHQWDQG866HQWHQFLQJ*XLGHOLQHV0DQXDO FULPHFDQRQO\DULVHLIWKHGHIHQGDQWmDFWLYHO\HPSOR\HGlWKH †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sDQXDU\UHTXLUHVWKDW FKDUJHG3HYHOHUZLWKXVLQJDILUHDUPLQUHODWLRQWRWKHGUXJ KLVFRQYLFWLRQDQGVHQWHQFHRQWKHILUHDUPFRXQWEHYDFDWHG WUDIILFNLQJ FULPH WKDW WRRN SODFH RQ 'HFHPEHU   3HYHOHU DOVR UHFHLYHG D WZROHYHO VHQWHQFLQJ HQKDQFHPHQW 7KH GLVWULFW FRXUW UHIHUUHG 3HYHOHUjV SHWLWLRQ WR WKH XQGHU 86 6HQWHQFLQJ *XLGHOLQHV 0DQXDO † ' E  PDJLVWUDWH MXGJH  ,Q sXQH RI  WKH PDJLVWUDWH MXGJH   IRU SRVVHVVLQJ D ILUHDUP GXULQJ WKH VDPH GUXJ UHFRPPHQGHG WKDW WKH GLVWULFW FRXUW YDFDWH 3HYHOHUjV WUDIILFNLQJFULPH+HLQVLVWVWKDWWKH'RXEOHsHRSDUG\&ODXVH FRQYLFWLRQ DQG VHQWHQFH RQ WKH ILUHDUP FRXQW  7KLV DQG†.FPWQSUHFOXGHDFRXUWIURPXVLQJWKHVDPH UHFRPPHQGDWLRQZDVEDVHGRQWKHJRYHUQPHQWjVFRQFHVVLRQ FRQGXFW WR LPSRVH ERWK D VHQWHQFLQJ HQKDQFHPHQW XQGHU WKDW3HYHOHUjVJXLOW\SOHDWRWKHILUHDUPFRXQWZDVQRORQJHU †' E  DQGDVHQWHQFHIRUXVLQJDILUHDUPLQUHODWLRQWR YDOLGDIWHU%DLOH\7KHJRYHUQPHQWKRZHYHUZLWKGUHZLWV DGUXJWUDIILFNLQJFULPH3HYHOHUjVDUJXPHQWKRZHYHUKDV FRQFHVVLRQVKRUWO\DIWHUWKH6XSUHPH&RXUWLVVXHGLWVGHFLVLRQ QR PHULW EHFDXVH WKH FRXQW WKDW FKDUJHG KLP ZLWK XVLQJ D LQ%RXVOH\Y8QLWHG6WDWHV86   KROGLQJWKDW ILUHDUP LQ UHODWLRQ WR WKH GUXJ WUDIILFNLQJ FULPH RQ DSHWLWLRQHUEHODWHGO\UDLVLQJD%DLOH\FKDOOHQJHWRKLVJXLOW\ 'HFHPEHUZDVGLVPLVVHGDVSDUWRIKLVSOHDEDUJDLQ SOHDIRUYLRODWLQJ† F PXVWVKRZmFDXVHDQGSUHMXGLFHl +HZDVWKXVQRWVHQWHQFHGRQWKDWFRXQW+LVDUJXPHQWWKDW WR DYRLG SURFHGXUDO GHIDXOW RU HOVH GHPRQVWUDWH KLV DFWXDO KHKDVEHHQSXQLVKHGWZLFHIRUWKHVDPHFRQGXFWWKHUHIRUH LQQRFHQFHZLWKUHJDUGWRWKH† F FKDUJHDQGDQ\RWKHU IDLOV PRUH VHULRXV FKDUJHV GLVPLVVHG GXULQJ SOHD EDUJDLQLQJ  6HHNLQJ UHFRQVLGHUDWLRQ RI WKH PDJLVWUDWH MXGJHjV $FFRUGLQJO\ZHDJUHHZLWKWKHGLVWULFWFRXUWWKDWWRH[FXVH UHFRPPHQGDWLRQWKHJRYHUQPHQWDUJXHGWKDW%RXVOH\OLPLWHG KLV SURFHGXUDO GHIDXOW 3HYHOHU PXVW SURYH KLV DFWXDO 3HYHOHUjVDELOLW\WRFKDOOHQJHKLVILUHDUPFRQYLFWLRQ LQQRFHQFH UHJDUGLQJ WKH ILUHDUP FRXQWV LQ WKH RULJLQDO LQGLFWPHQW  7R SURYH KLV DFWXDO LQQRFHQFH 3HYHOHU PXVW 7KH JRYHUQPHQW LQVLVWHG WKDW 3HYHOHU KDG SURFHGXUDOO\ VKRZWKDWmLWLVPRUHOLNHO\WKDQQRWWKDWQRUHDVRQDEOHMXURU GHIDXOWHGKLVGXHSURFHVVFODLPE\IDLOLQJWRDVVHUWLWRQGLUHFW ZRXOG KDYH FRQYLFWHG KLPl  %RXVOH\  86 DW  DSSHDO3HYHOHUFRXOGDYRLGWKLVSURFHGXUDOGHIDXOWDFFRUGLQJ LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQVRPLWWHG 7KHGLVWULFW WRWKHJRYHUQPHQWRQO\E\VKRZLQJFDXVHDQGSUHMXGLFHIRU FRXUW DGRSWLQJ WKH PDJLVWUDWH MXGJHjV UHFRPPHQGDWLRQ WKHGHIDXOWRUE\GHPRQVWUDWLQJWKDWKHLVDFWXDOO\LQQRFHQW FRQFOXGHGWKDW3HYHOHUIDLOHGWRPHHWWKLVEXUGHQRISURRI &LWLQJ%RXVOH\WKHJRYHUQPHQWIXUWKHUDUJXHGWKDWLQWHUPV RIGHPRQVWUDWLQJDFWXDOLQQRFHQFH3HYHOHUKDGWRVKRZERWK :HILQGQRHUURULQWKHGLVWULFWFRXUWjVFRQFOXVLRQ$WWKH WKDWKHGLGQRWDFWXDOO\FRPPLWWKHILUHDUPRIIHQVHFKDUJHGLQ KHDULQJEHIRUHWKHPDJLVWUDWHMXGJH%ODQIRUGWHVWLILHGWKDWKH WKH VXSHUVHGLQJ LQIRUPDWLRQ WKH FRXQW RQ ZKLFK KH SOHG SXUFKDVHGPDULMXDQDIURP3HYHOHURQ1RYHPEHUDQG JXLOW\  DQG WKDW KH GLG QRW FRPPLW WKH ILUHDUP YLRODWLRQV DJDLQ RQ 'HFHPEHU    %ODQIRUG VDLG WKDW WKH FKDUJHG LQ WKH RULJLQDO LQGLFWPHQW FRXQWV WKDW WKH 1RYHPEHU   VDOH RFFXUUHG LQ WKH OLYLQJ URRP RI JRYHUQPHQWGLVPLVVHGDVSDUWRI3HYHOHUjVSOHDDJUHHPHQW  3HYHOHUjVWUDLOHUKRPH+HIXUWKHUWHVWLILHGWKDWWKHUHZDVD 7KHJRYHUQPHQWDUJXHGWKDW3HYHOHUFRPPLWWHGWKHILUHDUP  3HYHOHUY8QLWHG6WDWHV 1R 1R 3HYHOHUY8QLWHG6WDWHV  RIIHQVHV FKDUJHG LQ WKH RULJLQDO LQGLFWPHQW HYHQ XQGHU WK&LU  m,VVXHVQRWSUHVHQWHGWRWKHGLVWULFWFRXUWEXW %DLOH\jVLQWHUSUHWDWLRQRI† F  UDLVHGIRUWKHILUVWWLPHRQDSSHDODUHQRWSURSHUO\EHIRUHWKH FRXUWl 0RUHRYHUHYHQLIWKHDUJXPHQWKDGEHHQSURSHUO\ 3HYHOHUFRXOGSUHYDLORQKLVGXHSURFHVVFODLPWKHGLVWULFW SUHVHUYHGLWODFNVPHULW$WWKHWLPH3HYHOHUSOHGJXLOW\D FRXUWDJUHHGRQO\E\VKRZLQJKLVDFWXDOLQQRFHQFHUHJDUGLQJ VHFRQG YLRODWLRQ IRU XVLQJ D ILUHDUP LQ UHODWLRQ WR D GUXJ WKHILUHDUPFRXQWVLQERWKWKHVXSHUVHGLQJLQIRUPDWLRQDQGWKH WUDIILFNLQJ FULPH FDUULHG ZLWK LW D PDQGDWRU\ PLQLPXP RULJLQDO LQGLFWPHQW  ,W WKHQ UHPDQGHG WKH LVVXH WR WKH VHQWHQFHRI\HDUVLQSULVRQ86&† F  & L PDJLVWUDWH MXGJH IRU D UHFRPPHQGDWLRQ UHJDUGLQJ ZKHWKHU QRZ  \HDUV IROORZLQJ D  DPHQGPHQW   7KH WZR 3HYHOHUZDVDFWXDOO\LQQRFHQWRIWKHILUHDUPFKDUJHV ILUHDUP FRXQWV LQ WKH RULJLQDO LQGLFWPHQW ZKHQ YLHZHG LQ FRPELQDWLRQ DUH WKXV mPRUH VHULRXVl WKDQ WKH RQH ILUHDUP 7KHPDJLVWUDWHMXGJHFRQGXFWHGDQHYLGHQWLDU\KHDULQJLQ FRXQWLQWKHVXSHUVHGLQJLQIRUPDWLRQ s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† HVWDEOLVKLQJDILYH\HDU FULPHVRQ1RYHPEHUDQG'HFHPEHU VWDWXWHRIOLPLWDWLRQVIRUQRQFDSLWDOIHGHUDOFULPHV %XWRQFH DJDLQ3HYHOHUKDVZDLYHGWKLVDUJXPHQWE\QRWUDLVLQJLWLQ %ODQIRUG3HYHOHUDQG3HYHOHUjVFRGHIHQGDQWsDPLH*URVV WKHFRXUWEHORZs&:\FNRII $VVRFV,QF)GDW WHVWLILHG DW WKH KHDULQJ EHIRUH WKH PDJLVWUDWH MXGJH  %RWK   ,Q DQ\ HYHQW 3HYHOHU EDVHV WKLV DUJXPHQW RQ KLV 3HYHOHU DQG *URVV GHQLHG 3HYHOHUjV JXLOW RQ WKH ILUHDUP PLVWDNHQ EHOLHI WKDW WKH GLVWULFW FRXUW SXQLVKHG KLP IRU FKDUJHV LQ WKH RULJLQDO LQGLFWPHQW  %ODQIRUG WHVWLILHG FRPPLWWLQJWKHWZRILUHDUPRIIHQVHVFKDUJHGLQWKHRULJLQDO KRZHYHU WKDW KH VDZ ILUHDUPV O\LQJ RXW LQ WKH RSHQ ZKHQ LQGLFWPHQW  7KH GLVWULFW FRXUW KRZHYHU GLG QRW SXQLVK SXUFKDVLQJPDULMXDQDIURP3HYHOHURQ1RYHPEHU 3HYHOHURQWKRVHFRXQWV,QVWHDGFRQVLVWHQWZLWK%RXVOH\WKH DQG'HFHPEHU&UHGLWLQJ%ODQIRUGj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jV UHTXHVW IRU UHOLHI IURP KLV DOORZLQJ D SHWLWLRQHU WR UDLVH D SURFHGXUDOO\ GHIDXOWHG FRQYLFWLRQ DQG VHQWHQFH RQ WKH ILUHDUP FRXQW LQ WKH FKDOOHQJH WR D VHQWHQFH KH EDUJDLQHG IRU ZKLOH HVFDSLQJ VXSHUVHGLQJ LQIRUPDWLRQ EH GHQLHG  2YHUUXOLQJ 3HYHOHUjV SXQLVKPHQWIRUGLVPLVVHGFRXQWVWKDWKHDFWXDOO\FRPPLWWHG REMHFWLRQVWKHGLVWULFWFRXUWDGRSWHGWKHPDJLVWUDWHMXGJHjV 8QLWHG6WDWHVY/OR\G)GQ G&LU UHFRPPHQGDWLRQ7KLVWLPHO\DSSHDOIROORZHG   m7KH DSSDUHQW UHDVRQ IRU UHTXLULQJ D VKRZLQJ RI LQQRFHQFHRQGLVPLVVHGFKDUJHVLVWKDWWKRVHFKDUJHVRIWHQ FDQQRWEHUHLQVWDWHGGXHWRWKHUXQQLQJRIWKHILYH\HDUVWDWXWH RIOLPLWDWLRQVl   3HYHOHUY8QLWHG6WDWHV 1R 1R 3HYHOHUY8QLWHG6WDWHV  FLWDWLRQVRPLWWHG 7KHmKXUGOHl3HYHOHUIDFHVLQH[FXVLQJ ,,$1$/<6,6 KLVSURFHGXUDOGHIDXOWLVmLQWHQWLRQDOO\KLJKIRUUHVSHFW IRUWKHILQDOLW\RIMXGJPHQWVGHPDQGVWKDWFROODWHUDODWWDFN $ 6WDQGDUGRIUHYLHZ JHQHUDOO\QRWEHDOORZHGWRGRVHUYLFHIRUDQDSSHDOl(O]\Y 8QLWHG6WDWHV)G WK&LU  ,QUHYLHZLQJWKHGHQLDORID86&†SHWLWLRQWKLV FRXUWmDSSOLHVDGHQRYRVWDQGDUGRIUHYLHZRIWKHOHJDOLVVXHV 3HYHOHUDUJXHVWKDWKHKDVGHPRQVWUDWHGmFDXVHlE\UDLVLQJ DQGZLOOXSKROGWKHIDFWXDOILQGLQJVRIWKHGLVWULFWFRXUWXQOHVV KLVGXHSURFHVVFODLPmDW WKH HDUOLHVWSRVVLEOHVWDJHl WKH\DUHFOHDUO\HUURQHRXVl+LOOLDUGY8QLWHG6WDWHV QDPHO\DIWHUWKH6XSUHPH&RXUWLVVXHGLWVGHFLVLRQLQ%DLOH\ )G WK&LU  FLWLQJ*DOOY8QLWHG6WDWHV $ FODLP mVR QRYHO WKDW LWV OHJDO EDVLV LV QRW UHDVRQDEO\ )G WK&LU  DYDLODEOH WR FRXQVHOl PD\ HVWDEOLVK FDXVH IRU SURFHGXUDO GHIDXOW%RXVOH\86DW TXRWDWLRQPDUNVRPLWWHG  % 3HYHOHU SURFHGXUDOO\ GHIDXOWHG KLV GXH SURFHVV ,Q%RXVOH\KRZHYHUWKH6XSUHPH&RXUWKHOGWKDWLWVGHFLVLRQ FKDOOHQJH WR KLV FRQYLFWLRQ DQG VHQWHQFH RQ WKH LQ%DLOH\ZDVQRWVXIILFLHQWO\QRYHOWRH[FXVHWKHSHWLWLRQHUjV ILUHDUPFRXQWLQWKHVXSHUVHGLQJLQIRUPDWLRQ IDLOXUH WR UDLVH D GXH SURFHVV FKDOOHQJH WR KLV ILUHDUP FRQYLFWLRQRQGLUHFWDSSHDO,G7KH&RXUWH[SODLQHGWKDWmDW 3HYHOHUPDLQWDLQVWKDWLQOLJKWRI%DLOH\Y8QLWHG6WDWHV WKH WLPH RI SHWLWLRQHUjV SOHD WKH )HGHUDO 5HSRUWHUV ZHUH 86  KHGLGQRWYROXQWDULO\DQGLQWHOOLJHQWO\ UHSOHWHZLWKFDVHVLQYROYLQJFKDOOHQJHVWRWKHQRWLRQWKDWµXVHj SOHDG JXLOW\ WR WKH ILUHDUP FRXQW LQ WKH VXSHUVHGLQJ LVV\QRQ\PRXVZLWKPHUHµSRVVHVVLRQj>IRUSXUSRVHVRIXVLQJ LQIRUPDWLRQ+HWKHUHIRUHLQVLVWVWKDWGXHSURFHVVUHTXLUHV DILUHDUPLQUHODWLRQWRDGUXJWUDIILFNLQJFULPH@l,G WKDW KLV FRQYLFWLRQ DQG VHQWHQFH RQ WKH ILUHDUP FRXQW EH YDFDWHG3HYHOHUjVFODLPKDVDVXEVWDQWLYHEDVLV)LUVWWKH 7R H[FXVH KLV SURFHGXUDO GHIDXOW WKHQ 3HYHOHU PXVW 6XSUHPH&RXUWLQ%RXVOH\Y8QLWHG6WDWHV86 GHPRQVWUDWHKLVmDFWXDOLQQRFHQFHlZLWKUHJDUGWRERWKWKH   KHOGWKDW%DLOH\DSSOLHVUHWURDFWLYHO\VXFKWKDW ILUHDUPFRXQWLQWKHVXSHUVHGLQJLQIRUPDWLRQDQGDQ\RWKHU D SHWLWLRQHU PD\ UHO\ RQ %DLOH\ LQ FROODWHUDOO\ FKDOOHQJLQJ mPRUHVHULRXVlFRXQWVGLVPLVVHGGXULQJSOHDEDUJDLQLQJ,G ZKHWKHUKLVHDUOLHUJXLOW\SOHDWRXVLQJDILUHDUPLQUHODWLRQWR DW   3DUW RI KLV EXUGHQ LV VDWLVILHG E\ WKH JRYHUQPHQW DGUXJWUDIILFNLQJFULPHFRPSRUWVZLWKGXHSURFHVV6HFRQG KDYLQJ FRQFHGHG WKDW 3HYHOHU LV DFWXDOO\ LQQRFHQW RI WKH WKH JRYHUQPHQW KDV FRQFHGHG WKDW XQGHU %DLOH\jV ILUHDUPYLRODWLRQFKDUJHGLQWKHVXSHUVHGLQJLQIRUPDWLRQ%XW LQWHUSUHWDWLRQ RI mXVLQJl D ILUHDUP LQ UHODWLRQ WR D GUXJ WKHGLVWULFWFRXUWKHOGWKDW3HYHOHUIDLOHGWRGHPRQVWUDWHKLV WUDIILFNLQJFULPH3HYHOHUGLGQRWFRPPLWWKHILUHDUPRIIHQVH DFWXDOLQQRFHQFHRQWKHWZRGLVPLVVHGILUHDUPFRXQWVLQWKH FKDUJHGLQWKHVXSHUVHGLQJLQIRUPDWLRQ RULJLQDOLQGLFWPHQW:LWKUHJDUGWRWKHUHTXLUHGVKRZLQJRI DFWXDO LQQRFHQFH m>L@Q FDVHV ZKHUH WKH *RYHUQPHQW KDV $GXHSURFHVVFKDOOHQJHEDVHGRQ%DLOH\KRZHYHUPXVW IRUJRQHPRUHVHULRXVFKDUJHVLQWKHFRXUVHRISOHDEDUJDLQLQJ ILUVWEHUDLVHGE\WKHSHWLWLRQHURQGLUHFWDSSHDO%RXVOH\ SHWLWLRQHUjVVKRZLQJPXVWDOVRH[WHQGWRWKRVHFKDUJHVl,G 86DW m>7@KHYROXQWDULQHVVDQGLQWHOOLJHQFHRIDJXLOW\ SOHD FDQ EH DWWDFNHG RQ FROODWHUDO UHYLHZ RQO\ LI ILUVW 3HYHOHU QRZ DUJXHV WKDW WKH WZR ILUHDUP FRXQWV LQ WKH FKDOOHQJHG RQ GLUHFW UHYLHZl   2WKHUZLVH WKH FODLP LV RULJLQDOLQGLFWPHQWDUHQRWmPRUHVHULRXVlWKDQWKHILUHDUP SURFHGXUDOO\GHIDXOWHG,G$SURFHGXUDOO\GHIDXOWHGFODLP FRXQWLQWKHVXSHUVHGLQJLQIRUPDWLRQ%XWKHGLGQRWUDLVH DEVHQWDVKRZLQJRIFDXVHDQGSUHMXGLFHRUDFWXDOLQQRFHQFH WKLVDUJXPHQWEHORZDQGLWLVWKHUHIRUHZDLYHGs&:\FNRII FDQQRWJLYHULVHWRUHOLHIXQGHU†,GDW $VVRFV,QFY6WDQGDUG)LUH,QV&R)G  3HYHOHUY8QLWHG6WDWHV 1R 1R 3HYHOHUY8QLWHG6WDWHV  ,Q WKH SUHVHQW FDVH WKH GLVWULFW FRXUW KHOG WKDW 3HYHOHU 0RUHRYHURXUKROGLQJWKDW3HYHOHUKDVSURFHGXUDOO\GHIDXOWHG SURFHGXUDOO\ GHIDXOWHG KLV GXH SURFHVV FODLP  :H DJUHH KLVGXHSURFHVVFODLPLQQRZD\FRQIOLFWVZLWKWKH6HFRQG EHFDXVH3HYHOHUQHYHUUDLVHGKLVGXHSURFHVVFODLPZKHQKH &LUFXLWjVGHFLVLRQLQ1DSROL DSSHDOHG KLV FRQYLFWLRQ RQ WKH ILUHDUP FRXQW  +H LQVWHDG OLPLWHGKLVDSSHDOWRWKHGLVWULFWFRXUWjVGHQLDORIKLVPRWLRQ ,Q 1DSROL +DUROG )LVKPDQ DQG sRVHSK 1DSROL ILOHG  WRVXSSUHVV$OWKRXJK3HYHOHUPDLQWDLQVWKDWKHUDLVHGKLV 86&†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jVDQG1DSROLjVFKDOOHQJHWRWKHMXU\ DFODLPFKDOOHQJHVWKH&RXUWjVMXULVGLFWLRQ):3%6,QFY LQVWUXFWLRQZDVQRWSURFHGXUDOO\EDUUHGEXWFRQFOXGHGWKDW &LW\RI'DOODV86   VWDWLQJWKDWmZH JLYLQJWKHLQVWUXFWLRQZDVDWPRVWKDUPOHVVHUURU)LVKPDQ DUHUHTXLUHGWRDGGUHVVWKHLVVXH>RIMXULVGLFWLRQ@HYHQLIWKH DQG1DSROLVXEVHTXHQWO\DSSHDOHGWRWKH6HFRQG&LUFXLW FRXUWVEHORZKDYHQRWSDVVHGRQLWDQGHYHQLIWKHSDUWLHV IDLOWRUDLVHWKHLVVXHEHIRUHXVl  FLWDWLRQRPLWWHG $QRWKHU 7KH6HFRQG&LUFXLWGLGQRWFRQWUDU\WR3HYHOHUjVDUJXPHQW H[FHSWLRQDO FLUFXPVWDQFH ZDV IRXQG ZKHUH WKH &RXUW ZDV DJUHH ZLWK WKH GLVWULFW FRXUW WKDW )LVKPDQ DQG 1DSROL KDG SUHVHQWHGZLWKWKHTXHVWLRQRIZKHWKHUDUHPHG\LVDYDLODEOH SUHVHUYHGWKHLU FODLPVE\UDLVLQJWKHPIRUWKHILUVWWLPHLQ GLUHFWO\ XQGHU WKH &RQVWLWXWLRQ LI D SODLQWLIIjV DOOHJDWLRQV WKHLU SHWLWLRQV IRU D ZULW RI FHUWLRUDUL  ,QVWHDG WKH 6HFRQG FRXOGDOVRVXSSRUWDVXLWDJDLQVWWKH8QLWHG6WDWHVXQGHUWKH &LUFXLW KHOG WKDW HYHQ DVVXPLQJ )LVKPDQ DQG 1DSROL KDG )HGHUDO7RUW&ODLPV$FW&DUOVRQY*UHHQ86 SUHVHUYHGWKHLUFKDOOHQJHWRWKHMXU\LQVWUXFWLRQDQ\HUURULQ Q   DGGUHVVLQJWKHPHULWVZKHUHWKHSDUWLHVDJUHHGWKDW WKHLQVWUXFWLRQZRXOGQRWMXVWLI\JUDQWLQJUHOLHIXQGHU†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jVGHFLVLRQLQ GHIDXOW 1DSROLY8QLWHG6WDWHV)G G&LU WRVXSSRUW WKHRSSRVLWHFRQFOXVLRQ:HRIFRXUVHDUHQRWERXQGE\D %DVHGRQ3HYHOHUjVSURFHGXUDOGHIDXOWmWKHFODLPPD\EH GHFLVLRQIURPDQRWKHUFLUFXLW,QUH$QQ$UERU55&R UDLVHG>LQDSHWLWLRQXQGHU86&†@RQO\LI>3HYHOHU@ )G   WK &LU   UHFRJQL]LQJ WKLV SULQFLSOH  FDQILUVWGHPRQVWUDWHHLWKHUµFDXVHjDQGDFWXDOµSUHMXGLFHjRU WKDW KH LV µDFWXDOO\ LQQRFHQWjl  %RXVOH\  86 DW