United States v. Chance
Opinion
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+,/,3 $ &+$1&( 'HIHQGDQW$SSHOODQW 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG 1Rn.DWKOHHQ0F'RQDOG2j0DOOH\ 'LVWULFWsXGJH $UJXHG6HSWHPEHU 'HFLGHGDQG)LOHG6HSWHPEHU %HIRUH%$7&+(/'(5DQG&2/(&LUFXLWsXGJHV %(&.:,7+'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8('3HWHU'*ROGEHUJHU/$:2)),&(2)3(7(5 *2/'%(5*(5 $UGPRUH 3HQQV\OYDQLD IRU $SSHOODQW
7KH +RQRUDEOH 6DQGUD 6 %HFNZLWK 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 6RXWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ
8QLWHG6WDWHVY&KDQFH 1R
)UDQN s 0DULQH 81,7(' 67$7(6 '(3$570(17 2) s867,&( :DVKLQJWRQ '& IRU $SSHOOHH 21 %5,() 3HWHU ' *ROGEHUJHU /$: 2)),&( 2) 3(7(5 *2/'%(5*(5 $UGPRUH 3HQQV\OYDQLD IRU $SSHOODQW )UDQN s 0DULQH 81,7(' 67$7(6 '(3$570(17 2) s867,&(:DVKLQJWRQ'&&UDLJ60RUIRUG$66,67$17 81,7(' 67$7(6 $77251(< &OHYHODQG 2KLR IRU $SSHOOHH BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB %(&.:,7+'LVWULFWs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jVFRQGXFWZDVXQGHUWDNHQDVFKLHI ODZHQIRUFHPHQWRIILFHURI0DKRQLQJ&RXQW\2KLRZDVQRW WDNHQLQWRFRQVLGHUDWLRQE\WKH6HQWHQFLQJ*XLGHOLQHV7KH GLVWULFWFRXUWDOVRLPSRVHGDWZROHYHOLQFUHDVHLQWKHRIIHQVH OHYHOSXUVXDQWWR866*&IRUREVWUXFWLRQRIMXVWLFH RQWKHJURXQGVWKDW$SSHOODQWFRPPLWWHGSHUMXU\GXULQJWKH WULDO2QDSSHDO$SSHOODQWFKDOOHQJHVWKHVXIILFLHQF\RIWKH HYLGHQFH VXSSRUWLQJ WKH FRQYLFWLRQV WKH GLVWULFW FRXUWjV GHFLVLRQWRLPSRVHDVHQWHQFLQJHQKDQFHPHQWIRUREVWUXFWLRQ RIMXVWLFHDQGWKHGLVWULFWFRXUWjVGHFLVLRQWRXSZDUGO\GHSDUW 8QLWHG6WDWHVY&KDQFH 1R 1R 8QLWHG6WDWHVY&KDQFH
ZHOODVWKHGLVWULFWFRXUW VVWDWHGUHDVRQVIRUWKHLPSRVLWLRQRI IURP WKH JXLGHOLQH VHQWHQFH $SSHOODQW DOVR FODLPV WKH WKHSDUWLFXODUVHQWHQFH8QLWHG6WDWHVY&URXVH)G GLVWULFWFRXUWHUUHGE\SHUPLWWLQJWKHSURVHFXWLRQWRFRQGXFW WK&LU:HZLOOUHPDQGIRUUHVHQWHQFLQJLI FURVVH[DPLQDWLRQ UHJDUGLQJ FULPLQDO FRQYLFWLRQV RU WKHGLVWULFWFRXUWIDLOVWRMXVWLI\WKHH[WHQWRIWKHGHSDUWXUH LQGLFWPHQWV RI RWKHU HPSOR\HHV RI WKH 0DKRQLQJ &RXQW\ 6HH%DUDMDV1XQH])GDW,QWKLVFDVH$SSHOODQW 6KHULIIjV'HSDUWPHQW)RUWKHUHDVRQVVHWIRUWKEHORZZH DUJXHVWKDWWKHGLVWULFWFRXUWZKLOHH[SODLQLQJZK\WKHILYH DIILUP$SSHOODQWjVFRQYLFWLRQVRQ&RXQWVDQGRIWKH OHYHO GHSDUWXUH UHTXHVWHG E\ WKH JRYHUQPHQW ZDV LQGLFWPHQW:HUHYHUVH$SSHOODQWjVFRQYLFWLRQVRQ&RXQWV LQDSSURSULDWHGLGQRWH[SODLQZK\WKHWKUHHOHYHOGHSDUWXUH DQGRIWKHLQGLFWPHQW,QDGGLWLRQZHDIILUPWKHGLVWULFW LWXOWLPDWHO\LPSRVHGZDVDSSURSULDWH:HDUHFRPSHOOHGWR FRXUWjV GHFLVLRQ WR XSZDUGO\ GHSDUW IURP WKH JXLGHOLQH DJUHH ZLWK $SSHOODQW RQ WKLV LVVXH $V ZH UHDG WKH WULDO VHQWHQFLQJUDQJHEXWUHPDQGWKHFDVHIRUWKHGLVWULFWFRXUWWR WUDQVFULSWWKHGLVWULFWFRXUWj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jVFRQYLFWLRQVDVWR&RXQWVDQGRIWKH LQFXPEHQW(G1HPHWK$SSHOODQWGLGKRZHYHUJDUQHUIRUW\ LQGLFWPHQW:HUHYHUVH$SSHOODQWjVFRQYLFWLRQVDVWR&RXQWV SHUFHQW RI WKH YRWHV LQ WKH SULPDU\ %XR\HG E\ WKLV DQG RI WKH LQGLFWPHQW 6LQFH &RXQWV DQG GLG QRW DFKLHYHPHQW$SSHOODQWGHFLGHGWRUXQIRU6KHULIIDJDLQLQ FRQWURO WKH RIIHQVH OHYHO IRU SXUSRVHV RI FDOFXODWLQJ WKH 0LVVLQJIURPKLVFDPSDLJQKRZHYHUZDVDNH\ VHQWHQFHIRUWKHJURXSHGFRXQWVZHQHHGQRWUHPDQGWKHFDVH LQJUHGLHQW RI KLV FDPSDLJQoWKH ILQDQFLDO VXSSRUW RI IRU UHVHQWHQFLQJ DV D UHVXOW RI WKH UHYHUVDO RI WKRVH $SSHOODQW KDG EHHQ D GHSXW\ VKHULII IRU 0DKRQLQJ &RXQW\ IURP 7KH FRXUW SRLQWHG WR $SSHOODQWjV ODFN RI NQRZOHGJH RI WKH YLROHQW WR DWWDLQLQJ WKH KLJKHVW UDQN RI GHWHFWLYH $SSHOODQW KDG D DFWLYLWLHV RI WKH 6WUROOR HQWHUSULVH DQG WKH OHWWHUV RI VXSSRUW LQGLFDWLQJ WKDW QXPEHU RI MREV EHWZHHQ DQG LQFOXGLQJ ZRUNLQJ IRU D VHFXULW\ $SSHOODQW RWKHUZLVH UHGXFHG YLROHQW VWUHHW FULPH DJHQF\ LQ
Free access — add to your briefcase to read the full text and ask questions with AI
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+,/,3 $ &+$1&( 'HIHQGDQW$SSHOODQW 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG 1Rn.DWKOHHQ0F'RQDOG2j0DOOH\ 'LVWULFWsXGJH $UJXHG6HSWHPEHU 'HFLGHGDQG)LOHG6HSWHPEHU %HIRUH%$7&+(/'(5DQG&2/(&LUFXLWsXGJHV %(&.:,7+'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8('3HWHU'*ROGEHUJHU/$:2)),&(2)3(7(5 *2/'%(5*(5 $UGPRUH 3HQQV\OYDQLD IRU $SSHOODQW
7KH +RQRUDEOH 6DQGUD 6 %HFNZLWK 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 6RXWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ
8QLWHG6WDWHVY&KDQFH 1R
)UDQN s 0DULQH 81,7(' 67$7(6 '(3$570(17 2) s867,&( :DVKLQJWRQ '& IRU $SSHOOHH 21 %5,() 3HWHU ' *ROGEHUJHU /$: 2)),&( 2) 3(7(5 *2/'%(5*(5 $UGPRUH 3HQQV\OYDQLD IRU $SSHOODQW )UDQN s 0DULQH 81,7(' 67$7(6 '(3$570(17 2) s867,&(:DVKLQJWRQ'&&UDLJ60RUIRUG$66,67$17 81,7(' 67$7(6 $77251(< &OHYHODQG 2KLR IRU $SSHOOHH BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB %(&.:,7+'LVWULFWs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jVFRQGXFWZDVXQGHUWDNHQDVFKLHI ODZHQIRUFHPHQWRIILFHURI0DKRQLQJ&RXQW\2KLRZDVQRW WDNHQLQWRFRQVLGHUDWLRQE\WKH6HQWHQFLQJ*XLGHOLQHV7KH GLVWULFWFRXUWDOVRLPSRVHGDWZROHYHOLQFUHDVHLQWKHRIIHQVH OHYHOSXUVXDQWWR866*&IRUREVWUXFWLRQRIMXVWLFH RQWKHJURXQGVWKDW$SSHOODQWFRPPLWWHGSHUMXU\GXULQJWKH WULDO2QDSSHDO$SSHOODQWFKDOOHQJHVWKHVXIILFLHQF\RIWKH HYLGHQFH VXSSRUWLQJ WKH FRQYLFWLRQV WKH GLVWULFW FRXUWjV GHFLVLRQWRLPSRVHDVHQWHQFLQJHQKDQFHPHQWIRUREVWUXFWLRQ RIMXVWLFHDQGWKHGLVWULFWFRXUWjVGHFLVLRQWRXSZDUGO\GHSDUW 8QLWHG6WDWHVY&KDQFH 1R 1R 8QLWHG6WDWHVY&KDQFH
ZHOODVWKHGLVWULFWFRXUW VVWDWHGUHDVRQVIRUWKHLPSRVLWLRQRI IURP WKH JXLGHOLQH VHQWHQFH $SSHOODQW DOVR FODLPV WKH WKHSDUWLFXODUVHQWHQFH8QLWHG6WDWHVY&URXVH)G GLVWULFWFRXUWHUUHGE\SHUPLWWLQJWKHSURVHFXWLRQWRFRQGXFW WK&LU:HZLOOUHPDQGIRUUHVHQWHQFLQJLI FURVVH[DPLQDWLRQ UHJDUGLQJ FULPLQDO FRQYLFWLRQV RU WKHGLVWULFWFRXUWIDLOVWRMXVWLI\WKHH[WHQWRIWKHGHSDUWXUH LQGLFWPHQWV RI RWKHU HPSOR\HHV RI WKH 0DKRQLQJ &RXQW\ 6HH%DUDMDV1XQH])GDW,QWKLVFDVH$SSHOODQW 6KHULIIjV'HSDUWPHQW)RUWKHUHDVRQVVHWIRUWKEHORZZH DUJXHVWKDWWKHGLVWULFWFRXUWZKLOHH[SODLQLQJZK\WKHILYH DIILUP$SSHOODQWjVFRQYLFWLRQVRQ&RXQWVDQGRIWKH OHYHO GHSDUWXUH UHTXHVWHG E\ WKH JRYHUQPHQW ZDV LQGLFWPHQW:HUHYHUVH$SSHOODQWjVFRQYLFWLRQVRQ&RXQWV LQDSSURSULDWHGLGQRWH[SODLQZK\WKHWKUHHOHYHOGHSDUWXUH DQGRIWKHLQGLFWPHQW,QDGGLWLRQZHDIILUPWKHGLVWULFW LWXOWLPDWHO\LPSRVHGZDVDSSURSULDWH:HDUHFRPSHOOHGWR FRXUWjV GHFLVLRQ WR XSZDUGO\ GHSDUW IURP WKH JXLGHOLQH DJUHH ZLWK $SSHOODQW RQ WKLV LVVXH $V ZH UHDG WKH WULDO VHQWHQFLQJUDQJHEXWUHPDQGWKHFDVHIRUWKHGLVWULFWFRXUWWR WUDQVFULSWWKHGLVWULFWFRXUWj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jVFRQYLFWLRQVDVWR&RXQWVDQGRIWKH LQFXPEHQW(G1HPHWK$SSHOODQWGLGKRZHYHUJDUQHUIRUW\ LQGLFWPHQW:HUHYHUVH$SSHOODQWjVFRQYLFWLRQVDVWR&RXQWV SHUFHQW RI WKH YRWHV LQ WKH SULPDU\ %XR\HG E\ WKLV DQG RI WKH LQGLFWPHQW 6LQFH &RXQWV DQG GLG QRW DFKLHYHPHQW$SSHOODQWGHFLGHGWRUXQIRU6KHULIIDJDLQLQ FRQWURO WKH RIIHQVH OHYHO IRU SXUSRVHV RI FDOFXODWLQJ WKH 0LVVLQJIURPKLVFDPSDLJQKRZHYHUZDVDNH\ VHQWHQFHIRUWKHJURXSHGFRXQWVZHQHHGQRWUHPDQGWKHFDVH LQJUHGLHQW RI KLV FDPSDLJQoWKH ILQDQFLDO VXSSRUW RI IRU UHVHQWHQFLQJ DV D UHVXOW RI WKH UHYHUVDO RI WKRVH $SSHOODQW KDG EHHQ D GHSXW\ VKHULII IRU 0DKRQLQJ &RXQW\ IURP 7KH FRXUW SRLQWHG WR $SSHOODQWjV ODFN RI NQRZOHGJH RI WKH YLROHQW WR DWWDLQLQJ WKH KLJKHVW UDQN RI GHWHFWLYH $SSHOODQW KDG D DFWLYLWLHV RI WKH 6WUROOR HQWHUSULVH DQG WKH OHWWHUV RI VXSSRUW LQGLFDWLQJ WKDW QXPEHU RI MREV EHWZHHQ DQG LQFOXGLQJ ZRUNLQJ IRU D VHFXULW\ $SSHOODQW RWKHUZLVH UHGXFHG YLROHQW VWUHHW FULPH DJHQF\ LQ VXUURXQGLQJ LQ UHO\LQJ RQ WKH IDFW WKDW $SSHOODQW ZDV WKH FKLHI ODZ 7HVWLPRQ\ DW WULDO VKRZHG WKDW GXULQJ WKH HOHFWLRQ HQIRUFHPHQW RIILFHU RI WKH FRXQW\ ZLWKRXW IXUWKHU FDPSDLJQ$SSHOODQWDVNHG&KLFDVHWRDSSURDFKsHHS*DURQR H[SODQDWLRQDVDEDVLVIRUDQXSZDUGGHSDUWXUH DERXW VROLFLWLQJ PRQH\ RQ KLV EHKDOI IURP /HQQ\ 6WUROOR GHVSLWH&KLFDVHjVZDUQLQJVWKDWLIKHWRRNPRQH\IURP6WUROOR )LQDOO\ZHWKLQNWKHGLVWULFWFRXUWFRXOGSURSHUO\UHO\RQ KHmZRXOGEHVHOOLQJKLVVRXOWRWKH'HYLOl$SSHOODQWDOVR WKH IDFW WKDW $SSHOODQW YLRODWHG VWDWH FDPSDLJQ ODZV LQ DVNHG 2j1HVWL WR DVN 6WUROOR IRU PRQH\ IRU KLV FDPSDLJQ XSZDUGO\GHSDUWLQJIURPWKH6HQWHQFLQJ*XLGHOLQHV6HFWLRQ 6WUROOR WHVWLILHG WKDW LQLWLDOO\ KH DQG $SSHOODQW PHW DW KLV %SURYLGHV KRXVH VHYHUDO WLPHV DQG WKDW $SSHOODQW XQGHUVWRRG ZKDW ZRXOGEHUHTXLUHGZKHQKHWRRNRIILFH7KHXQGHUVWDQGLQJ ,QGHWHUPLQLQJWKHVHQWHQFHWRLPSRVHZLWKLQDJXLGHOLQH RI FRXUVH ZDV WKDW $SSHOODQW ZRXOG XVH WKH 6KHULIIjV UDQJH RU ZKHWKHU D GHSDUWXUH IURP WKH JXLGHOLQHV LV 'HSDUWPHQW WR VKXW GRZQ WKH QRQFRRSHUDWLQJ JDPEOLQJ ZDUUDQWHG WKH FRXUW PD\ FRQVLGHU ZLWKRXW OLPLWDWLRQ RSHUDWLRQVLGHQWLILHGE\6WUROOREXWOHDYHXQPROHVWHG6WUROORjV DQ\LQIRUPDWLRQFRQFHUQLQJWKHEDFNJURXQGFKDUDFWHURU RZQRSHUDWLRQV$IWHUWKHLQLWLDOIHZIDFHWRIDFHPHHWLQJV FRQGXFWRIWKHGHIHQGDQWXQOHVVRWKHUZLVHSURKLELWHGE\ $SSHOODQWDQG6WUROORXVHG&KLFDVH*DURQRDQG2j1HVWLDV ODZ6HH86& JREHWZHHQV VR WKH WZR ZRXOG QRW EH FRQQHFWHG DQG UXLQ $SSHOODQWjVELGWREHFRPHVKHULII7HVWLPRQ\DWWULDOIXUWKHU 0RUHRYHULQGHYHORSLQJDQDSSURSULDWHVHQWHQFHDGLVWULFW VKRZHG WKDW 6WUROOR XVHG *DURQR 2j1HVWL DQG &KLFDVH WR FRXUWPD\WDNHLQWRFRQVLGHUDWLRQXQFKDUJHGFRQGXFWRUHYHQ IXQQHO RYHU WR $SSHOODQW IRU KLV FDPSDLJQ ,Q FRQGXFWIRUZKLFKWKHGHIHQGDQWKDVEHHQDFTXLWWHGVRORQJDV DGGLWLRQ 6WUROOR SDLG IRU WKH FRVW RI FDWHULQJ RQH RI WKDW FRQGXFW KDV EHHQ SURYHQ E\ D SUHSRQGHUDQFH RI WKH $SSHOODQWjVIXQGUDLVHUVE\IRUJLYLQJDJDPEOLQJGHEW HYLGHQFH 8QLWHG 6WDWHV Y :DWWV 86 RZHGWRKLPE\WKHFDWHUHUjVQHSKHZ,QDGGLWLRQDIWHUWKH 7KHUHIRUH LQ WKLV FDVH WKH GLVWULFW FRXUW FRXOG HOHFWLRQ6WUROORSDLGIRUDJDPEOLQJMXQNHWWR$WODQWLF&LW\ SURSHUO\WDNHLQWRDFFRXQWWKHIDFWWKDW$SSHOODQWjVFRXUVHRI WDNHQE\$SSHOODQWDQG&KLFDVH FRQGXFWLQFOXGHGYLRODWLRQVRIVWDWHFDPSDLJQODZVSURYLGHG WKHJRYHUQPHQWSURYHGVXFKFRQGXFWE\DSUHSRQGHUDQFHRI $SSHOODQW ZRQ WKH HOHFWLRQ DQG LQVWDOOHG &KLFDVH DV WKH WKHHYLGHQFH,QWKLVFDVH$SSHOODQWGRHVQRWDUJXHWKDWKH KHDG RI WKH YLFH GHSDUWPHQW $FFRUGLQJ WR &KLFDVHjV GLGQRWYLRODWHDQ\VWDWHFDPSDLJQODZVKHRQO\DUJXHVWKDW WHVWLPRQ\*DURQRLGHQWLILHGWZRJDPEOLQJRSHUDWLRQVRQHRQ WKLV FRQGXFW LV VXEVXPHG LQ WKH mSDWWHUQ RI UDFNHWHHULQJ /DQH 6WUHHW LQ FDOOHGWKH*UHHN&RIIHH+RXVH,WWXUQHGRXWKRZHYHUWKDW HQIRUFHPHQWRIILFHUl,QDGGLWLRQ$SSHOODQWZDVDQmHOHFWHG WKLV SDUWLFXODU JDPH ZDV RSHUDWHG E\ %HUQLH $OWVKXOHU RIILFLDOl:HWKLQNWKHFRPELQDWLRQRIWKRVHWZRHOHPHQWV DQRWKHU RQH RI 6WUROORjV WRS PHQ 7KHUHIRUH *DURQR WROG HQFRPSDVVHVWKHGLVWULFWFRXUWjVUDWLRQDOHWKDW$SSHOODQWZDV &KLFDVHWROHDYHLWDORQH)DFHGZLWKFRQIOLFWLQJLQVWUXFWLRQV WKHFKLHIODZHQIRUFHPHQWRIILFHULQWKHFRXQW\DQGWKHUHIRUH &KLFDVHZHQWWR$SSHOODQWZKRWROGKLPQRWWRUDLGWKHJDPH LVWDNHQLQWRFRQVLGHUDWLRQE\WKH*XLGHOLQHV DQGVDLGWKDWKHZRXOGmWDNHFDUHRIl2j1HVWL$VDUHVXOWWKH 6KHULIIjV'HSDUWPHQWQHYHUUDLGHGWKH*UHHN&RIIHH+RXVH 0RUHRYHUZHGLVDJUHHZLWKWKHJRYHUQPHQWWKDWWKHGLVWULFW JDPH FRXUWXSZDUGO\GHSDUWHGSXUVXDQWWR$SSOLFDWLRQ1RWHRI &:KLOHWKHGLVWULFWMXGJHGLGVD\WKDWVKHDJUHHGZLWK ,QDGGLWLRQWRKLVDJUHHPHQWZLWK/HQQ\6WUROOR$SSHOODQW WKHJRYHUQPHQWWKDWWKHFDVHGLGQRWLQYROYHmJDUGHQYDULHW\ KDG KLV RZQ SODQ WR H[WRUW FDPSDLJQ FRQWULEXWLRQV IURP EULEHU\l WKHUH ZDV QR ILQGLQJ WKDW WKH FRUUXSWLRQ ZDV DVDUHVXOW=ROGDQSXUFKDVHGDSSUR[LPDWHO\LQWLFNHWV WRDJROIRXWLQJEHLQJKHOGWRUHGXFH$SSHOODQWjVFDPSDLJQ LQ 'DGH &RXQW\ DQG LQ WKLV FRXQWU\l DW 6LPLODUO\ LQ )G WK &LU WKH GLVWULFW FRXUW ,G 8QLWHG GHEW VSHFLILFDOO\ IRXQG WKDW WKH GHIHQGDQWjV FRQGXFW mUHVXOWHG LQ LUUHSDUDEOH 6WDWHV Y +DWFK KDUP WR SXEOLF FRQILGHQFH LQ ODZ HQIRUFHPHQWl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m>Z@H ILQG QRWKLQJ ,G 8QLWHG 6WDWHV Y 5HHYHV ZDV RQ D VLQJOH WKURZ RI WKH GLFH DQG WKH SRW VL]H YDULHG JUHDWO\ 7KH ZLQQHU ZRXOG SD\ WR WKH KRXVH DQG . SHUFHQW RI REMHFWLRQDEOH LQ D GHWHUPLQDWLRQ WKDW FHUWDLQ RIILFH KROGHUV FKDUJHG ZLWK WKH DPRXQW KH ZRQ H[FOXVLYH RI KLV RZQ EHW FHUWDLQ UHVSRQVLELOLWLHV ZDUUDQW D GHSDUWXUH IURP WKH JXLGHOLQHVl DW 7KH &RXUW FRQFOXGHG KRZHYHU WKDW WKH XSZDUG GHSDUWXUH ZDV ,G 6HH 8QLWHG 6WDWHV Y 0DWWXFFL )G WK &LU MXVWLILHG VROHO\ XQGHU $SSOLFDWLRQ 1RWH EHFDXVH WKH PRQHWDU\ YDOXH RI WKH EULEH ZDV XQNQRZQ DQG GLG QRW DGHTXDWHO\ UHIOHFW WKH VHULRXVQHVV RI =ROGDQ ZDV D ORQJWLPH YLFWLP RI H[WRUWLRQ ,Q WKH HDUO\ V WKH RIIHQVH 7KXV WKH &RXUWjV LQLWLDO VWDWHPHQW HQGRUVLQJ WKH JRYHUQPHQWjV SRVLWLRQ LV QRW RQO\ GLFWD EXW FRQIOLFWV ZLWK RXU RZQ ,G =ROGDQ GUHZ WKH LUH RI D 3KLODGHOSKLD PREVWHU QDPHG %LOO\ 'j(OLD IRU VHOOLQJ ILUHZRUNV LQ WKH 1HZ :H WKLQNWKDW$SSHOODQWjVILUVWDUJXPHQWWKDWWKH5,&2 2Q)HEUXDU\DJUDQGMXU\IRUWKH1RUWKHUQ'LVWULFW VHQWHQFLQJ JXLGHOLQH 866* ( DOUHDG\ WDNHV LQWR RI2KLRUHWXUQHGDVL[FRXQWLQGLFWPHQWDJDLQVW$SSHOODQWDQG FRQVLGHUDWLRQ WKH IDFW WKDW WKH RIIHQVH ZLOO RIWHQ LQYROYH sRKQ &KLFDVH $SSHOODQW ZDV FKDUJHG LQ ILYH RI WKRVH VL[ RUJDQL]HG FULPH KDV VRPH VXSHUILFLDO DSSHDO $IWHU DOO FRXQWV&KLFDVHODWHUHQWHUHGLQWRDSOHDDJUHHPHQWZLWKWKH &RQJUHVVj SXUSRVH LQ HQDFWLQJ WKH 5,&2 VWDWXWHV ZDV WR JRYHUQPHQWDQGWHVWLILHGDJDLQVW$SSHOODQWDWWULDO&RXQW HUDGLFDWHRUJDQL]HGFULPH6HH5XVVHOORY8QLWHG6WDWHV RI WKH LQGLFWPHQW FKDUJHG $SSHOODQW ZLWK FRQGXFWLQJ WKH 867KXVE\VKHHUIRUFHRIUHDVRQLWZRXOG DIIDLUV RI DQ HQWHUSULVH WKURXJK D SDWWHUQ RI UDFNHWHHULQJ VHHPWKDWWKH6HQWHQFLQJ&RPPLVVLRQPXVWKDYHFRQVLGHUHG DFWLYLW\LQYLRODWLRQRIWKH5DFNHWHHU,QIOXHQFHGDQG&RUUXSW WKLVIDFWRULQGHYHORSLQJDQDSSURSULDWHVHQWHQFLQJJXLGHOLQH 2UJDQL]DWLRQV $FW m5,&2l 86& F $V IRU5,&2RIIHQVHV%XWVHH8QLWHG6WDWHVY5DLQRQH)G SUHGLFDWH DFWV RI WKH 5,&2 FKDUJH WKH LQGLFWPHQW DOOHJHG WK&LUKROGLQJWKDWXSZDUGGHSDUWXUH WKUHH VHSDUDWHDFWVRIEULEHU\LQYLRODWLRQRI2KLR5HYLVHG EDVHGRQLQYROYHPHQWZLWKRUJDQL]HGFULPHZDVDSSURSULDWH &RGHWZRVHSDUDWHDFWVRIH[WRUWLRQLQYLRODWLRQRI EHFDXVH DSSOLFDWLRQ RI 5,&2 LV QRW OLPLWHG WR mRUJDQL]HG WKH+REEV$FW86&DQGRQHDFWRIREVWUXFWLRQ FULPHl DQG QRWLQJ WKDW mUXQ RI WKH PLOO FULPLQDO RIORFDOODZHQIRUFHPHQWLQYLRODWLRQRI86& DFWLYLWLHVDUHWKHURXWLQHJULVWRI5,&2SURVHFXWLRQVl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sXQH FULPHILJXUHVLQGHWHUPLQLQJZKHWKHUWRXSZDUGO\GHSDUWIURP 'XULQJ WULDO DQG RYHU $SSHOODQWjV REMHFWLRQV WKH WKHJXLGHOLQHUDQJH GLVWULFW FRXUW SHUPLWWHG WKH SURVHFXWLRQ WR FURVVH[DPLQH $SSHOODQW FRQFHUQLQJ WKH FULPLQDO LQGLFWPHQWV RI RWKHU :HGRKRZHYHUDJUHHZLWK$SSHOODQWWKDWWKHHLJKWOHYHO GHSXWLHV ZRUNLQJ XQGHU $SSHOODQW RQ WKH 6KHULIIjV HQKDQFHPHQWXQGHU&E %WRRNLQWRFRQVLGHUDWLRQ 'HSDUWPHQW7KHWULDOFRXUWDOVRGHQLHG$SSHOODQWjV5XOH WKH IDFW WKDW $SSHOODQW ZDV WKH KLJKHVW ODZ HQIRUFHPHQW PRWLRQV IRU MXGJPHQW RI DFTXLWWDO DW WKH FORVH RI WKH RIILFLDOLQWKHFRXQW\,QWKLVFDVHWKHGLVWULFWFRXUWVWDWHGWKDW JRYHUQPHQWjVFDVHLQFKLHIDQGDWWKHFORVHRIHYLGHQFH2Q WKH6HQWHQFLQJ*XLGHOLQHVmGRQRWWDNHLQWRFRQVLGHUDWLRQWKH IDFWWKDW>$SSHOODQW@ZDVWKHFKLHIODZHQIRUFHPHQWRIILFHUIRU WKHFRXQW\l)RUSXUSRVHVRIWKLVVHFWLRQ$SSOLFDWLRQ1RWH WR & VWDWHV WKDW mµ2IILFLDO KROGLQJ D KLJKOHYHO 6WUROOR DFWHG DV D PHGLDWRU DQG QHJRWLDWHG WKH GHPDQG GRZQ WR GHFLVLRQPDNLQJRUVHQVLWLYHSRVLWLRQjLQFOXGHVIRUH[DPSOH ZKLFK =ROGDQ SDLG 7KHUHDIWHU =ROGDQ SDLG 6WUROOR SURWHFWLRQ PRQH\ RI SURVHFXWLQJ DWWRUQH\V MXGJHV DJHQF\ DGPLQLVWUDWRUV SHU \HDU ,Q DGGLWLRQ WR PRE H[WRUWLRQ =ROGDQ WHVWLILHG WKDW LQ WKHQ6KHULII sDPHV 7UDILFDQW FORVHG GRZQ KLV ILUHZRUNV RSHUDWLRQ VXSHUYLVRU\ODZHQIRUFHPHQWRIILFHUVDQGRWKHUJRYHUQPHQWDO RQ sXO\ UG DW WKH EHKHVW RI D FRPSHWLQJ RSHUDWLRQ $SSHOODQW DV D RIILFLDOVZLWKVLPLODUOHYHOVRIUHVSRQVLELOLW\l$VWKHVKHULII GHSXW\ OHG WKH UDLG WKDW GD\ =ROGDQ VXHG WKH FRXQW\ RQ YDULRXV RI WKH FRXQW\ $SSHOODQW FOHDUO\ ZDV D mVXSHUYLVRU\ ODZ FRQVWLWXWLRQDO YLRODWLRQV DQG UHFHLYHG D mODUJH VXP RI PRQH\l IURP WKH FRXQW\ WR VHWWOH WKH FDVH 8QLWHG6WDWHVY&KDQFH 1R 1R 8QLWHG6WDWHVY&KDQFH sXO\WKHMXU\UHWXUQHGYHUGLFWVFRQYLFWLQJ$SSHOODQW WKDW$SSHOODQWKDGRWKHUZLVHUHGXFHGYLROHQWVWUHHWFULPHLQ RQDOOFRXQWV 0DKRQLQJ&RXQW\6HHLGDW 7KH GLVWULFW FRXUW KHOG D VHQWHQFLQJ KHDULQJ RQ $SSHOODQWDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQGHSDUWLQJ 1RYHPEHU)RUSXUSRVHVRIVHQWHQFLQJ$SSHOODQWj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jV SRVLWLRQDQGWKHIDFWWKDW$SSHOODQWDEXVHGDQGRUYLRODWHG REMHFWLRQVWKHGLVWULFWFRXUWWKHQDGGHGDOHYHOHQKDQFHPHQW WKHHOHFWLRQODZVZDVPHUHO\DILQGLQJWKDW$SSHOODQWHQJDJHG XQGHU&IRUREVWUXFWLRQRIMXVWLFHRQWKHJURXQGVWKDW LQ mD SDWWHUQ RI UDFNHWHHULQJ DFWLYLW\l DQG WKDW WKH 5,&2 $SSHOODQW FRPPLWWHG SHUMXU\ GXULQJ WULDO 7KXV WKRVH JXLGHOLQHV DOVR WDNH WKLV IDFWRU LQWR FRQVLGHUDWLRQ ,Q FDOFXODWLRQVFRPELQHGZLWKDFULPLQDOKLVWRU\FDWHJRU\RI, RSSRVLWLRQ WKH JRYHUQPHQW HVVHQWLDOO\ DUJXHV WKDW WKH SURYLGHGDJXLGHOLQHVHQWHQFLQJUDQJHRIWRPRQWKVRI VHQWHQFLQJFRXUWDGRSWHGWKHSRVLWLRQWKHJRYHUQPHQWWRRNLQ LPSULVRQPHQW 7KH WULDO MXGJH KRZHYHU IRXQG WKDW LWV VHQWHQFLQJ PHPRUDQGXP WKDW DQ XSZDUG GHSDUWXUH ZDV $SSHOODQWjVFDVHZDVmRXWVLGHWKHKHDUWODQGlRIEULEHU\FDVHV DSSURSULDWH SXUVXDQW WR $SSOLFDWLRQ 1RWH RI & DQGWKHUHIRUHDJDLQRYHU$SSHOODQWjVREMHFWLRQVXSZDUGO\ EHFDXVH $SSHOODQWjV RIIHQVH PD\ FDXVH ORVV RI SXEOLF GHSDUWHGWKUHHOHYHOVWRDILQDORIIHQVHOHYHORI$ILQDO FRQILGHQFHLQJRYHUQPHQW,QVXSSRUWRILWVSRVLWLRQWKH RIIHQVHOHYHORISURGXFHGDVHQWHQFLQJUDQJHRIWR JRYHUQPHQW FLWHV D QXPEHU RI FDVHV XSKROGLQJ XSZDUG PRQWKVRILPSULVRQPHQW7KHGLVWULFWFRXUWWKHQVHQWHQFHG GHSDUWXUHVLQ5,&2FDVHVRQWKHJURXQGVRI ORVVRISXEOLF $SSHOODQW WR PRQWKV RI LPSULVRQPHQW WZR \HDUV RI FRQILGHQFH$SSHOODQWQRWHVLQKLVUHSO\EULHIKRZHYHUWKDW VXSHUYLVHGUHOHDVHKRXUVRIFRPPXQLW\VHUYLFHDQGD WKH GLVWULFW FRXUW QHYHU PDGH D ILQGLQJ WKDW WKH RIIHQVH VSHFLDODVVHVVPHQW LQYROYHG V\VWHPDWLF RU SHUYDVLYH FRUUXSWLRQ RU WKDW WKH RIIHQVHPLJKWFDXVHDORVVRISXEOLFFRQILGHQFH $SSHOODQWQRZDSSHDOVIURPWKHMXGJPHQWRIWKHGLVWULFW FRXUW6SHFLILFDOO\$SSHOODQWFKDOOHQJHVWKHVXIILFLHQF\RI WKHHYLGHQFHVXSSRUWLQJWKHFRQYLFWLRQVWKHGLVWULFWFRXUWjV GHFLVLRQUHJDUGLQJWKHSURSHUVFRSHRIFURVVH[DPLQDWLRQWKH GLVWULFWFRXUWjVGHFLVLRQWRLPSRVHDWZROHYHOHQKDQFHPHQW $SSOLFDWLRQ 1RWH SURYLGHV IRUREVWUXFWLRQRIMXVWLFHDQGWKHGLVWULFWFRXUWj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mLOOHJDOJDPEOLQJEXVLQHVVlDVGHILQHGLQ86& 7KLV&RXUWUHYLHZVWKHVXIILFLHQF\RIWKHHYLGHQFHVXSSRUWLQJ 7KH\DOVRGRQRWWDNHLQWRDFFRXQWWKDWDV0U0RUIRUG D FULPLQDO FRQYLFWLRQ mE\ GHWHUPLQLQJ ZKHWKHU DIWHU VDLG WKLV LV QRW D JDUGHQ YDULHW\ EULEHU\ LQ ZKLFK UHYLHZLQJ WKH HYLGHQFH LQ WKH OLJKW PRVW IDYRUDEOH WR WKH VRPHRQHWDNHVDVPDOODPRXQWRIPRQH\IURPVRPHRQH SURVHFXWLRQDQ\UDWLRQDOWULHURIIDFWFRXOGKDYHIRXQGWKH RQWKHVWUHHWEXWZKHUHVRPHRQHWDNHVPRQH\IURPDQ HVVHQWLDOHOHPHQWVRIWKHFULPHEH\RQGDUHDVRQDEOHGRXEWl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jVFDVHLQFKLHIDQGDWWKHFORVHRIHYLGHQFH IRURIILFHDQGKRZKHZDVSHUPLWWHGWRFRQGXFWKLPVHOI GXULQJWKHFRXUVHRIWKDWSURFHVV $OORIWKRVHIDFWRUVPHDQWKDWVRPHXSZDUGDGMXVWPHQW LVDSSURSULDWH 5XOH RI WKH )HGHUDO 5XOHV RI &ULPLQDO 3URFHGXUH SURYLGHV LQ SHUWLQHQW SDUW sW $SS[ DW 7KH GLVWULFW FRXUW WKHQ UHMHFWHG WKH 7KH FRXUW RQ PRWLRQ RI D GHIHQGDQW RU RI LWV RZQ PRWLRQ VKDOO JRYHUQPHQWj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jVFDVHLQFKLHIDQGDWWKHFORVHRIWKHHYLGHQFH :KDWIHDWXUHVRIWKLVFDVHSRWHQWLDOO\WDNHLWRXWVLGH 8QLWHG6WDWHVY'DQG\)GWK&LU WKH*XLGHOLQHV mKHDUWODQGl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j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jV *XLGHOLQHV WKH VHQWHQFLQJ FRXUW VKRXOG GHSDUW RQO\ LI WKH 5XOHPRWLRQDWWKHHQGRIWKHJRYHUQPHQWj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jVFKDOOHQJHWRWKHGLVWULFW 7KH &RXUW , XQGHUVWDQG , DFWXDOO\ ZHQW WKURXJK WKH MXGJHjV GHFLVLRQ WR LPSRVH D WZROHYHO VHQWHQFLQJ LQGLFWPHQW WKLV PRUQLQJ DQG DVVHVVHG HDFK RI WKH HQKDQFHPHQWIRUREVWUXFWLRQRIMXVWLFHWREHZLWKRXWPHULW HOHPHQWVLQDQWLFLSDWLRQRID5XOHPRWLRQDQG,WKLQN WKDW \RX DUH SUREDEO\ FRUUHFW WKDW RQH RI WKH ZHDNHVW 8SZDUG'HSDUWXUHIURPWKH*XLGHOLQH6HQWHQFLQJ5DQJH SODFHVLQWKHJRYHUQPHQWjVFDVHLVWKHUHIHUHQFHWRWKH H[WRUWLRQ RI 0U =ROGDQ EXW WR WKH H[WHQW WKDW s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j1HVWL 7KH6HQWHQFLQJ*XLGHOLQHVSURYLGH 0U LWZDVZURQJ7KDWjVFRPLQJULJKWRXWRIWKHPRXWKRI RILGHQWLI\LQJWKHSDUWLFXODUSRUWLRQVRI$SSHOODQWjVWHVWLPRQ\ RQH RI WKH ZLWQHVVHV WKDWjV TXRWLQJ ZKDW 3KLO &KDQFH VKHIRXQGWREHSHUMXULRXV VDLG )XUWKHUPRUH ZH DJUHH ZLWK WKH GLVWULFW FRXUW WKDW 0U0RUIRUG.QHZZKDWZDVZURQJ" $SSHOODQWjVWHVWLPRQ\LQWKHDUHDVLGHQWLILHGZDVXQWUXWKIXO DQG PDWHULDO WR WKH FDVH 7KH WKUHH DUHDV RI WHVWLPRQ\ 7KH&RXUW,jPQRWVXUHWKDWjVDQH[DFWFKDUDFWHUL]DWLRQ LGHQWLILHG E\ WKH GLVWULFW FRXUW DUH UHODWHG DQG PDWHULDO EHFDXVHZLWKRXWSURRIRIDUHODWLRQVKLSEHWZHHQ/HQQ\6WUROOR 0U 0RUIRUG (YHQ LI LW ZDV HYHQ LI WKDWjVoKH DQG$SSHOODQWWKHUHLVQRIDFWXDOSUHGLFDWHIRUILQGLQJWKDW >$SSHOODQW@ NQHZ ZKDW ZDV JRLQJ RQ KH NQHZ LW ZDV $SSHOODQW WRRN EULEHV IURP 6WUROOR RU DJUHHG WR SURWHFW ZURQJ WR JR LQ DQG FRQGXFW WKH UDLG DQG KH GLG LW 6WUROORjV JDPEOLQJ RSHUDWLRQV ZKLOH UDLGLQJ WKRVH RI KLV DQ\ZD\>@2ND\" FRPSHWLWRUV7KHJRYHUQPHQWjVHQWLUHSURVHFXWLRQZDVEDVHG RQSURYLQJ$SSHOODQWjVUHODWLRQVKLSZLWK6WUROOR7KXVZKLOH 0U KDYHKDGDPDWHULDOLPSDFWRQDQGZDVLQWHQGHGWRKDYH 6R\RXU5XOHPRWLRQLVGHQLHG DPDWHULDOLPSDFWRQWKLVSURVHFXWLRQ sW$SS[ 6RIRUDOORIWKRVHUHDVRQV,FRQFOXGHWKDWDWZROHYHO DGMXVWPHQWIRUREVWUXFWLRQRIMXVWLFHLVDSSURSULDWHLQWKLV $W WKH FORVH RI HYLGHQFH WKH IROORZLQJ GLVFXVVLRQ RQ FDVHDQG,jPJRLQJWRDSSO\LW $SSHOODQWjVUHQHZHG5XOHPRWLRQWRRNSODFH sW$SS[DW:HGRREVHUYHWKDWLQLWVVHQWHQFLQJ 0U HVWDEOLVKHG E\ SURRI EH\RQG D UHDVRQDEOH GRXEW EXW , RIWKH&RXUWFDQHDVLO\FRQFOXGHWKDWWKHGHIHQGDQWGLG WKLQN WKDW ZLWK WKH WHVWLPRQ\ RI sRKQ &KLFDVH &KXFN LQIDFWFRPPLWSHUMXU\RQWKHVWDQG 2j1HVWLDQG0U0DUWLQRDQG0U=ROGDQKLPVHOIWKDW WKHUHLVHQRXJKWRJRWRWKHMXU\RQWKDWTXHVWLRQ 7KHGHIHQGDQWDV0U0RUIRUGVWDWHVWRRNWKHVWDQGDQG GHQLHGMXVWQRWKLVJXLOWRULQQRFHQFHEXWGHQLHGYLUWXDOO\ 6R,jPJRLQJWRGHQ\WKH5XOHPRWLRQVDQGVHQGWKH HYHU\ VLQJOH IDFW WKDW RWKHU ZLWQHVVHV WHVWLILHG WR +H LVVXHVWRWKHMXU\ GHQLHGDQ\UHODWLRQVKLSZLWK0U6WUROOR+HGHQLHGHYHU WDNLQJ DQ\ PRQH\ IURP 0U 6WUROOR RU WKURXJK 0U sW$SS[DW *DURQR+HGHQLHGWKHDFWLYLWLHVRIWKHVKHULIIjVRIILFH ZLWKUHVSHFWWRUDLGLQJRUQRWUDLGLQJFHUWDLQLQVWLWXWLRQV :HWKLQNWKDW$SSHOODQWLVFRUUHFWZKHQKHDUJXHVWKDWKLV LQDZD\WKDWZRXOGEHQHILW0U6WUROOR 5XOHPRWLRQVZHUHJHQHUDOLQQDWXUHDQGWKDWWKHWULDOFRXUW XQGHUVWRRGWKHPRWLRQVWREHJHQHUDO:KLOHLWLVWUXHWKDWWKH $QG KH GHQLHG DOO RI WKHVH WKLQJV GHVSLWH VXEVWDQWLDO PXFKRIWKHFROORTX\RQWKHPRWLRQVFHQWHUHGDURXQGVSHFLILF HYLGHQFH WR WKH FRQWUDU\ ,QGHHG LQ UHYLHZLQJ WKH DUHDV RI HYLGHQFH SDUWLFXODUO\ ZKHWKHU $SSHOODQW PDGH GHIHQGDQWjVWHVWLPRQ\WRUHIUHVKWKH&RXUWjVUHFROOHFWLRQ WKUHDWHQLQJVWDWHPHQWVWR0U=ROGDQLWLVFOHDUWKDWWKHWULDO RI WKH VFRSH RI WKH WHVWLPRQ\ LW ZDV FOHDU WKDW WKH FRXUWjV UXOLQJV RQ WKH PRWLRQV ZHUH QRW DGGUHVVHG WR WKH GHIHQGDQWOLHGDERXWVRPDQ\WKLQJVXQGHURDWKWKDWKH H[WRUWLRQFKDUJHRQO\)RULQVWDQFHGXULQJWKHILUVWFROORTX\ HYHQJRWWRWKHSRLQWDERXWO\LQJDERXWLPPDWHULDOWKLQJV WKHWULDOMXGJHVWDWHGWKDWVKHmZHQWWKURXJKWKHLQGLFWPHQWl $QG ZKLOH WKH &RXUW FDQQRW UHO\ RQ WKH MXU\jV DQG mDVVHVVHG HDFK HOHPHQW LQ DQWLFLSDWLRQ RI D 5XOH GHWHUPLQDWLRQ LWjV REYLRXV IURP WKH IDFW WKDW WKH PRWLRQl6HHsW$SS[DWHPSKDVLVDGGHG,QDGGLWLRQ GHIHQGDQW WRRN WKH VWDQG DQG VDLG WKDW HYHU\RQH ZKR WKH WULDO MXGJH VWDWHG RQ WKUHH VHSDUDWH RFFDVLRQV WKDW WKH WHVWLILHGKDGEHHQXQWUXWKIXODQGWKDWKHKDGQRWHQJDJHG JRYHUQPHQWKDGDGGXFHGVXIILFLHQWHYLGHQFHRQHDFKRIWKH LQDQ\RIWKLVFRQGXFWWKDWWKHMXU\GLVEHOLHYHGDOORIKLV FKDUJHVWRSUHVHQWWKHFDVHWRWKHMXU\6HHLGDWm,WKLQN WHVWLPRQ\ ZKHQ LW FRQFOXGHG WKDW KH ZDV JXLOW\ ZLWK WKHJRYHUQPHQWKDVHVWDEOLVKHGHQRXJKHYLGHQFHWR JR WKH UHVSHFW WR HYHU\ VLQJOH RQH RI WKH FRXQWV LQ WKH MXU\RQHDFKRILWVFODLPVlm>7@KHUHFHUWDLQO\LVHQRXJKRQ LQGLFWPHQW HDFKRIWKHFODLPVWRJRWKHMXU\lm7KHUHLVFHUWDLQO\HQRXJK IRU WKH MXU\ WR FRQVLGHU HDFK RI WKH FKDUJHV DJDLQVW WKH $QG DJDLQ ZKLOH WKH MXU\ FDQoZKLOH WKH &RXUW FDQQRW GHIHQGDQWl HPSKDVLV DGGHG :H ILQG WKDW HYHQ WKRXJK UHO\RQWKHMXU\jVGHWHUPLQDWLRQDQGPXVWPDNHLWVRZQ PRVWRIWKHGLVFXVVLRQFHQWHUHGRQRQHDOOHJHGIODZLQWKH LQGHSHQGHQWGHWHUPLQDWLRQDJDLQ,VLPSO\QRWHWKDWP\ HYLGHQFHRQRQHSDUWLFXODUFKDUJHWULDOFRXQVHOGLGQRWLQWHQG GHWHUPLQDWLRQLVFRQVLVWHQWZLWKWKDWUHDFKHGE\WKHMXU\ DQG WKH WULDO MXGJH GLG QRW LQWHUSUHW $SSHOODQWjV 5XOH PRWLRQWREHOLPLWHGWRMXVWWKDWRQHFKDUJH)DLUO\UHDGWKH ,jYH KDG WKH RSSRUWXQLW\ WR YLHZ WKH GHIHQGDQW ZKLOH WULDOMXGJHjVVWDWHPHQWVLQGLFDWHWKDWVKHFRQVLGHUHGWKH5XOH WHVWLI\LQJ ,jYH KDG WKH RSSRUWXQLW\ WR UHUHYLHZ KLV PRWLRQZLWKUHVSHFWWRDOORIWKHFKDUJHVDJDLQVW$SSHOODQW WHVWLPRQ\$QGLQDOOWKHZD\VWKDW,j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mHQFRPSDVVHVDOORIWKHIDFWXDOSUHGLFDWHVIRUD FRQVWUXHGDVD5XOHPRWLRQEDVHGRQVSHFLILFJURXQGVDQG ILQGLQJRISHUMXU\l,G:LWKUHVSHFWWRWKHILUVWUHTXLUHPHQW WKDWLWZRXOGEHXQUHDVRQDEOHWRLQWHUSUHWWKLVFROORTX\DVD LGHQWLI\LQJZLWKSDUWLFXODULW\SHUMXULRXVWHVWLPRQ\WKH6L[WK ZDLYHU RI IXUWKHU FKDOOHQJHV WR WKH VXIILFLHQF\ RI WKH &LUFXLWKDVmQHYHULQVLVWHGRQULJLGDGKHUHQFHWRLWVWHUPVVR HYLGHQFH$FFRUGLQJO\ZHILQGWKDW$SSHOODQWSUHVHUYHGIRU ORQJ DV WKH UHFRUG EHORZ LV VXIILFLHQW WR LQGLFDWH WKRVH DSSHDOKLVFKDOOHQJHVWRWKHVXIILFLHQF\RIWKHHYLGHQFH VWDWHPHQWVWKDWWKHGLVWULFWFRXUWFRQVLGHUHGWREHSHUMXULRXV DQGWKDWWKHGLVWULFWFRXUWIRXQGWKDWWKRVHVWDWHPHQWVVDWLVILHG :HQRZWXUQWRWKHPHULWVRI$SSHOODQWjVFKDOOHQJHVWRWKH HDFKHOHPHQWRISHUMXU\l6DVVDQHOOL)GDW7KH VXIILFLHQF\RIWKHHYLGHQFH GLVWULFWFRXUWPD\UHO\RQDGHWDLOHGOLVWRIDOOHJHGSHUMXULRXV VWDWHPHQWVSURIIHUHGE\WKHJRYHUQPHQWDWVHQWHQFLQJZLWKRXW 5,&2(QWHUSULVH UHSHDWLQJWKHOLVWLIWKHUHFRUGFOHDUO\LQGLFDWHVWKDWWKHWULDO FRXUWKDVLQGHSHQGHQWO\DGRSWHGWKHJRYHUQPHQWjVYHUVLRQ &RXQW RI WKH LQGLFWPHQW FKDUJHG $SSHOODQW ZLWK ,G :KHUH WKH WHVWLPRQ\ DSSHDUV WR EH mSHUYDVLYHO\ FRQGXFWLQJWKHDIIDLUVRIDQHQWHUSULVHWKURXJKDSDWWHUQRI SHUMXULRXVlWKHWULDOFRXUWLVQRWUHTXLUHGWRFLWHWKHSHUMXU\ UDFNHWHHULQJ DFWLYLW\ LQ YLRODWLRQ RI 86& F OLQHE\OLQHLILWVILQGLQJVHQFRPSDVVWKHIDFWXDOSUHGLFDWHV 5,&2GHILQHVDQmHQWHUSULVHlDVmDQ\LQGLYLGXDOFRUSRUDWLRQ IRUILQGLQJSHUMXU\,G,IKRZHYHUWKHUHLVQRLQGLFDWLRQLQ DVVRFLDWLRQRURWKHUOHJDOHQWLW\DQGDQ\XQLRQRUJURXSRI WKHUHFRUGDVWRWKHVWDWHPHQWVWKHGLVWULFWFRXUWFRQVLGHUHGWR LQGLYLGXDOVDVVRFLDWHGLQIDFWDOWKRXJKQRWDOHJDOHQWLW\l EHXQWUXWKIXOWKHVHQWHQFHPXVWEHUHYHUVHG,G:HDUHQRW 86&8QGHU5,&2DQmHQWHUSULVHlPD\SOD\D SHUPLWWHG WR UHYLHZ WKH UHFRUG LQGHSHQGHQWO\ WR PDNH RXU GLIIHUHQW UROH GHSHQGLQJ RQ WKH VXEVHFWLRQ LPSOLFDWHG 6HH RZQ ILQGLQJV DQG WKHQ LQIHU WKDW WKH GLVWULFW FRXUW KDG WKH 1DWLRQDO2UJIRU:RPHQ,QFY6FKHLGOHU86 VDPH VWDWHPHQWV LQ PLQG ,G &RQWUDU\ WR $SSHOODQWjV 8QGHUVXEVHFWLRQVDDQGEWKHmHQWHUSULVHlLV DVVHUWLRQZHILQGQRWKLQJLQWKHFDVHODZZKLFKUHTXLUHVWKH VRPHWKLQJ DFTXLUHG WKURXJK LOOHJDO DFWLYLWLHV RU E\ PRQH\ VHQWHQFLQJFRXUWWRJLYHWKHGHIHQGDQWSULRUQRWLFHDVWRWKH REWDLQHGWKURXJKLOOHJDODFWLYLWLHV,GDW)RUSXUSRVHV WHVWLPRQ\WKHGLVWULFWFRXUWEHOLHYHVPLJKWEHSHUMXULRXVVR RIVXEVHFWLRQFKRZHYHUWKHmHQWHUSULVHlLVWKHLQVWUXPHQW ORQJDVWKHSUHVHQWHQFHLQYHVWLJDWLRQUHSRUWLQGLFDWHVDVLWGLG WKURXJKZKLFKLOOHJDODFWLYLW\LVFRQGXFWHG,G,QRUGHUWR LQ WKLV FDVH WKDW DQ REVWUXFWLRQ HQKDQFHPHQW PLJKW EH HVWDEOLVKWKHH[LVWHQFHRIDQmHQWHUSULVHl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jVDVLWXDWLRQLQZKLFKKDYLQJOLVWHQHGWRWKHWHVWLPRQ\ D SDWWHUQ RI UDFNHWHHULQJ DFWLYLW\ RU FROOHFWLRQ RI XQODZIXO GHEW KDYLQJUHYLHZHGWKHWHVWLPRQ\ZKLFK,KDYHDWUDQVFULSW 86& F 8QLWHG6WDWHVY&KDQFH 1R 1R 8QLWHG6WDWHVY&KDQFH GXWLHV DQG WKDW WKH HQWHUSULVH ZDV VHSDUDWH DQG GLVWLQFW GLVWULFWFRXUWKDVGHWHUPLQHGWKDWWKHGHIHQGDQWKDVREVWUXFWHG IURPWKHSDWWHUQRIUDFNHWHHULQJDFWLYLW\LQZKLFKLWHQJDJHG MXVWLFH WKH DSSOLFDWLRQ RI WKH WZR OHYHO HQKDQFHPHQW LV )UDQNY'j$PEURVL)GWK&LU,Q PDQGDWRU\DQGZHUHYLHZWKHHQKDQFHPHQWGHQRYR,G WKLV FDVH $SSHOODQW DUJXHV WKDW WKH JRYHUQPHQW IDLOHG WR SURYH WKDW WKH DOOHJHG HQWHUSULVH ZDV VHSDUDWH DQG GLVWLQFW ,QWKLVFDVHWKHGLVWULFWMXGJHIRXQGWKDWDQREVWUXFWLRQRI IURPWKHSDWWHUQRIUDFNHWHHULQJDFWLYLW\:HGLVDJUHH MXVWLFHHQKDQFHPHQWZDVDSSURSULDWHEHFDXVHVKHIRXQGWKDW $SSHOODQWFRPPLWWHGSHUMXU\RQWKHVWDQG7KHGLVWULFWFRXUW 7KH LQGLFWPHQW DOOHJHG DQ HQWHUSULVH FRQVLVWLQJ RI PD\ QRW UHO\ VROHO\ RQ WKH MXU\jV YHUGLFW LQ DSSO\LQJ DQ $SSHOODQW sRKQ &KLFDVH /HQQ\ 6WUROOR %HUQLH $OWVKXOHU REVWUXFWLRQ HQKDQFHPHQW IRU SHUMXU\ 8QLWHG 6WDWHV Y sHHS *DURQR &KDUOHV 2j1HVWL DQG RWKHU XQVSHFLILHG 6DVVDQHOOL )G WK &LU 5DWKHU LQ PHPEHUVRIWKH3LWWVEXUJKEUDQFKRI/D&RVD1RVWUD7KH RUGHU WR LPSRVH DQ REVWUXFWLRQ RI MXVWLFH HQKDQFHPHQW IRU SXUSRVH RI WKH HQWHUSULVH WKH LQGLFWPHQW DOOHJHG ZDV WR SHUMXU\WKHWULDOFRXUWPXVWILQGWKDWWKHGHIHQGDQWFRPPLWWHG FRQWUROFULPLQDODFWLYLW\LQ0DKRQLQJ&RXQW\RQEHKDOIRIWKH SHUMXU\ZLWKLQWKHPHDQLQJRI86&WKDWLVWKDW 3LWWVEXUJKIDPLO\DQGWRSUHVHUYHDQGHQULFKWKH3LWWVEXUJK WKHGHIHQGDQWWHVWLILHGIDOVHO\mFRQFHUQLQJDPDWHULDOPDWWHU IDPLO\jVSRZHUDQGSURILWV7KHLQGLFWPHQWIXUWKHUGHVFULEHG ZLWKWKHZLOOIXOLQWHQWWRSURYLGHIDOVHWHVWLPRQ\UDWKHUWKDQ HDFKSDUWLFLSDQWjVUROHLQWKHHQWHUSULVH/HQQ\6WUROORZDVWKH DVDUHVXOWRIFRQIXVLRQPLVWDNHRUIDXOW\PHPRU\l8QLWHG ERVV RI WKH HQWHUSULVH DQG GLUHFWHG LWV DIIDLUV %HUQLH 6WDWHVY'XQQLJDQ86DEURJDWHGRQ $OWVKXOHUsHHS*DURQR&KDUOHV2j1HVWLDQGsRKQ&KLFDVH RWKHUJURXQGV8QLWHG6WDWHVY:HOOV86 ZHUHOLDLVRQVRUJREHWZHHQVEHWZHHQ$SSHOODQWDQG6WUROOR 7KH GLVWULFW FRXUW LV UHTXLUHG WR mUHYLHZ WKH HYLGHQFH DQG DQG $SSHOODQW ZDV WR HQIRUFH WKH ODZV LQ D PDQQHU ZKLFK PDNH LQGHSHQGHQW ILQGLQJV QHFHVVDU\ WR HVWDEOLVK D ZLOOIXO IXUWKHUHGWKHSXUSRVHVRIWKHHQWHUSULVH:HEHOLHYHWKDWWKH LPSHGLPHQWWRRUREVWUXFWLRQRIMXVWLFHRUDQDWWHPSWWRGR LQGLFWPHQWGHVFULEHVDQHQWHUSULVHZKLFKLVVHSDUDWHIURPWKH WKHVDPHXQGHUWKHSHUMXU\GHILQLWLRQ>WKH&RXUWKDV@VHWRXWl SDWWHUQ RI UDFNHWHHULQJ DFWLYLW\ DQG WKDW WKH JRYHUQPHQW ,GDW:KLOHmLWLVSUHIHUDEOHIRUDGLVWULFWFRXUWWRDGGUHVV SURYHGWKHH[LVWHQFHRIWKLVHQWHUSULVHDWWULDO HDFKHOHPHQWRIWKHDOOHJHGSHUMXU\LQDVHSDUDWHDQGFOHDU ILQGLQJlDGHWHUPLQDWLRQWKDWDQHQKDQFHPHQWLVUHTXLUHGLV )LUVWZHILQGWKHUHZDVHYLGHQFHWRILUPO\HVWDEOLVKWKDW VXIILFLHQWLImWKHFRXUWPDNHVDILQGLQJRIDQREVWUXFWLRQRI /HQQ\ 6WUROOR ZDV WKH OHDGHU RI WKH HQWHUSULVH 6WUROOR RULPSHGLPHQWWRMXVWLFHWKDWHQFRPSDVVHVDOORIWKHIDFWXDO WHVWLILHGWKDWE\WKHWLPHWKHHOHFWLRQVDSSURDFKHGKH SUHGLFDWHVIRUDILQGLQJRISHUMXU\l,G7KXVLQ'XQQLJDQ HVVHQWLDOO\KDGKDGDIDOOLQJRXWZLWKWKHLQFXPEHQWVKHULII WKHGLVWULFWFRXUWjVILQGLQJRISHUMXU\ZDVVXIILFLHQWZKHUHLW (G1HPHWKLQWKDW1HPHWKQRORQJHUIHOWREOLJDWHGWRZRUN VWDWHGWKDWmWKHGHIHQGDQWZDVXQWUXWKIXODWWULDOZLWKUHVSHFW ZLWK6WUROORWRVKXWGRZQFRPSHWLQJLQGHSHQGHQWJDPEOLQJ WR PDWHULDO PDWWHUV LQ WKLV FDVHl DQG WKDW WKH XQWUXWKIXO RSHUDWLRQV 7KHUHIRUH 6WUROOR WHVWLILHG ZKLOH KH IDFLDOO\ WHVWLPRQ\RQPDWHULDOPDWWHUVmZDVGHVLJQHGWRVXEVWDQWLDOO\ VXSSRUWHG1HPHWKjVFDPSDLJQLQRUGHUWRKHGJHKLVEHWVKH DIIHFWWKHRXWFRPHRIWKHFDVHl,GHPSKDVLVLQRULJLQDO GHYRWHGWKHPDMRULW\RIKLVVXSSRUWWR$SSHOODQW6WUROORPHW ZLWK $SSHOODQW VHYHUDO WLPHV GXULQJ WKH SULPDU\ FDPSDLJQ 7KH 6L[WK &LUFXLW LQWHUSUHWV 'XQQLJDQ WR LPSRVH WZR DQGSHUVRQDOO\JDYH$SSHOODQWDWOHDVW,QH[FKDQJH UHTXLUHPHQWVRQWKHGLVWULFWFRXUWLQLPSRVLQJDQREVWUXFWLRQ IRU KLV ILQDQFLDO VXSSRUW 6WUROOR WHVWLILHG WKDW $SSHOODQW RIMXVWLFHHQKDQFHPHQWEDVHGRQSHUMXU\)LUVWWKHFRXUWPXVW XQGHUVWRRGWKDWDPRQJRWKHUWKLQJVKHZRXOGEHUHTXLUHGWR LGHQWLI\WKHSDUWLFXODUSRUWLRQVRIWKHGHIHQGDQWjVWHVWLPRQ\ ZRUNZLWK6WUROORWRHQIRUFHDQGFROOHFWWKHVWUHHWWD[DPRQJ LWFRQVLGHUVWREHSHUMXULRXV8QLWHG6WDWHVY0LVH)G WKHLQGHSHQGHQWJDPEOLQJRSHUDWLRQV,QRUGHUWRDFFRPSOLVK WK &LU 6HFRQG WKH FRXUW PXVW PDNH 8QLWHG6WDWHVY&KDQFH 1R 1R 8QLWHG6WDWHVY&KDQFH &6HQWHQFLQJ,VVXHV WKLV JRDO 6WUROOR DQG &KDQFH DJUHHG WKDW &KDQFH ZRXOG DSSRLQW &KLFDVH WR OHDG WKH YLFH GHSDUWPHQW $V IXUWKHU $SSHOODQWQH[WFKDOOHQJHVWKHGLVWULFWFRXUWjVGHFLVLRQVWR HYLGHQFHRI6WUROORjVFRQWURORYHU&KDQFH6WUROORWHVWLILHG LPSRVHDWZROHYHOHQKDQFHPHQWIRUREVWUXFWLRQRIMXVWLFHDQG WKDW KH LQVWUXFWHG &KDQFH QRW WR DFFHSW DQ\ FDPSDLJQ WRXSZDUGO\GHSDUWIURPWKHJXLGHOLQHVHQWHQFLQJUDQJH:H FRQWULEXWLRQVIURPWKHULYDO&HQWHU6WUHHWPREEHFDXVHWKH\ WDNHXSWKHVHLVVXHVVHULDWLP ZRXOG WU\ WR FRQWURO KLP RU RWKHUZLVH ZHDNHQ 6WUROORjV LQIOXHQFHRYHUKLP6WUROORDOVRWHVWLILHGWKDWKHXVHG&KXFN 2EVWUXFWLRQRIsXVWLFH(QKDQFHPHQW 2j1HVWLDQGsHHS*DURQRDVLQWHUPHGLDULHVWRFRPPXQLFDWH ZLWK$SSHOODQWDQGWKDWRQRQHRFFDVLRQKHGHDOWGLUHFWO\ZLWK ,Q FDOFXODWLQJ $SSHOODQWjV RIIHQVH OHYHO WKH WULDO MXGJH sRKQ&KLFDVHs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j1HVWLDVNHG&KLFDVHWR IDOVH)XUWKHUPRUH$SSHOODQWDUJXHVWKHWULDOMXGJHHUUHGE\ VKXWGRZQWKHJDPEOLQJRSHUDWLRQDWWKH*UHHN&RIIHH+RXVH IDLOLQJ WR JLYH VSHFLILF QRWLFH RI WKH SRUWLRQV RI WKH WULDO EXWWKDW*DURQRRUGHUHGKLPWROHDYHLWDORQHEHFDXVHLWZDV WUDQVFULSWVKHUHOLHGXSRQLQUHDFKLQJKHUFRQFOXVLRQV %HUQLH$OWVKXOHUjVRSHUDWLRQ:KHQ&KLFDVHWROG$SSHOODQW RI WKH FRQIOLFWLQJ UHTXHVWV $SSHOODQW WROG &KLFDVH WKDW KH 5HYLHZ RI D GLVWULFW MXGJHjV GHFLVLRQ WR LPSRVH DQ ZRXOGWDNHRI2j1HVWL,G,QIDFWWKH6KHULIIjV'HSDUWPHQW REVWUXFWLRQRIMXVWLFHHQKDQFHPHQWSXUVXDQWWR&LVD GLGQRWFORVHGRZQWKH*UHHN&RIIHH+RXVHJDPH,G WKUHHVWHS SURFHVV )LUVW ZH UHYLHZ WKH GLVWULFW FRXUWjV ILQGLQJRIIDFWVXQGHUO\LQJWKHHQKDQFHPHQWIRUFOHDUHUURU ,Q DGGLWLRQ WR RUGHUV IORZLQJ GRZQZDUG IURP 6WUROOR 8QLWHG6WDWHVY0LGGOHWRQ)GWK&LU WKURXJK *DURQR RU 2j1HVWL WR &KLFDVH WR $SSHOODQW WKH 1H[WWKHGLVWULFWFRXUWjVFRQFOXVLRQWKDWDJLYHQVHWRIIDFWV HYLGHQFHVKRZHGWKDWWKHOLQHVRIFRPPXQLFDWLRQIORZHGWKH FRQVWLWXWHVREVWUXFWLRQRIMXVWLFHLVDPL[HGTXHVWLRQRIODZ RWKHUZD\&KLFDVHWHVWLILHGWKDWZKHQ$SSHOODQWjVFDPSDLJQ DQG IDFW ZKLFK ZH UHYLHZ GH QRYR ,G )LQDOO\ RQFH WKH QHHGHG FDVK $SSHOODQW LQVWUXFWHG &KLFDVH WR DSSURDFK *DURQRWRDVN6WUROORIRUPRQH\,GDW$SSHOODQWDOVR DSSURDFKHG 2j1HVWL WR DVN 6WUROOR IRU PRQH\ ,G DW 7KLV VHFWLRQ SURYLGHV )XUWKHUPRUH $SSHOODQW ZDV DZDUH WKDW &KLFDVH VROLFLWHG PRQH\IURP6WUROORWKURXJK*DURQRDQG2j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j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j1HVWL 6WUROOR WKHQ VHQW PRQH\ WR $SSHOODQW 8QLWHG6WDWHVY0DUWLQ)GWK&LU WKURXJK 2j1HVWL RU *DURQR WR &KLFDVH :KHQ WKHUH ZHUH m:KHUH DQ HUURU LV QRW RI FRQVWLWXWLRQDO GLPHQVLRQV LW LV FRQIOLFWLQJ LQVWUXFWLRQV $SSHOODQW EHFDPH SHUVRQDOO\ KDUPOHVV XQOHVV LW LV PRUH SUREDEOH WKDQ QRW WKDW WKH HUURU LQYROYHG LQ UHVROYLQJ WKH GLVSXWH 7KLV ZDV QR DG KRF PDWHULDOO\DIIHFWHGYHUGLFWl DVVRFLDWLRQRIFULPLQDOV $FFRUGLQJO\LQVXPPDU\ZHILQGWKLVDVVLJQPHQWRIHUURU $FFRUGLQJO\ ZH ILQG WKDW $SSHOODQWj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mIHZ VXFK DV WKH VHOILQFULPLQDWLRQ FODXVH WKH FRQIURQWDWLRQ FODXVH WKRXVDQGGROODUVl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j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j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sW$SS[DW7KHWULDO WKHLQGLFWPHQWDOOHJHGWKDWWKHHQWHUSULVHLQYROYHGPHPEHUV FRXUWIXUWKHUJDYHDQDSSURSULDWHLQVWUXFWLRQWRWKHMXU\RQWKH RIWKH3LWWVEXUJK/D&RVD1RVWUD/HQQ\6WUROORWHVWLILHGWKDW SURSHUSXUSRVHVIRUZKLFKVXFKHYLGHQFHFRXOGEHFRQVLGHUHG KHZDVDPHPEHURIWKH3LWWVEXUJKIDPLO\DQGWKDWSURFHHGV ,GDW$OWKRXJKWKHLQVWUXFWLRQZDVQRWSDUWLFXODUO\ IURPKLVLOOHJDOJDPEOLQJRSHUDWLRQVZHUHWUDQVIHUUHGDFURVV WDLORUHG WR WKH WHVWLPRQ\ WKH JRYHUQPHQW HOLFLWHG IURP VWDWHOLQHVs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jV LOOHJDO :HDOVRUHMHFW$SSHOODQWjVFRQWHQWLRQWKDWWKHWULDOMXGJH JDPEOLQJ RSHUDWLRQ FURVVHG RYHU WKH 0LFKLJDQ ERUGHU LQWR DOORZHGWKHJRYHUQPHQWWRDGGXFHWKHFRQWHVWHGHYLGHQFHDV 2KLR7KXVZHDUHVDWLVILHGLQWKLVFDVHWKDWWKHJRYHUQPHQW DSXQLWLYHPHDVXUHIRUWKHSHUFHLYHGH[FHVVHVRIWULDOFRXQVHO PHW LWV EXUGHQ RI GHPRQVWUDWLQJ WKDW WKH DFWLYLWLHV RI WKH :KLOHWKHMXGJHGLGFRPPHQWWKDWWULDOFRXQVHOKDGDEXVHG HQWHUSULVHKDGDWOHDVWDGHPLQLPLVFRQQHFWLRQZLWKLQWHUVWDWH KHU SULRU UXOLQJV DERXW HOLFLWLQJ FKDUDFWHU HYLGHQFH ZH FRPPHUFH EHOLHYHLQWRWRWKDWWKHVLGHEDUFROORTX\PHUHO\LQGLFDWHVD UHFRJQLWLRQRQWKHSDUWRIWKHGLVWULFWMXGJHWKDWFRXQVHOZDV 7XUQLQJ WR WKH +REEV $FW FKDUJHV ZH ILQG WKDW WKH DWWHPSWLQJWRFUHDWHDIDOVHLPSUHVVLRQRI$SSHOODQWWKDWWKH JRYHUQPHQW FDUULHG LWV EXUGHQ RI HVWDEOLVKLQJ WKH UHTXLUHG JRYHUQPHQWZDVHQWLWOHGWRUHEXW6HH6HJLQHV)GDW FRQQHFWLRQ ZLWK LQWHUVWDWH FRPPHUFH ZLWK UHVSHFW WR WKH 7KHUHIRUH ZH ILQG WKDW WKH WULDO FRXUWjV HYLGHQWLDU\ H[WRUWLRQ RI %UXFH =ROGDQ DV DOOHJHG LQ &RXQW RI WKH UXOLQJ ZDV QRW VLPSO\ D UHWDOLDWRU\ JHVWXUH DV $SSHOODQW LQGLFWPHQW /LNH 5,&2 WKH +REEV $FW RQO\ UHTXLUHV D FRQWHQGV VKRZLQJ RI D GH PLQLPLV FRQQHFWLRQ ZLWK LQWHUVWDWH FRPPHUFH8QLWHG6WDWHVY+DUGLQJ)GWK 7KHRQO\LVVXHZKLFKJLYHVXVVRPHSDXVHLVWKHGLVWULFW &LU$QH[FHSWLRQWRWKHGHPLQLPLVVWDQGDUGDSSOLHV FRXUWjVUHIXVDOWRJLYHWKHMXU\DFRQWHPSRUDQHRXVOLPLWLQJ DV$SSHOODQWFRUUHFWO\SRLQWVRXWZKHUHWKHDOOHJHG+REEV LQVWUXFWLRQXQGHU)HGHUDO5XOHRI(YLGHQFHRQWKHSURSHU $FWUREEHU\RUH[WRUWLRQLVGLUHFWHGDWDQLQGLYLGXDODQGQRW XVHVRIWKHFKDOOHQJHGWHVWLPRQ\DV$SSHOODQWj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jVUHDVRQLQJDVWRWKHDSSOLFDEOH mLVDGPLWWHGlWKHWH[WLWVHOIGRHVQRWFOHDUO\UHTXLUHWKHWULDO VWDQGDUGZHGLVDJUHHWKDWWKH=ROGDQH[WRUWLRQGLGQRWKDYH FRXUW WR JLYH WKH LQVWUXFWLRQ DW WKH VDPH WLPH WKH MXU\ LV DVXEVWDQWLDOFRQQHFWLRQWRLQWHUVWDWHFRPPHUFH,Q:DQJ H[SRVHG WR WKH HYLGHQFH 7KH SKUDVH mLV DGPLWWHGl PD\ WKLV&RXUWDOVRQRWHGWKDWDVXEVWDQWLDOFRQQHFWLRQFRXOGEH UHDVRQDEO\EHLQWHUSUHWHGWRUHTXLUHVLPSO\WKDWWKHWULDOFRXUW HVWDEOLVKHG E\ SURRI WKDW WKH GHIHQGDQW NQHZ RI RU ZDV JLYHWKHUHTXHVWHGLQVWUXFWLRQGXULQJILQDOLQVWUXFWLRQVDVWKH PRWLYDWHGE\WKHYLFWLPjVFRQQHFWLRQWRLQWHUVWDWHFRPPHUFH WULDOMXGJHLQGLFDWHGVKHZRXOGGRLQWKLVFDVH%XWVHH 6HHLGDWFLWLQJ8QLWHG6WDWHVY0LOOV)G :ULJKW *UDKDP )('(5$/ 35$&7,&( 352&('85( WK&LU ,QWKLVFDVH$SSHOODQWWKURXJK&KLFDVH DW 6XSSVWDWLQJWKDW5XOH WKUHDWHQHGWRFORVHGRZQ=ROGDQjVILUHZRUNVEXVLQHVVLIKH UHTXLUHV WULDO MXGJH WR JLYH FRQWHPSRUDQHRXV LQVWUXFWLRQ LI GLGQRWPDNHDFDPSDLJQFRQWULEXWLRQ:HEHOLHYHWKHIDFW UHTXHVWHG,QWKHFRQWH[WRI5XOHEZKLFKJRYHUQVWKH WKDWWKHWKUHDWZDVGLUHFWHGDW=ROGDQjVEXVLQHVVDQGQRWDW DGPLVVLELOLW\RISULRUDFWVHYLGHQFHWKLV&RXUWKDVKHOGWKDW =ROGDQSHUVRQDOO\HYHQLIWKHPRQH\ZDVWRKDYHEHHQSDLG LWLVZLWKLQWKHWULDOMXGJHjVGLVFUHWLRQWRGHFLGHZKHWKHUWR IURP=ROGDQjVSHUVRQDODVVHWVVKRZVWKDW$SSHOODQWNQHZRI JLYH WKH OLPLWLQJ LQVWUXFWLRQ FRQWHPSRUDQHRXV ZLWK WKH 8QLWHG6WDWHVY&KDQFH 1R 1R 8QLWHG6WDWHVY&KDQFH LPSURSHUO\H[SDQGHGWKHVFRSHRIUHFURVVH[DPLQDWLRQ:H DQG ZDV PRWLYDWHG E\ =ROGDQjV FRQQHFWLRQ WR LQWHUVWDWH WKLQNQRW FRPPHUFH7KHUHIRUHHYHQLIZHZHUHWRFRQFOXGHWKDWWKH JRYHUQPHQWZDVUHTXLUHGWRSURYHDVXEVWDQWLDOFRQQHFWLRQWR ,QLWLDOO\ZHGRDJUHHWKDWFRXQVHOjVTXHVWLRQm'LG\RXDOVR LQWHUVWDWHFRPPHUFHLQWKLVFDVHZHEHOLHYHWKDWVWDQGDUGKDV NQRZWKHPWREHFRPSHWHQWKDUGZRUNLQJIRONV"lDVSRVHG EHHQVDWLVILHGZLWKUHVSHFWWR&RXQW WR$SSHOODQWZDVLQWHQGHGWREHOLPLWHGWREHWRWKHVSHFLILF SHUVRQVLGHQWLILHG2VPDQ5XVVR&ROXFFLDQG)DULQD:H :HDJUHHZLWK$SSHOODQWKRZHYHUWKDWWKHHYLGHQFHZDV EHOLHYH KRZHYHU WKDW $SSHOODQWjV DQVZHU m7KH\ DOO ZHUH LQVXIILFLHQWWRHVWDEOLVKHYHQDGHPLQLPLVFRQQHFWLRQZLWK YHU\ FRPSHWHQW H[FHSW IRU sRKQ>@l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mUHDOLVWLF SUREDELOLW\ WKDW LPSOLFDWLRQ FRQWDLQHG LQ KLV DQVZHU WR WKH TXHVWLRQ 7KH >HLWKHURIWKHVHRSHUDWLRQVZRXOG@KDYHDQHIIHFWRQLQWHUVWDWH SKUDVH mFRPSHWHQW KDUGZRUNLQJ SHRSOHl VXJJHVWV WKDW WKH FRPPHUFHl:DQJ)GDWTXRWLQJ8QLWHG6WDWHVY SHUVRQV LGHQWLILHG ZHUH ZKROHVRPHO\ LQGXVWULRXV FLWL]HQV 3HHWH)GWK&LU 5HJDUGLQJWKH :H GR QRW WKLQN WKDW ZKROHVRPHO\ LQGXVWULRXV ODZ /DQH 6WUHHW RSHUDWLRQ WKHUH ZDV QR HYLGHQFH UHJDUGLQJ LWV HQIRUFHPHQW RIILFHUV SODQW HYLGHQFH PLVWDNH IORXU IRU VL]HDPRXQWRISURILWVZKRLWVFXVWRPHUVZHUHRUZKHWKHU FRFDLQHRUVZHDURXWIDOVHDIILGDYLWVLQVXSSRUWRIVHDUFKDQG PRQH\ HLWKHU LQFRPLQJ RU RXWJRLQJ WUDYHOHG DFURVV VWDWH DUUHVW ZDUUDQWV &RQVHTXHQWO\ ZH UHMHFW $SSHOODQWjV OLQHV7KHRQO\HYLGHQFHSUHVHQWHGZDVWKDWWKHRSHUDWLRQZDV FRQWHQWLRQWKDWWKHWHVWLPRQ\HOLFLWHGGRHVQRWLPSHDFKWKH ORFDWHGLQDEDUFDOOHGm&KXFNjV3ODFHlDQGWKDW/HQQ\6WUROOR FODLP ZDQWHGLWFORVHGGRZQ6HHsW$SS[DW7KHVDPH NLQGRIHYLGHQFHLVODFNLQJUHJDUGLQJWKHJDPEOLQJVWDJDWWKH :HUHFRJQL]HWKDWWKHWHVWLPRQ\VKRZHGWKDW$SSHOODQWjV 2SHQ+HDUWK5HVWDXUDQW:HEHOLHYHWKDWWKHODFNRIHYLGHQFH EURWKHUZDVRQO\LQGLFWHGDQGQRWFRQYLFWHGRIDQ\FULPHIRU SUHVHQWHG RQ WKHVH RSHUDWLRQVj FRQQHFWLRQ ZLWK LQWHUVWDWH WKHIORXUFRFDLQHLQFLGHQW$SSHOODQWKRZHYHUDGPLWWHGWKDW FRPPHUFHSUHVHQWVDVLWXDWLRQQHDUO\LGHQWLFDOWRWKHVLWXDWLRQ WKH IDFWV XQGHUO\LQJ WKH LQGLFWPHQW ZHUH WUXH IORXU ZDV LQ7XUQHUZKHUHWKLV&RXUWKHOGWKDWWKHJRYHUQPHQWIDLOHGWR LGHQWLILHGDVFRFDLQHDQGWKHHYLGHQFHZDVODWHUORVWDQGRU HVWDEOLVKWKDWWKHYLFWLPjVJDPEOLQJRSHUDWLRQKDGHYHQDGH GHVWUR\HG 7KHUHIRUH WKH W\SLFDO UHDVRQ IRU H[FOXGLQJ PLQLPLVFRQQHFWLRQZLWKLQWHUVWDWHFRPPHUFH6HH7XUQHU LQGLFWPHQWHYLGHQFHWKHLQGLFWPHQWLVRQO\DQDFFXVDWLRQQRW )GDW IDFW LV QRW LPSOLFDWHG EHFDXVH $SSHOODQWj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jV3ODFHRUWKH2SHQ DQG WKH\ KDG WR FRXQW RQ HDFK RWKHU IRU WKHLU YHU\ VXUYLYDO WR ZDWFK WKHLU EDFN $QG EDFN LQ WKRVH GD\V sRKQ &KLFDVH KDG D +HDUWK5HVWDXUDQW,Q5LFKDUGVRQZKLFKDOVRLQYROYHGODZ UHSXWDWLRQ DV EHLQJ D JRRG FRS +H SXW D ORW RI GUXJ GHDOHUV RII HQIRUFHPHQWRIILFHUVLQYROYHGLQDQH[WRUWLRQVFKHPHWKHUH WKH VWUHHW 2Q RQH RFFDVLRQ KH VDYHG 3KLO &KDQFHjV OLIH ZDVHYLGHQFHWKDWDOFRKROLFEHYHUDJHVVROGE\WKHYLFWLPEDUV ZHUH IRU WKH PRVW SDUW PDQXIDFWXUHG RXW RI VWDWH 6HH 5LFKDUGVRQ)GDW$JDLQQRVXFKWHVWLPRQ\ZDV >&KLFDVH@ GHYHORSHG WKLV GHWHFWLYH DJHQF\ DQG VHFXULW\ FRPSDQ\ SUHVHQWHGDERXWWKHJDPEOLQJRSHUDWLRQVLQYROYHGLQWKLVFDVH ZKLFK SXW D KXQGUHG PHQ RQ WKH VWUHHWV ZLWK FRPSDQLHV OLNH :HGRQRWHWKDWWKHUHZDVWHVWLPRQ\IURPsHIIUH\&KU\VWDO JURFHU\ VWRUHV PDOOV VKRSSLQJ FHQWHUV 7KH\ REWDLQHG D ZKRWKUHZWKHJDPEOLQJVWDJDWWKH2SHQ+HDUWK5HVWDXUDQW FRQWUDFW WKH sRKQ &KLFDVH &RPSDQ\ VWDWHZLGH ZLWK WKH FLW\ RI WKDW WKH IRRG VHUYHG DW WKH SDUW\ WUDYHOHG LQ LQWHUVWDWH )RUH[DPSOHXQOLNH3HDUVRQWKHJRYHUQPHQWZDVQRWLQ 0XUSK\jV WHVWLPRQ\ ZKLFK LQGLFDWHV ZKHUH WKH VHUYLFH KH JHQHUDODWWHPSWLQJWRLPSHDFKDZLWQHVVWKURXJKHYLGHQFHRI XVHG ZDV ORFDWHG ,W IXUWKHU DSSHDUV WKDW 0XUSK\ RQO\ DQLQGLFWPHQWRQDSULRUXQUHODWHGFKDUJH,QDGGLWLRQXQOLNH DVVXPHGWKDWWKHLQIRUPDWLRQFDPHIURP1HZ ,Q SDUW FRXQVHO VWDWHG $ >'HIHQGDQW DQG sRKQ &KLFDVH@ ZRUNHG IRU 6KHULII 7UDILFDQW LQ 4 7R \RXU XQGHUVWDQGLQJ ZKHUH GLG WKDW LQIRUPDWLRQ XOWLPDWHO\ WKH 6KHULIIjV 'HSDUWPHQW LQ WKH V ,Q WKH WR FRPH IURP" SHULRG \RX ZLOO OHDUQ WKH\ ZHUH SDUW RI DQ HOLWH GUXJ WDVN IRUFH XQLW WKDW JDLQHG TXLWH D UHSXWDWLRQ IRU LWVHOI DORQJ ZLWK DQ $ +HDULQJ IURP YDULRXV SHRSOH WKH\ VDLG WKDW WKH\ JRW WKHLU OLQH LQGLYLGXDO WKH\ ZRUNHG ZLWK E\ WKH QDPH RI 3DXO %UDGOH\ ZKR IURP /DV 9HJDV RU 1HZ 7KH\ ZHUH UHVSRQVLEOH IRU GR]HQV RI GUXJ UDLGV PDNLQJ GR]HQV sW $SS[ DW 8QLWHG6WDWHVY&KDQFH 1R 1R 8QLWHG6WDWHVY&KDQFH $V QRWHG DERYH LQ WKLV FDVH WKHUH ZDV QR HYLGHQFH WKDW WKH WULDO FRXUW IDLOHG WR JLYH WKH MXU\ D SURSHU OLPLWLQJ SUHVHQWHG UHJDUGLQJ WKH FOLHQW EDVH RI WKH LQGHSHQGHQW LQVWUXFWLRQ GXULQJ ILQDO LQVWUXFWLRQV :KLOH ZH DJUHH ZLWK ERRNPDNHUV7KXVWKHUHZDVQREDVLVXSRQZKLFKDMXURU VRPH RI $SSHOODQWj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mRSHQHG WKH GRRUl RQ DQ LVVXH WKH RSSRQHQW LQ WKH WULDO QHFHVVDU\WRSURYHDQHIIHFWRQLQWHUVWDWHFRPPHUFHRQDFDVH FRXUWjVGLVFUHWLRQPD\LQWURGXFHHYLGHQFHRQWKHVDPHLVVXH E\FDVHEDVLVEHFDXVH&RQJUHVVKDVDOUHDG\GHWHUPLQHGWKDW WRUHEXWDQ\IDOVHLPSUHVVLRQWKDWPD\KDYHEHHQFUHDWHGE\ LOOHJDOJDPEOLQJLWVHOIKDVDQHIIHFWRQLQWHUVWDWHFRPPHUFH WKH HDUOLHU DGPLVVLRQ RI HYLGHQFH 6HH 8QLWHG 6WDWHV Y :HDJUHHZLWK$SSHOODQWWKDWWKHVHFDVHVDUHLQDSSRVLWH%RWK 6HJLQHV)GWK&LU:HUHYLHZDWULDO $EOHV DQG :DOO DGGUHVVHG &RQJUHVVj DXWKRULW\ XQGHU WKH FRXUWj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j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jVTXHVWLRQVH[FHHGHG OLJKWRIWKH866XSUHPH&RXUWjVGHFLVLRQLQ8QLWHG6WDWHVY WKHSHUPLVVLEOHVFRSHRIFURVVH[DPLQDWLRQDQGWKDWWKH&RXUW /RSH]86,Q/RSH]WKH&RXUWKHOGWKDW KDGSHUPLWWHGHYLGHQFHRIDQLQGLFWPHQWWREHSURRIRIJXLOW &RQJUHVV ODFNHG DXWKRULW\ XQGHU WKH &RPPHUFH &ODXVH WR 7ULDO FRXQVHO DOVR DVNHG WKH &RXUW WR LVVXH D FDXWLRQDU\ HQDFWWKH*XQ)UHH6FKRRO=RQHV$FW86&T LQVWUXFWLRQWRWKHMXU\VWDWLQJWKDWWKHIDFWRIDQLQGLFWPHQWLV EHFDXVHLQWHUDOLDWKHVWDWXWHGLGQRWFRQWDLQmDMXULVGLFWLRQDO QRW SURRI RI JXLOW ,G DW 7KH GLVWULFW FRXUW GHQLHG HOHPHQWZKLFKZRXOGHQVXUHWKURXJKFDVHE\FDVHLQTXLU\ $SSHOODQWjV PRWLRQ IRU D PLVWULDO RQ WKH JURXQGV WKDW WULDO WKDW WKH ILUHDUP SRVVHVVLRQ LQ TXHVWLRQ DIIHFWV LQWHUVWDWH FRXQVHOKDGUHSHDWHGO\DEXVHGWKHOLPLWDWLRQVDQGUXOLQJVRQ FRPPHUFHl/RSH]86DW7KH&RXUWIXUWKHUQRWHG HYLGHQFHLWKDGJLYHQLQ$SSHOODQWjVIDYRU7KHFRXUWDOVR WKDWmQHLWKHUWKHVWDWXWHQRULWVOHJLVODWLYHKLVWRU\FRQWDLQ>V@ GHFOLQHGWRLVVXHWKHUHTXHVWHGFDXWLRQDU\LQVWUXFWLRQRQWKH H[SUHVV FRQJUHVVLRQDO ILQGLQJV UHJDUGLQJ WKH HIIHFWV XSRQ JURXQGV WKDW WKH MXU\ KDG DOUHDG\ EHHQ LQVWUXFWHG WKDW DQ LQWHUVWDWHFRPPHUFHRIJXQSRVVHVVLRQLQDVFKRRO]RQHl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mUHDPVlRILQIRUPDWLRQ IDPLO\PHPEHUVDQGHPSOR\HHVRIWKH6KHULIIjV'HSDUWPHQW VXSSRUWLQJ D VSHFLILF ILQGLQJ E\ &RQJUHVV WKDW LOOHJDO $SSHOODQWDUJXHVWKDWKLVTXHVWLRQLQJZDVOLPLWHGWRWKHIRXU JDPEOLQJ PDNHV ZLGHVSUHDG XVH RI DQG KDV DQ HIIHFW RQ SHUVRQVVSHFLILFDOO\LGHQWLILHGE\WULDOFRXQVHODQGWKDWWKH LQWHUVWDWH FRPPHUFH ,G $V D UHVXOW WKH :DOO &RXUW WULDO FRXUW PLVFKDUDFWHUL]HG KLV WHVWLPRQ\ DV D EURDG FRQFOXGHG WKDW m 86& LV D SURSHU H[HUFLVH RI HQGRUVHPHQW RI DOO RI WKH SHUVRQV KH KLUHG 0RUHRYHU FRQJUHVVLRQDOSRZHUXQGHUWKH8QLWHG6WDWHV&RQVWLWXWLRQl $SSHOODQW DUJXHV HYLGHQFH WKDW RWKHU HPSOR\HHV ZHUH ,G DW 7KH &RXUW LQ $EOHV HVVHQWLDOO\ IROORZHG WKH LQGLFWHGGRHVQRWUHEXWKLVWHVWLPRQ\WKDWWKHIRXUSHUVRQVKH UHDVRQLQJRIWKHSDQHOLQ:DOO PHQWLRQHGZHUHFRPSHWHQWDQGKDUGZRUNLQJ$SSHOODQWDOVR FRQWHQGVWKDWWKHWULDOFRXUWDOORZHGWKHSURVHFXWLRQWRLQTXLUH DERXW RWKHU GHSXWLHV VLPSO\ DV D SXQLWLYH PHDVXUH IRU SHUFHLYHGH[FHVVHVRIWULDOFRXQVHO$SSHOODQWDOVRFODLPV 6WDWH PHDQV DQ\ 6WDWH RI WKH 8QLWHG 6WDWHV WKH 'LVWULFW RI &ROXPELD WKH &RPPRQZHDOWK RI 3XHUWR 5LFR DQG DQ\ WHUULWRU\ RU SRVVHVVLRQ RI WKH 8QLWHG 6WDWHV $SSHOODQW DOVR SRLQWV RXW WKDW WKH JRYHUQPHQW ILUVW UDLVHG RQ FURVV H[DPLQDWLRQ WKH LVVXH RI WKH SHUVRQV KH KLUHG DQG SURPRWHG :H DJUHH F ,I ILYH RU PRUH SHUVRQV FRQGXFW ILQDQFH PDQDJH VXSHUYLVH ZLWK WKDW REVHUYDWLRQ :H QRWH WKDW RQ FURVVH[DPLQDWLRQ WKH JRYHUQPHQW GLUHFW RU RZQ DOO RU SDUW RI D JDPEOLQJ EXVLQHVV DQG VXFK DVNHG $SSHOODQW ZKHWKHU KH KDG KLUHG 5XVVHOO 2VPDQ 5RFN\ 5XVVRjV EXVLQHVV RSHUDWHV IRU WZR RU PRUH VXFFHVVLYH GD\V WKHQ IRU WKH VRQ 0DUN &ROXFFL DQG 5LFN )DULQD 6HH sW $SS[ DW 7KH SXUSRVH RI REWDLQLQJ ZDUUDQWV IRU DUUHVWV LQWHUFHSWLRQV DQG JRYHUQPHQWj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oZKRZDVWKHWKLUGRQH,PHQWLRQHGoLWLV LQGLFDWHVWKDWDWVRPHSRLQWLQWLPHDIWHUWKLV FRQYHUVDWLRQ QRERG\XQGHULQGLFWPHQWRUDQ\ERG\WKDWLVLQWURXEOH $SSHOODQWDQG&KLFDVHUHDFKHGDQDJUHHPHQWWRH[WRUW=ROGDQ IRUFDPSDLJQPRQH\)XUWKHUPRUHZHEHOLHYHLWLUUHOHYDQW 7KH&RXUW VSHFLILFDOO\ RUGHU WKDW LW EH FRPPXQLFDWHG WR =ROGDQ 8QLWHG6WDWHVY&KDQFH 1R 1R 8QLWHG6WDWHVY&KDQFH 0U /RQDUGR >GHIHQVH FRXQVHO@ , GLGQjW PHQWLRQ KLV RQH RU PRUH RI VXFK SHUVRQV FRQGXFWV ILQDQFHV EURWKHU PDQDJHVVXSHUYLVHVGLUHFWVRURZQVDOORUSDUWRIDQ LOOHJDOJDPEOLQJEXVLQHVV 0U 0RUIRUG IRUWKHFRQWLQXRXVWKLUW\GD\SHULRG7KHUHIRUH$SSHOODQW DUJXHVKLVFRQYLFWLRQRQ&RXQWRIWKHLQGLFWPHQWVKRXOGEH 7KH&RXUW ,QLWLDOO\ ZH QRWH WKDW LQ RUGHU WR GHWHUPLQH ZKHWKHU WKH 0U 0RUIRUG HOHPHQWRIZHPD\FRQVXOWFDVHODZLQWHUSUHWLQJ 4 ZKR LV D IULHQG RI \RXUV ZRUNHG LQ WKH FDPSDLJQ 86&ZKLFKLQFOXGHVDVDQHOHPHQWRIWKHRIIHQVH 5RFN\5XVVRjVVRQo WKHLGHQWLFDOO\GHILQHGmLOOHJDOJDPEOLQJEXVLQHVVl6HH 86&E VHHDOVR8QLWHG6WDWHVY0DUULILHOG $ LVVXHZHUHVXIILFLHQWWRFDUU\WKHGD\LQWKDWWKHEDUEXWJDPH 6WUROOR VKDUHG SURILWV ZLWK *DURQR ZKHQ *DURQR UDQ WKH DW WKH *UHHN &RIIHH +RXVH SUREDEO\ PHHWV WKH WKLUW\ GD\ JDPH,QDGGLWLRQDOWKRXJK6WUROORjVWHVWLPRQ\LGHQWLILHVILYH UHTXLUHPHQW,QDFULPLQDOFDVHKRZHYHUWKHJRYHUQPHQW SHRSOHZKRZHUHLQYROYHGLQWKHJDPHZKHQKHVKDUHGSURILWV FDQQRW PHHW LWV EXUGHQ RI SURRI E\ LPSDUWLQJ D JHQHUDO ZLWK%HUQLH$OWVKXOHUKHWHVWLILHGWKDW*DU\*RRGULFNGHDOW LPSUHVVLRQ WKDW WKH GHIHQGDQWjV FRQGXFW PHHWV RQH RI WKH RQO\ mRQ RFFDVLRQl :H GR QRW EHOLHYH WHVWLPRQ\ WKDW HOHPHQWV RI WKH RIIHQVH SDUWLFXODUO\ ZKHUH WKHUH LV QR *RRGULFNGHDOWmRQRFFDVLRQl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jV UHTXLUHPHQW RU WKH WKLUW\ GD\ UHTXLUHPHQW RI WHVWLPRQ\ ZH ILQG HVWDEOLVKHV WKDW RQO\ IRXU SHUVRQV 7KHUHIRUH WKH JRYHUQPHQW IDLOHG WR SURYH WKDW WKH EDUEXW SDUWLFLSDWHGLQRSHUDWLQJWKHEDUEXWJDPHGXULQJWKHWLPHWKDW JDPHZDVDQmLOOHJDOJDPEOLQJEXVLQHVVlXQGHUDQG KHSDUWLFLSDWHGLQWKHRSHUDWLRQ WKXV IDLOHG WR SURYH DQ HVVHQWLDO HOHPHQW RI WKH RIIHQVH &RQVHTXHQWO\ $SSHOODQWj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jVUXOLQJ WKHVWDWXWH)RULQVWDQFHRYHUDSHULRGRIWLPHWKUHHSULQFLSDO WKDWRQUHGLUHFWH[DPLQDWLRQRI$SSHOODQW$SSHOODQWjVWULDO RSHUDWRUVRIDFDUGJDPHPD\HPSOR\ILIWHHQGLIIHUHQWGHDOHUV FRXQVHOmRSHQHGWKHGRRUlIRUWKHSURVHFXWLRQWRLQTXLUHLQWR EXWRQO\RQHDWDWLPHDQGRQO\LQVXFFHVVLRQ,QVXFKDFDVH WKH FULPLQDO LQGLFWPHQWV DQG SURVHFXWLRQV RI FHUWDLQ WKHFDUGJDPHZRXOGQRWEHDQmLOOHJDOJDPEOLQJEXVLQHVVl VXERUGLQDWHV RI $SSHOODQWjV ZLWKLQ WKH 0DKRQLQJ &RXQW\ EHFDXVHLWQHYHUKDGPRUHWKDQIRXUDFWLYHSDUWLFLSDQWVDWDQ\ 6KHULIIj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mVXEVWDQWLDOO\FRQWLQXRXVlGRHVQRWPHDQHYHU\GD\UDWKHU *RRGULFNUDQWKHRSHUDWLRQ$OWVKXOHU6WUROOR 0DOLVDQG mWKHRSHUDWLRQPXVWEHRQHWKDWZDVFRQGXFWHGXSRQD 3UXQHVNL7KXVZHUHLWHUDWHWKHHYLGHQFHSUHVHQWHGE\WKH VFKHGXOHRIUHJXODULW\VXIILFLHQWWRWDNHLWRXWRIWKHFDVXDO JRYHUQPHQW ZDV LQVXIILFLHQW WR HVWDEOLVK WKH ILYH SHUVRQ QRQEXVLQHVVFDWHJRU\l TXRWLQJ8QLWHG6WDWHVY1HURQH UHTXLUHPHQWRIE LL )GWK&LU )XUWKHUPRUH ZH DUH XQFRQYLQFHG WKDW WKH JRYHUQPHQW /HQQ\6WUROORjVWHVWLPRQ\RQWKLVSRLQWLVVLPLODUO\QRQ SURYHGEH\RQGDUHDVRQDEOHGRXEWWKDWWKHEDUEXWJDPHDWWKH VSHFLILF DQG ZH WKLQN WKH JRYHUQPHQW H[DJJHUDWHV LI QRW *UHHN &RIIHH +RXVH ZDV LQ VXEVWDQWLDOO\ FRQWLQXRXV GLVWRUWV KLV WHVWLPRQ\ E\ DUJXLQJ WKDW KH WHVWLILHG WKDW RSHUDWLRQ IRU WKLUW\ RU PRUH GD\V DV LV UHTXLUHG E\ JDPEOLQJKDGEHHQJRLQJRQDWWKH*UHHN&RIIHH+RXVHmIRU E LLL$VZHUHDGWKHWULDOWUDQVFULSWSURYLGHG \HDUVl6HH*RYjWjVEULHIDW6WUROORWHVWLILHGDVIROORZV WKHUHLVDJHQHUDOVHQVHLPSDUWHGIURPWKHWHVWLPRQ\WKDWWKH EDUEXW JDPH PD\ KDYH EHHQ LQ H[LVWHQFH IRU D QXPEHU RI 4:KDWLVWKH*UHHN&RIIHH+RXVH" \HDUV7KHJRYHUQPHQWKRZHYHUQHYHUHOLFLWHGWHVWLPRQ\ ZKLFKGHVFULEHGWKHVSHFLILFWLPHSHULRGVWKHJDPHZDVLQ $,WjVDFRIIHHKRXVHWKDWWKH*UHHNVKDYHKDGIRU\HDUV RSHUDWLRQ)RULQVWDQFHsHHS*DURQRWHVWLILHGDVIROORZV WKDWWKH\FRQJUHJDWHWRJHWKHUDQGWKH\SOD\VKRUWFDUGV DQGZKHQ,VD\VKRUWFDUGV\RXNQRZWKH\KDYH*UHHN 4:KDWNLQGRIDFWLYLW\WRRNSODFHDWWKH*UHHN&RIIHH JDPHVOLNH*UHHNUXPP\$QGMXVWWRSDVVWKHWLPHDQG +RXVH" WKH\VHOOWKHLU7XUNLVKFRIIHH $$UHZHWDONLQJ V" 4:KDWKDSSHQVDWQLJKWDIWHUKRXUV" 4/HWjVWDON VDQGPRUHUHFHQWWLPHZKDWjVWKHPDLQ $%DUEXWH>VLF@DQGWKHJDPHEDUEXWH>VLF@LVD*UHHN JDPHWKH\SOD\HG" JDPH,WjVDGLFHJDPH $%DUEXWH>VLF@ 4,VLWDJDPEOLQJJDPH" 6HHsW$SS[DW*DURQRWKHQJRHVRQWRWHVWLI\DERXW $
United States v. Chance (United States v. Chance) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.