United States v. Dupree

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$SSHOOHH    1R Y  !  521$/' '835((  'HIHQGDQW$SSHOODQW  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH:HVWHUQ'LVWULFWRI0LFKLJDQDW*UDQG5DSLGV 1Rn*RUGRQs4XLVW'LVWULFWsXGJH $UJXHG'HFHPEHU 'HFLGHGDQG)LOHG0DUFK %HIRUH.583$16.<6,/(5DQG&2/(&LUFXLW sXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8('$QWKRQ\&*UHHQH*UDQG5DSLGV0LFKLJDQIRU $SSHOODQWsRDQ(0H\HU$66,67$1781,7('67$7(6 $77251(< *UDQG 5DSLGV 0LFKLJDQ IRU $SSHOOHH 21%5,()$QWKRQ\&*UHHQH*UDQG5DSLGV0LFKLJDQ IRU $SSHOODQW  sRDQ ( 0H\HU $66,67$17 81,7(' 67$7(6 $77251(< *UDQG 5DSLGV 0LFKLJDQ IRU $SSHOOHH   8QLWHG6WDWHVY'XSUHH 1R 1R 8QLWHG6WDWHVY'XSUHH  BBBBBBBBBBBBBBBBB DQGWKHSDUWLHVKDYHQRWFDOOHGLWWRWKHFRXUWjVDWWHQWLRQWKDW KH ZDV UHSULPDQGHG IRU WKLV LQ DQ\ ZD\  0RUHRYHU +XQW 23,1,21 WHVWLILHGWKDWVKHUHFRPPHQGHG'XSUHHLQSDUWIRUKLVYLGHR BBBBBBBBBBBBBBBBB H[SHUWLVH ZKLOH KH DSSDUHQWO\ GLG QRW FKDQJH WKH FRQILJXUDWLRQRIUHFRUGHUVWKDWGD\LQWKHFRQWUROURRP+XQW 6,/(5&LUFXLWsXGJH'HIHQGDQW5RQDOG'XSUHHDSSHDOV UHDIILUPHG KHU WHVWLPRQ\ WKDW WKH GLUHFWLRQ RI DW OHDVW RQH KLV FRQYLFWLRQ DQG VHQWHQFH IRU UDFNHWHHULQJ FRQVSLUDF\ FDPHUD KDG EHHQ FKDQJHG  ,QGHHG 'XSUHHjV JUHDWHU DUPHGUREEHU\DQGXQODZIXOSRVVHVVLRQDQGXVHRIDILUHDUP IOH[LELOLW\ LQ KLV MRE LV HYLGHQFHG E\ WKH LQGLFDWLRQ LQ WKH LQWKHFRPPLVVLRQRIDFULPHRIYLROHQFH+HZDVVHQWHQFHG JRYHUQPHQWj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m9DOXH&LW\l LQ:\RPLQJ0LFKLJDQ$W WKHWLPHRIWKHUREEHU\'XSUHHZDVHPSOR\HGDW9DOXH&LW\ DV D ORVV SUHYHQWLRQ RIILFHU DQG ZDV DW WKH VWRUH ZKHQ WKH UREEHU\RFFXUUHG7ZRPHQHQWHUHGWKHVWRUHVKRUWO\DIWHUWKH DUPRUHG WUXFN JXDUG 6WHYHQ 6KRRN DUULYHG DQG IROORZHG KLPWRWKHEDFNRIWKHVWRUH6KRRNKDGMXVWWDNHQGHOLYHU\RI WZREDJVRIPRQH\ RQHFRQWDLQLQJDQGWKHRWKHU FRQWDLQLQJ DQGSODFHGWKHEDJVLQWRRQHFDQYDV EDJZKHQKHZDVFRQIURQWHGE\%ULDQ7XIQHOO7XIQHOOKHOG DJXQWR6KRRNj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jV ORVV 7KH WHVWLPRQ\ ZDV WKDW HPSOR\HHV VXFK DV 'XSUHH ZHUH VXSSRVHG WR mFORFN LQl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j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mZKHWKHU DIWHU QRWGLIILFXOWIRU.0DUWjVPDQDJHPHQWWRREMHFWLYHO\DQG UHYLHZLQJ WKH HYLGHQFH LQ WKH OLJKW PRVW IDYRUDEOH WR WKH H[SHGLHQWO\GHWHUPLQH+RVNLQVjVKRQHVW\RUREVHUYHKLV SURVHFXWLRQDQ\UDWLRQDOWULHURIIDFWFRXOGKDYHIRXQGWKH ZKHUHDERXWV$TXLFNFKHFNRIWKHVHFXULW\ERRWKZDVDOO HVVHQWLDOHOHPHQWVRIWKHFULPHEH\RQGDUHDVRQDEOHGRXEWl WKDWZDVUHTXLUHGWRVHHLI+RVNLQVZDVRQGXW\+RVNLQV 8QLWHG 6WDWHV Y :DQJ  )G   WK &LU  ZDVVXSSRVHGWREHVLWWLQJLQWKHVHFXULW\URRPZDWFKLQJ LQWHUQDOTXRWDWLRQPDUNVRPLWWHG  HPSKDVLVLQRULJLQDO ,Q VHFXULW\PRQLWRUVEHWZHHQDQGDP+HZDV UHYLHZLQJ WKH GHQLDO RI 'XSUHHjV PRWLRQ WR VXSSUHVV WKLV UHTXLUHG WR FORFNLQ  ,QGHHG +RVNLQVjV VXSHUYLVRU FRXUWXSKROGVWKHGLVWULFWFRXUWjVILQGLQJVRIIDFWXQOHVVWKH\ ZDUQHG +RVNLQV WKDW . 0DUW QHDUO\ ILUHG DQRWKHU DUH FOHDUO\ HUURQHRXV DQG UHYLHZV LWV OHJDO FRQFOXVLRQVGH HPSOR\HH IRU OHDYLQJ WKH VHFXULW\ RIILFH WR XVH WKH QRYR8QLWHG6WDWHVY$WNLQ)G WK&LU UHVWURRP  *HQHUDOO\ WKRVH RFFXS\LQJ SRVLWLRQV  7KHFRXUWUHYLHZVWKHWULDOFRXUWjVGHQLDORI'XSUHHj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jV FKDOOHQJHV WR KLV YDULRXV VHQWHQFHHQKDQFHPHQWVm>W@KLVFRXUWUHYLHZVDGLVWULFWFRXUWjV ,GDW DSSOLFDWLRQ RI WKH 6HQWHQFLQJ *XLGHOLQHV GH QRYR DQG WKH GLVWULFW FRXUWjV ILQGLQJV RI IDFW WKHUHXQGHU IRU FOHDU HUURUl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† D 7KLVmEURDGMXULVGLFWLRQDOODQJXDJHlKDV KLVWRULFDOO\EHHQFRQVWUXHGDVUHTXLULQJRQO\ DGHPLQLPXV 8QLWHG6WDWHVY7ULEEOH)G WK&LU  HIIHFWRQLQWHUVWDWHFRPPHUFH6HH8QLWHG6WDWHVY0LOOV )G WK&LU 'XSUHHKRZHYHUDUJXHVWKDW 7XUQLQJWRWKHQDWXUHRI'XSUHHjVZRUNZHQRWHDIDFWXDOO\ LQOLJKWRIUHFHQWSUHFHGHQWVDEURJDWLQJWKHEURDGFRQVWUXFWLRQ VLPLODUFDVHIURPDQRWKHU&LUFXLW8QLWHG6WDWHVY+RVNLQV RIWKH&RPPHUFH&ODXVHoLQFOXGLQJ8QLWHG6WDWHVY/RSH] )G WK&LU FHUWGHQLHG6&W 86  8QLWHG6WDWHVY0RUULVRQ86  ,QWKDWFDVH+RVNLQVZKRKDGEHHQZRUNLQJDVD.  DQGsRQHVY8QLWHG6WDWHV86  o 0DUW VHFXULW\ JXDUG IRU DERXW D PRQWK KHOSHG SODQ DQG WKH JRYHUQPHQW IDLOHG WR PHHW LWV EXUGHQ RI VKRZLQJ D H[HFXWHDUREEHU\RIWKHVWRUH$OWKRXJKKLVMREUHTXLUHGKLP VXIILFLHQW HIIHFW RQ LQWHUVWDWH FRPPHUFH WR PHHW WKH WR VLW LQ WKH VWRUHjV VHFXULW\ URRP DQG ZDWFK WKH VHFXULW\ MXULVGLFWLRQDOSUHGLFDWHIRUKLVSURVHFXWLRQXQGHUWKH+REEV PRQLWRUVEHWZHHQDPDQGDPHDFKPRUQLQJRQ $FW WKHPRUQLQJRIWKHUREEHU\+RVNLQVVWDWLRQHGKLPVHOIRQWKH VDOHVIORRU,GDW$IWHUUHFHLYLQJDVLJQDOIURP+RVNLQV WKHUREEHU*UHJJHIROORZHG+RVNLQVWRWKHFDVKURRPDQG  ZLWK D JXQ RUGHUHG WKH FDVK URRP DWWHQGDQW WR RSHQ WKH ,Q /RSH]  WKH 6XSUHPH &RXUW IRXQG WKDW &RQJUHVVjV HQDFWPHQW RI WKH mFDJHlZKHUHWKHFDVKZDVNHSWDQGWROLHGRZQRQWKHIORRU *XQ)UHH 6FKRRO =RQHV $FW RI  H[FHHGHG WKH VFRSH RI LWV DXWKRULW\ QH[W WR +RVNLQV  *UHJJH KDG WKH FDVK URRP DWWHQGDQW KDQGFXII KHUVHOI WR +RVNLQV DQG LQVWUXFWHG WKHP WR VWD\ XQGHU WKH &RPPHUFH &ODXVH LQ WKDW mSRVVHVVLRQ RI D JXQ LQ D ORFDO VFKRRO ]RQH LV LQ QR VHQVH DQ HFRQRPLF DFWLYLW\ WKDW PLJKW WKURXJK UHSHWLWLRQ HOVHZKHUH VXEVWDQWLDOO\ DIIHFW DQ\ VRUW RI LQWHUVWDWH FRPPHUFHl /RSH]  GRZQ  +H WKHQ FROOHFWHG WKH PRQH\ DQG OHIW  ,G  ,Q  86 DW  0RUH UHFHQWO\ LQ 0RUULVRQ WKH &RXUW LQYDOLGDWHG WKH UHYLHZLQJWKHVHQWHQFLQJMXGJHjVLPSRVLWLRQRIWKH†% FLYLO UHPHG\ SURYLVLRQ RI WKH 9LROHQFH $JDLQVW :RPHQ $FW ILQGLQJ WKDW HQKDQFHPHQWWKHFRXUWQRWHGWKDWWKHUHZDVQRTXHVWLRQWKDW LW GLG QRW UHJXODWH DFWLYLW\ WKDW VXEVWDQWLDOO\ DIIHFWHG LQWHUVWDWH FRPPHUFH sRQHV +RVNLQV KDG XVHG KLV SRVLWLRQ WR KHOS FRPPLW WKH UREEHU\ ,Q WKH &RXUW UHYHUVHG D GHIHQGDQWjV FRQYLFWLRQ XQGHU WKH IHGHUDO DUVRQ VWDWXWH DUVRQ RI DQ RZQHURFFXSLHG SULYDWH UHVLGHQFH ZKLFK ZDV QRW HYHQSOD\LQJWKHYLFWLP EXWWKDWWKLVZDVQRWWKHVDPHDV XVHG IRU DQ\ FRPPHUFLDO SXUSRVH GLG QRW FRQVWLWXWH mFRPPHUFHDIIHFWLQJ KDYLQJDEXVHGDSRVLWLRQRIWUXVW7KHFRXUWWKHQSURFHHGHG DFWLYLW\l sRQHV  86 DW   8QLWHG6WDWHVY'XSUHH 1R 1R 8QLWHG6WDWHVY'XSUHH  &LU ,Q'XHUVRQWKHHQKDQFHPHQWZDVKHOGWRDSSO\ 'XSUHHUHOLHVSULPDULO\RQ8QLWHG6WDWHVY:DQJ)G WR D PDQDJHULDO HPSOR\HH RI WKH 8QLWHG 3DUFHO 6HUYLFH  WK&LU IRUVXSSRUW,QWKDWFDVHWKLVFRXUWKHOG m836l ZKRUREEHGD836GLVSDWFKHUDQGDUPRUHGWUXFN WKDW WKH UREEHU\ RI D FRXSOH LQ WKHLU KRPH GLG QRW KDYH D FRXULHU RI PRUH WKDQ   7KH FRXUW DIILUPHG WKH VXEVWDQWLDO HIIHFW RQ LQWHUVWDWH FRPPHUFH UHTXLULQJ WKH GLVWULFWFRXUWjVILQGLQJWKDW'XHUVRQKDGH[SORLWHGKLVSRVLWLRQ UHYHUVDO RI :DQJjV FRQYLFWLRQ XQGHU WKH +REEV $FW DVDPDQDJHULQDZD\WKDWVXEVWDQWLDOO\IDFLOLWDWHGWKHFULPH 6SHFLILFDOO\ZHREVHUYHGWKDWmRXUSUHFHGHQWVKDYHLQYROYHG E\ UREEHULHVLQZKLFKWKHYLFWLPVZHUHEXVLQHVVHVHQJDJHGLQ LQWHUVWDWHFRPPHUFH%XWZKHUHDVKHUHWKHFULPLQDODFWLV FXWWLQJ WKURXJK WKH VHFXULW\ UHVWULFWLRQV DSSOLFDEOH WR GLUHFWHG DW D SULYDWH FLWL]HQ WKH FRQQHFWLRQ WR LQWHUVWDWH ORZHUOHYHO HPSOR\HHV VR WKDW KH FRXOG OHDUQ ZKHUH FRPPHUFHLVPXFKPRUHDWWHQXDWHGl,GDW3URFHHGLQJ HYHU\WKLQJ ZDV ORFDWHG LQFOXGLQJ WKH GHSRVLW YDXOW IURP:DQJ'XSUHHFKDUDFWHUL]HVWKHFULPHLQWKHLQVWDQWFDVH WDNLQJDGYDQWDJHRIKLVDFFHVVWRWKHNH\VWRWKHWZR DVWKHUREEHU\RIDQLQGLYLGXDOQRWHV WKDWWKHDUPRUHGFDU 836 YHKLFOHV XVHG LQ WKH JHWDZD\    UHYLHZLQJ WKH VHUYLFH IRU ZKLFK WKDW LQGLYLGXDO ZRUNHG GLG QRW RSHUDWH WHOHSKRQH V\VWHP VR WKDW KH FRXOG GLVDEOH LW DQG    RXWVLGHRI0LFKLJDQDQGFRQWHQGVWKDWWKHJRYHUQPHQWKDV TXHVWLRQLQJ D 836 WUXFN PDQDJHU DERXW WKH )HGHUDO QRWVKRZQDVXIILFLHQWLQWHUVWDWHQH[XV7KLVDUJXPHQWLVQRW $UPRUHGFRXULHUjVVFKHGXOH SHUVXDVLYH7KHUREEHU\LQWKLVFDVHWDUJHWHGDQDUPRUHGFDU PHVVHQJHUHQJDJHGLQWKHSHUIRUPDQFHRIKLVGXWLHVLQVLGH ,GDW7KHFRXUWREVHUYHGWKDWm>L@WZRXOGKDYHEHHQIDU DGHSDUWPHQWVWRUHRQKLVUHJXODUURXWH6KRRNKDGMXVWWDNHQ PRUH GLIILFXOW IRU WKH GHIHQGDQW WR FRPPLW WKH FULPH DQG SRVVHVVLRQ RI   LQ FDVK DQG FKHFNV o QRW DQ PDNHJRRGKLVHVFDSHLIKHKDGQRWKHOGDSRVLWLRQRIWUXVW LQVLJQLILFDQWVXPoZKHQKHZDVUREEHG7KLVVLWXDWLRQLV RU KDG QRW SRVVHVVHG VSHFLDO VNLOOV LQ FRPSXWHUV DQG FOHDUO\GLVWLQJXLVKDEOHIURPWKHUREEHU\RISULYDWHFLWL]HQVLQ HOHFWURQLFVl,G7KHPDMRULW\RIWKHFRXUWjVGLVFXVVLRQRIWKH WKHLUUHVLGHQFHLQ:DQJ HQKDQFHPHQWKRZHYHUZDVGHYRWHGWRUHMHFWLQJ'XHUVRQjV DUJXPHQWWKDWWKHYLFWLPRIWKHUREEHU\ZDVWKHDUPRUHGWUXFN ,Q8QLWHG6WDWHVY6PLWK)G WK&LU WKLV VHUYLFHZLWKZKRPKHKHOGQRSRVLWLRQRIWUXVWUDWKHUWKDQ FRXUWKHOGWKDWWKHWUDGLWLRQDOGHPLQLPXVVWDQGDUGIRU+REEV 836,GDW $FWYLRODWLRQVVXUYLYHG/RSH]VRWKDWmLIDVWDWXWHUHJXODWHV DQDFWLYLW\ZKLFKWKURXJKUHSHWLWLRQLQ>WKH@DJJUHJDWHKDVD 'XHUVRQ KRZHYHU SODFHV D JUHDW GHDO RI HPSKDVLV RQ VXEVWDQWLDO HIIHFW RQ LQWHUVWDWH FRPPHUFH WKH GH PLQLPXV IDFLOLWDWLRQRIWKHFULPHDQGLQWKDWDVSHFWLVGLVWLQJXLVKDEOH FKDUDFWHURILQGLYLGXDOLQVWDQFHVDULVLQJXQGHUWKHVWDWXWHLVRI LQGHJUHHIURPWKHLQVWDQWFDVH+HUH'XSUHHGLGQRWDFWXDOO\ QR FRQVHTXHQFHl  ,G DW  LQWHUQDO TXRWDWLRQ PDUNV FRPPLWWKHUREEHU\(YHQLIKHIDFLOLWDWHGLWWKLVIDFLOLWDWLRQ RPLWWHG :DQJUHFRJQL]HGWKLVKROGLQJEXWmVWDWHGWKDWWKH GLGQRWULVHWRWKHOHYHORIDFWLYLW\LQ'XHUVRQ6WLOO'XSUHHjV UHTXLUHGVKRZLQJµLVRIDGLIIHUHQWRUGHUjZKHQWKHYLFWLPLV UHOLDQFH RQ WKH IDFW WKDW WKH FDPHUDV KH LV DOOHJHG WR KDYH D SULYDWH FLWL]HQ UDWKHU WKDQ D EXVLQHVV HQWLW\ HQJDJHG LQ PRYHG ZHUH QRW UHFRUGLQJ LV PLVSODFHG HYHQ ZLWKRXW LQWHUVWDWHFRPPHUFHl8QLWHG6WDWHVY*DUFLD)6XSS DIIHFWLQJ WKH UHFRUGLQJ WKHUH ZHUH RWKHU ZD\V 'XSUHHjV G ('0LFK  TXRWLQJ:DQJ)GDW DOOHJHG DFWLRQV FRXOG KDYH IDFLOLWDWHG WKH FULPH  0RUH  7KHLQVWDQWFDVHGRHVQRWIDOOZLWKLQWKLVH[FHSWLRQ $OWKRXJK WKH PRQH\ LQ WKH UREEHU\ ZDV WDNHQ IURP DQ DUPRUHGWUXFNJXDUGLWKDGMXVWEHHQSLFNHGXSIURPD9DOXH  &LW\'HSDUWPHQW6WRUH9DOXH&LW\LVHQJDJHGLQLQWHUVWDWH 6LPLODUO\ ZH VKRXOG UHMHFW VXFK LPSOLFDWLRQ E\ 'XSUHH ZKR UHSHDWHGO\ QRWHV WKDW KH ZDV QRW DQ HPSOR\HH RI WKH DUPRUHG FDU FRPSDQ\ FRPPHUFH DQG WKH PRQH\ DOWKRXJK LQ WKH FXVWRG\ RI WKH LQ WKLV FDVH  8QLWHG6WDWHVY'XSUHH 1R 1R 8QLWHG6WDWHVY'XSUHH  DUPRUHGWUXFNFRPSDQ\ZDVGHVWLQHGIRUDGHSRVLWRQEHKDOI 'XSUHHFRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGE\GHHPLQJKLV RI9DOXH&LW\DQGZDVQRWWKHSURSHUW\RIWKHDUPRUHGWUXFN MREDmSRVLWLRQRIWUXVWl+HFLWHVWKH$SSOLFDWLRQ1RWHVWR FRPSDQ\7KHDUPRUHGWUXFNFRPSDQ\DOVRKDGLQVXUHGWKH † % ZKLFK SURYLGH WKDW D SRVLWLRQ RI WUXVW LV SURFHHGVZLWKDQRXWRIVWDWHLQVXUDQFHFRPSDQ\7KHIDFWV mFKDUDFWHUL]HGE\SURIHVVLRQDORUPDQDJHULDOGLVFUHWLRQ LH RIWKLVFDVHGRQRWUHTXLUHmORQJFKDLQVRIFDXVDOLQIHUHQFH VXEVWDQWLDO GLVFUHWLRQDU\ MXGJPHQW WKDW LV RUGLQDULO\ JLYHQ WRDUULYHDWDVXEVWDQWLDOHIIHFWRQLQWHUVWDWHFRPPHUFHlQRU FRQVLGHUDEOH GHIHUHQFH  3HUVRQV KROGLQJ VXFK SRVLWLRQV WKHW\SHRImµEXWWHUIO\HIIHFWjWKHRU\RIFDXVDWLRQlHVFKHZHG RUGLQDULO\ DUH VXEMHFW WR VLJQLILFDQWO\ OHVV VXSHUYLVLRQ WKDQ LQ :DQJ  6HH :DQJ  )G DW   7KH JRYHUQPHQW HPSOR\HHV ZKRVH UHVSRQVLELOLWLHV DUH SULPDULO\ QRQ VXIILFLHQWO\ HVWDEOLVKHG WKH MXULVGLFWLRQDO SUHGLFDWH IRU GLVFUHWLRQDU\ LQ QDWXUHl  7KH $SSOLFDWLRQ 1RWHV JR RQ WR 'XSUHHjVSURVHFXWLRQXQGHUWKH+REEV$FW GLVWLQJXLVKIRUH[DPSOHWKHHPEH]]OHPHQWRIDFOLHQWj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j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mILGXFLDU\OLNHlUHODWLRQVKLSZLWKWKHVWRUH  PDUNHG E\ JUHDW GLVFUHWLRQ ZKLFK LQFOXGHG mLQWLPDWH 7KH JRYHUQPHQW GLVSXWHV WKH H[LVWHQFH RI DQ\ LQIRUPDO DJUHHPHQW WR WKLV HIIHFW WKRXJK FRXQVHO IRU WKH 8QLWHG 6WDWHV UHFRXQWHG WR WKH WULDO NQRZOHGJH RI WKH FDVK WUDQVIHU RI VWRUH VDOHV UHFHLSWV MXGJH WKDW KH KDG WROG 'XSUHHjV FRXQVHO WKDW KH ZRXOG EH mSUHGLVSRVHGl   DFFHVV WR   VWRUH VXUYHLOODQFH FDPHUDV DQG WR JLYLQJ KLP QRWLFH DQG DQ RSSRUWXQLW\ IRU 'XSUHH WR WXUQ KLPVHOI LQ LQYROY>HPHQW@LQDQ\LQYHVWLJDWLRQRIZURQJGRLQJDWWKH SULRU WR DQ\ DUUHVW &RXQVHO DOVR VWDWHG KRZHYHU WKDW LQ WKH LQWHULP WKH VWRUH LQFOXGLQJ WKH LQYHVWLJDWLRQ RI WKLV FULPHl  7KH JRYHUQPHQWIXUWKHUQRWHV'XSUHHjVDWWHPSWVWRFDVWVXVSLFLRQ JRYHUQPHQW OHDUQHG WKDW WKH ZHDSRQ XVHG LQ WKH UREEHU\ ZDV KLGGHQ LQ 'XSUHHjV KRXVH VR WKDW LW IHDUHG GHVWUXFWLRQ RI HYLGHQFH LI DQ\ DGYDQFH ZDUQLQJ RI 'XSUHHjV DUUHVW ZDV JLYHQ RQ D VWRUH PDQDJHU DQG WKH DUPRUHG WUXFN JXDUG LQ WKH DIWHUPDWKRIWKHUREEHU\ZKLOHDWZRUN7KHVH DVSHFWVRI  'XSUHHj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mLQWHUURJDWLRQl  ,Q WKDW HYHQW WKH +Hj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jVQRWDSRVLWLRQRIWUXVWLQWKHVDPHVHQVHSHUKDSV DVVHUWWKDWKHDVNHGIRUFRXQVHO7KHUHTXHVWIRUFRXQVHOPXVW WKDW D EDQN YLFHSUHVLGHQW KDV DV GLVWLQJXLVKHG IURP D EHH[SUHVVDQGXQDPELJXRXVLQRUGHUWRUHTXLUHWKHFHVVDWLRQ ERRNNHHSHURUDWHOOHUDWDEDQN,GRQjWWKLQNDWHOOHUKDV RITXHVWLRQLQJ6HH'DYLVY8QLWHG6WDWHV86 DSRVLWLRQRIWUXVW,WKLQNDYLFHSUHVLGHQWGRHV%XW  0RUHRYHUm>W@KHPHUHIDFWWKDWWKHJRYHUQPHQWLV KHUH\RXKDYHWKHVSHFLILFSHUVRQLQFKDUJHRIVHFXULW\ DZDUHWKDWDVXVSHFWKDVDQDWWRUQH\RULVVRRQWRKDYHRQH ZKRLVWUXVWHGWRHQIRUFHVHFXULW\QRWWRFRPSURPLVHWKH GRHV QRW XQDPELJXRXVO\ DVVHUW WKH VXVSHFWjV ULJKW WR GHDO VHFXULW\RUEHWUD\LWDFWXDOO\ H[FOXVLYHO\ZLWKWKHSROLFHWKURXJKFRXQVHOGXULQJFXVWRGLDO 6R ,jP JRLQJ WR JLYH KLP WZR SRLQWV IRU EUHDFK RI SRVLWLRQRIWUXVW WKHPVHOYHV ZLWK LWV OD\RXW DQG WR REVHUYH WKH DUPRUHG FDU PHVVHQJHU 2XUUHYLHZRIWKHGLVWULFWFRXUWjVGHWHUPLQDWLRQWKDW'XSUHH 'XSUHH KDG WROG 7XIQHOO DQG &ORSWRQ WKDW KH KDG IRUPHUO\ ZRUNHG DV D KHOGDSRVLWLRQRIWUXVWIRUSXUSRVHVRIWKHHQKDQFHPHQWLVGH PHVVHQJHU IRU DQ DUPRUHG FDU FRPSDQ\ *LOOLJDQ DOVR VDLG WKDW 'XSUHH QRYR8QLWHG6WDWHVY5DJODQG)G WK&LU NQHZ WKDW 7XIQHOO KDG JRQH LQWR WKH VWRUH SUHYLRXVO\ LQWHQGLQJ WR URE WKH JXDUG EXW GLG QRW EHFDXVH WKHUH ZHUH WRR PDQ\ SHRSOH DURXQG )LQDOO\   *LOOLJDQ UHFRXQWHG 'XSUHHjV DGPLVVLRQ WKDW WKUHH RU IRXU GD\V EHIRUH WKH UREEHU\ KH KDG JLYHQ KLV JXQ WR &ORSWRQ DQG JRW LW EDFN D GD\ RU WZR DIWHU WKH UREEHU\ 'XSUHH SXUSRUWHGO\ WROG *LOOLJDQ WKDW KH VXVSHFWHG 7XIQHOO KDG FRPPLWWHG WKH UREEHU\  8QLWHG6WDWHVY'XSUHH 1R 1R 8QLWHG6WDWHVY'XSUHH  LQWHUURJDWLRQl8QLWHG6WDWHVY6XDUH])G GLUHFWFRQWURORUXOWLPDWHGHFLVLRQPDNLQJDXWKRULW\LVQRW WK&LU FHUWGHQLHG86  *LOOLJDQ UHTXLUHGIRUOHDGHUVKLSHQKDQFHPHQWl8QLWHG6WDWHVY&UX] WHVWLILHGWKDWZKHQVKHLQWHUYLHZHG'XSUHHKHGLGQRWDSSHDU 1R:/DW  WK&LU$SU  WREHXQGHUWKHLQIOXHQFHRIDQ\GUXJVRUDOFRKRODQGKHZDV )LQDOO\LQDYHU\UHFHQWDQGVWULNLQJO\VLPLODUFDVHWKLVFRXUW FRKHUHQWDQGDUWLFXODWH6KHWROGKLPWKDWVKHZDVQRWWKHUH DIILUPHG WKH IROORZLQJ ILQGLQJV RI WKH GLVWULFW FRXUW DV WRTXHVWLRQKLP DQG LQVWUXFWHGKLPWRUHDGWKHFRPSODLQW VXIILFLHQWWRVXSSRUWDQHQKDQFHPHQW *LOOLJDQIXUWKHUWHVWLILHGWKDWZKHQ'XSUHHLQGLFDWHGWKDWKH ZDQWHGWRWDONVKHDGYLVHGKLPm1LJKWFOXE@ >WKH ZKDW\RXZDQWWRGRWKHUREEHU@QRWRQO\ZLWK ZKLFKZHUHZLWQHVVHGE\DQRWKHUGHWHFWLYHDQGSURGXFHGDW WKHLQWHUQDOSODQVRIWKHOD\RXWRIWKH5HG=RQHEXWKH WULDO7KRXJKFRXQVHOIRU'XSUHHDVVHUWVWKDWm>W@KHUHFRUGLQ WROG KLP DERXW \RX NQRZ WKH WLPH WKDW HYHU\WKLQJ WKLVFDVHLVQRWVRFOHDUlUHJDUGLQJZKHWKHUWKHZDLYHUVZHUH FUXFLDOWRWKHUREEHU\WRRNSODFH+HJDYH>WKHUREEHU@ YROXQWDULO\ VLJQHG 'XSUHH GRHV QRW FKDOOHQJH *LOOLJDQjV WKHWRROVQHFHVVDU\WRFRPSOHWHWKHUREEHU\KHDUUDQJHG WHVWLPRQ\RUSUHVHQWDQ\IDFWVZKLFKZRXOGOHDGWKHFRXUWWR IRU >WKH UREEHU@ WR WUDYHO LQWR WRZQ WR FRPPLW WKH FRQFOXGHRWKHUZLVH8QGHUWKHWRWDOLW\RIWKHFLUFXPVWDQFHV UREEHU\KHVKRZHGKLPZKHUHWREUHDNLQDQGGHWDLOHG WKHVWDWHPHQWVZHUHSURSHUO\DGPLWWHG KRZLWZRXOGEHEHVWWREUHDNLQDQGDGYLVHGKLPDVWR ZKHUHWKHPRQH\ZDVVWRUHG>7KHGHIHQGDQW@SURYLGHG & 0RWLRQIRUD1HZ7ULDO >WKHUREEHU@ZLWKWKHNQLIHGXFWWDSHDQGWZRZD\UDGLR WR XVH  $QG VR ZKHQ \RX ORRN DW DOO WKRVH WKLQJV $W WULDO sHDQ +XQW WKH PDQDJHU RI WKH ORVV SUHYHQWLRQ WRJHWKHULWjVIDLUO\FOHDUWKDWDWZROHYHOHQKDQFHPHQWLV GHSDUWPHQWDW9DOXH&LW\WHVWLILHGWKDWVWRUHSROLF\GLFWDWHG DSSURSULDWHDVKHZDVWKHOHDGHUDQGRUJDQL]HU WKDWDVWRUHVXUYHLOODQFHFDPHUDEHGLUHFWHGWRZDUGWKHIURQW GRRUVRIWKHVWRUHDWDOOWLPHV$SHUVRQFRXOGRQO\FKDQJH 8QLWHG6WDWHVY7DQLJXFKL1RV:/ WKHGLUHFWLRQRIWKHFDPHUDVIURPWKHORVVSUHYHQWLRQRIILFH DW  WK&LU2FW *LYHQWKLVFRXUWjV WR ZKLFK RQO\ XSSHU PDQDJHPHQW DQG WKH ORVV SUHYHQWLRQ UHFHQWUHIHUHQFHWRDPRUHGHIHUHQWLDOVWDQGDUGRIUHYLHZZH GHSDUWPHQW VKHDQG'XSUHH KDGDFFHVV6KHIXUWKHUWHVWLILHG XSKROGWKHHQKDQFHPHQWEDVHGRQWKHGLVWULFWFRXUWjVILQGLQJV WKDW ZKHQ VKH OHIW WKH ORVV SUHYHQWLRQ RIILFH WR JR WR D UHJXODUO\VFKHGXOHGPDQDJHPHQWPHHWLQJ GXULQJZKLFKWKH  $EXVHRID3RVLWLRQRI7UXVW UREEHU\ZDVFRPPLWWHG DFDPHUDZDVIRFXVHGRQWKHIURQW )LQDOO\ 'XSUHH FRQWHQGV WKDW WKH GLVWULFW FRXUW HUUHG E\ DSSO\LQJWKHWZROHYHOHQKDQFHPHQWDUWLFXODWHGLQ†%RI  WKH6HQWHQFLQJ*XLGHOLQHVZKLFKDSSOLHVm>L@IWKHGHIHQGDQW *LYHQ WKLV FRQFOXVLRQ LW LV XQQHFHVVDU\ WR DGGUHVV WKH SDUWLHVj DEXVHGDSRVLWLRQRISXEOLFRUSULYDWHWUXVWRUXVHGDVSHFLDO GLVSXWH DV WR ZKHWKHU DQ\ HUURU LQ DGPLWWLQJ WKH VWDWHPHQWV ZRXOG EH VNLOOLQDPDQQHUWKDWVLJQLILFDQWO\IDFLOLWDWHGWKHFRPPLVVLRQ KDUPOHVV RUFRQFHDOPHQWRIWKHRIIHQVHl7KHGLVWULFWFRXUWKHOG  +XQW KDG SUHYLRXVO\ ZRUNHG ZLWK 'XSUHH DV D PHVVHQJHU IRU WKH 0U'XSUHHZDVWKHSHUVRQDW9DOXH&LW\DWWKHWLPH %ULQNV DUPRUHG FDU FRPSDQ\ VKH FRQVLGHUHG KLP D IULHQG DQG KDG UHFRPPHQGHG KLP IRU WKH MRE LQ ORVV SUHYHQWLRQ DW 9DOXH &LW\ GXH WR KLV RIWKHUREEHU\oZKRZDVHQWUXVWHGZLWKVHFXULW\DWWKH H[WHQVLYH NQRZOHGJH RI FDPHUD V\VWHPV VWRUH+HZDVQRWDVDOHVFOHUNDVWRFNHURUERRNNHHSHU  8QLWHG6WDWHVY'XSUHH 1R 1R 8QLWHG6WDWHVY'XSUHH     (YHQ PRUH UHFHQWO\ KRZHYHU LQ DQ XQSXEOLVKHG RIWKHVWRUHZKHQVKHUHWXUQHGLPPHGLDWHO\DIWHUWKHUREEHU\ RSLQLRQWKLVFRXUWLQGLFDWHGWKDWWKHmVWDQGDUGRIUHYLHZIRU WKDW FDPHUD ZDV IRFXVHG WRZDUG WKH EDFN RI WKH VWRUH LQ HQKDQFHPHQWVXQGHU†%LVQRZRSHQWRTXHVWLRQlGXHWR KRXVHZDUHV+XQWVWDWHGWKDWVKHKDGQRWPRYHGWKHFDPHUD WKH6XSUHPH&RXUWjVGHWHUPLQDWLRQLQ%XIRUGY8QLWHG6WDWHV DQGWKDWWKHUHZDVQRRQHRWKHUWKDQ'XSUHHZKRKDGDNH\WR  86    WKDW D GLVWULFW FRXUWjV DSSOLFDWLRQ RI WKHORVVSUHYHQWLRQRIILFHDQGZDVDWZRUNWKDWGD\EXWZDV 866* † % VKRXOG EH UHYLHZHG XQGHU D GHIHUHQWLDO QRWDWWKHPDQDJHPHQWPHHWLQJ VWDQGDUGUDWKHUWKDQGHQRYR8QLWHG6WDWHVY:LOOLDPV1R :/DW  WK&LU2FW )ROORZLQJ WKH WULDO LQ SUHSDUDWLRQ IRU VHQWHQFLQJ WKH REVHUYLQJWKDWm>D@VLQJOHFOHDUHUURUVWDQGDUGLVFRQVLVWHQW GLVWULFWFRXUWUHDGDOHWWHULWKDGUHFHLYHGIURP+XQWSULRUWR ZLWKWKH6XSUHPH&RXUWjV%XIRUGKROGLQJ  WKHWULDO7KHOHWWHUVWDWHGLQSDUW ,QWKHLQVWDQWFDVHLWDSSHDUVWKDWWKHGLVWULFWFRXUWDSSOLHG , NQRZ RQH RI WKH WKLQJV WKH\ ZHUH VD\LQJ ZDV 5RQ WKHHQKDQFHPHQWRI†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jVHQXPHUDWHGIDFWV LQ WKDW GD\  :H RQO\ KDG RQH UHFRUGHU KRRNHG WR D 7KH NH\ LV WKDW 'XSUHH VXSSOLHG WKH JXQ DQG LQVLGHU FDPHUD7KDWV>VLF@WKHRQH,ZDVXVLQJ LQIRUPDWLRQDERXWWKHVWRUHDQGWKHDUPRUHGWUXFNVHUYLFHLQ WKLVVHQVHKHVXSHUYLVHG7XIQHOODQG&ORSWRQ$QRWKHUUHFHQW 7KH GLVWULFW FRXUW UHFRJQL]LQJ WKH SRWHQWLDO LQFRQVLVWHQF\ FDVHTXRWHVWKHEDFNJURXQGQRWHVWR†% F ZKLFKVWDWH ZLWK +XQWjV WHVWLPRQ\ DW WULDO IRUZDUGHG WKH OHWWHU WR WKH WKDW SDUWLHV'XSUHHILOHGDPRWLRQIRUDQHZWULDODQGWKHFRXUW KHOGDQHYLGHQWLDU\KHDULQJ$WWKDWKHDULQJ+XQWUHDIILUPHG ,Q UHODWLYHO\ VPDOO FULPLQDO HQWHUSULVHV WKDW DUH QRW KHU WULDO WHVWLPRQ\ WKDW WKH FDPHUD KDG EHHQ PRYHG EXW RWKHUZLVHWREHFRQVLGHUHGDVH[WHQVLYHLQVFRSHRULQ FODULILHGWKDWDQ\FDPHUDGLUHFWHGDWWKHGRRUZRXOGQRWKDYH SODQQLQJ RU SUHSDUDWLRQ WKH GLVWLQFWLRQ EHWZHHQ EHHQUHFRUGLQJDFWLYLW\RQWDSH7KHFRXUWGHQLHG'XSUHHjV RUJDQL]DWLRQDQGOHDGHUVKLSDQGWKDWRIPDQDJHPHQWRU PRWLRQIRUDQHZWULDOILQGLQJWKDWWKHOHWWHUGLGQRWLPSHDFK VXSHUYLVLRQ LV RI OHVV VLJQLILFDQFH WKDQ LQ ODUJHU +XQWjVWHVWLPRQ\DVWKHUHZHUHUHDVRQV'XSUHHPLJKWKDYH HQWHUSULVHVWKDWWHQGWRKDYHFOHDUO\GHOLQHDWHGGLYLVLRQV PRYHG WKH FDPHUD IURP WKH IURQW GRRUV HYHQ LI LW ZDV QRW RIUHVSRQVLELOLW\7KLVLVUHIOHFWHGLQWKHLQFOXVLYHQHVVRI UHFRUGLQJ IRUH[DPSOHWRDYRLGWKHSRVVLELOLW\WKDWVRPHRQH †% F  ZRXOGZDONLQWRWKHORVVSUHYHQWLRQGHSDUWPHQWDQGREVHUYH WKH UREEHUV RQ WKH PRQLWRU   7KH FRXUW DOVR IRXQG WKDW D 8QLWHG6WDWHVY&RZKHUG1R:/ UHDVRQDEOHMXU\FRXOGKDYHIRXQGWKHWHVWLPRQ\RI7XIQHOODQG DW  WK&LU6HSW $GGLWLRQDOO\mHYLGHQFHRI &ORSWRQFUHGLEOHDQGFRPELQHGZLWKWKHREMHFWLYHHYLGHQFH OLQNLQJ'XSUHHWRWKHFULPHmFRXOGOHDGWRDFRQFOXVLRQE\D  ,Q :LOOLDPV KRZHYHU WKH FRXUW IRXQG WKDW WKH DSSOLFDWLRQ RI WKH  HQKDQFHPHQW ZRXOG EH DIILUPHG XQGHU HLWKHU D GHIHUHQWLDO RU GH QRYR 7KH OHWWHU ZDV VHQW IRU XVH DW 'XSUHHjV VHQWHQFLQJ EHIRUH KH VWDQGDUG GXH WR WKH GLVWULFW FRXUWjV ILQGLQJ WKDW WKH GHIHQGDQW VXSHUYLVHG GHFLGHG WR ZLWKGUDZ KLV SOHD DQG JR WR WULDO WKH GLVWULFW FRXUW KRZHYHU DQRWKHU SDUWLFLSDQW GXULQJ WKH RIIHQVH ,G DW  GLG QRW UHDG WKH OHWWHU XQWLO DIWHU WKH WULDO  8QLWHG6WDWHVY'XSUHH 1R 1R 8QLWHG6WDWHVY'XSUHH  UHDVRQDEOH MXU\  WKDW WKH GHIHQGDQW ZDV JXLOW\ EH\RQG D ZLWKGHIHQVHFRXQVHOWKDWLWZDVQRWZDUUDQWHG,GDW UHDVRQDEOHGRXEWl 2Q DSSHDO WKLV FRXUW QRWHG WKDW DV 9DQGHEHUJ KDG SOHG JXLOW\ WKH GLVWULFW FRXUW mODFNHG WKH DGYDQWDJH RI KDYLQJ 'XSUHHDUJXHVWKDWWKHUHYHODWLRQWKDWWKHFDPHUDZKLFKKDG REVHUYHG D WULDOl ,G DW   0RUHRYHU ZH UHYLHZHG WKH EHHQIRFXVHGRQWKHIURQWGRRUFRXOGQRWUHFRUGJUHDWO\DIIHFWV UHFRUGDQGGHWHUPLQHGWKDW WKHJRYHUQPHQWjVHIIRUWVWROLQNKLPWRWKHFRQVSLUDF\LQWKDW LWXQGHUPLQHVWKHQHFHVVLW\RIKLVEHLQJSUHVHQWDWZRUNWKDW $OWKRXJK 9DQGHEHUJ SURYLGHG >WKH EXUJODU@ KLV FR GD\ WR HQVXUH WKDW WKH FDPHUD SRLQWHG DW WKH IURQW GRRUV FRQVSLUDWRULQIRUPDWLRQFUXFLDOWRKHOSLQJ>WKHEXUJODU@ ZRXOGQRWUHFRUGWKHUREEHUV +HIXUWKHUDVVHUWVWKDWWKLV EXUJODUL]H WKH KRXVH WKHUH LV QR LQGLFDWLRQ WKDW IDFWZDVSUHVHQWHGLQDFRQIXVLQJIDVKLRQmZKLFKOLNHO\OHIW 9DQGHEHUJHLWKHUUHFUXLWHG>WKHEXUJODU@RUH[HUFLVHGDQ\ WKHRSSRVLWHLPSUHVVLRQIURPZKDWWKHUHDOIDFWVZHUHl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jVOHWWHUGLGQRWLPSHDFKKHUWULDOWHVWLPRQ\DQGWKDW WLPHRIWKHUREEHU\ WKH HYLGHQFHZDVVXFKWKDWLWZRXOGQRWKDYHSURGXFHGDQ DFTXLWWDO ,Q8QLWHG6WDWHVY&DVHVORUHQWH)G WK&LU   WKLV FRXUW UHFRXQWHG WKH KLVWRU\ RI WKH † % m>0@RWLRQV IRU D QHZ WULDO EDVHG RQ QHZO\GLVFRYHUHG HQKDQFHPHQWQRWLQJWKDWSULRUWRWKH6L[WK&LUFXLWKHOG HYLGHQFHDUHGLVIDYRUHGDQGVKRXOGEHJUDQWHGZLWKFDXWLRQl WKDW mLW ZDV VXIILFLHQW WR VKRZ PHUHO\ WKDW D GHIHQGDQW *ORYHU  )G DW   7KRXJK +XQWjV OHWWHU PLJKW EH H[HUFLVHG VRPH PHDVXUH RI OHDGHUVKLS RYHU WKH FULPLQDO YLHZHG DV LPSHDFKLQJ KHU WULDO WHVWLPRQ\ WKDW LW ZDV VWRUH DFWLYLW\lIRUWKHHQKDQFHPHQWWRDSSO\,GDW7KLVYLHZ SROLF\ WR KDYH D FDPHUD IRFXVHG RQ WKH IURQW GRRUV DW DOO FRQWUDVWHG ZLWK WKDW RI RWKHU &LUFXLWV ZKLFK UHTXLUHG D WLPHV VKH UHDIILUPHG KHU WHVWLPRQ\ WKDW WKH FDPHUD ZDV VKRZLQJWKDWWKHGHIHQGDQWH[HUFLVHGFRQWURORYHUDWOHDVWRQH PRYHG7KHUHPD\KDYHEHHQVRPHFRQIXVLRQDWWULDODVWR SDUWLFLSDQWLQWKHFULPLQDOVFKHPH,G,QKRZHYHU ZKHWKHUWKHFDPHUDIRFXVHGRQWKHIURQWGRRUZDVUHFRUGLQJ $SSOLFDWLRQ 1RWH  RI WKH FRPPHQWDU\ WR † % ZDV EXWWKHWULDOFRXUWZDVFRUUHFWLQQRWLQJWKDW'XSUHHZRXOG DPHQGHGWRFODULI\WKDWZKLOHWKHGHIHQGDQWPXVWKDYHOHG KDYH KDG UHDVRQV IRU EHLQJ DW WKH VWRUH WKDW GD\ DQG IRU RUJDQL]HGPDQDJHGRUVXSHUYLVHGDQRWKHUSDUWLFLSDQWLQRUGHU PRYLQJWKHFDPHUDDSDUWIURPLWVDELOLW\WRUHFRUGWKHUREEHUVj WRTXDOLI\IRUDVHQWHQFHHQKDQFHPHQWDQXSZDUGGHSDUWXUH PLJKWEHMXVWLILHGZKHUHWKHGHIHQGDQWH[HUFLVHGPDQDJHPHQW UHVSRQVLELOLW\ RYHU WKH FULPLQDO RUJDQL]DWLRQjV SURSHUW\  &ORSWRQ KDG WHVWLILHG DW WULDO WKDW KH ZDV FRQFHUQHG DERXW EHLQJ DVVHWV RU DFWLYLWLHV  7KLV GLVWLQFWLRQ ZDV FRQILUPHG LQ YLGHRWDSHG E\ WKH 9DOXH &LW\ VXUYHLOODQFH FDPHUDV SDUWLFXODUO\ WKH RQH VXEVHTXHQWFDVHV6HH&DVHVORUHQWH)GDW FLWLQJ WUDLQHG RQ WKH IURQW GRRU EXW WKDW 'XSUHH WROG KLP QRW WR ZRUU\ EHFDXVH 8QLWHG 6WDWHV Y *RUW'L'RQDWR  )G  WK &LU KH KDG DFFHVV WR mWDNH FDUH RIl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jVPRWLRQIRUD VKDUHRIWKHSURFHHGVIURPWKHFULPHSXUSRUWHGO\WRSD\RII QHZWULDOEDVHGRQ+XQWjVOHWWHU6HHHJ*ORYHU)GDW DQmLQVLGHUlDWWKHEDQN,G7KHVHFDVHVDUHPDUNHGE\D  WHVWLPRQ\RIFRQYLFWHGGUXJGHDOHUWKDWKHQRWWKH KLJKHU OHYHO RI OHDGHUVKLS RU FRQWURO WKDQ LV DOOHJHG LQ WKH GHIHQGDQWKLGFRFDLQHLQUHVLGHQFHZDVXQOLNHO\WRSURGXFH LQVWDQWFDVH DQDFTXLWWDOLIFDVHZHUHUHWULHG  )XUWKHUWKHJRYHUQPHQWjVDVVHUWLRQWKDW7RFFRFRPSHOVWKH ' 3URVHFXWRULDO9LQGLFWLYHQHVV DSSOLFDWLRQRIWKLVHQKDQFHPHQWWR'XSUHHGXHWRLWVKROGLQJ WKDW ZKHUH FRFRQVSLUDWRUV FDQQRW HQJDJH LQ H[WRUWLRQDWH 'XSUHHFRQWHQGVWKDWWKHIDFWWKDWKHZDVFKDUJHGZLWKDQG DFWLYLWLHVZLWKRXWWKHGHIHQGDQWjVSHUPLVVLRQLWLVUHYHUVLEOH FRQYLFWHG RI YLRODWLQJ  86& †  F    $  LL  o HUURU QRW WR DSSO\ WKH HQKDQFHPHQW IRU WKH GHIHQGDQWjV EUDQGLVKLQJ D ILUHDUP GXULQJ DQG LQ UHODWLRQ WR D FULPH RI VXSHUYLVRU\UROHLVQRWSHUVXDVLYH6HH7RFFR)GDW YLROHQFH o GHVSLWH WKH NQRZOHGJH WKDW   RQO\ 7XIQHOO 7KHFRXUWjVILQGLQJLQ7RFFRLQYROYHGDQDOOHJHGPDILD SRVVHVVHGDQGEUDQGLVKHGWKHILUHDUPDQG  WKLVFKDUJHZDV ERVVZKRVHFRQWURORYHUFRFRQVSLUDWRUVZDVHVWDEOLVKHGE\ GURSSHG DJDLQVW ERWK 7XIQHOO DQG &ORSWRQ FRQVWLWXWHV ZLUHWDSSHG FRQYHUVDWLRQV  ,G  'XSUHHjV mFRQWURO RYHU SURVHFXWRULDO YLQGLFWLYHQHVV  7R HVWDEOLVK YLQGLFWLYH H[WRUWLRQDWHDFWLYLW\lDOOHJHGKHUHE\WKHJRYHUQPHQWFRQVLVWV SURVHFXWLRQ'XSUHHPXVWVKRZ RIKLVDFWLRQVLQDOOHJHGO\WDNLQJ7XIQHOODQG&ORSWRQWKURXJK WKH VWRUH SRLQWLQJ RXW WKH FDVK ZLQGRZ DQG IDPLOLDUL]LQJ   H[HUFLVH RI D SURWHFWHG ULJKW   WKH SURVHFXWRUjV WKHPZLWKWKHOD\RXW7KLVFRQGXFWKRZHYHULVPRUHDNLQWR mVWDNHl LQ WKH H[HUFLVH RI WKDW ULJKW   WKH WKDW KHOG QRW WR ZDUUDQW D VXSHUYLVRU\ HQKDQFHPHQW LQ XQUHDVRQDEOHQHVV RI WKH SURVHFXWRUjV FRQGXFW DQG 9DQGHEHUJ)GDW,QWKDWFDVHDQDFTXDLQWDQFHRI SUHVXPDEO\  WKDWWKHSURVHFXWLRQZDVLQLWLDWHGZLWK 9DQGHEHUJEXUJODUL]HGWKHKRPHRI9DQGHEHUJjVHPSOR\HU WKHLQWHQWWRSXQLVKWKHSODLQWLIIIRUWKHH[HUFLVHRIWKH 9DQGHEHUJKDGUHOD\HGLQIRUPDWLRQUHJDUGLQJWKHORFDWLRQRI SURWHFWHG ULJKW  7KXV D SHUVRQ FODLPLQJ WR EH WKH KRPH WKH DODUP V\VWHP DQG WKH ORFDWLRQ RI D VDIH YLQGLFWLYHO\SURVHFXWHGPXVWVKRZWKDWWKHSURVHFXWRU FRQWDLQLQJLWHPVRIYDOXH,GDW1HYHUWKHOHVVWKLVFRXUW KDGVRPHmVWDNHlLQGHWHUULQJWKHSHWLWLRQHUjVH[HUFLVHRI IRXQG WKDW 9DQGHEHUJjV DFW RI SURYLGLQJ WKLV mFUXFLDO KLV ULJKWV DQG WKDW WKH SURVHFXWRUjV FRQGXFW ZDV LQIRUPDWLRQl WR WKH EXUJODU ZDV QRW HQRXJK WR WULJJHU WKH VRPHKRZXQUHDVRQDEOH HQKDQFHPHQWDQGFODULILHGWKDWm>P@HUHO\SOD\LQJDQHVVHQWLDO UROHLQWKHRIIHQVHLVQRWHTXLYDOHQWWRH[HUFLVLQJPDQDJHULDO 1DWjO(QJjJ &RQWUDFWLQJ&RY+HUPDQ)G FRQWURORYHURWKHUSDUWLFLSDQWVDQGRUWKHDVVHWVRIDFULPLQDO WK &LU   LQWHUQDO TXRWDWLRQ PDUNV DQG FLWDWLRQV HQWHUSULVHl,GDW RPLWWHG 7KHUHDUHWZRDSSURDFKHVWRVKRZLQJSURVHFXWRULDO YLQGLFWLYHQHVV D GHIHQGDQW FDQ VKRZ   mDFWXDO 9DQGHEHUJ WKRXJK LV OLNHZLVH GLVWLQJXLVKDEOH  ,Q WKDW FDVHWKHGLVWULFWFRXUWVXPPDULO\LPSRVHGWKHHQKDQFHPHQW  IRU OHDGHUVKLS GHVSLWH WKH IDFW WKDW WKH JRYHUQPHQW DJUHHG 7KH JRYHUQPHQW FRQWHQGV &ORSWRQ ZDV QHYHU FKDUJHG ZLWK WKLV &RXQW  8QLWHG6WDWHVY'XSUHH 1R 1R 8QLWHG6WDWHVY'XSUHH  YLQGLFWLYHQHVVl E\ SURGXFLQJ mREMHFWLYH HYLGHQFH WKDW D   8QLWHG 6WDWHV Y 3DUNHU 1R   :/ SURVHFXWRUDFWHGLQRUGHUWRSXQLVKWKHGHIHQGDQWIRUVWDQGLQJ  WK&LU)HE 8QLWHG6WDWHVY7RFFR RQ KLV OHJDO ULJKWVl RU   mD UHDOLVWLF OLNHOLKRRG RI )G WK&LU  YLQGLFWLYHQHVVlE\XWLOL]LQJWKHIUDPHZRUNRXWOLQHGDERYH IRFXVLQJRQWKHSURVHFXWRUjVmVWDNHlLQGHWHUULQJWKHH[HUFLVH 7KHTXHVWLRQRIZKHWKHU'XSUHHRU7XIQHOOILUVWSURSRVHG RIDSURWHFWHGULJKWDQGWKHXQUHDVRQDEOHQHVVRIKLVDFWLRQV  WKHUREEHU\LVPXGGOHGVRPHZKDWE\7XIQHOOjVRZQWHVWLPRQ\ %UDJDQY3RLQGH[WHU)G WK&LU  UHJDUGLQJKLVmGUHDPlWRUREDQDUPRUHGFDU7XIQHOOGLG $WWHPSWLQJ WR VKRZ DFWXDO YLQGLFWLYHQHVV KDV EHHQ KRZHYHUJRRQWRUHODWHWKDW'XSUHHILUVWPHQWLRQHG6KRRNDV FKDUDFWHUL]HG DV mH[FHHGLQJO\ GLIILFXOWl DQG DQ mRQHURXV DSRVVLEOHWDUJHW7XIQHOODOVRVWDWHGWKDW&ORSWRQZDVQRW EXUGHQl,GDW LQYROYHGZKHQKHDQG'XSUHHILUVWVWDUWHGWDONLQJEXWWKDWKH 7XIQHOO JRW &ORSWRQ LQYROYHG  7KLV DFFRXQW ZDV 5HJDUGOHVVRIZKHWKHUWKLVFRXUWUHYLHZV'XSUHHjVFODLPGH FRUURERUDWHG E\ &ORSWRQ  )XUWKHU RQ FURVVH[DPLQDWLRQ QRYRRUIRUFOHDUHUURULWIDLOV+HDUJXHVWKDWWKHSURVHFXWRU 7XIQHOO FKDUDFWHUL]HG 'XSUHH DV KDYLQJ mSODQQHG DQG IDLOHG WR GURS WKH ILUHDUPV FKDUJH DJDLQVW KLP EHFDXVH KH PDVWHUPLQGHGlWKHUREEHU\7KHGLVWULFWFRXUWZDVSULY\WRDOO H[HUFLVHGKLVSURWHFWHGULJKWWRDMXU\WULDODQGIXUWKHUDVVHUWV WKLVWHVWLPRQ\KRZHYHUDQGKDGWKHXQLTXHRSSRUWXQLW\RI WKDWWKHSOHDRIIHUZDVGHVLJQHGWRGHWHUKLPIURPJRLQJWR MXGJLQJWKHFUHGLELOLW\RIWKHZLWQHVVHV0RUHRYHUWKHGLVWULFW WULDO  ,W LV VLJQLILFDQW WR QRWH KRZHYHU WKDW 'XSUHH LV QRW FRXUWjV ILQGLQJV WKDW 'XSUHH VXSSOLHG WKH JXQ SURYLGHG DVVHUWLQJWKDWWKHSURVHFXWRUDGGHGDQ\DGGLWLRQDORUPRUH LQIRUPDWLRQ DV WR ZKHQ WKH DUPRUHG WUXFN ZRXOG DUULYH VHYHUHFKDUJHVWRWKHLQGLFWPHQWDIWHUKHHOHFWHGWRJRWRWULDO VLJQDOHGWR7XIQHOODQG&ORSWRQZKHQLWZDVODWHDQGPRYHG KHPHUHO\DUJXHVWKDWWKHSURVHFXWRUIDLOHGWRGURS&RXQW,,, WKH VXUYHLOODQFH FDPHUDV DUH UHOHYDQW WR WKH IDFWRUV RI DJDLQVWKLPDVKHGLGIRU7XIQHOOZKHQ7XIQHOOSOHGJXLOW\ SDUWLFLSDWLRQLQSODQQLQJWKHRIIHQVHDQGH[HUFLVHRIGHFLVLRQ 7KH SURVHFXWRUjV FRQGXFW LQ SURFHHGLQJ ZLWK WKH IXOO PDNLQJDXWKRULW\,WGRHVQRWDSSHDUWKDW'XSUHHUHFUXLWHG LQGLFWPHQWKRZHYHUFDQQRWEHYLHZHGDVXQUHDVRQDEOH7KH WKHRWKHUVRUFODLPHGDODUJHUVKDUHRIWKHSURFHHGVIURPWKH 6XSUHPH&RXUWKDVUHFRJQL]HGWKDWmLQWKHµJLYHDQGWDNHjRI UREEHU\  $GGLWLRQDOO\ LW LV XQGLVSXWHG WKDW IROORZLQJ WKH SOHDEDUJDLQLQJWKHUHLVQRVXFKHOHPHQWRISXQLVKPHQWRU UREEHU\&ORSWRQNHSWFRQWURORIWKHPRQH\DQGGLVSHQVHGLW UHWDOLDWLRQVRORQJDVWKHDFFXVHGLVIUHHWRDFFHSWRUUHMHFWWKH LQUHODWLYHO\VPDOODPRXQWVWR7XIQHOODQG'XSUHH&ORSWRQ SURVHFXWLRQjVRIIHUl%RUGHQNLUFKHUY+D\HV86 DOVR WRRN UHVSRQVLELOLW\ IRU KLGLQJ WKH JXQV HYHQWXDOO\     0RUHRYHU ZLWK UHJDUG WR WKH SURVHFXWRUjV UHWXUQLQJ'XSUHHjVWRKLP mVWDNHlLQDYRLGLQJDWULDOWKH&RXUWmKDVQHFHVVDULO\DFFHSWHG DV FRQVWLWXWLRQDOO\ OHJLWLPDWH WKH VLPSOH UHDOLW\ WKDW WKH 7KH FDVHV FLWHG E\ WKH JRYHUQPHQW DV mFRPSHOOLQJl WKH SURVHFXWRUjVLQWHUHVWDWWKHEDUJDLQLQJWDEOHLVWRSHUVXDGHWKH HQKDQFHPHQW LQ WKH LQVWDQW FDVH %DQG\ DQG 3DUNHU DUH GHIHQGDQWWRIRUHJRKLVULJKWWRSOHDGQRWJXLOW\l,GDW ODUJHO\GLVWLQJXLVKDEOH,Q%DQG\WKHGHIHQGDQWDGPLWWHGWKDW ,Q %RUGHQNLUFKHU WKH &RXUW KHOG WKDW WKHUH ZDV QR 'XH KHDQGDFRGHIHQGDQWSODQQHGDQGH[HFXWHGWKHUREEHU\WKDW 3URFHVV YLRODWLRQ ZKHUH WKH SURVHFXWRU UHLQGLFWHG WKH KHZLHOGHGDSHOOHWJXQDQGRUGHUHGWKHEDQNPDQDJHUWRJHW GHIHQGDQW RQ PRUH VHULRXV FKDUJHV LQ UHVSRQVH WR WKH WKHPRQH\DQGWKDWKHKDGVWROHQWKHJHWDZD\FDUDQGOLFHQVH GHIHQGDQWjV GHFLVLRQ QRW WR SOHDG JXLOW\  7KH SURVHFXWRU SODWHLQSUHSDUDWLRQIRUWKHUREEHU\%DQG\)GDW +LVFRGHIHQGDQWVWHVWLILHGWKDW%DQG\KDGUHFUXLWHGWKHPWR UREWKHEDQNSURYLGHGWKHZHDSRQVDQGPDGHWKHPIROORZ WKURXJKZLWKWKHFULPHZKHQWKH\VKRZHGUHOXFWDQFHWRGRVR  $FFRUGLQJ WR WKH JRYHUQPHQW 7XIQHOO VWLOO SOHG JXLOW\ WR EHLQJ D ,G,Q3DUNHUWKHGHIHQGDQWjVDFFRPSOLFHVWHVWLILHGWKDWKH IHORQ LQ SRVVHVVLRQ RI D ILUHDUP  8QLWHG6WDWHVY'XSUHH 1R 1R 8QLWHG6WDWHVY'XSUHH  UROH RI OHDGHU   ,W ZDV &ORSWRQjV YDQ XVHG IRU WKH DGPLWWHGKHKDGPDGHWKLVWKUHDWGXULQJSOHDQHJRWLDWLRQVDQG UREEHU\  &ORSWRQWRRNWKHJXQVDIWHUWKHUREEHU\DQG WKHGHIHQGDQWjVFRQYLFWLRQRQWKHPRUHVHYHUHFKDUJHUHVXOWHG  &ORSWRQFRQWUROOHGWKHPRQH\IURPWKHUREEHU\ LQDPDQGDWRU\OLIHVHQWHQFH,GDW7KLVFRXUWKDV VXPPDUL]HG%RUGHQNLUFKHUDVKROGLQJmWKDWDFWXDOUHWDOLDWRU\ 'XSUHHWKXVFRQWHQGVWKDWWKHGLVWULFWFRXUWPLVDSSOLHGWKH EHKDYLRU LV DFFHSWDEOH DW OHDVW LQ WKH SOHD EDUJDLQLQJ IDFWRUV UHFRJQL]HG E\ WKLV FRXUW DV UHOHYDQW WR GHWHUPLQLQJ FRQWH[Wl8QLWHG6WDWHVY$QGUHZV)G WK ZKHWKHUWKH†%HQKDQFHPHQWDSSOLHVZKLFKLQFOXGHmWKH &LU VHHDOVR6XDUH])GDW mSURVHFXWRULDO GHIHQGDQWjV H[HUFLVH RI GHFLVLRQPDNLQJ DXWKRULW\ DQ\ YLQGLFWLYHQHVV FDQ SRWHQWLDOO\ EH IRXQG LQ WKH SUHWULDO UHFUXLWPHQWRIDFFRPSOLFHVWKHFODLPHGULJKWWRDODUJHUVKDUH DGGLWLRQRIFKDUJHVIROORZLQJSUHWULDODVVHUWLRQVRISURWHFWHG RI WKH IUXLWV RI WKH FULPH WKH GHJUHH RI SDUWLFLSDWLRQ LQ ULJKWV  +RZHYHU LI WKH FKDUJHV DUH EURXJKW VLPSO\ DV WKH SODQQLQJWKHRIIHQVHDQGWKHGHJUHHRIFRQWUROWKHGHIHQGDQW UHVXOWRIIDLOXUHRIWKHSOHDEDUJDLQLQJSURFHVVWKH\DUHQRW H[HUFLVHGRYHURWKHUVl8QLWHG6WDWHVY9DQGHEHUJ)G YLQGLFWLYHl  FLWDWLRQVRPLWWHG *LYHQWKHIDFWWKDW'XSUHH  WK&LU  LQWHUQDOTXRWDWLRQPDUNVRPLWWHG  KDVQRWHYHQDOOHJHGWKHDGGLWLRQRIQHZFKDUJHVIROORZLQJKLV GHFLVLRQ WR JR WR WULDO KLV DUJXPHQWV RQ WKLV LVVXH DUH 7KH EXUGHQ LV RQ WKH JRYHUQPHQW WR SURYH E\ D XQDYDLOLQJ SUHSRQGHUDQFHRIWKHHYLGHQFHWKDWDSDUWLFXODUVHQWHQFLQJ HQKDQFHPHQWDSSOLHV8QLWHG6WDWHVY0DUWLQH])G ( 6HQWHQFH(QKDQFHPHQWV  WK&LU m'HWHUPLQLQJWKHQDWXUHDQGH[WHQW RIWKH UROH >'XSUHH@SOD\HGLQWKHRIIHQVHHQWDLOVDIDFWXDO  7DNLQJRID:HDSRQ LQTXLU\ZKLFKZHUHYLHZRQO\IRUFOHDUHUURUl8QLWHG6WDWHV Y%ODQGIRUG)G WK&LU 86& %HFDXVHWKHUREEHUVWRRNWKHDUPRUHGFDUJXDUGjVZHDSRQ † H VWDWHVWKDWZHVKRXOGJLYHmGXHGHIHUHQFHWRWKH IURP KLP GXULQJ WKH UREEHU\ WKH GLVWULFW FRXUW DSSOLHG WKH GLVWULFWFRXUWjVDSSOLFDWLRQRIWKHJXLGHOLQHVWRWKHIDFWVl7KH HQKDQFHPHQWHQXQFLDWHGLQ†% E  RIWKH6HQWHQFLQJ JRYHUQPHQW DFNQRZOHGJHV WKH IDFWRUV ZKLFK LQIRUP WKH *XLGHOLQHV m,I D ILUHDUP GHVWUXFWLYH GHYLFH RU FRQWUROOHG GHWHUPLQDWLRQRIZKHWKHUWKHHQKDQFHPHQWLVDSSOLFDEOHDQG VXEVWDQFH ZDV WDNHQ RU LI WKH WDNLQJ RI VXFK LWHP ZDV DQ FLWHVWKHGLVWULFWFRXUWjVILQGLQJVWKDW'XSUHHILUVWVXJJHVWHG REMHFWRIWKHRIIHQVHLQFUHDVHE\OHYHOl'XSUHHFKDOOHQJHV WKH UREEHU\ IXUQLVKHG WKH JXQ XVHG GHWHUPLQHG ZKHQ WKH WKLVHQKDQFHPHQWE\QRWLQJWKHXQGLVSXWHGIDFWWKDWKHGLGQRW DUPRUHGWUXFNZRXOGDUULYHPRYHGWKHVXUYHLOODQFHFDPHUDV DFWXDOO\WDNHWKHZHDSRQIURPWKHJXDUGDQGDUJXLQJ ZLWKRXW DQGVLJQDOHG WR 7XIQHOO DQG &ORSWRQ ZKHQ WKH WUXFN ZDV DXWKRULW\RUHODERUDWLRQ WKDWm>F@DVHODZGRHVQRWVXSSRUWWKH ODWH   7KH JRYHUQPHQW DOVR FLWHV VHYHUDO FDVHV ZKLFK LW FRXUW VFRULQJ WKLV IDFWRU  7KHUH LV QR HYLGHQFH WKDW WKH FRQWHQGVFRPSHODSSOLFDWLRQRIWKLVHQKDQFHPHQWWR'XSUHH $SSHOODQWKDGDQ\UHDVRQWREHOLHYHWKDWDZHDSRQZRXOGEH 6HH HJ 8QLWHG 6WDWHV Y %DQG\  )G  WK &LU WDNHQIURPWKHJXDUGl$FWVFRPPLWWHGLQIXUWKHUDQFHRID MRLQWFULPLQDOHQWHUSULVHZKLFKDUHUHDVRQDEO\IRUHVHHDEOHFDQ EH DWWULEXWHG WR DOO LQGLYLGXDOV LQYROYHG LQ WKH HQWHUSULVH  8QLWHG 6WDWHV Y 3DWWRQ 1RV    7KLV ODVW ILQGLQJ LV VXSSRUWHG E\ 7XIQHOOjV WHVWLPRQ\ WKDW KH DQG :/DW  WK&LU2FW  FLWLQJ866* &ORSWRQ DUULYHG DW 9DOXH &LW\ DURXQG QRRQ RQ WKH GD\ RI WKH UREEHU\ DQG †% :KHWKHUDFRFRQVSLUDWRUjVDFWLRQVZHUHUHDVRQDEO\ ZDLWHG LQ WKH SDUNLQJ ORW IRU WKH DUPRUHG WUXFN WR SXOO XS 7XIQHOO VWDWHG IRUHVHHDEOH LV D IDFWXDO ILQGLQJ UHYLHZHG IRU FOHDU HUURU WKDW DW RQH SRLQW 'XSUHH FDPH RXW RI WKH IURQW RI WKH VWRUH ORRNHG LQ WKHLU GLUHFWLRQ DQG mWKUHZ KLV KDQGV XS OLNH µ, GRQjW NQRZ ZKHUH WKH\jUH 8QLWHG6WDWHVY7LVGDOH)G WK&LU  DW EXW LWjV VWLOO D JRjl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jV FRFRQVSLUDWRUVWKDWKHGLGQRWNQRZZK\WKHWUXFNKDG GHVFULSWLRQ,WZDVFHUWDLQO\IRUHVHHDEOHE\0U'XSUHH QRWDUULYHG,QRWKHUZRUGVLWjVKDUGWRWHOO,WKLQNo, WKDW0U7XIQHOODQG5HJLQDOG&ORSWRQZRXOGGLVDUPWKH WKLQN D JRRG DUJXPHQW FRXOG EH PDGH WKDW KH ZDV D DUPRUHGFDUJXDUG OHDGHU+HFHUWDLQO\RUFKHVWUDWHGLWLQWKHVHQVHWKDWKH IXUQLVKHGWKHLGHDWKHZHDSRQDQGWKHVSHFLILFWLPLQJRI $VLGHIURPWKHEDUHDVVHUWLRQWKDW'XSUHHKDGQRUHDVRQWR WKHUREEHU\0D\EHWKDWDGGVXSWREHLQJDOHDGHUWRR EHOLHYHWKDWWKHJXDUGjVZHDSRQZRXOGEHWDNHQ'XSUHHGRHV EXW,GRQjWNQRZWKDW,KDYHWRUHDOO\JRWKDWIDU QRWFRQWHVWWKHGLVWULFWFRXUWjVILQGLQJVRIIDFW*LYHQWKHIDFW WKDWWKHUREEHUVNQHZWKHDUPRUHGFDUJXDUGZRXOGEHDUPHG 'XSUHHFRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGLQDSSO\LQJWKLV DQGFDUULHGDJXQLQFDVHWKH\ZHUHXQVXFFHVVIXOLQGLVDUPLQJ HQKDQFHPHQW RYHU LWV RZQ UHFRJQLWLRQ WKDW mWKH KLPWKHGLVWULFWFRXUWjVILQGLQJWKDWWKHWDNLQJRIWKHJXDUGjV SUHSRQGHUDQFH RI WKH HYLGHQFH ZRXOG >QRW@ VXSSRUW D ZHDSRQZDVUHDVRQDEO\IRUHVHHDEOHLVQRWFOHDUO\HUURQHRXV FRQFOXVLRQWKDW0U'XSUHHZDVDOHDGHURIWKHUREEHU\LQWKH ZD\WKDWWHUPLVRUGLQDULO\XVHGLQ(QJOLVKSDUODQFHl7KH  5ROHDV2UJDQL]HURU/HDGHU FRXUW DOVR FRPPHQWHG WKDW LWV mFRQFOXVLRQV UHJDUGLQJ WKH WHVWLPRQ\LVWKDWWKH\DOOVHHPHGWREHLQLWWRJHWKHU'XSUHH 3XUVXDQWWR†% F RIWKH6HQWHQFLQJ*XLGHOLQHVWKH 7XIQHOODQG&ORSWRQ$QGLWLVGLIILFXOWWRVD\ZKRUHDOO\ZDV GLVWULFWFRXUWHQKDQFHG'XSUHHjVVHQWHQFHE\WZROHYHOVXSRQ WKHOHDGHUl ILQGLQJ WKDW KH ZDV DQ RUJDQL]HU OHDGHU PDQDJHU RU VXSHUYLVRU  7KH FRXUW EDVHG WKLV HQKDQFHPHQW RQ WKH 7KHVH UHPDUNV SUHIDFHG WKH FRXUWjV HQXPHUDWLRQ RI LWV IROORZLQJIDFWXDOILQGLQJV IDFWXDO ILQGLQJV VXSSRUWLQJ WKH HQKDQFHPHQW ZLWK ZKLFK 'XSUHHDOVRWDNHVLVVXH6SHFLILFDOO\'XSUHHFLWHV7XIQHOOjV RZQWHVWLPRQ\DWWULDOZKHQLQUHVSRQVHWRDTXHVWLRQDERXW ZKHQKHILUVWGLVFXVVHGFRPPLWWLQJDUREEHU\DW9DOXH&LW\  ZLWK'XSUHH7XIQHOOUHFRXQWHGWKDWm>Z@KHQZHILUVWVWDUWHG 7XIQHOO WHVWLILHG WKDW KH GLG QRW RZQ D JXQ EHFDXVH KH ZDV D WDONLQJDQGKHVDLGKHXVHGWREHD%ULQNVWUXFNGULYHU,VDLG FRQYLFWHG IHORQ &ORSWRQ WHVWLILHG WKDW KH 7XIQHOO DQG 'XSUHH GLVFXVVHG WKDWLWZRXOGEHDGUHDPWRJRURED%ULQNVWUXFNDUPRUHG WKH SRVVLELOLW\ WKDW WKH\ PLJKW QRW EH DEOH WR JHW WKH DUPRUHG FDU JXDUGjV WUXFNZLWKDOOWKHPRQH\DQGVWXII$QGWKHFRQYHUVDWLRQMXVW JXQ GXULQJ WKH UREEHU\ DQG FRQFOXGHG WKDW WKH\ ZRXOG QHHG D JXQ mMXVW LQ FDVH VKRWV ZHUH ILUHGl 7XIQHOO UHFRXQWHG WKDW KH REWDLQHG D QLQH ZHQWRQIURPWKHQl&ORSWRQZKHQDVNHGWRGHVFULEHKRZ PLOOLPHWHU VHPLDXWRPDWLF SLVWRO IURP 'XSUHH WKRXJK LW ZDV LQLWLDOO\ WKHFRQYHUVDWLRQDERXWUREELQJ9DOXH&LW\ILUVWJRWVWDUWHG XQORDGHG 7XIQHOO ODWHU DVNHG IRU WKH FOLS WR WKH JXQ ZKLFK 'XSUHH OHIW DW UHVSRQGHG WKDW m>L@W DFWXDOO\ VWDUWHG ZLWK %ULDQ 7XIQHOOl 7XIQHOOjV DSDUWPHQW &ORSWRQ WHVWLILHG WKDW DIWHU WKH UREEHU\ KH KLG :LWKRXWVSHFLILFFLWDWLRQ'XSUHHDOVRDVVHUWVWKDW 'XSUHHjV JXQ EHKLQG WKH UHVWDXUDQW DQG 'XSUHH UHWULHYHG LW DORQJ ZLWK  RI WKH SURFHHGV IURP WKH UREEHU\ ODWHU WKDW QLJKW &ORSWRQ DOVR 3XUVXDQWWR7XIQHOOjVWHVWLPRQ\LWZDV7XIQHOOjVLGHDWR VWDWHG WKDW DIWHU KH ZDV DUUHVWHG KH WROG WKH )%, ZKHUH 'XSUHH NHSW KLV JXQ 7KH )%, DQG ORFDO SROLFH UHFRYHUHG WKH QLQH PLOOLPHWHU VHPL UREWKHJXDUGDQG7XIQHOOWROG&ORSWRQZKRVWDWHGWKDWKH DXWRPDWLF SLVWRO IURP 'XSUHHjV UHVLGHQFH LQ WKH SODFH &ORSWRQ KDG ZRXOGKDYHWRFDOO'XSUHH7KHQ&ORSWRQDVVXPHGWKH VSHFLILHG ZKHQ WKH\ ODWHU H[HFXWHG D VHDUFK ZDUUDQW