United States v. Price

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$SSHOOHH    1R Y  !  %,//< s2( 35,&(  'HIHQGDQW$SSHOODQW  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW*UHHQHYLOOH 1Rn7KRPDV*+XOO'LVWULFWsXGJH 6XEPLWWHGsXQH 'HFLGHGDQG)LOHGsXO\ %HIRUH*8<%2**6DQG*,/0$1&LUFXLWsXGJHV BBBBBBBBBBBBBBBBB &2816(/ 21%5,()&OLIWRQ/&RUNHUsRKQVRQ&LW\7HQQHVVHHIRU $SSHOODQW'DQ56PLWK$66,67$1781,7('67$7(6 $77251(<sRKQVRQ&LW\7HQQHVVHHIRU$SSHOOHH

  8QLWHG6WDWHVY3ULFH 1R 1R 8QLWHG6WDWHVY3ULFH 

BBBBBBBBBBBBBBBBB & 'HQLDORIGRZQZDUGGHSDUWXUH 23,1,21 )LQDOO\3ULFHFODLPVWKDWKHZDVHQWLWOHGWRDGRZQZDUG BBBBBBBBBBBBBBBBB GHSDUWXUHSXUVXDQWWR866HQWHQFLQJ*XLGHOLQHV†. DUJXLQJWKDWKLVFRQGXFWZDVDVLQJOHDFWRIDEHUUDQWEHKDYLRU 521$/'/((*,/0$1&LUFXLWsXGJH%LOO\sRH3ULFH $GLVWULFWFRXUWjVGHFLVLRQQRWWRGHSDUWGRZQZDUGIURPDQ ZDVLQGLFWHGIRUFRQVSLULQJWRGLVWULEXWHFUDFNFRFDLQH HVWDEOLVKHGJXLGHOLQHUDQJHKRZHYHULVQRWDSSHDODEOHDV  GLVWULEXWLQJ FUDFN FRFDLQH ZLWK WKH DVVLVWDQFH RI D ORQJ DV m WKH 'LVWULFW &RXUW SURSHUO\ FRPSXWHG WKH FRGHIHQGDQWDQGXVLQJDWHOHSKRQHGHYLFHWRIDFLOLWDWHWKH JXLGHOLQHUDQJHWKH'LVWULFW&RXUWZDVQRWXQDZDUHRILWV FRQVSLUDF\$IWHUDWZRGD\MXU\WULDOKHZDVFRQYLFWHGRQDOO GLVFUHWLRQWRGHSDUWGRZQZDUGIURPWKHJXLGHOLQHUDQJHDQG FRXQWV DQG VHQWHQFHG WR  PRQWKV LQ SULVRQ  3ULFH QRZ WKH'LVWULFW&RXUWGLGQRWLPSRVHWKHVHQWHQFHLQYLRODWLRQ DSSHDOVFKDOOHQJLQJKLVFRQYLFWLRQDQGVHQWHQFHRQYDULRXV RI ODZ RU DV D UHVXOW RI WKH LQFRUUHFW DSSOLFDWLRQ RI WKH JURXQGV)RUWKHUHDVRQVVHWIRUWKEHORZZH$)),50WKH 6HQWHQFLQJ*XLGHOLQHVl8QLWHG6WDWHVY&KDONLDV)G MXGJPHQWRIWKHGLVWULFWFRXUW   WK &LU  LQWHUQDO TXRWDWLRQ PDUNV DQG FLWDWLRQRPLWWHG ,%$&.*5281' +HUH3ULFHGRHVQRWDUJXHWKDWWKHJXLGHOLQHUDQJHRIWR $ )DFWXDOEDFNJURXQG PRQWKVZDVLPSURSHUO\FRPSXWHGDQGKHPDNHVQRFODLP RI D OHJDO LQILUPLW\ LQ LPSRVLQJ WKH VHQWHQFH  1RU FDQ KH 7KLVFDVHLQYROYHVWKHDFWLRQVRI3ULFHKLVFRGHIHQGDQWV VXFFHVVIXOO\DUJXHWKDWWKHGLVWULFWFRXUWZDVXQDZDUHRILWV &DUO0RVOH\$QJHOLF0XUSK\DQGsRVH6WXOW]DQGKLVIRUPHU GLVFUHWLRQWRGHSDUWGRZQZDUGIURPWKHJXLGHOLQHVUDQJH7KH JLUOIULHQG$QJHOD+HQGHUVRQ,Q)HEUXDU\RI0RVOH\ GLVWULFW FRXUW UHMHFWHG 3ULFHjV PRWLRQ IRU D GRZQZDUG 0XUSK\ DQG 6WXOW] PRYHG IURP 1HZ

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+HWKHQWROG$JHQW:KHDW +HQGHUVRQLQWKH%XUJHU.LQJSDUNLQJORW$JHQW:KHDWWKHQ WKDWKHZDVJRLQJWRJHWZRUWKRIFUDFNFRFDLQHDQG VDZ3ULFHUHWXUQZLWKWKHGUXJVWKDWKHKDGSURPLVHGWREULQJ ZRXOGVHOOKLPWKHUHVWLI$JHQW:KHDWOLNHGLW 7KHVH IDFWV DUH VXIILFLHQW WR VXSSRUW WKH FKDUJH RI XVLQJ D WHOHSKRQHGHYLFHWRIDFLOLWDWHDFRQVSLUDF\WRGLVWULEXWHFUDFN 3ULFHOHIWDIWHU$JHQW:KHDWDJUHHGWR3ULFHjVRIIHU%HIRUH FRFDLQH 3ULFH UHWXUQHG $JHQW :KHDW VDZ +HQGHUVRQ DQG 6WXOW] FLUFOLQJ $JHQW :KHDWjV ORFDWLRQ LQ D ZKLWH )RUG 7HPSR % $GMXVWPHQWIRUDFFHSWDQFHRIUHVSRQVLELOLW\ 3ULFHWKHQUHWXUQHGVD\LQJWKDWKHKDGWKHZKROHZRUWK RI FUDFN FRFDLQH  $IWHU $JHQW :KHDW JDYH 3ULFH  LQ 7XUQLQJ QRZ WR 3ULFHjV VHQWHQFLQJ KH DUJXHV WKDW WKH H[FKDQJHIRUWKHFRFDLQH3ULFHVDLGKHKDGWROHDYHEHFDXVH GLVWULFWFRXUWLQFRUUHFWO\IDLOHGWRUHGXFHKLVRIIHQVHOHYHOE\ mWKHVHSHRSOHZRXOGEHZDQWLQJWKHLUPRQH\l$JHQW:KHDW WZROHYHOVIRUDFFHSWDQFHRIUHVSRQVLELOLW\SXUVXDQWWR86 WKHQUDGLRHGKLVEDFNXSWHDPWHOOLQJWKHPWRIROORZ3ULFH 6HQWHQFLQJ *XLGHOLQHV † (  7KLV FRXUW DFFRUGV JUHDW (YHQWXDOO\KHREVHUYHG2IILFHU&RJDQZLWKWKHsRKQVRQ&LW\ GHIHUHQFHWRWKHGLVWULFWFRXUWjVGHWHUPLQDWLRQRIZKHWKHUD 3ROLFH'HSDUWPHQWSXOORYHUWKH7HPSRDQGDUUHVW+HQGHUVRQ GHIHQGDQW KDV DFFHSWHG UHVSRQVLELOLW\ IRU KLV RIIHQVHV DQG DQG6WXOW]+HDOVRVDZ3ULFHUXQQLQJIURPWKH7HPSRLQDQ ZLOO QRW RYHUWXUQ WKH UHVXOW UHDFKHG XQOHVV LW LV FOHDUO\ DWWHPSWWRDYRLGDUUHVW HUURQHRXV6HH8QLWHG6WDWHVY&KLOGHUV)G WK&LU 6HYHUDORWKHUDJHQWVDOVRREVHUYHGWKHDUUHVWRI+HQGHUVRQ 6WXOW]DQG3ULFH$JHQWV/DUU\5REELQVDQG&DUO:DONHU 7RVXSSRUWKLVDUJXPHQW3ULFHSRLQWVRXWWKDWKHUHDGLO\ ZKRZHUHRQ$JHQW:KHDWjVEDFNXSWHDPVDZ3ULFHOHDYH DGPLWWHGWRVHOOLQJJUDPVRIFUDFNFRFDLQHDQGWKDWWKH $JHQW:KHDWWRPHHWZLWK+HQGHUVRQDQG6WXOW]/DWHUWKH\ RQO\ UHDVRQ KH FKRVH WR OHW WKH FDVH JR WR WKH MXU\ ZDV WR ZDWFKHGDPDUNHGSROLFHFDUSXOOWKH7HPSRRYHUDQGVDZ FRQWHVWWKHFRQVSLUDF\FKDUJH%XWWKLVFRXUWKDVKHOGWKDWmD 3ULFH MXPS RXW RI WKH FDU DQG UXQ  $JHQW :DONHU KHOSHG GHIHQGDQWPXVWDFFHSWUHVSRQVLELOLW\IRUDOOFRXQWVEHIRUHKH SXUVXH 3ULFH RQ IRRW ZKLOH $JHQW 5REELQV DVVLVWHG LQ WKH LV HQWLWOHG WR D UHGXFWLRQ LQ VHQWHQFH IRU DFFHSWDQFH RI DUUHVW RI +HQGHUVRQ DQG 6WXOW]  :KHQ 3ULFH ZDV DUUHVWHG UHVSRQVLELOLW\l8QLWHG6WDWHVY&KDPEHUV)G $JHQW:DONHUIRXQGWKHWKDW$JHQW:KHDWKDGXVHGWR  WK &LU  UHMHFWLQJ WKH GHIHQGDQWjV FODLP WKDW EX\WKHFRFDLQHRQWKHJURXQGQH[WWR3ULFHDQGDSDFNDJHRI H[HUFLVLQJ KLV ULJKW WR WULDO RQ DQ DVVDXOW FRXQW VKRXOG QRW PDULMXDQDLQ3ULFHjVSRFNHW SUHFOXGH D VHQWHQFH UHGXFWLRQ IRU KLV DFFHSWDQFH RI UHVSRQVLELOLW\RQRWKHUFRXQWV7KHGLVWULFWFRXUWWKHUHIRUH $QRWKHUDJHQW7LP7HVWHUDOVRREVHUYHGWKHPHHWLQJLQ SURSHUO\ UHIXVHG WR JUDQW 3ULFH WZR OHYHOV RI UHGXFWLRQ IRU ZKLFK$JHQW:KHDWDJUHHGWRSXUFKDVHFRFDLQHIURP3ULFH DFFHSWDQFHRIUHVSRQVLELOLW\  8QLWHG6WDWHVY3ULFH 1R 1R 8QLWHG6WDWHVY3ULFH 

+HVDZ3ULFHOHDYH$JHQW:KHDWDQGGULYHWRZDUGWKH%XUJHU QHSKHZ&KDUOHV0F(OPXUUD\6HHLGDW$IWHUERWK .LQJ WR PHHW ZLWK +HQGHUVRQ DQG 6WXOW] LQ WKHLU 7HPSR VLGHV UHVWHG WKHLU FDVH WKH WZR GHIHQGDQWV PRYHG IRU D $JHQW7HVWHUWKHQZDWFKHG3ULFHOHDYHWKH7HPSRHQWHUKLV MXGJPHQWRIDFTXLWWDO7KHWULDOFRXUWJUDQWHG0F(OPXUUD\jV RZQFDUDQGGULYHEDFNWRVHOOWKHFRFDLQHWR$JHQW:KHDW PRWLRQEXWGHQLHG0F&ODWFK\jV6HHLGDW0F&ODWFK\ +HIROORZHG+HQGHUVRQDQG6WXOW]LQWKHLU7HPSRDVWKH\OHIW WKHQDUJXHGWKDWEHFDXVHWKHLQGLFWPHQWFKDUJHGWKDWKHDQG WKH%XUJHU.LQJDQGSDUNHGEHVLGH3ULFHjVFDU LQ DQHDUE\ 0F(OPXUUD\ mDLGHG DQG DEHWWHG ZLWK HDFK RWKHU ZLWK WKH .PDUWSDUNLQJORW$JHQW7HVWHUQH[WVDZ3ULFHJHWRXWRIKLV LQWHQW WR GHIUDXGl LG DW  WKDW KH VKRXOG KDYH EHHQ RZQ FDU DQG HQWHU WKH 7HPSR  )LQDOO\ KH REVHUYHG WKH GLVPLVVHGDORQJZLWK0F(OPXUUD\ 7HPSRJHWVWRSSHGE\WKHSROLFHDQGKHKHOSHGSXUVXH3ULFH RQIRRWDV3ULFHUDQIURPWKHRIILFHUV 7KHFRXUWUHMHFWHG0F&ODWFK\jVFRQWHQWLRQSRLQWLQJWRWKH JRYHUQPHQWjV DUJXPHQW WKDW mD FDUHIXO UHDGLQJ RI WKH % 7ULDOEDFNJURXQG LQGLFWPHQW UHYHDOV WKDW ERWK 0F&ODWFK\ DQG 0F(OPXUUD\ ZHUHFKDUJHGLQFRXQWVRQHDQGWZRDVSULQFLSDODQGDLGHUDQG $W WULDO WKH JRYHUQPHQW FDOOHG WZR RI 3ULFHjV WKUHH DEHWWRUl DQG WKDW mDV WKH FDVH SURFHHGHG ZLWKRXW FRGHIHQGDQWVDVZLWQHVVHV$OWKRXJK0RVOH\SOHGJXLOW\WR 0F(OPXUUD\WKHDLGLQJDQGDEHWWLQJODQJXDJHEHFDPHPHUH FRQVSLULQJ ZLWK 3ULFH KH WHVWLILHG GXULQJ WKH WULDO WKDW KH VXUSOXVDJHLQWKHLQGLFWPHQWl,GDW:HILQGVLPLODU mQHYHUPHW%LOO\sRHl0XUSK\KDGDOVRSOHGJXLOW\WRWKH UHDVRQLQJDSSOLFDEOHKHUH$QH[DPLQDWLRQRIWKHLQGLFWPHQW FKDUJHWKDWVKHFRQVSLUHGZLWK3ULFHEXWOLNHZLVHWHVWLILHG PDNHV FOHDU WKDW 6WXOW] DQG 3ULFH ZHUH HDFK FKDUJHG ZLWK GXULQJ WKH WULDO WKDW VKH KDG QHYHU PHW RU KDG DQ\ SULRU GLVWULEXWLRQ DQG WKDW WKH DLGLQJ DQG DEHWWLQJ ODQJXDJH LV GHDOLQJVZLWKKLP6WXOW]GLGQRWWDNHWKHVWDQG FRQWDLQHGLQDVXEVLGLDU\FODXVHWKDWZDVQRWHVVHQWLDOWRWKH YLDELOLW\RI&RXQW,,7KXVLWZDVQRWQHFHVVDU\WKDWWKH\ERWK +HQGHUVRQ ZKR KDG DJUHHG WR FRRSHUDWH ZLWK ODZ EHFRQYLFWHGLQRUGHUIRUHLWKHUWREHFRQYLFWHG HQIRUFHPHQW XSRQ DUUHVW ZDV DQ DGGLWLRQDO JRYHUQPHQW ZLWQHVV6KHGHVFULEHGKRZ3ULFHLQLWLDOO\DSSURDFKHGKHUWR 3ULFH GRHV QRW GLVSXWH WKDW KH YLRODWHG IHGHUDO ODZ E\ ERUURZVRPHPRQH\EXWWKHQGHWDLOHGWKHGUXJWUDQVDFWLRQ VHOOLQJFUDFNFRFDLQHWRDQXQGHUFRYHURIILFHUQRUGRHVKH WKDWRFFXUUHGZKHQVKHLQVWHDGRIIHUHGKLPFUDFNFRFDLQHWR FKDOOHQJH WKH WHVWLPRQ\ WKDW KH PHW ZLWK +HQGHUVRQ DQG VHOO3ULFHHOHFWHGQRWWRWHVWLI\LQKLVRZQGHIHQVH 6WXOW]ERWKEHIRUHDQGDIWHUWKHGUXJWUDQVDFWLRQ6XIILFLHQW HYLGHQFH WKHUHIRUH H[LVWHG IRU WKH MXU\ WR ILQG EH\RQG D )ROORZLQJ D WZRGD\ MXU\ WULDO 3ULFH ZDV FRQYLFWHG RI UHDVRQDEOHGRXEWWKDW3ULFHZDVJXLOW\RIGLVWULEXWLQJFUDFN FRQVSLULQJWRGLVWULEXWHFUDFNFRFDLQHEHWZHHQ)HEUXDU\ FRFDLQHDVFKDUJHGLQ&RXQW,, DQG0DUFKLQYLRODWLRQRI86&†  GLVWULEXWLQJ FUDFN FRFDLQH LQ YLRODWLRQ RI  86&  8VLQJDWHOHSKRQHGHYLFHWRIDFLOLWDWHDFRQVSLUDF\WR †D DQGXVLQJDWHOHSKRQHGHYLFHWRIDFLOLWDWHD GLVWULEXWHFUDFNFRFDLQH IHORQ\GUXJRIIHQVHLQYLRODWLRQRI86&†E+H ILOHGDPRWLRQIRUDQHZWULDOFKDOOHQJLQJWKHVXIILFLHQF\RI )LQDOO\3ULFHDUJXHVWKDWWKHHYLGHQFHZDVQRWVXIILFLHQWWR WKH HYLGHQFH DJDLQVW KLP  3ULFH DOVR DOOHJHG WKDW KLV VXSSRUW WKH MXU\jV ILQGLQJ WKDW KH ZDV JXLOW\ RI XVLQJ D FRQYLFWLRQ ZDV LQFRQVLVWHQW ZLWK 6WXOW]jV DFTXLWWDO RQ WKH WHOHSKRQH GHYLFH WR IDFLOLWDWH WKH FRQVSLUDF\ WR GLVWULEXWH FKDUJHVRIEHLQJDPHPEHURIDGUXJFRQVSLUDF\DQGRIDLGLQJ FUDFN FRFDLQH  +H DUJXHV WKDW LI WKHUH ZDV LQVXIILFLHQW DQGDEHWWLQJ3ULFHLQGLVWULEXWLQJFUDFNFRFDLQH7KHGLVWULFW HYLGHQFH WR ILQG KLP JXLOW\ RI SDUWLFLSDWLQJ LQ D GUXJ FRXUWIRXQGQRPHULWWR3ULFHjVFODLPVRIHUURU FRQVSLUDF\ WKHQ KH FDQQRW EH IRXQG JXLOW\ IRU XVLQJ D WHOHSKRQH GHYLFH WR IDFLOLWDWH WKDW FRQVSLUDF\  3ULFHjV  8QLWHG6WDWHVY3ULFH 1R 1R 8QLWHG6WDWHVY3ULFH 

ZDVDFRPPRQDJUHHPHQWWRGLVWULEXWHFUDFNFRFDLQHDQGWKDW $WWKHVHQWHQFLQJKHDULQJ3ULFHREMHFWHGWRWKHILQGLQJLQ 3ULFH NQHZ RI LQWHQGHG WR MRLQ DQG SDUWLFLSDWHG LQ WKH WKHSUHVHQWHQFHUHSRUWWKDWKHZDVQRWHQWLWOHGWRDGRZQZDUG YHQWXUH DGMXVWPHQWIRUDFFHSWDQFHRIUHVSRQVLELOLW\+HDOVRPRYHG IRU D GRZQZDUG GHSDUWXUH EHORZ WKH VHQWHQFLQJ JXLGHOLQH (YHQWKRXJK3ULFHjVDOWHUQDWLYHH[SODQDWLRQRIWKH0DUFK UDQJHDUJXLQJWKDWKLVSDUWLFLSDWLRQLQWKHFRQVSLUDF\ZDVD HSLVRGHDVDQLVRODWHGEX\HUVHOOHUWUDQVDFWLRQLVQRW VLQJOHDFWRIDEHUUDQWEHKDYLRU7KHGLVWULFWFRXUWRYHUUXOHG WRWDOO\LPSODXVLEOHWKLVZDVQRWWKHYHUVLRQRIWKHHYHQWVWKDW WKHREMHFWLRQGHQLHGWKHPRWLRQDQGVHQWHQFHG3ULFHWR WKHMXU\FKRVHWRDFFHSW%DVHGXSRQWKHHYLGHQFHSUHVHQWHG PRQWKVLQSULVRQ7KLVWLPHO\DSSHDOIROORZHG ZH KDYH QR JURXQGV WR GLVWXUE WKH MXU\jV YHUGLFW  6HH sDFNVRQ86DW7KHODWHGDWHDWZKLFK3ULFHMRLQHG ,,$1$/<6,6 WKH FRQVSLUDF\ KRZHYHU ZDV WDNHQ LQWR DFFRXQW DW VHQWHQFLQJ6HH866HQWHQFLQJ*XLGHOLQHV0DQXDO†% $ 6XIILFLHQF\RIWKHHYLGHQFH FPW QF  GHVFULELQJ D K\SRWKHWLFDO ZKHUH 'HIHQGDQW m2l ZRXOG EH KHOG DFFRXQWDEOH DW VHQWHQFLQJ IRU RQO\ WKH 3ULFH FKDOOHQJHV WKH VXIILFLHQF\ RI WKH HYLGHQFH XVHG WR GUXJTXDQWLW\LQYROYHGRQWKHRQHRFFDVLRQWKDWVKHPDGHD VXSSRUW HDFK RI WKH FKDUJHV DJDLQVW KLP  ,Q UHYLHZLQJ D GHOLYHU\IRUKHULOOER\IULHQGGHVSLWHKHUNQRZOHGJHRIKLV FKDOOHQJH WR WKH VXIILFLHQF\ RI WKH HYLGHQFH ZH PXVW RQJRLQJGUXJWUDIILFNLQJDFWLYLW\ GHWHUPLQHmZKHWKHUDIWHUYLHZLQJWKHHYLGHQFHLQWKHOLJKW PRVWIDYRUDEOHWRWKHSURVHFXWLRQDQ\UDWLRQDOWULHURIIDFW &RXQW,,FKDUJHRIGLVWULEXWLQJFUDFNFRFDLQH FRXOGKDYHIRXQGWKHHVVHQWLDOHOHPHQWVRIWKHFULPHEH\RQG DUHDVRQDEOHGRXEWlsDFNVRQY9LUJLQLD86 7KHVHFRQGFRXQWRI3ULFHjVLQGLFWPHQWFKDUJHGWKDW6WXOW] HPSKDVLVLQRULJLQDO7KLVUHTXLUHVXVWRmUHIUDLQ DQG3ULFHmDLGHGDQGDEHWWHGE\HDFKRWKHUGLGNQRZLQJO\ IURP LQGHSHQGHQWO\ MXGJLQJ WKH FUHGLELOLW\ RI ZLWQHVVHV RU LQWHQWLRQDOO\DQGZLWKRXWDXWKRULW\GLVWULEXWHDTXDQWLW\RID ZHLJKWRIWKHHYLGHQFHl8QLWHG6WDWHVY:HOFK)G PL[WXUHDQGVXEVWDQFHFRQWDLQLQJFRFDLQHEDVHl3ULFH  WK &LU   (YHQ FLUFXPVWDQWLDO HYLGHQFH PD\ DUJXHVWKDWEHFDXVHWKHMXU\IRXQG6WXOW]QRWJXLOW\RQWKLV VXVWDLQDFRQYLFWLRQVRORQJDVWKHWRWDOLW\RIWKHHYLGHQFHZDV FRXQWWKDWKHWRRVKRXOGKDYHEHHQDFTXLWWHG VXEVWDQWLDO HQRXJK WR HVWDEOLVK JXLOW EH\RQG D UHDVRQDEOH GRXEW6HH8QLWHG6WDWHVY3KLEEV)GWK 7KH6XSUHPH&RXUWKDVKHOGKRZHYHUWKDWWKHDFTXLWWDORI &LU DSULQFLSDOGRHVQRWSUHFOXGHWKHFRQYLFWLRQRIDQDLGHUDQG DEHWWRU6HH6WDQGHIHUY8QLWHG6WDWHV86 &RQVSLUDF\WRGLVWULEXWHFUDFNFRFDLQH KROGLQJWKHGHIHQGDQWUHVSRQVLEOHIRUDLGLQJDQGDEHWWLQJDQ ,QWHUQDO 5HYHQXH 6HUYLFH DJHQW LQ DFFHSWLQJ XQODZIXO 3ULFHILUVWDUJXHVWKDWWKHUHZDVLQVXIILFLHQWHYLGHQFHWRILQG FRPSHQVDWLRQHYHQWKRXJKWKH,56DJHQWZDVDFTXLWWHGRQ KLPJXLOW\RISDUWLFLSDWLQJLQDFRQVSLUDF\WRGLVWULEXWHFUDFN WKH VDPH FKDUJH  %XW 3ULFH DUJXHV WKDW KLV VLWXDWLRQ LV FRFDLQHEHWZHHQ)HEUXDU\DQG0DUFK7RVXSSRUW GLIIHUHQWEHFDXVHKLVLQGLFWPHQWDOOHJHGO\FKDUJHGKLPDQG DFRQYLFWLRQIRUFRQVSLUDF\WKHJRYHUQPHQWZDVUHTXLUHGWR 6WXOW] RQO\ ZLWK DLGLQJ DQG DEHWWLQJ HDFK RWKHU QRW ZLWK SURYHWKDWWKHUHZDVDQDJUHHPHQWWRYLRODWHWKHGUXJODZV HLWKHURIWKHPEHLQJDSULQFLSDO DQG WKDW 3ULFH NQHZ RI DQG YROXQWDULO\ MRLQHG LQ WKH FRQVSLUDF\6HH8QLWHG6WDWHVY$YHU\)G $ VLPLODU DUJXPHQW ZDV UHMHFWHG LQ 8QLWHG 6WDWHV Y WK &LU   m$ FRQVSLUDF\ PD\ EH LQIHUUHG IURP 0F&ODWFK\  )G  WK &LU   ,Q WKDW FDVH FLUFXPVWDQWLDOHYLGHQFHWKDWFDQUHDVRQDEO\EHLQWHUSUHWHGDV &KDUOHV0F&ODWFK\ZDVLQGLFWHGIRUFRQYHUVLRQDORQJZLWKKLV SDUWLFLSDWLRQLQWKHFRPPRQSODQl8QLWHG6WDWHVY%ODNHQH\  8QLWHG6WDWHVY3ULFH 1R 1R 8QLWHG6WDWHVY3ULFH 

)GWK&LULQWHUQDOTXRWDWLRQPDUNV ,QDGGLWLRQDGHIHQGDQWFDQEHFRQQHFWHGWRDFRQVSLUDF\ DQGFLWDWLRQRPLWWHGm7KHFRQQHFWLRQRIWKHGHIHQGDQWWRWKH WKURXJK HYLGHQFH DERXW KLV LQWHUDFWLRQV ZLWK DQRWKHU FRQVSLUDF\QHHGRQO\EHVOLJKWLIWKHUHLVVXIILFLHQWHYLGHQFH FRFRQVSLUDWRUHYHQLIWKDWFRFRQVSLUDWRUZDVQRWLQGLFWHGDV WR HVWDEOLVK WKDW FRQQHFWLRQ EH\RQG D UHDVRQDEOH GRXEWl ORQJDVWKHUHZDVHYLGHQFHWRFRQQHFWWKHGHIHQGDQWWRWKH 8QLWHG6WDWHVY&KULVWLDQ)GWK&LU FRFRQVSLUDWRUDQGWKHFRFRQVSLUDWRUWRWKHFRQVSLUDF\6HH LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQRPLWWHG 8QLWHG6WDWHVY6DQG\)G WK &LU KROGLQJWKDWmLWLVLPPDWHULDOWKDW6KLIIULQ>WKHFRFRQVSLUDWRU 7KH FUX[ RI 3ULFHjV DUJXPHQW LV WKDW WKH RQO\ HSLVRGH WRZKRPWKHGHIHQGDQWVLQ6DQG\ZHUHFRQQHFWHG@ZDVQRW FRQQHFWLQJ KLP ZLWK KLV FRGHIHQGDQWV ZDV WKH GUXJ KLPVHOI FKDUJHG LQ WKH LQGLFWPHQW KH ZDV QDPHG DV DQ WUDQVDFWLRQ WKDW RFFXUUHG RQ 0DUFK   DQG WKDW QR XQLQGLFWHGFRFRQVSLUDWRUDQGWKHHYLGHQFHDWWULDOFRQQHFWHG WHVWLPRQ\ZDVSUHVHQWHGIURPZKLFKLWFRXOGEHLQIHUUHGWKDW KLPZLWKWKHFRQVSLUDF\l,WLVVXIILFLHQWLQDmGUXJFKDLQ DQDJUHHPHQWWRGLVWULEXWHFRFDLQHH[LVWHG6HH8QLWHG6WDWHV FRQVSLUDF\l WR VKRZ WKDW HDFK PHPEHU RI WKH FRQVSLUDF\ Y:LOOLDPV)GWK&LUKROGLQJHYHQ UHDOL]HGWKDWKHZDVSDUWLFLSDWLQJLQDMRLQWYHQWXUHHYHQLIKH WKRXJKWKHUHZDVHYLGHQFHSODFLQJWKHGHIHQGDQWLQDPRWHO GLGQRWNQRZWKHLGHQWLWLHVRIHYHU\RWKHUPHPEHURUZDVQRW URRPHPSW\LQJSODVWLFEDJVRIQDUFRWLFVLQWRWKHWRLOHWWKDW LQYROYHG LQ DOO RI WKH DFWLYLWLHV LQ IXUWKHUDQFH RI WKH WKHUH ZDV QR VKRZLQJ RI D FRQVSLUDF\ WR GLVWULEXWH GUXJV FRQVSLUDF\6HH8QLWHG6WDWHVY0DOLV]HZVNL)G ZKHUH WKH RQO\ WHVWLPRQ\ SUHVHQWHG ZLWK UHJDUG WR WKH WK&LU GHIHQGDQWZDVWKDWKHKDGRQFHPHWWKHDOOHJHGFRFRQVSLUDWRU DWDSDUW\DQGKDGRQO\JRQHWRWKHPRWHOWRJLYHWKLVSHUVRQ ,QWKLVFDVHWKHHYLGHQFHGHPRQVWUDWHVWKDW3ULFHQHJRWLDWHG DULGHLQWRWKHWRZQ%XWWKLVFRXUWKDVKHOGWKDWDVLQJOHVDOH WKHVDOHRIZRUWKRIFUDFNFRFDLQHWR$JHQW:KHDWZKR FDQEHVXIILFLHQWWRHVWDEOLVKDFRQVSLUDF\6HH8QLWHG6WDWHV ZDVDFWLQJXQGHUFRYHU+HQGHUVRQDQG6WXOW]FLUFOHG:KHDWjV Y+DPLOWRQ)GWK&LUUHMHFWLQJ FDU WR DVVHVV WKH VLWXDWLRQ EHIRUH SURYLGLQJ 3ULFH ZLWK WKH WKHGHIHQGDQWjVDUJXPHQWWKDWEHFDXVHKHZDVLQYROYHGLQ GUXJV$IWHUGHOLYHULQJWKHFRFDLQH3ULFHWROG:KHDWWKDWKH RQO\RQHVDOHKHFRXOGQRWEHJXLOW\RIDFRQVSLUDF\WRGHDOLQ KDG WR JR EHFDXVH mWKHVH SHRSOH ZRXOG EH ZDQWLQJ WKHLU LOOHJDO H[SORVLYHV  ,Q SDUWLFXODU mWKH VLQJOHVDOH GHIHQVH PRQH\l+HWKHQDWWHPSWHGWRJHWWKHPRQH\KHHDUQHGIURP DSSOLHV RQO\ LQ WZR VLWXDWLRQV QHLWKHU DSSOLFDEOH KHUH WKHVDOHRIWKHGUXJVEDFNWR+HQGHUVRQDQG6WXOW] ZKHQWKHEX\HUDQGVHOOHUDUHWKHRQO\WZRSDUWLFLSDQWVDQG ZKHUHWKHEX\HULVDPLQRUILJXUHLQDFRPSOH[FRQVSLUDF\ $OWKRXJK+HQGHUVRQZDVQRWLQGLFWHGE\WKHSROLFHWKHUH VRDVWRUDLVHTXHVWLRQVRIZKHWKHUKHNQHZRIWKHVFRSHRIWKH ZDV DPSOH HYLGHQFH WR FRQQHFW KHU ZLWK WKH UHVW RI WKH FRQVSLUDF\l,GFLWLQJ8QLWHG6WDWHVY5HQIUR)G FRQVSLUDF\ DV VKH KHUVHOI DFNQRZOHGJHG WKDW VKH ZDV QWK&LU  WUDYHOLQJZLWK6WXOW]IRUWKHSXUSRVHRIVHOOLQJFRFDLQH3ULFH PRUHRYHUZDVFRQQHFWHGWRWKHFRQVSLUDF\QRWRQO\WKURXJK 7KHWUDQVDFWLRQRQ0DUFKFOHDUO\LQYROYHGPRUH +HQGHUVRQ EXW DOVR WKURXJK 6WXOW]  /DZ HQIRUFHPHQW WKDQWZRSDUWLFLSDQWV$WWKHYHU\OHDVWLWZDVDWKUHHZD\ ZLWQHVVHV REVHUYHG 3ULFH HQWHULQJ WKH 7HPSR DQG PHHWLQJ WUDQVDFWLRQEHWZHHQ+HQGHUVRQ3ULFHDQG$JHQW:KHDW1RU ZLWKERWK6WXOW]DQG+HQGHUVRQWRJLYHWKHPmWKHLUPRQH\l ZDV WKH 0DUFK  HSLVRGH SDUWLFXODUO\ FRPSOH[ XQOLNH D DQG +HQGHUVRQ WHVWLILHG WKDW 6WXOW] ZDV WKH VRXUFH RI WKH mODUJHUFRQVSLUDF\FRQVLVWLQJRIWHQRIVPXJJOHUVGLVWULEXWRUV FRFDLQH VROG E\ 3ULFH  ,Q OLJKW RI WKLV HYLGHQFH UHJDUGLQJ PLGGOHPHQ DQG RWKHU EX\HUVl  5HQIUR  )G DW  3ULFHjVGUXJVDOHDQGKLVFRQQHFWLRQVWR+HQGHUVRQDQG6WXOW] GLVFXVVLQJWKHVHFRQGHOHPHQWRIWKHVLQJOHVDOHGHIHQVH WKHUHZDVVXIILFLHQWHYLGHQFHSUHVHQWHGDWWULDOIRUDUDWLRQDO 7KHVLQJOHVDOHGHIHQVHWKHUHIRUHGRHVQRWDSSO\WRWKLVFDVH WULHURIIDFWWRFRQFOXGHEH\RQGDUHDVRQDEOHGRXEWWKDWWKHUH