United States v. Hurst

U.S. Court of Appeals for the Sixth Circuit

United States v. Hurst

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21  8QLWHG6WDWHVY+XUVW 1R  3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

(/(&7521,& &,7$7,21  )(' $SS 3 WK &LU

FRXUWjVWZROHYHOHQKDQFHPHQWRIGHIHQGDQWjVRIIHQVHOHYHO )LOH 1DPH DS

ZDVQRWLPSURSHU ,,,&21&/86,21 81,7('67$7(6&28572)$33($/6 )RUDOORIWKHIRUHJRLQJUHDVRQVGHIHQGDQWjVFRQYLFWLRQDQG )257+(6,;7+&,5&8,7 VHQWHQFHDUH$)),50('WKHGLVWULFWFRXUWKDYLQJSURSHUO\ BBBBBBBBBBBBBBBBB GHQLHGGHIHQGDQWjVPRWLRQVWRVXSSUHVVDQGKDYLQJPDGHQR UHYHUVLEOHHUURULQVHQWHQFLQJGHIHQGDQW 81,7(' 67$7(6 2) $0(5,&$ ; 3ODLQWLII$SSHOOHH    1R  Y  !  6&277,( 5$< +8567  'HIHQGDQW$SSHOODQW  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW.QR[YLOOH 1R n5/HRQsRUGDQ'LVWULFWsXGJH $UJXHG 0D\ 'HFLGHGDQG)LOHG 6HSWHPEHU %HIRUH 0225(DQG*,/0$1&LUFXLWsXGJHV 0F.($*8( 'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8('   s 5RQQLH *UHHU *UHHQHYLOOH 7HQQHVVHH IRU $SSHOODQW6WHYH+&RRN$66,67$1781,7('67$7(6 $77251(< .QR[YLOOH 7HQQHVVHH IRU $SSHOOHH

7KH +RQRUDEOH 'DYLG : 0F.HDJXH 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH :HVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ

  8QLWHG6WDWHVY+XUVW 1R  1R  8QLWHG6WDWHVY+XUVW 

21%5,() s5RQQLH*UHHU*UHHQHYLOOH7HQQHVVHHIRU †. D  $WWKHWLPHRIGHIHQGDQWjVVHQWHQFLQJ1RWH $SSHOODQW6WHYH+&RRN$66,67$1781,7('67$7(6 SURYLGHGLQUHOHYDQWSDUWDVIROORZV $77251(<.QR[YLOOH7HQQHVVHHIRU$SSHOOHH ,I WKH RQO\ RIIHQVH WR ZKLFK † . DSSOLHV LV  BBBBBBBBBBBBBBBBB 86&†  L  M RU X RU86&†  O RU P RIIHQVHV LQYROYLQJ D VWROHQ ILUHDUP RU VWROHQ 23,1,21 DPPXQLWLRQ  DQG WKH EDVH RIIHQVH OHYHO LV GHWHUPLQHG BBBBBBBBBBBBBBBBB XQGHUVXEVHFWLRQ D  GRQRWDSSO\WKHDGMXVWPHQWLQ VXEVHFWLRQ E  XQOHVVWKHRIIHQVHLQYROYHGDILUHDUP '$9,':0F.($*8('LVWULFWsXGJH7KLVLVDQDSSHDO ZLWK DQ DOWHUHG RU REOLWHUDWHG VHULDO QXPEHU  7KLV LV IURPDFRQYLFWLRQDQGVHQWHQFHUHQGHUHGLQWKH8QLWHG6WDWHV EHFDXVHWKHEDVHRIIHQVHOHYHOWDNHVLQWRDFFRXQWWKDWWKH 'LVWULFW &RXUW IRU WKH (DVWHUQ 'LVWULFW RI 7HQQHVVHH ILUHDUPRUDPPXQLWLRQZDVVWROHQ 'HIHQGDQW ZDV FKDUJHG LQ D VHYHQFRXQW LQGLFWPHQW ZLWK FRQVSLUDF\ WR WUDQVSRUW VWROHQ ILUHDUPV DQG DPPXQLWLRQ LQ 866*†.FRPPHQW Q  LQWHUVWDWH FRPPHUFH SRVVHVVLRQ RI VWROHQ ILUHDUPV DQG DPPXQLWLRQDQGSRVVHVVLRQRIILUHDUPVE\DFRQYLFWHGIHORQ 'HIHQGDQW+XUVWZDVFRQYLFWHGRIDILUHDUPVYLRODWLRQRWKHU $ MXU\ IRXQG KLP JXLOW\ DV FKDUJHG DQG WKH GLVWULFW FRXUW WKDQ WKH HQXPHUDWHG RIIHQVHV LH FRQYLFWHG IHORQ LQ VHQWHQFHG KLP WR D PRQWK WHUP RI LPSULVRQPHQW  2Q SRVVHVVLRQRIDILUHDUP86&†  J  DQGKLVEDVH DSSHDOGHIHQGDQWFRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGZKHQ RIIHQVHOHYHOZDVGHWHUPLQHGXQGHU†. D  QRW D   LWGHQLHGERWKKLVPRWLRQWRVXSSUHVVHYLGHQFHVHL]HGGXULQJ ,WWKHUHIRUHIROORZVLQDFFRUGDQFHZLWKWKHSODLQODQJXDJHRI DZDUUDQWOHVVVHDUFKDQGKLVPRWLRQWRVXSSUHVVVWDWHPHQWV $SSOLFDWLRQ 1RWH  WKDW WKH 1RWH  H[FHSWLRQ WR WKH PDGHE\KLP+HDOVRFODLPVHUURULQFRQQHFWLRQZLWKWKH † . E   VWROHQ ILUHDUP HQKDQFHPHQW GRHV QRW DSSO\ GLVWULFWFRXUWjVLPSRVLWLRQRIVHQWHQFHDQGDSSOLFDWLRQRIWKH &RQVLVWHQWZLWKWKHXQLIRUPDSSURDFKRIRXUVLVWHUFLUFXLWV 8QLWHG6WDWHV6HQWHQFLQJ*XLGHOLQHV m866*l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jV'HSXW\REVHUYHGDYHKLFOH WKDW WKH KDQGJXQ GHIHQGDQW +XUVW SRVVHVVHG KDG QRW EHHQ PDWFKLQJ WKH UHSRUWHG GHVFULSWLRQ QRW IDU IURP WKH 6PLWK VWROHQEHIRUHGHIHQGDQWDFTXLUHGLWGRHVQRWGHIHDWWKHIDFW UHVLGHQFH VRXWKERXQG RQ 86 WUDYHOLQJ WRZDUG WKDW KH DFTXLUHG LW E\ WKHIW DQG WKHQ SRVVHVVHG D VWROHQ &XPEHUODQG&RXQW\DWDKLJKUDWHRIVSHHG+HQRWHGWKDWWKH ILUHDUP  %HFDXVH GHIHQGDQW ZDV FRQYLFWHG RI D ILUHDUPV IURQW HQG RI WKH YHKLFOH ZDV GDPDJHG DQG WKH JULOO ZDV RIIHQVHRWKHUWKDQWKRVHLQYROYLQJVWROHQILUHDUPVWKHGLVWULFW PLVVLQJ  7KH LQIRUPDWLRQ ZDV FRQYH\HG WR &XPEHUODQG &RXQW\ DXWKRULWLHV  6RRQ WKHUHDIWHU &XPEHUODQG &RXQW\  8QLWHG6WDWHVY+XUVW 1R  1R  8QLWHG6WDWHVY+XUVW 

0F'RQDOG)GDW'HIHQGDQW+XUVWjVXVHRIWKH 6KHULIIjV'HSXW\6FRWW,OHVREVHUYHGDYHKLFOHPDWFKLQJWKH VWROHQ KDQGJXQ LQ WKH SHUSHWUDWLRQ RI WKH 6PLWK EXUJODU\ UHSRUWHGGHVFULSWLRQHDVWERXQGRQ,QHDUWKHLQWHUVHFWLRQ FHUWDLQO\ LQYROYHG DQRWKHU RIIHQVH EH\RQG PHUH ILUHDUPV RI86DSSUR[LPDWHO\PLQXWHVjGULYLQJWLPHIURPWKH SRVVHVVLRQRUWUDIILFNLQJ 6PLWKUHVLGHQFH,OHVSXOOHGWKHYHKLFOHRYHU 6HFWLRQ . E   mLV D VHQWHQFLQJ HQKDQFHPHQW 7KH YHKLFOH ZDV DFWXDOO\ D GDUN EOXH 0HUFXU\ &RXJDU SURYLVLRQWKDWZDVFUHDWHGLQUHVSRQVHWRDFRQFHUQDERXWWKH VLPLODULQDSSHDUDQFHWRD7KXQGHUELUG'HIHQGDQW6FRWWLH LQFUHDVHG ULVN RI YLROHQFH ZKHQ ILUHDUPV DUH XVHG RU 5D\+XUVWZDVWKHGULYHUFRGHIHQGDQW(GZLQ4XLQRQHVsU SRVVHVVHG GXULQJ WKH FRPPLVVLRQ RI DQRWKHU IHORQ\l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† . E   EHFDXVH WKH ILUHDUPV FRQGXFWHG  4XLQRQHV ZDV DUUHVWHG   WKH KLWFKKLNHU ZDV SRVVHVVHGE\GHIHQGDQWZHUHVWROHQ&LWLQJ8QLWHG6WDWHVY UHOHDVHG7KHYHKLFOHZDVLPSRXQGHGDQGVXEMHFWHGWRDQ 5RZOHWW)G WK&LU  GHIHQGDQWFRQWHQGVWKH LQYHQWRU\VHDUFK7KHLQYHQWRU\VHDUFKFRQGXFWHGE\,OHVDQG †. E  HQKDQFHPHQWDSSOLHVRQO\ LIWKHILUHDUPVKH *LEVRQ\LHOGHGMHZHOU\FORWKLQJFDVKD6RQ\3OD\6WDWLRQ SRVVHVVHGZHUHVWROHQEHIRUHKHSRVVHVVHGWKHP,Q5RZOHWW FRPSDFWGLVFVDFHOOXODUSKRQHDKDQGJXQDVKRWJXQDQG WKH7HQWK&LUFXLWFRQFOXGHGWKDW†. E  mLVFRQFHUQHG DPPXQLWLRQ0HDQZKLOHRWKHURIILFHUVFRQWLQXHGWRSXUVXH QRW ZLWK WKH ZD\ LQ ZKLFK ILUHDUPV DQG DPPXQLWLRQ DUH +XUVW DSSUHKHQGLQJ KLP VHYHUDO KRXUV ODWHU  7KH VHDUFK DFTXLUHG E\ D SDUWLFXODU GHIHQGDQW EXW UDWKHU ZLWK WKHLU LQFLGHQWWRKLVDUUHVW\LHOGHGVHYHUDOJROGQHFNODFHVDQG FRQGLWLRQZKHQDFTXLUHGE\ZKDWHYHUPHDQVl,GDW ELOOV %HFDXVH WKHUH LV QR HYLGHQFH WKDW WKH KDQGJXQ KH VWROH RQ 0DUFK KDGHDUOLHUEHHQVWROHQGHIHQGDQWDUJXHVWKLV 2Q 'HFHPEHU    WKH IHGHUDO JUDQG MXU\ LQ WKH WZROHYHOHQKDQFHPHQWZDVLPSURSHU (DVWHUQ 'LVWULFW RI 7HQQHVVHH UHWXUQHG D VHYHQFRXQW LQGLFWPHQWFKDUJLQJ+XUVWDQG4XLQRQHVLQFRXQWRQHZLWK 5RZOHWW ZDV GHFLGHG SULRU WR WKH   DPHQGPHQW RI FRQVSLUDF\ WR WUDQVSRUW VWROHQ ILUHDUPV DQG DPPXQLWLRQ LQ $SSOLFDWLRQ1RWHWR†.6LQFH 1RWHKDV LQWHUVWDWH FRPPHUFH LQ YLRODWLRQ RI  86& †   LQ PDGHLWFOHDUWKDWWKH†. E  HQKDQFHPHQWDSSOLHVWR FRXQWVWZRWKUHHDQGILYHZLWKSRVVHVVLRQRIVWROHQILUHDUPV DOO ILUHDUPV RIIHQVHV H[FHSW FHUWDLQ HQXPHUDWHG RIIHQVHV LQYLRODWLRQRI 86&†  M DQGLQFRXQWIRXUZLWK ZKHUH WKH EDVH RIIHQVH OHYHO LV GHWHUPLQHG XQGHU WUDQVSRUWLQJ VWROHQ ILUHDUPV LQ YLRODWLRQ RI  86& †  L &RXQWVVL[DQGVHYHQFKDUJHG+XUVWZLWKEHLQJD FRQYLFWHGIHORQLQSRVVHVVLRQRIILUHDUPVDQGDPPXQLWLRQLQ YLRODWLRQRI86&†  J  +XUVWDQG4XLQRQHVZHUH  6HFWLRQ . E  SURYLGHV mLI DQ\ ILUHDUP ZDV VWROHQ RU KDG DQ WULHGVHSDUDWHO\7KHGLVWULFWFRXUWGHQLHGGHIHQGDQW+XUVWjV DOWHUHG RU REOLWHUDWHG VHULDO QXPEHU LQFUHDVH E\ WZR OHYHOVl  8QLWHG6WDWHVY+XUVW 1R  1R  8QLWHG6WDWHVY+XUVW 

SUHWULDOPRWLRQVWRVXSSUHVVHYLGHQFHVHL]HGLQDZDUUDQWOHVV OHYHOJXLGHOLQHHQKDQFHPHQWDILQGLQJRIDVHSDUDWLRQRI VHDUFK DQG WR VXSSUHVV VWDWHPHQWV PDGH E\ KLP  $W WKH WLPH EHWZHHQ WKH RIIHQVH RI FRQYLFWLRQ DQG WKH RWKHU FRQFOXVLRQ RI D WZRGD\ MXU\ WULDO RQ sXO\    IHORQ\RIIHQVHRUDGLVWLQFWLRQRIFRQGXFWEHWZHHQWKDW GHIHQGDQWZDVIRXQGJXLOW\DVFKDUJHG$VHQWHQFLQJKHDULQJ RFFXUULQJ LQ WKH RIIHQVH RI FRQYLFWLRQ DQG WKH RWKHU ZDVFRQGXFWHGRQ'HFHPEHU DWZKLFKWKHGLVWULFW IHORQ\ RIIHQVH  2WKHUZLVH WKH ZRUG mDQRWKHUl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mDQRWKHUIHORQ\RIIHQVHlDIWHUWKHEXUJODU\RIWKH SDZQ VKRS WKH FRXUW FRQWLQXHG HQKDQFHPHQW SXUVXDQW WR ,,$1$/<6,6 †. E  ZRXOGKDYHEHHQSURSHU,GDW6HHDOVR 8QLWHG6WDWHVY0F'RQDOG)G WK&LU 7ZR RI GHIHQGDQWjV DSSHOODWH FODLPV UHODWH WR GHQLDOV RI   IROORZLQJ6DQGHUV DFFRUG8QLWHG6WDWHVY6]DNDFV PRWLRQVWRVXSSUHVVHYLGHQFH:KHQUHYLHZLQJWKHGHQLDORI )G WK&LU  DPRWLRQWRVXSSUHVVZHUHYLHZWKHGLVWULFWFRXUWjVILQGLQJV RI IDFW IRU FOHDU HUURU DQG LWV FRQFOXVLRQV RI ODZ GH QRYR 7KH IDFWV DQG FRQVHTXHQW UXOLQJ LQ 6DQGHUV DUH FOHDUO\ 8QLWHG6WDWHVY1DYDUUR&DPDFKR)G WK GLVWLQJXLVKDEOH+HUHWKHHYLGHQFHVKRZHGWKDWWKHKDQGJXQ &LU 8QLWHG6WDWHVY:DONHU)G WK VWROHQE\+XUVWLQRQHEXUJODU\ZDVXVHGLQWKHFRPPLVVLRQ &LU FHUWGHQLHG6&W  7KHHYLGHQFHPXVW RI mDQRWKHUl ODWHU EXUJODU\  7KHUH ZDV LQGLVSXWDEO\ D EHUHYLHZHGKRZHYHUmLQWKHOLJKWPRVWOLNHO\WRVXSSRUWWKH VHSDUDWLRQRIWLPHDOEHLWLQGHWHUPLQDWHLQOHQJWKEHWZHHQ GLVWULFW FRXUWjV GHFLVLRQl  1DYDUUR&DPDFKR  )G DW WKHFRPSOHWLRQRIWKHILUVWEXUJODU\RQ0DUFK ZKHQ  WKHKDQGJXQZDVVWROHQDQGWKHFRPPLVVLRQRIWKHVHFRQGDW WKH6PLWKUHVLGHQFHODWHUWKDWGD\GXULQJZKLFK+XUVWFDUULHG WKHVWROHQKDQGJXQ7KHUHZDVDOVRDGLVWLQFWLRQRIFRQGXFW $OWKRXJKERWKEXUJODULHVZHUHFRPPLWWHGRQWKHVDPHGD\  DQGGHIHQGDQWjVPRGXVRSHUDQGLZDVWKHVDPHHDFKEXUJODU\ :H DUH QRW XQPLQGIXO WKDW WKH 6XSUHPH &RXUW KDV GHWHUPLQHG WKDW UHVXOWHG LQ WKH LQYDVLRQ RI GLVWLQFW KRPHV LQ GLIIHUHQW mDOO HYLGHQWLDU\ GHFLVLRQV DUH UHYLHZHG XQGHU DQ DEXVH RI GLVFUHWLRQ FRXQWLHVLQWKHWKHIWRIGLIIHUHQW SHUVRQDOSURSHUW\DQGLQ VWDQGDUGl *HQHUDO (OHF &R Y sRLQHU  86     VHH LQMXU\WRGLIIHUHQWYLFWLPV DOVR 7UHSHO Y 5RDGZD\ ([SUHVV   )G   WK &LU   $ UXOLQJ RQ D PRWLRQ WR VXSSUHVV KRZHYHU LV QRW VLPSO\ D UXOLQJ RQ DQ HYLGHQWLDU\ REMHFWLRQ RU D PRWLRQ LQ OLPLQH EDVHG RQ WKH )HGHUDO 5XOHV RI 7KXVDVWKH6DQGHUVFRXUWUHFRJQL]HGIDFWVVXFKDVWKRVH (YLGHQFH $ PRWLRQ WR VXSSUHVV LV WKH PHFKDQLVP ZKHUHE\ IXQGDPHQWDO KHUH SUHVHQWHG FOHDUO\ IDOO ZLWKLQ WKH FRYHUDJH RI FRQVWLWXWLRQDO ULJKWV JXDUDQWHHG E\ WKH )RXUWK DQG )LIWK $PHQGPHQWV DUH † . E    0RUHRYHU DSSOLFDWLRQ RI WKH HQKDQFHPHQW SURWHFWHG WKURXJK HQIRUFHPHQW RI WKH MXGJHPDGH ([FOXVLRQDU\ 5XOH XQGHU WKHVH IDFWV LV FRQVLVWHQW ZLWK $SSOLFDWLRQ 1RWH  0RWLRQV WR VXSSUHVV QRUPDOO\ LPSOLFDWH PL[HG TXHVWLRQV RI IDFW DQG ODZ UHTXLULQJ WKH ORZHU FRXUW WR PDNH ILQGLQJV RI IDFW DQG FRQFOXVLRQV RI ODZ ZKLFKVWDWHVWKDWmµDQRWKHUIHORQ\RIIHQVHjUHIHU>V@WR UDWKHU WKDQ VLPSO\ LQWHUSUHWLQJ WKH )HGHUDO 5XOHV RI (YLGHQFH :H RIIHQVHVRWKHUWKDQILUHDUPVSRVVHVVLRQRUWUDIILFNLQJ WKHUHIRUH FRQFOXGH WKDW QHLWKHU sRLQHU QRU 7UHSHO KDV FKDQJHG WKH VWDQGDUG RIIHQVHVl  866* † . E   FRPPHQW Q RI UHYLHZ DSSOLFDEOH WR D UXOLQJ RQ D PRWLRQ WR VXSSUHVV  8QLWHG6WDWHVY+XUVW 1R  1R  8QLWHG6WDWHVY+XUVW 

RIIHQVH%DVHGRQ4XLQRQHVjWHVWLPRQ\WKHGLVWULFWFRXUW 7KHUHPDLQLQJDSSHOODWHLVVXHVUHODWHWRVHQWHQFLQJ7KH IRXQG WKDW RQ 0DUFK    GHIHQGDQW +XUVW ZKLOH VHQWHQFLQJFRXUWjVIDFWXDOILQGLQJVLQUHODWLRQWRDSSOLFDWLRQ EXUJODUL]LQJWKH6PLWKUHVLGHQFHFDUULHGDKDQGJXQKHKDG RI WKH 6HQWHQFLQJ *XLGHOLQHV DUH VXEMHFW WR WKH GHIHUHQWLDO VWROHQHDUOLHUWKDWGD\ mFOHDUO\ HUURQHRXVl VWDQGDUG RI UHYLHZ  8QLWHG 6WDWHV Y /DWRXI)G WK&LU  FHUWGHQLHG 4XLQRQHVUHFDOOHGWKDWKHKDGVHHQDPDQLQDQHDUE\ILHOG 6&W   /HJDOFRQFOXVLRQVDUHUHYLHZHGGHQRYR DV WKH\ SXOOHG LQWR WKH GULYHZD\ RI WKH 6PLWK UHVLGHQFH ,G$ILQGLQJRIIDFWZLOOEHGHHPHGFOHDUO\HUURQHRXVRQO\ :KHQ KH UHSRUWHG WKLV ZKLOH LQVLGH WKH 6PLWK UHVLGHQFH ZKHQDOWKRXJKWKHUHPD\EHVRPHHYLGHQFHWRVXSSRUWWKH +XUVWGLVSOD\HGWKHKDQGJXQVD\LQJmWKDWjVZKDW,KDYHWKLV ILQGLQJWKHUHYLHZLQJFRXUWXSRQUHYLHZRIWKHHQWLUHUHFRUG IRUl'HIHQGDQWFRQWHQGVWKDWHYHQLI4XLQRQHVjWHVWLPRQ\ LVOHIWZLWKWKHGHILQLWHDQGILUPFRQYLFWLRQWKDWDPLVWDNHKDV LVFUHGLWHGKLVWKHIWRIWKHKDQGJXQLQRQHEXUJODU\DQGKLV EHHQFRPPLWWHG,G SRVVHVVLRQRILWGXULQJDVHFRQGEXUJODU\ODWHUWKHVDPHGD\ DUHERWKSDUWVRIWKHVDPHFRXUVHRIFRQGXFWDQGVKRXOGQRW $9DOLGLW\RI$XWRPRELOH6HDUFK EHWUHDWHGDVVHSDUDWHRIIHQVHVIRUSXUSRVHVRIHQKDQFHPHQW XQGHU †. E    ,Q VXSSRUW KH FLWHV 8QLWHG 6WDWHV Y 'HIHQGDQW FRQWHQGV WKDW WKH GLVWULFW FRXUW HUUHG ZKHQ LW 6DQGHUV)G  WK&LU   GHQLHG KLV PRWLRQ WR VXSSUHVV HYLGHQFH VHL]HG IURP KLV DXWRPRELOH)LUVWKHDUJXHVWKHFLUFXPVWDQFHVVXUURXQGLQJ ,Q6DQGHUVWKHGHIHQGDQWEXUJODUL]HGDSDZQVKRSVWHDOLQJ WKH VWRSSLQJ RI KLV YHKLFOH ZHUH LQVXIILFLHQW WR FUHDWH ILUHDUPVDPRQJRWKHUWKLQJV+HSODFHGWKHPLQKLVFDUDQG mUHDVRQDEOHVXVSLFLRQlDVUHTXLUHGE\7HUU\Y2KLR  VKRUWO\ WKHUHDIWHU ZDV VWRSSHG E\ WKH SROLFH IRU D WUDIILF 86      6SHFLILFDOO\ KH FRQWHQGV KLV YHKLFOH D YLRODWLRQ7KHILUHDUPVZHUHGLVFRYHUHG'HIHQGDQW6DQGHUV 0HUFXU\&RXJDUFRQWDLQLQJWKUHHSHUVRQVDWWKHWLPHRIWKH SOHG JXLOW\ WR NQRZLQJO\ WUDQVSRUWLQJ VWROHQ ILUHDUPV LQ VWRSGLGQRWPDWFKWKHGHVFULSWLRQJLYHQWRDXWKRULWLHVRID YLRODWLRQRI86&†  L DQGWREHLQJDFRQYLFWHGIHORQ )RUG7KXQGHUELUGFRQWDLQLQJWZRSHUVRQV LQ SRVVHVVLRQ RI ILUHDUPV LQ YLRODWLRQ RI  86& †  J    7KH GLVWULFW FRXUW LPSRVHG D IRXUOHYHO 8QGHU 7HUU\ mZKHUH D ODZ HQIRUFHPHQW RIILFHU ODFNV HQKDQFHPHQWSXUVXDQWWR†. E  7KLV&RXUWUHYHUVHG SUREDEOH FDXVH EXW SRVVHVVHV D UHDVRQDEOH DQG DUWLFXODEOH ILQGLQJWKHHQKDQFHPHQWLPSURSHUEHFDXVHWKHUHZDVRQO\RQH VXVSLFLRQWKDWDSHUVRQKDVEHHQLQYROYHGLQFULPLQDODFWLYLW\ RIIHQVHZKLFKUHVXOWHGLQWKHGHIHQGDQWjVSRVVHVVLRQRIWKH KHPD\GHWDLQWKHVXVSHFWEULHIO\WRLQYHVWLJDWHWKHVXVSLFLRXV ILUHDUPVoWKHEXUJODU\RIWKHSDZQVKRS,GDW 7KH FLUFXPVWDQFHVl8QLWHG6WDWHVY%HQWOH\ )G 6DQGHUVFRXUWUHDVRQHGDVIROORZV  WK&LU  7KH7HUU\GRFWULQHDSSOLHVWRLQYHVWLJDWLYH VWRSVRIPRYLQJDXWRPRELOHV,G7KHDSSOLFDEOHODZLVZHOO $ORJLFDOUHDGLQJRIWKH†. E  *XLGHOLQHWHUP VXPPDUL]HGDVIROORZV mDQRWKHU IHORQ\ RIIHQVHl ZRXOG DW OHDVW UHTXLUH DV D FRQGLWLRQ SUHFHGHQW WR WKH DSSOLFDWLRQ RI D PDMRU IRXU >$@Q LQYHVWLJDWLYH GHWHQWLRQ LV SHUPLVVLEOH ZKHQ LW LV EDVHGXSRQmVSHFLILFDQGDUWLFXODEOHIDFWVZKLFKWDNHQ WRJHWKHUZLWKUDWLRQDOLQIHUHQFHVIURPWKRVHIDFWVlJLYH  ULVHWRDUHDVRQDEOHVXVSLFLRQWKDWWKHLQGLYLGXDOLVZDV 6HFWLRQ . E  UHTXLUHV D IRXUOHYHO RIIHQVH OHYHO HQKDQFHPHQW RU LV DERXW WR EH HQJDJHG LQ FULPLQDO DFWLYLW\    ,Q mLI WKH GHIHQGDQW XVHG RU SRVVHVVHG DQ\ ILUHDUP RU DPPXQLWLRQ LQ FRQQHFWLRQ ZLWK DQRWKHU IHORQ\ RIIHQVH RU SRVVHVVHG RU WUDQVIHUUHG DQ\ UHYLHZLQJDFKDOOHQJHGLQYHVWLJDWLYHVWRSmWKHWRWDOLW\RI ILUHDUP RU DPPXQLWLRQ ZLWK NQRZOHGJH LQWHQW RU UHDVRQ WR EHOLHYH WKDW WKHFLUFXPVWDQFHVnWKHZKROHSLFWXUHnPXVWEHWDNHQ LW ZRXOG EH XVHG RU SRVVHVVHG LQ FRQQHFWLRQ ZLWK DQRWKHU IHORQ\ RIIHQVHl LQWR DFFRXQWl   )XUWKHUPRUH m>L@Q DVVHVVLQJ WKH  8QLWHG6WDWHVY+XUVW 1R  1R  8QLWHG6WDWHVY+XUVW 

UHDVRQDEOHQHVVRIWKHVWRSWKHIDFWVDUHµMXGJHGDJDLQVW 7KHQRQH[KDXVWLYHOLVWRIH[DPSOHVRIREVWUXFWLYHFRQGXFW DQREMHFWLYHVWDQGDUG  ZRXOGWKHIDFWVDYDLODEOHWRWKH IRXQG LQ WKH 6HQWHQFLQJ *XLGHOLQHV &RPPHQWDU\ LQFOXGHV RIILFHU DW WKH PRPHQW RI WKH VHL]XUH RU WKH VHDUFK mWKUHDWHQLQJ LQWLPLGDWLQJ RU RWKHUZLVH XQODZIXOO\ mZDUUDQWDPDQRIUHDVRQDEOHFDXWLRQLQWKHEHOLHIlWKDW LQIOXHQFLQJ D FRGHIHQGDQW ZLWQHVV RU MXURU GLUHFWO\ RU WKHDFWLRQWDNHQZDVDSSURSULDWH"jl LQGLUHFWO\ RU DWWHPSWLQJ WR GR VRl  866* † & FRPPHQW Q  D   ,W LV IRU WKH GLVWULFW FRXUW WR PDNH D 8QLWHG6WDWHVY%DUUHWW )G WK&LU  IDFWXDOILQGLQJZKHWKHUDGHIHQGDQWREVWUXFWHGRUDWWHPSWHG FLWDWLRQV RPLWWHG   :KLOH DQ RIILFHU PDNLQJ D 7HUU\ VWRS WRREVWUXFWMXVWLFH&UHGLELOLW\GHWHUPLQDWLRQVDUHLQWHJUDOWR PXVW KDYH PRUH WKDQ D KXQFK mUHDVRQDEOH VXVSLFLRQl LV WKLV IDFWILQGLQJ UROH  2QFH D VHQWHQFLQJ FRXUW ILQGV E\ D FRQVLGHUDEO\ OHVV WKDQ SURRI RI ZURQJGRLQJ E\ D SUHSRQGHUDQFHRIWKHHYLGHQFHWKDWDGHIHQGDQWWKUHDWHQHGRU SUHSRQGHUDQFH RI WKH HYLGHQFH  8QLWHG 6WDWHV Y 6RNRORZ LQWLPLGDWHGDSRWHQWLDOZLWQHVVWKHFRXUWKDVQRGLVFUHWLRQ LW  86    PXVWHQKDQFHWKHVHQWHQFHDFFRUGLQJO\6HH=DMDF)GDW  $FDUURXJKO\PDWFKLQJWKHDSSHDUDQFHRI+XUVWjVLQFRORU DQGVW\OHZDVUHSRUWHGO\VHHQRXWVLGHWKH6PLWKUHVLGHQFHDW $WWKHVHQWHQFLQJKHDULQJGHIHQGDQW+XUVWDGPLWWHGKDYLQJ WKHWLPHWKHEXUJODU\RFFXUUHG0LQXWHVODWHUDQRIIGXW\ DWWDFNHG4XLQRQHVDWWKHMDLOFKXUFKVHUYLFH+RZHYHUKH RIILFHUREVHUYHGDYHKLFOHPDWFKLQJWKHUHSRUWHGGHVFULSWLRQ GLVDYRZHG DQ\ LQWHQW WR GHWHU 4XLQRQHV IURP FRRSHUDWLQJ WUDYHOLQJ VRXWKERXQG DZD\ IURP WKH YLFLQLW\ RI WKH 6PLWK ZLWK WKH JRYHUQPHQW  4XLQRQHVj FRQWUDU\ LPSUHVVLRQ RI UHVLGHQFHDWKLJKVSHHGDQGQRWHGWKHIURQWJULOOZDVPLVVLQJ GHIHQGDQWjVPRWLYHVSUHVHQWHGDTXHVWLRQRIFUHGLELOLW\IRUWKH :KHQ'HSXW\,OHVLQWKHVXEMHFWYHKLFOHj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jVGHWHUPLQDWLRQZDVFOHDUO\HUURQHRXV IDFWV ZKLFK WDNHQ WRJHWKHU ZLWK UHDVRQDEOH LQIHUHQFHV $FFHSWLQJ WKHUHIRUH DV ZH PXVW WKH WUXWKIXOQHVV RI FHUWDLQO\ JDYH ULVH WR UHDVRQDEOH VXVSLFLRQ RI FULPLQDO 4XLQRQHVj WHVWLPRQ\ ZH FRQFOXGH WKH GLVWULFW FRXUWjV DFWLYLW\7KHSUHVHQFHRIWKUHHSHUVRQVLQWKHFDUUDWKHUWKDQ GHWHUPLQDWLRQ ZDV VXSSRUWHG E\ D SUHSRQGHUDQFH RI WKH WZRLVDGLVFUHSDQF\WKDWPLJKWUHDVRQDEO\EHH[SODLQHGLQ HYLGHQFH  :H IXUWKHU ILQG WKDW GHIHQGDQWjV LQWLPLGDWLQJ DQ\QXPEHURIZD\VDQGGRHVQRWGHIHDWWKHDVVHVVPHQWWKDW FRQGXFWZDVREVWUXFWLYHRIMXVWLFHDQGZHXSKROGWKHWZR 'HSXW\ ,OHV KDG UHDVRQDEOH JURXQGV WR LQYHVWLJDWH IXUWKHU OHYHOHQKDQFHPHQWIRUREVWUXFWLRQRIMXVWLFH 7KHLQYHVWLJDWLYHVWRSRI+XUVWjVYHKLFOHZDVQRWSUHPLVHGRQ D PHUH KXQFK EXW RQ VSHFLILF DQG DUWLFXODEOH IDFWV )  (QKDQFHPHQW IRU 3RVVHVVLRQ RI )LUHDUP LQ &RQVLGHULQJWKHWRWDOLW\RIWKHFLUFXPVWDQFHVWKHLQYHVWLJDWLYH &RQQHFWLRQZLWK$QRWKHU)HORQ\ VWRSZDVFOHDUO\MXVWLILHG 3XUVXDQW WR 866* † . E   WKH GLVWULFW FRXUW LPSRVHG D IRXUOHYHO HQKDQFHPHQW ILQGLQJ GHIHQGDQW KDG XVHGRUSRVVHVVHGDILUHDUPLQFRQQHFWLRQZLWKDQRWKHUIHORQ\  'HSXW\ ,OHV WHVWLILHG WKDW D &RXJDU DQG D 7KXQGHUELUG mORRN SUDFWLFDOO\ DOLNHl +H FKDUDFWHUL]HG WKHP DV mVLVWHU PRGHOVl     mLGHQWLFDO H[FHSW IRU D IHZ FRVPHWLF GLIIHUHQFHVl  8QLWHG6WDWHVY+XUVW 1R  1R  8QLWHG6WDWHVY+XUVW 

(2EVWUXFWLRQRIsXVWLFH(QKDQFHPHQW 1H[W GHIHQGDQW DUJXHV WKDW HYHQ LI WKH 7HUU\ VWRS ZDV SURSHU MXVWLI\LQJ D UHDVRQDEOH VHDUFK IRU ZHDSRQV WKH 7KH GLVWULFW FRXUW DSSOLHG D WZROHYHO HQKDQFHPHQW IRU FRPSOHWHLQYHQWRU\VHDUFKRIKLVFDUZLWKRXWDZDUUDQWZDV REVWUXFWLRQ RI MXVWLFH SXUVXDQW WR 866* † &7KH QRW MXVWLILHG  7KH GLVWULFW FRXUW IRXQG KRZHYHU WKDW GLVWULFWFRXUWj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jV GHQLDO RI WKH PRWLRQ WR DUJXHVLWZDVQRWPDWHULDOWHVWLPRQ\'HIHQGDQWFRQWHQGVD VXSSUHVV ZH PXVW FRQVLGHU WKH HYLGHQFH LQ WKH OLJKW PRVW ILQGLQJ RI PDWHULDOLW\ LV SUHUHTXLVLWH WR HQKDQFHPHQW IRU IDYRUDEOHWRWKHJRYHUQPHQW,GDW SHUMXU\SXUVXDQWWR†&6HH8QLWHG6WDWHVY'XQQLJDQ  86      8QLWHG 6WDWHV Y 6SHDUV   )G 7KH JRYHUQPHQW KDG WKH EXUGHQ RI SURYLQJ GHIHQGDQWjV  WK&LU  +HDUJXHVWKHGLVWULFWFRXUWGLG FRQVHQWE\FOHDUDQGSRVLWLYHWHVWLPRQ\,GDW7KURXJK QRWPDNHVXFKDPDWHULDOLW\ILQGLQJ WKHWHVWLPRQ\RI,OHVDQG*LEVRQWKHJRYHUQPHQWVDWLVILHGLWV EXUGHQRIVKRZLQJWKDWGHIHQGDQWYROXQWDULO\FRQVHQWHGWRWKH 7KH JRYHUQPHQW FRQWHQGV WKDW HYHQ LI WKH GLVWULFW FRXUW VHDUFK  'HIHQGDQW RIIHUV QR UHDVRQ WR VHFRQGJXHVV WKH IDLOHG WR PDNH D VXIILFLHQWO\ H[SOLFLW GHWHUPLQDWLRQ RI WKH GLVWULFWFRXUWjVFUHGLELOLW\GHWHUPLQDWLRQLQWKLVUHJDUG7KH PDWHULDOLW\ RI GHIHQGDQWjV YDULRXV IDOVH VWDWHPHQWV WKH PDJLVWUDWH MXGJH ZKRVH UHSRUW DQG UHFRPPHQGDWLRQ ZDV REVWUXFWLRQ RI MXVWLFH HQKDQFHPHQW LV SURSHU EDVHG RQ DSSURYHG E\ WKH GLVWULFW FRXUW FRUUHFWO\ REVHUYHG WKDW GHIHQGDQWjVLQWLPLGDWLRQRI4XLQRQHV4XLQRQHVWHVWLILHGDW GHIHQGDQWjV FUHGLELOLW\ ZDV XQGHUFXW E\ KLV LQDELOLW\ WR GHIHQGDQWjVVHQWHQFLQJWKDWGHIHQGDQWKDGWKUHDWHQHGKLPDQG H[SODLQWKHSUHVHQFHRIJXQVDQGRWKHUVWROHQSURSHUW\LQWKH SK\VLFDOO\DVVDXOWHGKLPDWDFKXUFKVHUYLFHLQWKHMDLOIRU FDU7KHUHLVQREDVLVLQWKHUHFRUGWRFRQFOXGHWKHGLVWULFW EHLQJDmVQLWFKl+HDOVRWHVWLILHGWKDWGHIHQGDQWKDGLQFLWHG FRXUW FOHDUO\ HUUHG LQ ILQGLQJ WKDW GHIHQGDQW YROXQWDULO\ RWKHULQPDWHVWRDVVDXOWKLPIRUWKHVDPHUHDVRQ4XLQRQHV FRQVHQWHGWRWKHVHDUFK VXEVHTXHQWO\ZLWKGUHZKLVDJUHHPHQWWRFRRSHUDWHZLWKWKH DXWKRULWLHV'HIHQGDQWFRQWHQGVWKDW4XLQRQHVjWHVWLPRQ\LV QRWFUHGLEOH  $OWKRXJK GHIHQGDQW KDV QRW PDGH WKH DUJXPHQW RQ DSSHDO LW PLJKW UHDVRQDEO\ EH TXHVWLRQHG ZKHWKHU GHIHQGDQWjV UHVLVWDQFH WR KDQGFXIILQJ DQG IOLJKW IURP WKH VFHQH LPSOLHG D ZLWKGUDZDO RI FRQVHQW )LUVW RI DOO XQGHU WKH FLUFXPVWDQFHV ZKHUH GHIHQGDQW ZDV UHDVRQDEO\ VXVSHFWHG RI  6HFWLRQ & SURYLGHV m,I $ WKH GHIHQGDQW ZLOOIXOO\ REVWUXFWHG KDYLQJ MXVW EXUJODUL]HG D KRPH DQG PLJKW UHDVRQDEO\ KDYH EHHQ GHHPHG RU LPSHGHG RU DWWHPSWHG WR REVWUXFW RU LPSHGH WKH DGPLQLVWUDWLRQ RI DUPHG DQG GDQJHURXV WKH RIILFHUVj DWWHPSW WR XVH KDQGFXIIV DV D MXVWLFH GXULQJ WKH LQYHVWLJDWLRQ SURVHFXWLRQ RU VHQWHQFLQJ RI WKH LQVWDQW SUHFDXWLRQDU\ PHDVXUH WR VHFXUH WKHLU VDIHW\ GXULQJ WKH YHKLFOH VHDUFK ZDV RIIHQVH RI FRQYLFWLRQ DQG % WKH REVWUXFWLYH FRQGXFW UHODWHG WR L WKH QRW XQUHDVRQDEOH RU RWKHUZLVH LPSURSHU $00 +RXVWRQ Y &ODUN &RXQW\ GHIHQGDQWjV RIIHQVH RI FRQYLFWLRQ DQG DQ\ UHOHYDQW FRQGXFW RU LL D 6KHULII 'HSXW\ sRKQ 'RHV  )G    WK &LU  FORVHO\ UHODWHG RIIHQVH LQFUHDVH WKH RIIHQVH OHYHO E\  OHYHOVl SUHFDXWLRQDU\ KDQGFXIILQJ UHDVRQDEO\ QHFHVVDU\ IRU SURWHFWLRQ RI RIILFHUV  8QLWHG6WDWHVY+XUVW 1R  1R  8QLWHG6WDWHVY+XUVW 

,Q DGGLWLRQ WKH GLVWULFW FRXUW FRQFOXGHG WKH VHDUFK ZDV FRQVLGHUHGRQDSSHDO $FFRUGLQJO\GHIHQGDQWjVFODLPRI ODZIXOO\FRQGXFWHGDVDQLQYHQWRU\VHDUFKRIDQLPSRXQGHG HUURULVUHMHFWHG YHKLFOH,WLVZHOOHVWDEOLVKHGWKDWODZHQIRUFHPHQWRIILFHUV PD\ PDNH D ZDUUDQWOHVV VHDUFK RI D OHJLWLPDWHO\ VHL]HG '(QKDQFHPHQWIRU1XPEHURI)LUHDUPV YHKLFOH SURYLGHG WKH LQYHQWRU\ LV FRQGXFWHG DFFRUGLQJ WR VWDQGDUGL]HG FULWHULD RU HVWDEOLVKHG URXWLQH  &RORUDGR Y $W VHQWHQFLQJ WKH GLVWULFW FRXUW DSSOLHG D VL[OHYHO %HUWLQH   86   Q    6RXWK 'DNRWD Y HQKDQFHPHQW SXUVXDQW WR 866* † . E   2SSHUPDQ86    &RQVLGHULQJGHIHQGDQWjVUHOHYDQWFRQGXFWGXULQJDFRPPRQ VFKHPHRIEXUJODULHVFRPPLWWHGRYHUDVL[PRQWKSHULRGWKH $JDLQ WKH UHSRUW DQG UHFRPPHQGDWLRQ RI WKH PDJLVWUDWH FRXUWIRXQGWKDWPRUHWKDQILUHDUPVZHUHVWROHQDQGVROG MXGJHZKRFRQGXFWHGWKHKHDULQJRQWKHPRWLRQWRVXSSUHVV 'HIHQGDQWDFNQRZOHGJHVWKHFRXUWjVILQGLQJLVVXSSRUWHGE\ H[SODLQVZK\EDVHGRQWKHWHVWLPRQ\RI,OHVDQG*LEVRQWKH WKHWHVWLPRQ\RIFRGHIHQGDQW4XLQRQHV<HWKHFRQWHQGV LQYHQWRU\ VHDUFK RI GHIHQGDQWjV FDU ZDV MXVWLILHG DQG 4XLQRQHVjWHVWLPRQ\LVXQFRUURERUDWHGDQGQRWFUHGLEOH DSSURSULDWH,QDVPXFKDV+XUVWKDGIOHGWKHVFHQHRVWHQVLEO\ DEDQGRQLQJ WKH YHKLFOH DQG WKH RIILFHUV KDG DOUHDG\ 4XLQRQHV WHVWLILHG DW WKH VHQWHQFLQJ KHDULQJ WKDW KH DQG XQFRYHUHGDORDGHGKDQGJXQXQGHUWKHGULYHUjVVHDWGXULQJ GHIHQGDQW +XUVW EHJDQ WR FRPPLW EXUJODULHV WRJHWKHU LQ WKHLUVHDUFKIRUZHDSRQVLQFLGHQWWRWKH7HUU\VWRSWKHVHL]XUH 6HSWHPEHU +HWHVWLILHGWKDWWKH\W\SLFDOO\FRPPLWWHG DQGLQYHQWRU\LQJRIWKHYHKLFOHZHUHMXVWLILHGWRSURWHFWWKH EXUJODULHVRQWKUHHRUIRXUGD\VSHUZHHNEXUJODUL]LQJWZR SXEOLFSURWHFWWKHSURSHUW\ULJKWVRIWKHYHKLFOHj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jV IOLJKW LV VHQWHQFLQJ FRXUWj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o mZKDW ZRXOG WKH W\SLFDO 4XLQRQHVjFUHGLELOLW\RUGHWHUPLQDWLRQRIGHIHQGDQWjVUHOHYDQW UHDVRQDEOH SHUVRQ KDYH XQGHUVWRRG E\ WKH H[FKDQJH EHWZHHQ WKH RIILFHU FRQGXFW:HWKHUHIRUHILQGQRHUURULQWKHGLVWULFWFRXUWjVVL[ DQG WKH VXVSHFW"l ,G TXRWLQJ )ORULGD Y s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

7KH LQFULPLQDWLQJ QDWXUH RI WKH VWDWHPHQW LV PDUJLQDO o URXWLQH VWDQGDUGL]HG SURFHGXUHV  %HFDXVH GHIHQGDQW KDV HVSHFLDOO\FRQVLGHULQJWKHVWURQJSK\VLFDOHYLGHQFHDJDLQVW IDLOHG WR GHPRQVWUDWH WKDW WKH RIILFHUV LPSRXQGHG DQG GHIHQGDQWDQGFDQQRWUHDVRQDEO\EHGHHPHGWRKDYHDIIHFWHG LQYHQWRULHGWKHFDUmLQEDGIDLWKRUIRUWKHVROHSXUSRVHRI GHIHQGDQWjVVXEVWDQWLDOULJKWV LQYHVWLJDWLRQlWKHLQYHQWRU\VHDUFKZDVSURSHUO\KHOGODZIXO 6HH8QLWHG6WDWHVY+DUYH\)G  WK&LU  $FFRUGLQJO\ZHILQGQRHUURULQWKHGLVWULFWFRXUWjVGHQLDO TXRWLQJ%HUWLQH 86DW  RIGHIHQGDQWjVPRWLRQWRVXSSUHVVKLVVWDWHPHQW $FFRUGLQJO\WKHPRWLRQWRVXSSUHVVHYLGHQFHVHL]HGIURP &8QDGGUHVVHG2EMHFWLRQVWR3UHVHQWHQFH5HSRUW WKHDXWRPRELOHZDVSURSHUO\GHQLHG 'HIHQGDQW FRQWHQGV WKH GLVWULFW FRXUW HUUHG E\ IDLOLQJ WR %$GPLVVLELOLW\RI'HIHQGDQWjV6WDWHPHQW H[SUHVVO\ UXOH RQ WZR RI KLV REMHFWLRQV WR WKH SUHVHQWHQFH UHSRUW6SHFLILFDOO\KHFRQWHQGVWKHFRXUWIDLOHGWRUXOHRQKLV 2Q0D\ ZKLOHGHWDLQHGDWWKH)HQWUHVV&RXQW\ REMHFWLRQVWRDUHFRPPHQGHGWZROHYHOHQKDQFHPHQWRIWKH sDLOGHIHQGDQWPDGHFHUWDLQVWDWHPHQWVWR$7)6SHFLDO$JHQW EDVHRIIHQVHOHYHOSXUVXDQWWR866*†. E   LIDQ\ 9HQGDUU\OsHQNLQVLQWKHSUHVHQFHRI.QR[YLOOH3ROLFH2IILFHU ILUHDUP ZDV VWROHQ  DQG D UHFRPPHQGHG IRXUOHYHO sDPHV &ODLERUQH  ,Q PRYLQJ WR VXSSUHVV RQH RI WKH HQKDQFHPHQWSXUVXDQWWR†. E   LIDILUHDUPZDVXVHG VWDWHPHQWVGHIHQGDQWFRQWHQGHGLWKDGEHHQWDNHQLQYLRODWLRQ LQFRQQHFWLRQZLWKDQRWKHUIHORQ\RIIHQVH ,QUHVSRQVHWKH RIKLV0LUDQGDULJKWV JRYHUQPHQW FRUUHFWO\ FRQWHQGV WKDW GHIHQGDQW HIIHFWLYHO\ ZDLYHG KLV ULJKW WR REMHFW   E\ IDLOLQJ WR DOOHJH LQ HLWKHU $WWKHVXSSUHVVLRQKHDULQJsHQNLQVWHVWLILHGWKDWKHILUVW REMHFWLRQ WKDW WKH UHSRUW FRQWDLQV IDFWXDO LQDFFXUDFLHV DQG H[SODLQHG WR GHIHQGDQW +XUVW WKDW KH DQG &ODLERUQH ZHUH   E\ IDLOLQJ WR VSHFLILFDOO\ EULQJ WKHVH PDWWHUV WR WKH LQWHUHVWHGLQWDONLQJZLWKKLPDERXWEXUJODULHVLQZKLFKKH DWWHQWLRQRIWKHFRXUWGXULQJWKHVHQWHQFLQJKHDULQJ PD\KDYHEHHQLQYROYHGsHQNLQVVDLGKHUHDGGHIHQGDQWKLV 0LUDQGD ULJKWV IURP D SUHSULQWHG FDUG  'HIHQGDQW 8QGHU)HG5&ULP3 F  WKHVHQWHQFLQJFRXUWLV SXUSRUWHGO\ UHVSRQGHG WKDW KH XQGHUVWRRG KLV ULJKWV EXW UHTXLUHGWRHLWKHUPDNHDILQGLQJRQHDFKPDWWHUFRQWURYHUWHG UHIXVHGWRVLJQWKHFDUGVD\LQJKHZDVZLOOLQJWRDQVZHURQO\ RUGHWHUPLQHWKDWQRILQGLQJLVQHFHVVDU\EHFDXVHWKHPDWWHU VSHFLILFTXHVWLRQV:KHQsHQNLQVDQG&ODLERUQHH[SODLQHG ZLOO QRW DIIHFW VHQWHQFLQJ  7KLV &RXUW UHTXLUHV OLWHUDO WKDWWKH\ZHUHSDUWLFXODUO\LQWHUHVWHGLQLQIRUPDWLRQUHODWLQJ FRPSOLDQFHZLWK5XOH F  6HH8QLWHG6WDWHVY0RQXV WRILUHDUPVWUDIILFNLQJGHIHQGDQWVDLGKHZDVQRWZLOOLQJDV )G  WK&LU  8QLWHG6WDWHVY7DFNHWW D FRQYLFWHG IHORQ WR GLVFXVV VWROHQ ILUHDUPV  $V WKH )G WK&LU  8QLWHG6WDWHVY)U\ FRQYHUVDWLRQVHHPHGWREHFRPLQJWRDQHQGsHQNLQVDGYLVHG )G WK&LU  <HWZKHUHGHIHQGDQWGLG GHIHQGDQW WKDW mZHjYH JRW JRRG LQIRUPDWLRQ RQ \RXl QRWHYHQDVVHUWWKDWWKHREMHFWHGWRUHFRPPHQGDWLRQVZHUH 'HIHQGDQWUHSRUWHGO\UHVSRQGHGWKDWKHNQHZWKH\JRWWKHLU EDVHG RQ IDOVH RU XQUHOLDEOH LQIRUPDWLRQ DQG GLG QRW LQIRUPDWLRQIURP(GZLQ 4XLQRQHV $QGKHDGGHGm,WZDV H[SUHVVO\ FDOO WKHP WR WKH FRXUWjV DWWHQWLRQ GXULQJ WKH KLV >4XLQRQHVj@ LGHD WR GR WKH EXUJODULHVl   7KLV LV WKH VHQWHQFLQJKHDULQJLWFDQKDUGO\EHVDLGWKDWWKHVHPDWWHUV VWDWHPHQWWKHGLVWULFWFRXUWUHIXVHGWRVXSSUHVV ZHUH VXIILFLHQWO\ mFRQWURYHUWHGl WR WULJJHU WKH VHQWHQFLQJ FRXUWjVIDFWILQGLQJGXW\XQGHU5XOH F  6HH)U\ &ODLERUQHjVDFFRXQWRIWKHHQFRXQWHUZDVVXEVWDQWLDOO\WKH )G DW   LQDFFXUDFLHV QRW SURSHUO\ SUHVHQWHG WR WKH VDPH DV WKDW JLYHQ E\ sHQNLQV  'HIHQGDQWjV DFFRXQW ZDV VHQWHQFLQJ FRXUW DW WKH WLPH RI VHQWHQFLQJ PD\ QRW EH PDWHULDOO\GLIIHUHQWRQO\LQWKDWKHGLGQRWUHPHPEHUsHQNLQV UHDGLQJ KLP WKH 0LUDQGD ULJKWV  <HW GHIHQGDQW IUHHO\  8QLWHG6WDWHVY+XUVW 1R  1R  8QLWHG6WDWHVY+XUVW 

DGPLWWHGDWWKHVXSSUHVVLRQKHDULQJWKDWKHZDVIDPLOLDUZLWK WR HOLFLW LQFULPLQDWLQJ LQIRUPDWLRQ IURP KLP DIWHU KH KDG KLV ULJKW WR UHPDLQ VLOHQW KDYLQJ EHHQ LQWHUYLHZHG E\ ODZ DWWHPSWHGWRFXWRIITXHVWLRQLQJ HQIRUFHPHQWRIILFHUVEHIRUH+HDOVRDGPLWWHGKHZDVZLOOLQJ WR VSHDN ZLWK WKH RIILFHUV SURYLGHG WKH\ DVNHG VSHFLILF 'HIHQGDQWj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s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mLQWHUURJDWLRQlXQGHU0LUDQGDUHIHUVQRW 6HFRQG WKH PHUH VWDWHPHQW E\ sHQNLQV WKDW mZHjYH JRW RQO\ WR H[SUHVV TXHVWLRQLQJ EXW DOVR WR DQ\ ZRUGV RU JRRG LQIRUPDWLRQ RQ \RXl YLHZHG LQ FRQWH[W FRQWDLQV QR DFWLRQV RQ WKH SDUW RI WKH SROLFH RWKHU WKDQ WKRVH FRPSXOVLYHHOHPHQWVXJJHVWLQJD)LIWK$PHQGPHQWYLRODWLRQ QRUPDOO\DWWHQGDQWWRDUUHVWDQGFXVWRG\ WKDWWKHSROLFH XQGHUWKHFLUFXPVWDQFHV0RUHRYHUGHIHQGDQWjVVWDWHPHQW VKRXOG NQRZ DUH UHDVRQDEO\ OLNHO\ WR HOLFLW DQ UHODWLQJWRWKHEXUJODULHVZDVZLWKLQWKHVFRSHRIWKHVXEMHFW LQFULPLQDWLQJUHVSRQVHIURPWKHVXVSHFW PDWWHUKHKDGEHHQJHQHUDOO\ZLOOLQJWRGLVFXVV,WZDVQRW GLUHFWO\ UHODWHG WR WKH VSHFLILF VXEMHFW LH ILUHDUPV ZLWK )RRWQRWHVRPLWWHG 7KXVLQWHUURJDWLRQWULJJHUVWKHQHHGWR UHVSHFW WR ZKLFK KH KDG GHFOLQHG WR DQVZHU TXHVWLRQV  ,Q JLYHWKH0LUDQGDZDUQLQJV RWKHU ZRUGV WKHUH LV QRWKLQJ LQ WKH QDWXUH RI GHIHQGDQWjV VWDWHPHQW WR VXJJHVW LW ZDV WKH SURGXFW RI FRHUFLRQ RU 'HIHQGDQWKDVQRWFKDOOHQJHGWKHGLVWULFWFRXUWjVILQGLQJ FRPSXOVLRQ  m$Q\ VWDWHPHQW JLYHQ IUHHO\ DQG YROXQWDULO\ WKDW KH KDG EHHQ JLYHQ WKH 0LUDQGD ZDUQLQJV DQG ZDV ZLWKRXWDQ\FRPSHOOLQJLQIOXHQFHVLVRIFRXUVHDGPLVVLEOHLQ RWKHUZLVHDZDUHRIKLVULJKWWRUHPDLQVLOHQW+HPDLQWDLQV HYLGHQFHl,QQLV86DW  TXRWLQJ0LUDQGDY KRZHYHUWKDWKHKDGLQYRNHGKLVULJKWWRUHPDLQVLOHQWZKHQ $UL]RQD86   7KHGLVWULFWFRXUWjV KHFKRVHQRWWRDQVZHUWKHRIILFHUVjTXHVWLRQVDERXWILUHDUPV ILQGLQJWKDWGHIHQGDQWjVVWDWHPHQWZDVYROXQWDULO\PDGHKDV 6WDWHPHQWVPDGHWKHUHDIWHUKHFRQWHQGVDUHDGPLVVLEOHRQO\ WKXVQRWEHHQVKRZQWREHFOHDUO\HUURQHRXV LI WKH RIILFHUV VFUXSXORXVO\ KRQRUHG KLV ULJKW WR FXW RII TXHVWLRQLQJ6HH0LFKLJDQY0RVOH\86     7KLUGHYHQLIWKHGLVWULFWFRXUWZHUHGHHPHGWRKDYHHUUHG 'HIHQGDQW PDLQWDLQV 6SHFLDO $JHQW sHQNLQV GLG QRW LQ DGPLWWLQJ GHIHQGDQWjV VWDWHPHQW WKH HUURU ZDV FOHDUO\ VFUXSXORXVO\KRQRUKLV)LIWK$PHQGPHQWULJKWEXWDWWHPSWHG KDUPOHVVDQGLVSURSHUO\GLVUHJDUGHG)HG5&ULP3 D 

Reference

Status
Published