United States v. Grubich

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$SSHOOHH    1RV Y  !  5(%(&&$ . &5266/( L@QDOOFULPLQDOSURVHFXWLRQVWKH KDGFRQWULEXWHGDQRWKHUIRUWKHSXUFKDVH DFFXVHGVKDOOHQMR\WKHULJKWWREHFRQIURQWHGZLWKWKH ZLWQHVVHV DJDLQVW KLPl  86 & $% DPHQG 9,  ,Q &URVVOH\DQG*UXELFKZHUHERWKFKDUJHGZLWKFRQVSLUDF\WR %URRNKDUW Y sDQLV  86    WKH 6XSUHPH FRPPLWPDLOIUDXGDQGZLWKLQGLYLGXDOPDLOIUDXGYLRODWLRQV &RXUWKHOGWKDWDGHIHQGDQWjVFRQVWLWXWLRQDOULJKWWRFRQIURQW LQ DQ LQGLFWPHQW LVVXHG RQ $SULO    &URVVOH\ ZDV ZLWQHVVHV FRXOG QRW EH ZDLYHG E\ FRXQVHO ZKHUH FRXQVHO DUUDLJQHGRQ0D\DQG*UXELFKZDVDUUDLJQHGRQ0D\ DJUHHGWRDWUXQFDWHGSULPDIDFLHWULDOLQZKLFKKHZRXOGQRW 7ULDOEHJDQRQsXQHDQGODVWHGIRUDGD\ EHDEOHWRFURVVH[DPLQHWKHJRYHUQPHQWjVZLWQHVVHVGHVSLWH DQGDKDOI%RWK&URVVOH\DQG*UXELFKWHVWLILHGDWWULDODQG WKH GHIHQGDQWjV H[SUHVVHG GHVLUH WR SOHDG QRW JXLOW\  7KH DGPLWWHGWRFDVKLQJWKHFKHFNVEXWGHQLHGDQ\NQRZOHGJHRI &RXUW UHDVRQHG WKDW m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mVKH WRRN DIILUPDWLYH DFWLRQ WR GHIHDW RU GLVDYRZ WKH WR0F&DOLVWHU6LPLODUO\*UXELFKWHVWLILHGWKDW0F&DOLVWHU SXUSRVHRIWKHFRQVSLUDF\l8QLWHG6WDWHVY/DVK)G DVNHGKHUWRFDVKDFODLPFKHFNEHFDXVHKHQHHGHGVRPHKHOS WK&LUFHUWGHQLHG86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jV HQWU\ RI MXGJPHQW QHFHVVDU\LQIRUPDWLRQ7KLVFKHFNZDVLVVXHGE\5HSXEOLF &URVVOH\DQG*UXELFKHDFKILOHGDWLPHO\QRWLFHRIDSSHDO &ODLPVRQ$SULODQGZDVVHQWRXWWKHVDPHRUQH[W EXVLQHVV GD\  7KHVH RYHUW DFWV LQ IXUWKHUDQFH RI WKH ,,$1$/ W@RIXOILOOWKLVSROLF\WKHGD\SHULRGVKRXOG LQ&RXQW2QHRIWKH,QGLFWPHQW$VGLVFXVVHGDERYHLQRUGHU FRPPHQFHRQO\DIWHUWKHLQGLFWPHQWRULQIRUPDWLRQKDVEHHQ WR HVWDEOLVK D FRQVSLUDF\ YLRODWLRQ mWKH JRYHUQPHQW PXVW ILOHGDQGPDGHSXEOLFDQGDGHIHQGDQWKDVILUVWDSSHDUHGZLWK SURYH DQ DJUHHPHQW EHWZHHQ WZR RU PRUH SHUVRQV WR DFW FRXQVHOHQJDJHGRUDSSRLQWHGWRUHSUHVHQWKLPDWWULDOl,G WRJHWKHU LQ FRPPLWWLQJ DQ RIIHQVH DQG DQ RYHUW DFW LQ VHHDOVR8QLWHG6WDWHVY6WRUP)GWK&LU IXUWKHUDQFHRIWKHFRQVSLUDF\l8QLWHG6WDWHVY0LOOLJDQ DGRSWLQJWKH'DO\FRXUWjVUHDVRQLQJDQGFRPPHQFLQJ )GWK&LUFHUWGHQLHG86 WKHWKLUW\GD\SHULRGRQWKHGDWHRQZKLFKWKHGLVWULFWFRXUW VHH DOVR 8QLWHG 6WDWHV Y $EOHV  )G   WK DSSRLQWHGQHZFRXQVHODIWHUGHWHUPLQLQJGHIHQGDQWFRXOGQR &LUFHUW GHQLHG  86   8QLWHG 6WDWHV Y ORQJHUEHUHSUHVHQWHGE\SUHYLRXVFRXQVHOGXHWRDFRQIOLFWRI 5RJHUV)GWK&LU LQWHUHVWFHUWGHQLHG86EXWVHH8QLWHG 6WDWHV Y 'DUE\  )G   WK &LU  *UXELFKDUJXHVWKDWWKHJRYHUQPHQWIDLOHGWRHVWDEOLVKWKDW UHMHFWLQJWKH1LQWK&LUFXLWjVDSSURDFKDQGFRQFOXGLQJWKDW RQHRIWKHQHFHVVDU\HOHPHQWVRIDFRQVSLUDF\WKHH[LVWHQFH EHFDXVH&RQJUHVVGLGQRWSODFHDQ\TXDOLILFDWLRQRQWKHWHUP RI D FRQVSLUDF\ DJUHHPHQW RFFXUUHG ZLWKLQ WKH ILYH\HDU mFRXQVHOl &RQJUHVV LQWHQGHG † FjV WKLUW\GD\ VWDWXWH RI OLPLWDWLRQV  6KH FRQWHQGV WKDW WKH VWDWXWH RI ZDLWLQJSHULRGWRFRPPHQFHZKHQDGHIHQGDQWILUVWDSSHDUV OLPLWDWLRQVEHJDQWRUXQRQWKHGDWHRQZKLFKVKHDJUHHGWR WKURXJKDQ\FRXQVHOFHUWGHQLHG86 FDVK D FKHFN IRU 0F&DOLVWHU DQG SURYLGHG WKH QHFHVVDU\ LQIRUPDWLRQWRKLPVRPHWLPHEHIRUHWKHFKHFNZDVLVVXHGRQ ,QDPRUHUHFHQWRSLQLRQWKH1LQWK&LUFXLWFODULILHGWKDWWKH $SULO7KHJRYHUQPHQWFRUUHFWO\SRLQWVRXWWKDWWKH IDLOXUHRIDGHIHQGDQWjVDFWXDOWULDOFRXQVHOWRDSSHDUGRHVQRW VWDWXWHRIOLPLWDWLRQVIRUDFRQVSLUDF\FKDUJHEHJLQVWRUXQ DXWRPDWLFDOO\ SUHYHQW WKH WKLUW\GD\ ZDLWLQJ SHULRG IURP IURP WKH ODVW RYHUW DFW FRPPLWWHG LQ IXUWKHUDQFH RI WKH VWDUWLQJ6HH8QLWHG6WDWHVY%RJDUG)GWK FRQVSLUDF\DOOHJHGLQWKHLQGLFWPHQW6HH8QLWHG 6WDWHVY &LUVXSHUVHGHGRQRWKHUJURXQGVDVVWDWHGLQ6LPSVRQ 6PLWK  )G   WK &LU   7KH VWDWXWH RI Y/HDU$VWURQLFV&RUS)GWK&LU OLPLWDWLRQVGRHVQRWVWDUWUXQQLQJRQWKHGDWHWKHFRQVSLUDF\ DJUHHPHQWZDVFRQFOXGHG0RUHRYHULQRUGHUIRUDGHIHQGDQW  8QLWHG6WDWHVY&URVVOH\HWDO 1RV 1RV 8QLWHG6WDWHVY&URVVOH\HWDO  FRPSOHWH IUHHGRP RI PRYHPHQW WKURXJKRXW WKH LQWHUYLHZ ,Q%RJDUGWKHGHIHQGDQWjVILUVWDSSHDUDQFHZDVPDGHWKURXJK ZKLFKODVWHGDSSUR[LPDWHO\RQHKRXUDQGWKLUW\ILYHPLQXWHV DORFDOFRXQVHOZKRPWKHGHIHQGDQWjVRXWRIVWDWHSULQFLSDO DQGZDVQRWDUUHVWHGDWLWVFRQFOXVLRQEXWLQVWHDGUHWXUQHGWR WULDOFRXQVHOKDGGHVLJQDWHGWRDFWRQKLVEHKDOI7KHFRXUW ZRUN7KH)%,DJHQWQHYHUPDGHDQ\VKRZLQJRIIRUFHRU FRQFOXGHG WKDW WKLV DSSHDUDQFH WKURXJK ORFDO FRXQVHO WKUHDWHQHG DUUHVW  6HH LG DW   6LPLODUO\ *UXELFK ZDV WULJJHUHGWKHWKLUW\GD\ZDLWLQJSHULRGVWDWLQJm>Q@RWKLQJLQ RUGHUHGWRPHHWZLWKWKH)%,DJHQWVDWZRUNEXWWKHDJHQWV WKH>6SHHG\7ULDO@$FWVXJJHVWVWKDWZHVKRXOGGLVUHJDUGDQ GLG QRW TXHVWLRQ *UXELFK DERXW KHU HPSOR\PHQW DQG D DSSHDUDQFHE\FRXQVHOZKRZDVGHVLJQDWHGE\WKHGHIHQGDQWjV UHDVRQDEOHSHUVRQZRXOGQRWKDYHEHOLHYHGWKDWVKHZDVVWLOO SULQFLSDOFRXQVHOWRDFWRQKLVEHKDOIl,G7KHGHIHQGDQWjV XQGHUPLOLWDU\RUGHUVIURPKHUVXSHULRUVDWZRUNWRFRQWLQXH SULQFLSDOFRXQVHOKDGEHHQLGHQWLILHGDVVXFKZKHQWKHORFDO WKHLQWHUYLHZ7KHDJHQWVGLGQRWWHOO*UXELFKWKDWVKHFRXOG FRXQVHODSSHDUHGZLWKWKHGHIHQGDQWDQGKDGWKLUW\GD\VWR QRWOHDYHDQGVKHQHYHUDVNHGRUDWWHPSWHGWROHDYHWKHURRP SUHSDUHDGHIHQVHDVUHTXLUHGXQGHUWKH6SHHG\7ULDO$FW6HH *UXELFKKDGFRPSOHWHIUHHGRPRIPRYHPHQWEHFDXVHVKHZDV LG QRWSK\VLFDOO\UHVWUDLQHGLQDQ\ZD\DQGZDVVLWWLQJFORVHWR WKHGRRULQDQXQORFNHGURRP7KHLQWHUYLHZODVWHGIRUOHVV :KHQ&URVVOH\ZDVDUUDLJQHGRQ0D\'DYLGsDFN WKDQDQKRXUDQG*UXELFKZDVQRWDUUHVWHGDWLWVFRQFOXVLRQ ZDVQRWHGDVKHUDSSRLQWHGFRXQVHOsDFNZDVQRWSUHVHQWIRU ,QDGGLWLRQWKHDJHQWVQHYHUPDGHDQ\VKRZLQJRIIRUFHVXFK WKH DUUDLJQPHQW DQG 'LDQH 'RXJKWUH\ WKH FRXQVHO RI DVEUDQGLVKLQJDILUHDUP$OWKRXJK$UFKH\WROG*UXELFKWKDW &URVVOH\jV FRGHIHQGDQW .DUHQ 5LFH VWRRG LQ IRU sDFN VKHFRXOGEHDUUHVWHGLIVKHOLHGDUHDVRQDEOHSHUVRQZRXOG $FFRUGLQJWRWKHSDUWLHVsDFNGLGQRWDSSHDUEHIRUHWKHFRXUW XQGHUVWDQGWKDWWKLVVWDWHPHQWDSSOLHVWRDQ\RQHZKROLHVWR XQWLOWKHILUVWGD\RIWULDORQs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sDFN ZDV QRW SUHVHQW DW WKH FRQVLGHULQJWKHIDFWWKDWGHIHQGDQWZDVLQWHUYLHZHGLQD DUUDLJQPHQWKHZDVQRWHGDV&URVVOH\jVDSSRLQWHGFRXQVHO ODUJHURRPZLWKZLQGRZVORRNLQJRQDSXEOLFVSDFHDVQRQ DQG&URVVOH\ZDVUHSUHVHQWHGE\KHUFRGHIHQGDQWjVFRXQVHO LQWLPLGDWLQJ 7KHIDFWVVXUURXQGLQJsDFNjVDEVHQFHDWWKHDUUDLJQPHQWDUH QRWNQRZQEXWKHKDGDOUHDG\DJUHHGDWWKDWWLPHWRUHSUHVHQW *UXELFKUHVSRQGVWKDWWKH0DKDQFDVHLVGLVWLQJXLVKDEOH &URVVOH\DWWULDO:HILQGWKHIDFWVRIWKLVFDVHWREHVLPLODU )LUVWWKHLQWHUYLHZLQ0DKDQZDVLQWHUUXSWHGDQGPRYHGWR WR WKH VLWXDWLRQ SUHVHQWHG LQ %RJDUG LQ ZKLFK WKH 1LQWK DQRWKHUURRPZKLFKJDYHWKHHPSOR\HHDQRSSRUWXQLW\WRVWRS &LUFXLW FRQFOXGHG WKDW WKH 6SHHG\ 7ULDO $FWjV WKLUW\GD\ WKHLQWHUYLHZZKLOH*UXELFKjVLQWHUYLHZZDVQRWLQWHUUXSWHG ZDLWLQJSHULRGEHJDQZKHQGHIHQGDQWjVSULPDU\RXWRIVWDWH IRU VXFK DQ RSSRUWXQLW\  6HFRQG WKH HPSOR\HH LQ 0DKDQ FRXQVHODVNHGORFDOFRXQVHOWRDSSHDUEHIRUHWKHFRXUWRQKLV FRXOG KDYH D FRPSDQ\ UHSUHVHQWDWLYH ZLWK KLP GXULQJ WKH EHKDOI6HH)GDW7KHIDFWWKDWDQRWKHUFRXQVHO PHHWLQJXQGHUWKHFRPSDQ\jVVHFXULW\SROLF\ZKLOH*UXELFK VWRRGLQIRUsDFNDWWKHDUUDLJQPHQWDIWHUsDFNKDGDOUHDG\ GLGQRWKDYHWKHEHQHILWRIEHLQJDFFRPSDQLHGE\DQHXWUDO DJUHHG WR UHSUHVHQW &URVVOH\ DW WULDO GRHV QRW SUHYHQW WKH SDUW\7KLUGWKHHPSOR\HHLQWKDWFDVHZDVTXHVWLRQHGE\RQH FRPPHQFHPHQW RI WKH WKLUW\GD\ ZDLWLQJ SHULRG  &URVVOH\ )%, DJHQW ZKR ZDV DFFRPSDQLHG E\ D ORFDO VKHULII ZKLOH DUJXHVWKDWXQOLNHWKHORFDOFRXQVHOLQ%RJDUGWKHFRXQVHORI *UXELFKZDVTXHVWLRQHGE\WZR)%,DJHQWV:HGRQRWDJUHH &URVVOH\jV FRGHIHQGDQW ZDV QRW DXWKRUL]HG WR DFW DV KHU  8QLWHG6WDWHVY&URVVOH\HWDO 1RV 1RV 8QLWHG6WDWHVY&URVVOH\HWDO  FRXQVHO DW WKH DUUDLJQPHQW  ,W DSSHDUV KRZHYHU WKDW WKH QRWLQIRUPHGRIWKHLQWHUYLHZDKHDGRIWLPHDQGZDVFDOOHGWR FRXQVHOGLGDFWRQKHUEHKDOILQKHOSLQJKHUHQWHUDQRWJXLOW\ &DPS5RXOVWRQjVDGPLQLVWUDWLYHRIILFHVGXULQJWKHZRUNGD\ SOHD $Q RIILFLDO DW WKH FDPS FKRVH WKH URRP IRU WKH LQWHUYLHZ ZKLFK ZDV DQ XQXVHG FODVVURRP ZLWK ZLQGRZV  7KH 0RUHRYHU EHFDXVH s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 IURP OHDYLQJ WKH URRP  *UXELFK QHYHU DVNHG WR OHDYH WKH m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l6LPLODUO\DGHIHQGDQWFDQQRWGHOD\KHUWULDOGDWH RQWKHEDVLVWKDWKHUDSSRLQWHGWULDOFRXQVHOZDVXQDEOHWR *UXELFK DUJXHV WKDW VKH ZDV VXEMHFW WR FXVWRGLDO DWWHQGKHUDUUDLJQPHQWZKHQVKHZDVUHSUHVHQWHGE\DQRWKHU LQWHUURJDWLRQ EHFDXVH VKH ZDV XQH[SHFWHGO\ VXPPRQHG WR FRXQVHORQKHUWULDOFRXQVHOjVEHKDOI%HFDXVH&URVVOH\ZDV &DPS 5RXOVWRQjV DGPLQLVWUDWLYH RIILFH DQG RUGHUHG E\ KHU WULHGWKLUW\GD\VDIWHUKHUILUVWDSSHDUDQFHZLWKFRXQVHOWKH PLOLWDU\ VXSHULRUV WR JR WR D FODVVURRP ZKHUH VKH ZDV GLVWULFWFRXUWZDVQRWUHTXLUHGWRJUDQW&URVVOH\jVPRWLRQIRU FRQIURQWHG E\ WKH WZR )%, DJHQWV 6KH DVVHUWV WKDW VKH DFRQWLQXDQFHLQRUGHUWRFRPSO\ZLWKWKH6SHHG\7ULDO$FW UHDVRQDEO\EHOLHYHGWKDWVKHZDVQRWIUHHWROHDYHEHFDXVHD UHDVRQDEOHSHUVRQZRXOGEHOLHYHWKDWDPLOLWDU\RIILFHUPXVW E6L[WKDQG)LIWK$PHQGPHQW&ODLPV IROORZWKHRUGHUVRIKHUVXSHULRUVDQGWKXVFRXOGQRWUHIXVHWR PHHWZLWKWKHDJHQWV0RUHRYHU$UFKH\WROG*UXELFKWKDW &URVVOH\ DOVR DUJXHV WKDW LQ GHQ\LQJ KHU PRWLRQ IRU D VKHFRXOGJRWRMDLOLIVKHGLGQRWWHOOWKHWUXWKZKLFK*UXELFK FRQWLQXDQFHWKHGLVWULFWFRXUWYLRODWHGKHU6L[WK$PHQGPHQW DUJXHVLPSOLHGWKDWVKHZDVLQFXVWRG\ ULJKW WR SUHSDUH DQ DGHTXDWH GHIHQVH DQG KHU )LIWK $PHQGPHQWULJKWWRGXHSURFHVV:HUHYLHZDGHQLDORID :H FRQFOXGH WKDW *UXELFK ZDV QRW VXEMHFW WR FXVWRGLDO PRWLRQIRUDFRQWLQXDQFHIRUDEXVHRIGLVFUHWLRQ6HH8QLWHG LQWHUURJDWLRQ  7KH IDFWV RI WKLV FDVH DUH VLPLODU WR WKRVH 6WDWHVY*DOOR)GWK&LUFHUW SUHVHQWHGLQ8QLWHG6WDWHVY0DKDQ)GWK&LU GHQLHG  86    m'HQLDO DPRXQWV WR D LQZKLFKZHKHOGWKDWDQHPSOR\HHTXHVWLRQHGDWZRUN FRQVWLWXWLRQDOYLRODWLRQRQO\LIWKHUHLVDQXQUHDVRQLQJDQG ZDVQRWVXEMHFWWRFXVWRGLDOLQWHUURJDWLRQ7KHHPSOR\HHLQ DUELWUDU\ LQVLVWHQFH XSRQ H[SHGLWLRXVQHVV LQ WKH IDFH RI D WKDWFDVHZDVEURXJKWWRDFRQIHUHQFHURRPE\DVXSHUYLVRU MXVWLILDEOHUHTXHVWIRUGHOD\l  ,GTXRWDWLRQVRPLWWHG,Q IRUDQLQWHUYLHZZLWKDQ)%,DJHQW7KHDJHQWQHYHUWROGWKH DGGLWLRQ m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mFXVWRGLDOLQWHUURJDWLRQVlZKLFK PXVWVKRZWKDWWKHGHQLDOUHVXOWHGLQDFWXDOSUHMXGLFHWRKLV KDYH EHHQ GHILQHG DV mµTXHVWLRQLQJ LQLWLDWHG E\ ODZ GHIHQVHl  ,G TXRWDWLRQV RPLWWHG  m$FWXDO SUHMXGLFHl LV HQIRUFHPHQW RIILFHUV DIWHU D SHUVRQ KDV EHHQ WDNHQ LQWR HVWDEOLVKHGmE\VKRZLQJWKDWDFRQWLQXDQFHZRXOGKDYHPDGH FXVWRG\RURWKHUZLVHGHSULYHGRIKLVIUHHGRPRIDFWLRQLQD UHOHYDQW ZLWQHVVHV DYDLODEOH RU DGGHG VRPHWKLQJ WR WKH VLJQLILFDQWZD\jl6DOYR)GDWTXRWLQJ2UHJRQY GHIHQVHl8QLWHG6WDWHVY.LQJ)GWK&LU 0DWKLDVRQ86,QHYDOXDWLQJZKHWKHU FHUWGHQLHG86 D GHIHQGDQW ZDV LQ FXVWRGLDO LQWHUURJDWLRQ ZH ORRN WR WKH WRWDOLW\RIWKHFLUFXPVWDQFHVmWRGHWHUPLQHKRZDUHDVRQDEOH &URVVOH\DVVHUWVWKDWVKHSURPSWO\UHTXHVWHGDWKUHHZHHN PDQ LQ WKH VXVSHFWjV SRVLWLRQ ZRXOG KDYH XQGHUVWRRG WKH FRQWLQXDQFHDWDSUHWULDOKHDULQJDIWHUWKHJRYHUQPHQWZDLWHG VLWXDWLRQl,GTXRWDWLRQVRPLWWHG2QHIDFWRULVZKHWKHUD WRUHVSRQGWRKHUFRXQVHOjV0D\GLVFRYHU\UHTXHVW UHDVRQDEOH SHUVRQ LQ WKH VXVSHFWjV VLWXDWLRQ ZRXOG KDYH XQWLO0D\WKHGD\EHIRUHWKHSUHWULDOKHDULQJ:KLOH EHOLHYHGWKDWVKHZDVIUHHWRWHUPLQDWHWKHLQWHUURJDWLRQDQG WKHJRYHUQPHQWKDGDJUHDWGHDORIWLPHWRLQYHVWLJDWHDQG OHDYH6HHLGDW:HDOVRKDYHFRQVLGHUHGWKHIROORZLQJ SUHSDUHLWVFDVHKHUFRXQVHOKDGWZRZHHNVDIWHUUHFHLYLQJWKH RWKHUIDFWRUV JRYHUQPHQWjV GRFXPHQWV WR HYDOXDWH WKH IDFWXDOO\ GHWDLOHG LQGLFWPHQWFRQWHPSODWHDQGUHVHDUFKWKHSURSULHW\RISUHWULDO WKHSXUSRVHRIWKHTXHVWLRQLQJZKHWKHUWKHSODFH PRWLRQV UHYLHZ GLVFRYHU\ FRQIHU ZLWK GHIHQGDQW DQG RIWKHTXHVWLRQLQJZDVKRVWLOHRUFRHUFLYHWKHOHQJWK SUHSDUHDQDGHTXDWHGHIHQVH$VHYLGHQFHRIDFWXDOSUHMXGLFH RIWKHTXHVWLRQLQJDQGRWKHULQGLFLDRIFXVWRG\VXFK &URVVOH\DVVHUWVWKDWWKHGHQLDORIWKHFRQWLQXDQFHDQGODFNRI DVZKHWKHUWKHVXVSHFWZDVLQIRUPHGDWWKHWLPHWKDWWKH WLPHWRSUHSDUHDGHIHQVHSUHYHQWHGKHUFRXQVHOIURPUDVLQJ TXHVWLRQLQJZDVYROXQWDU\RUWKDWWKHVXVSHFWZDVIUHHWR LVVXHV UHODWLQJ WR SUHLQGLFWPHQW GHOD\ DQG IURP PDNLQJ OHDYH RU WR UHTXHVW WKH RIILFHUV WR GR VR ZKHWKHU WKH DSSURSULDWHFKDOOHQJHVWRWKHMXU\LQVWUXFWLRQV VXVSHFW SRVVHVVHG XQUHVWUDLQHG IUHHGRP RI PRYHPHQW GXULQJ TXHVWLRQLQJ DQG ZKHWKHU WKH VXVSHFW LQLWLDWHG :H FRQFOXGH WKDW WKH GLVWULFW FRXUW GLG QRW DEXVH LWV FRQWDFW ZLWK WKH SROLFH RU YROXQWDULO\ DGPLWWHG WKH GLVFUHWLRQLQGHQ\LQJ&URVVOH\jVPRWLRQIRUDFRQWLQXDQFH RIILFHUVWRWKHUHVLGHQFHDQGDFTXLHVFHGWRWKHLUUHTXHVWV $OWKRXJK WKLV FDVH LQYROYHV D FRQVSLUDF\ ZLWK VHYHUDO WRDQVZHUVRPHTXHVWLRQV PHPEHUVLWLVDUHODWLYHO\VWUDLJKWIRUZDUGLQVXUDQFHVFDPDQG LV QRW D FRPSOH[ FDVH  $V WKH JRYHUQPHQW SRLQWV RXW LW ,G SUHVHQWHGMXVWIRXUZLWQHVVHVDQGWKHWULDORQO\ODVWHGIRUDGD\ DQGDKDOI7KHFRPSOH[LW\RI&URVVOH\jVFDVHWKXVGRHVQRW ,QWKLVFDVHRQ6HSWHPEHU)%,6SHFLDO$JHQWV ZHLJKLQIDYRURIWKHQHHGIRUDFRQWLQXDQFH6HH*DOOR $UFKH\DQG6WRQHZHQWWR&DPS5RXOVWRQ*UXELFKjVSODFHRI )GDWFRQFOXGLQJWKDWDGLVWULFWFRXUWDEXVHGLWV HPSOR\PHQWWRFRQGXFWDQLQWHUYLHZZLWK*UXELFK,QWKH GLVFUHWLRQ LQ GHQ\LQJ D SURPSW PRWLRQ IRU D FRQWLQXDQFH FRXUVH RI LQYHVWLJDWLQJ WKH LQVXUDQFH VFKHPH DW 5HSXEOLF ZKHUHWKHGHIHQGDQWKDGRQO\WHQRUHOHYHQGD\VWRSUHSDUHIRU &ODLPV$UFKH\DWWHPSWHGWRLQWHUYLHZDOORIWKHQRPLQHHV DKLJKO\FRPSOH[5,&2FDVH$OWKRXJKWKHJRYHUQPHQWjV ZKR KDG UHFHLYHG IUDXGXOHQW FKHFNV DQG KH ZDQWHG WR ODWH FRPSOLDQFH ZLWK &URVVOH\jV GLVFRYHU\ UHTXHVW OHIW KHU LQWHUYLHZ*UXELFKWRGHWHUPLQHKRZ PXFK PRQH\VKHKDG FRXQVHO ZLWK RQO\ WZR ZHHNV WR SUHSDUH IRU WULDO DIWHU UHFHLYHG IURP 0F&DOLVWHU IRU SDUWLFLSDWLQJ LQ WKH VFKHPH UHFHLYLQJWKHJRYHUQPHQWj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jV DOORZIRUDGGLWLRQDOGLVFRYHU\WKHUHLVQRHYLGHQFHWKDWWKH PDWHULDOV DW WKLV ODWH GDWH  6HH .LQJ  )G DW  FRXUWZRXOGKDYHGHQLHGDPRWLRQIRUDFRQWLQXDQFHLIWKH UHTXLULQJGHIHQGDQWWRH[SODLQZK\KHUFRXQVHOjVYRLUGLUH 6SHHG\7ULDO$FWYLRODWLRQKDGEHHQEURXJKWWRLWVDWWHQWLRQ TXHVWLRQVZHUHGHILFLHQWDQGWRGHOLQHDWHZKDWSRWHQWLDOOHJDO 0RUHLPSRUWDQWO\*UXELFKKDVIDLOHGWRLGHQWLI\DQ\VSHFLILF LVVXHV QHHGHG WR EH UHVHDUFKHG DQG ZK\ DGGLWLRQDO KDUP IURP WKH 6SHHG\ 7ULDO $FW YLRODWLRQ ZKLFK OHIW KHU FRQVXOWDWLRQVZHUHQHFHVVDU\WRVKRZDFWXDOSUHMXGLFHIURP DWWRUQH\ZLWKDSSUR[LPDWHO\WZHQW\ILYHGD\VWRSUHSDUHIRU GHQLDORIFRQWLQXDQFH:HDOVRQRWHWKDW&URVVOH\jVFRXQVHO WULDO LQVWHDG RI WKLUW\ GD\V  7KH GLVWULFW FRXUW JUDQWHG ZDLWHG RYHU WHQ GD\V WR IROORZ XS RQ KLV 0D\   *UXELFKjVPRWLRQIRUDQH[WHQVLRQWRILOHSUHWULDOPRWLRQVDQG GLVFRYHU\ UHTXHVW  ,Q OLJKW RI WKHVH FLUFXPVWDQFHV ZH *UXELFKjVDWWRUQH\ILOHGDPRWLRQWRVXSSUHVVRQKHUEHKDOI FRQFOXGHWKDWWKHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQ $VQRWHGDERYHWKLVZDVQRWDIDFWXDOO\FRPSOH[FDVHWKH GHQ\LQJ&URVVOH\jVPRWLRQIRUDFRQWLQXDQFHRIWULDO JRYHUQPHQWSUHVHQWHGRQO\IRXUZLWQHVVHVDQGWKHWULDOODVWHG IRUMXVWRQHGD\DQGDKDOI%HFDXVH*UXELFKIDLOHGWRUDLVH 'HQLDORI0RWLRQIRUsXGJPHQWRI$FTXLWWDO WKLVLVVXHEHIRUHWKHGLVWULFWFRXUWDQGEHFDXVHVKHIDLOHGWR VDWLVI\KHUEXUGHQRIVKRZLQJWKDWVKHDFWXDOO\ZDVSUHMXGLFHG :H UHYLHZ D GLVWULFW FRXUWjV GHQLDO RI D PRWLRQ IRU E\WKHXQWLPHO\FRPPHQFHPHQWRIWULDOZHKROGWKDW*UXELFK MXGJPHQWRIDFTXLWWDORQWKHEDVLVRILQVXIILFLHQWHYLGHQFHE\ LVQRWHQWLWOHGWRDQHZWULDO H[DPLQLQJmZKHWKHUDIWHUYLHZLQJWKHHYLGHQFHLQWKHOLJKW PRVWIDYRUDEOHWRWKHSURVHFXWLRQDQ\UDWLRQDOWULHURIIDFW 0RWLRQWR6XSSUHVV FRXOGKDYHIRXQGWKHHVVHQWLDOHOHPHQWVRIWKHFULPHEH\RQG DUHDVRQDEOHGRXEWlsDFNVRQY9LUJLQLD86 *UXELFKDOVRDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQGHQ\LQJ   7KLV UHYLHZ LV mTXLWH OLPLWHGl  8QLWHG 6WDWHV Y KHU PRWLRQ WR VXSSUHVV VWDWHPHQWV VKH PDGH GXULQJ DQ 0RUURZ)GWK&LUHQEDQFFHUW LQWHUYLHZE\WZR)%,DJHQWVLQDOOHJHGYLRODWLRQRIKHU)LIWK GHQLHG  86    :H GR QRW ZHLJK HYLGHQFH $PHQGPHQW ULJKW DJDLQVW VHOILQFULPLQDWLRQ  ,Q UHYLHZLQJ PDNHFUHGLELOLW\GHWHUPLQDWLRQVRUVXEVWLWXWHRXUMXGJPHQW VXSSUHVVLRQ LVVXHV ZH UHYLHZ WKH GLVWULFW FRXUWjV IDFWXDO IRUWKHMXU\jVYHUGLFW6HH8QLWHG6WDWHVY+LOOLDUG)G ILQGLQJVIRUFOHDUHUURUDQGLWVOHJDOFRQFOXVLRQVGHQRYR6HH WK&LUFHUWGHQLHG86 8QLWHG 6WDWHV Y 6DOYR  )G   WK &LU FHUW GHQLHG86:KHWKHUDGHIHQGDQWZDVmLQ D&RQVSLUDF\&KDUJH FXVWRG\lLVDPL[HGTXHVWLRQRIODZDQGIDFWVXEMHFWWRGH QRYRUHYLHZ6HHLG ,Q&RXQW2QHRIWKH,QGLFWPHQW&URVVOH\ZDVFKDUJHGZLWK FRQVSLUDF\ WR FRPPLW PDLO IUDXG  3XUVXDQW WR  86& 7KH )LIWK $PHQGPHQW VWDWHV WKDW D GHIHQGDQW FDQQRW EH † mFRPSHOOHG LQ DQ\ FULPLQDO FDVH WR EH D ZLWQHVV DJDLQVW KLPVHOIl86 & $%DPHQG9,Q0LUDQGDY$UL]RQD ,I WZR RU PRUH SHUVRQV FRQVSLUH HLWKHU WR FRPPLW DQ\ 86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sXQH   LQ ,Q RUGHU WR HVWDEOLVK D FRQVSLUDF\ mWKH JRYHUQPHQW PXVW YLRODWLRQ RI WKH 6SHHG\ 7ULDO $FW  $V GLVFXVVHG DERYH D SURYH DQ DJUHHPHQW EHWZHHQ WZR RU PRUH SHUVRQV WR DFW GHIHQGDQWLVHQWLWOHGWRDWKLUW\GD\ZDLWLQJSHULRGDIWHUVKH WRJHWKHU LQ FRPPLWWLQJ DQ RIIHQVH DQG DQ RYHUW DFW LQ mILUVW DSSHDUV WKURXJK FRXQVHOl XQWLO VKH LV WULHG  6HH  IXUWKHUDQFHRIWKHFRQVSLUDF\l8QLWHG6WDWHVY0LOOLJDQ 86& † F%HFDXVH*UXELFKGLGQRWKDYHWKLUW\ )GWK&LUFHUWGHQLHG86 GD\VEHWZHHQKHUILUVWDSSHDUDQFHWKURXJKFRXQVHODQGKHU 7KHJRYHUQPHQWQHHGQRWVKRZDIRUPDOZULWWHQDJUHHPHQW WULDO WKH GLVWULFW FRXUW YLRODWHG WKH 6SHHG\ 7ULDO $FW LQ mµD WDFLW RU PXWXDO XQGHUVWDQGLQJ DPRQJ WKH SDUWLHV ZLOO FRPPHQFLQJKHUWULDORQsXQH VXIILFHjl8QLWHG6WDWHVY$EOHV)GWK &LUTXRWLQJ8QLWHG6WDWHVY(OO]H\)GWK 7KH 6SHHG\ 7ULDO $FW GRHV QRW SURYLGH D VDQFWLRQ IRU &LU  FHUW GHQLHG  86   YLRODWLRQV RI LWV WKLUW\GD\ ZDLWLQJ SHULRG  :H KDYH KHOG &LUFXPVWDQWLDO HYLGHQFH ZKLFK D UHDVRQDEOH SHUVRQ FRXOG KRZHYHU WKDW D mGHIHQGDQW PXVW GHPRQVWUDWH WKDW VKH ZDV LQWHUSUHWDVVKRZLQJSDUWLFLSDWLRQLQDFRPPRQSODQPD\EH SUHMXGLFHGE\WKHXQWLPHO\FRPPHQFHPHQWRIWULDOLQRUGHUWR XVHGWRHVWDEOLVKWKHH[LVWHQFHRIDFRQVSLUDF\DJUHHPHQW6HH REWDLQDQHZWULDOl8QLWHG6WDWHV Y*URVVKDQV)G LG  7KH JRYHUQPHQW LV QRW UHTXLUHG WR SURYH WKDW HDFK WK&LUFHUWGHQLHG86,Q PHPEHURIDFRQVSLUDF\NQHZHYHU\GHWDLORUWKHLGHQWLW\RI *URVVKDQV WKH FRXUW VWDWHG WKDW ZKHQ D GHIHQGDQW IDLOV WR DOOWKHRWKHUPHPEHUVLQYROYHGLQWKHFRQVSLUDF\6HH8QLWHG UDLVHD6SHHG\7ULDO$FWFODLPEHIRUHWKHGLVWULFWFRXUWVKH 6WDWHV Y 5RJHUV  )G   WK &LU   7KH HIIHFWLYHO\ ZDLYHV LW EHFDXVH m>K@DG GHIHQGDQW UDLVHG WKH JRYHUQPHQWKRZHYHUPXVWVKRZWKDWDSDUWLFXODUGHIHQGDQW VWDWXWRU\ YLRODWLRQ WKHUH LV QR UHDVRQ WR EHOLHYH WKDW WKH NQHZWKHREMHFWRIWKHFRQVSLUDF\DQGmµYROXQWDULO\DVVRFLDWHG 'LVWULFW&RXUWZRXOGQRWKDYHFRUUHFWHGDQ\HUURUl,G7KH KLPVHOIZLWKLWWRIXUWKHULWVREMHFWLYHVjl8QLWHG6WDWHVY GHIHQGDQWLQ*URVVKDQVGLGQRWSUHVHQWD6SHHG\7ULDO$FW *LEEV)GWK&LUTXRWLQJ8QLWHG6WDWHVY REMHFWLRQ WR WKH GLVWULFW FRXUW DQG KDG VHYHUDO PRQWKV WR +RGJHV)GWK&LUFHUWGHQLHG SUHSDUHIRUWULDO7KHFRXUWFRQFOXGHGWKDWWKHGHIHQGDQWZDV 6&W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jV DWWRUQH\ UHTXHVWHG D FRQWLQXDQFH ZLWKRXW DQ\ PHQWLRQ RI WKH LWZDVIRUDmFDUJRORVVl&URVVOH\DGPLWWHGWKDWVKHNQHZVKH 6SHHG\ 7ULDO $FW EHFDXVH WKH JRYHUQPHQW KDG EHHQ ODWH LQ FRPSO\LQJ KDG QRW VXIIHUHG D FDUJR ORVV DQG ZDV QRW HQWLWOHG WR WKH ZLWK KLV GLVFRYHU\ UHTXHVW DQG WKDW WKH GLVWULFW FRXUW GHQLHG WKH FRQWLQXDQFH *UXELFKjV DWWRUQH\ WKHQ UHTXHVWHG DQ H[WHQVLRQ RI WLPH WR &URVVOH\KDVSURYLGHGVHYHUDOGLIIHUHQWH[SODQDWLRQV ILOH SUHWULDO PRWLRQV VXFK DV D PRWLRQ WR VXSSUHVV DQG D PRWLRQ WR VHYHU IRUFDVKLQJWKLVFKHFN$WWULDOVKHWHVWLILHGWKDWVKHEHOLHYHG 7KH GLVWULFW FRXUW MXGJH VWDWHG m, VWLOO ZRQjW FRQWLQXH WKH WULDO GDWHl WR VKH ZDV KHOSLQJ RXW 0F&DOLVWHU ZLWK KLV QHZ LQVXUDQFH ZKLFK *UXELFKjV DWWRUQH\ UHVSRQGHG m,jP QRW DVNLQJ IRU D FRQWLQXDQFH EXVLQHVVEHFDXVHKHKDGQRW\HWVHWXSDEDQNDFFRXQW:KHQ DW WKLV SRLQWl s$ DW  +HDULQJ 7U  8QLWHG6WDWHVY&URVVOH\HWDO 1RV 1RV 8QLWHG6WDWHVY&URVVOH\HWDO  FRQIURQWHG E\ )%, 6SHFLDO $JHQW 'HODJUDQJH RQ 0D\  :HQRWHWKDWRWKHUFRXUWVKDYHKHOGPRUHJHQHUDOO\WKDWWKH &URVVOH\H[SODLQHGWKDWVKHKDGUHFHLYHGWKHFKHFNLQ VWDWXWHRIOLPLWDWLRQVEHJLQVWRUXQRQWKHGDWHRIWKHPDLOLQJ H[FKDQJHIRUHQWHULQJFRPSXWHUGDWDIRU0F&DOLVWHU&URVVOH\ 6HH 8QLWHG 6WDWHV Y %DUJHU  )G   WK &LU ODWHUDGPLWWHGWKDWVKHQHYHUHQWHUHGDQ\FRPSXWHUGDWDIRU  VWDWLQJ WKDW mLW LV ZHOO VHWWOHG WKDW WKH VWDWXWH RI 0F&DOLVWHU,QDQLQWHUYLHZZLWK)%,6SHFLDO$JHQW$UFKH\ OLPLWDWLRQVIRUPDLOIUDXGEHJLQVUXQQLQJRQWKHGDWHRIWKH RQ1RYHPEHU&URVVOH\VWDWHGWKDWVKHKDGZRUNHGIRU PDLOLQJ DQG QRW ZKHQ WKH FULPLQDO VFKHPH LV FRPSOHWHl 0F&DOLVWHUjVQHZFRPSXWHUEXVLQHVVLQZKLFKKHILOHGFODLPV FLWLQJ8QLWHG6WDWHVY'XQQ)GWK&LU RQ GDPDJHG FRPSXWHUV DQG WKDW LQ UHWXUQ IRU FDVKLQJ WKH 8QLWHG6WDWHVY3HPEHUWRQ)GWK FKHFN0F&DOLVWHUSDLGIRUKDOIRIKHUFRPSXWHUSULQWHU,Q &LUFHUWGHQLHG868QLWHG6WDWHV OLJKW RI WKHVH FRQIOLFWLQJ H[SODQDWLRQV DQG &URVVOH\jV Y(LVHQ)GG&LUFHUWGHQLHG DGPLVVLRQWKDWVKHNQHZWKHFKHFNZDVIRUDQLQVXUDQFHFODLP 86    7KHVH FDVHV DUH FRQVLVWHQW ZLWK RXU WR ZKLFK VKH ZDV QRW HQWLWOHG D UDWLRQDO MXURU FRXOG KDYH KROGLQJ EHFDXVH ZH GR QRW EHOLHYH WKDW WKH mGDWH RI WKH FRQFOXGHGWKDW&URVVOH\NQHZWKDWVKHZDVLQYROYHGLQVRPH PDLOLQJlZDVLQWHQGHGWRKDYHDUHVWULFWLYHPHDQLQJOLPLWHG W\SH RI LQVXUDQFH VFDP DQG WKXV DGRSWHG WKH FRQVSLUDF\j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jVPDLQREMHFWLYH7KHUHIRUHZHKROG LQ WKH LQGLFWPHQW WKH GDWH RQ ZKLFK WKH GHIHQGDQW SODFHG WKDWWKHGLVWULFWFRXUWGLGQRWHUULQGHQ\LQJ&URVVOH\jVPRWLRQ GHSRVLWHG FDXVHG WR EH GHSRVLWHG WRRN RU UHFHLYHG WKH IRUMXGJPHQWRIDFTXLWWDORQWKLVEDVLV PDLOLQJRUWKHGDWHRQZKLFKWKHGHIHQGDQWNQRZLQJO\FDXVHG WKHPDLOLQJWREHGHOLYHUHG E0DLO)UDXG&KDUJH $VQRWHGDERYHWKHFKHFNPDGHRXWLQ*UXELFKjVQDPHZDV ,QRUGHUWRHVWDEOLVKDPDLOIUDXGYLRODWLRQXQGHU86& LVVXHGRQ$SULODQGDFFRUGLQJWRVWDQGDUGSUDFWLFH †WKHJRYHUQPHQWPXVWSURYHWKHIROORZLQJHOHPHQWV DW5HSXEOLF&ODLPVWKHFKHFNZRXOGKDYHEHHQPDLOHGIURP mµGHYLVLQJRULQWHQGLQJWRGHYLVHDVFKHPHWRGHIUDXGRU LWV$UL]RQDRIILFHRQ$SULORU*UXELFKZRXOG WRSHUIRUPVSHFLILHGIUDXGXOHQWDFWVLQYROYLQJDXVHRI QRWKDYHUHFHLYHGWKHFKHFNLQWKHPDLOLQ2KLREHIRUH$SULO WKHPDLOVDQGIRUWKHSXUSRVHRIH[HFXWLQJWKHVFKHPHRU   DQG WKH ,QGLFWPHQW ZDV ILOHG RQ $SULO   DWWHPSWLQJWRGRVRjl8QLWHG6WDWHVY)URVW)G %HFDXVH*UXELFKDVFKDUJHGLQWKH ,QGLFWPHQWNQRZLQJO\ WK&LUTXRWLQJ8QLWHG6WDWHVY2OGILHOG FDXVHGWKHFKHFNWREHGHOLYHUHGE\PDLODQGDOVRUHFHLYHGWKH )GWK &LUFHUWGHQLHG86 FKHFN LQ WKH PDLO ZLWKLQ ILYH \HDUV RI WKH ILOLQJ RI WKH   7KH 6XSUHPH &RXUW KDV VWDWHG WKDW mµ7KH )HGHUDO ,QGLFWPHQW KHUFRQYLFWLRQRI&RXQWLVQRWEDUUHGE\WKH PDLO IUDXG VWDWXWH GRHV QRW SXUSRUW WR UHDFK DOO IUDXGV EXW VWDWXWHRIOLPLWDWLRQV RQO\WKRVHOLPLWHGLQVWDQFHVLQZKLFKWKHXVHRIWKHPDLOVLV DSDUWRIWKHH[HFXWLRQRIWKHIUDXGOHDYLQJDOORWKHUFDVHVWR 6SHHG\7ULDO$FW EHGHDOWZLWKE\DSSURSULDWHVWDWHODZjl6FKPXFNY8QLWHG 6WDWHV  86    TXRWLQJ .DQQ Y 8QLWHG *UXELFKDOVRDUJXHVWKDWKHUFRQYLFWLRQVVKRXOGEHUHYHUVHG 6WDWHV867REHFRQVLGHUHGmSDUWRIWKH EHFDXVHVKHILUVWDSSHDUHGWKURXJKFRXQVHODWKHUDUUDLJQPHQW  8QLWHG6WDWHVY&URVVOH\HWDO 1RV 1RV 8QLWHG6WDWHVY&URVVOH\HWDO  EDU WR SURVHFXWLRQ WKDW PD\ EH UDLVHG IRU WKH ILUVW WLPH RQ H[HFXWLRQRIWKHIUDXGlWKH&RXUWIXUWKHUKDVLQVWUXFWHGWKDW DSSHDO mWKHXVHRIWKHPDLOVQHHGQRWEHDQHVVHQWLDOHOHPHQWRIWKH VFKHPHl,G,QVWHDGm>L@WLVVXIILFLHQWIRUWKHPDLOLQJWREH 7KHVWDWXWHRIOLPLWDWLRQVEHJLQVWRUXQZKHQHDFKHOHPHQW LQFLGHQWWRDQHVVHQWLDOSDUWRIWKHVFKHPHRUDVWHSLQ>WKH@ RI WKH FULPH KDV RFFXUUHG DQG WKH FULPH LV FRPSOHWH  6HH SORWl ,G DW  TXRWDWLRQV DQG FLWDWLRQV RPLWWHG 7RXVVLHY8QLWHG6WDWHV868QLWHG )LQDOO\ WKH JRYHUQPHQW GRHV QRW KDYH WR VKRZ WKDW WKH 6WDWHV Y /XW]  )G   WK &LU   $V GHIHQGDQWDFWXDOO\XVHGWKHPDLOVEXWPXVWVKRZmWKDWWKH GLVFXVVHG DERYH WKH RIIHQVH RI PDLO IUDXG LQFOXGHV WKH GHIHQGDQWDFWHGZLWKNQRZOHGJHWKDWXVHRIWKHPDLOVZRXOG IROORZLQJHOHPHQWVmµGHYLVLQJRULQWHQGLQJWRGHYLVHD IROORZLQWKHRUGLQDU\FRXUVHRIEXVLQHVVRUWKDWDUHDVRQDEOH VFKHPHWRGHIUDXGRUWRSHUIRUPVSHFLILHGIUDXGXOHQWDFWV SHUVRQZRXOGKDYHIRUHVHHQXVH RIWKHPDLOVl)URVW LQYROYLQJDXVHRIWKHPDLOVDQGIRUWKHSXUSRVHRI )GDW H[HFXWLQJWKHVFKHPHRUDWWHPSWLQJWRGRVRjl)URVW )G DW  TXRWLQJ 2OGILHOG  )G DW   0RUH &URVVOH\FRQWHQGVWKDWWKHJRYHUQPHQWIDLOHGWRSURYHWKDW VSHFLILFDOO\ PDLO IUDXG LV FRPPLWWHG ZKHUH D GHIHQGDQW VKHKDGDQ\NQRZOHGJHRIWKHVFKHPHWRGHIUDXGEHFDXVHVKH HQJDJHVLQRQHRIWKHIROORZLQJXVHVRIWKHPDLOVmSODFHV KDGQRNQRZOHGJHRIWKHLQVXUDQFHVFDPDW5HSXEOLF&ODLPV LQDQ\SRVWRIILFHRUDXWKRUL]HGGHSRVLWRU\IRUPDLOPDWWHU +RZHYHUDVGLVFXVVHGDERYHDUDWLRQDOMXURUH[DPLQLQJWKH DQ\PDWWHURUWKLQJZKDWHYHUWREHVHQWRUGHOLYHUHGE\WKH HYLGHQFHSUHVHQWHGDWWULDOFRXOGKDYHFRQFOXGHGWKDW&URVVOH\ 3RVWDO6HUYLFHlmGHSRVLWVRUFDXVHVWREHGHSRVLWHGDQ\ NQHZWKDWVKHZDVHQJDJLQJLQDVFKHPHWRGHIUDXGZKHQVKH PDWWHURUWKLQJZKDWHYHUWREHVHQWRUGHOLYHUHGE\DQ\SULYDWH DFFHSWHGWKHFODLPVFKHFNIRUDmFDUJRORVVlFDVKHGLWNHSW RU FRPPHUFLDO LQWHUVWDWH FDUULHUl  mWDNHV RU UHFHLYHV DSRUWLRQDQGJDYHWKHUHPDLQLQJEDODQFHWR0F&DOLVWHU WKHUHIURP DQ\ VXFK PDWWHU RU WKLQJl RU  mNQRZLQJO\ FDXVHVWREHGHOLYHUHGE\PDLORUVXFKFDUULHUDFFRUGLQJWRWKH &URVVOH\DOVRDUJXHVWKDWWKHJRYHUQPHQWGLGQRWSURYHWKDW GLUHFWLRQ WKHUHRQl   86& †   $FFRUGLQJO\ ZH VKHZDVDZDUHWKDWWKHPDLOVZHUHEHLQJXVHGLQWKHVFKHPH FRQFOXGHWKDWWKHRIIHQVHRIPDLOIUDXGLVFRPSOHWHGDQGWKH 7KHFKHFNPDGHRXWWRDQGHQGRUVHGE\&URVVOH\ZDVLQLWLDOO\ VWDWXWHRIOLPLWDWLRQVEHJLQVWRUXQRQWKHGDWHRQZKLFKWKH VHQW WR 5HSXEOLF &ODLPVjV $NURQ RIILFH  2QFH WKH FKHFN GHIHQGDQWGHSHQGLQJRQWKHVSHFLILFXVHRIWKHPDLOVFKDUJHG DUULYHG 0F&DOLVWHU SLFNHG LW XS DQG JDYH LW WR &URVVOH\ LQ WKH LQGLFWPHQW mSODFHVl mGHSRVLWVl mFDXVHV WR EH %HFDXVH VKH GLG QRW UHFHLYH WKH FKHFN LQ WKH PDLO DQG GHSRVLWHGl mWDNHVl RU mUHFHLYHVl PDLO RU mNQRZLQJO\ 0F&DOLVWHUGLGQRWWHOOKHUWKDWKHSODQQHGWRXVHWKHPDLOV FDXVHVlPDLOmWREHGHOLYHUHGlDVSDUWRIWKHH[HFXWLRQRID &URVVOH\QRZDUJXHVWKDWVKHGLGQRWNQRZRUKDYHUHDVRQWR VFKHPHWRGHIUDXG NQRZ WKDW WKH PDLOV ZRXOG EH XVHG  $OWKRXJK &URVVOH\ SHUVRQDOO\ GLG QRW XVH WKH PDLOV D UDWLRQDO MXURU FRXOG FRQFOXGH WKDW VXFK XVH ZDV UHDVRQDEO\ IRUHVHHDEOH WR &URVVOH\:KHQVKHDJUHHGWRFDVKDFKHFNIRU0F&DOLVWHU  &URVVOH\JDYHKLPKHUPDLOLQJDGGUHVV&URVVOH\VKRXOGKDYH :H QRWH WKDW WKLV FRXUW UHFHQWO\ PDGH WKH JHQHUDO VWDWHPHQW WKDW m>W@KH VWDWXWH RI OLPLWDWLRQV LV DQ DIILUPDWLYH GHIHQVH WKDW PD\ EH ZDLYHG IRUHVHHQ WKDW WKH PDLOV ZRXOG EH XVHG LQ RUGHU IRU KHU WR XQGHU )HGHUDO 5XOH RI &ULPLQDO 3URFHGXUH I LI QRW UDLVHG DW RU EHIRUH UHFHLYHKHUFKHFN7KHUHIRUHZHFRQFOXGHWKDWWKHGLVWULFW WULDOl 8QLWHG 6WDWHV Y &UDIW  )G   WK &LU  7KDW FDVH KRZHYHU LV QRW FRQWUROOLQJ KHUH EHFDXVH WKH GHIHQGDQW LQ &UDIW KDG UDLVHG WKH VWDWXWHRIOLPLWDWLRQV GHIHQVH DQG WKH FRXUW RQO\ KDG WR  GHWHUPLQH ZKHWKHU WKH VWDWXWHRIOLPLWDWLRQV GHIHQVH LQYROYHG HVVHQWLDOO\ ,Q IDFW &URVVOH\ WHVWLILHG DW WULDO WKDW VKH UHFHLYHG KHU FKHFN LQ WKH XQGLVSXWHG IDFWXDO LVVXHV WKDW FRXOG EH LVRODWHG IURP WKH PHULWV VXFK WKDW PDLO DW KHU DGGUHVV $FFRUGLQJ WR 5HSXEOLF &ODLPV KRZHYHU WKH FKHFN WKH GLVWULFW FRXUW FRXOG LVVXH D GHFLVLRQ RQ WKH GHIHQVH EHIRUH WULDO ,G ZDV PDLOHG WR LWV $NURQ RIILFH  8QLWHG6WDWHVY&URVVOH\HWDO 1RV 1RV 8QLWHG6WDWHVY&URVVOH\HWDO  FRXUWGLGQRWHUULQGHQ\LQJ&URVVOH\jVPRWLRQIRUMXGJPHQW EHUHYHUVHGEHFDXVHLWZDVEDUUHGE\WKHVWDWXWHRIOLPLWDWLRQV RI DFTXLWWDO RI WKH PDLO IUDXG FKDUJH LQ &RXQW  RI WKH HYHQWKRXJKWKHGHIHQGDQWGLGQRWUDLVHWKLVLVVXHEHIRUHWKH ,QGLFWPHQW GLVWULFWFRXUW6HHLG %6WDUOD*UXELFK :HVXEVHTXHQWO\UHH[DPLQHGWKLVLVVXHLQ8QLWHG6WDWHVY 'HO 3HUFLR  )G   WK &LU  ZKLFK 6WDWXWHRI/LPLWDWLRQV LQYROYHG GHIHQGDQWV ZKR KDG VLJQHG ZDLYHUV H[SUHVVO\ H[WHQGLQJ WKH VWDWXWH RI OLPLWDWLRQV RQ DQ\ FRQVSLUDF\ DQG 8QGHU86&†mQRSHUVRQVKDOOEHSURVHFXWHG IDOVH VWDWHPHQW FKDUJHV EHFDXVH WKH\ EHOLHYHG WKDW IXUWKHU WULHG RU SXQLVKHG IRU DQ\ RIIHQVH QRW FDSLWDO XQOHVV WKH LQTXLU\ ZRXOG UHVXOW LQ QR FULPLQDO FKDUJHV EHLQJ EURXJKW LQGLFWPHQWLVIRXQGRUWKHLQIRUPDWLRQLVLQVWLWXWHGZLWKLQILYH DJDLQVW WKHP  :KHQ WKH JRYHUQPHQW WKHQ EURXJKW VXFK \HDUVQH[WDIWHUVXFKRIIHQVHVKDOOKDYHEHHQFRPPLWWHGl,Q FKDUJHVDJDLQVWWKHPWKHGHIHQGDQWVFODLPHGWKDWWKHVWDWXWH WKLVFDVH*UXELFKZDVFKDUJHGZLWKYLRODWLQJWKHPDLOIUDXG RIOLPLWDWLRQVLVDQRQZDLYDEOHEDUWRSURVHFXWLRQ7KHFRXUW VWDWXWHLQ&RXQWRIWKH,QGLFWPHQWLVVXHGRQ$SULO ILUVW QRWHG WKDW DOPRVW HYHU\ RWKHU FLUFXLW FRXUW WKDW KDV $OWKRXJKWKH,QGLFWPHQWDOOHJHVWKDW*UXELFKFRPPLWWHGWKLV H[DPLQHGWKLVLVVXHKDVGLVDJUHHGZLWKWKH%HQHVFRXUWDQG RIIHQVHRQ$SULO*UXELFKjVLQVXUDQFHFODLPFKHFN KDV FRQFOXGHG WKDW WKH VWDWXWH RI OLPLWDWLRQV LV D ZDLYDEOH ZDVLVVXHGRQ$SULO$FFRUGLQJWR5HSXEOLF&ODLPV DIILUPDWLYH GHIHQVH DQG GRHV QRW DIIHFW D FRXUWjV VXEMHFW RQFHDFKHFNLVLVVXHGLWLVPDLOHGRXWRQWKHVDPHRUQH[W PDWWHUMXULVGLFWLRQ6HHLGDWFLWLQJ8QLWHG6WDWHVY EXVLQHVVGD\*UXELFKDUJXHVIRUWKHILUVWWLPHEHIRUHWKLV .DUOLQ)GG&LUFHUWGHQLHG FRXUWWKDWEHFDXVHKHUFKHFNZDVPDLOHGRQ$SULORU 868QLWHG6WDWHVY0HHNHU)G DQGWKH,QGLFWPHQWZDVQRWLVVXHGXQWLO$SULO WK&LUFHUWGHQLHG868QLWHG6WDWHVY WKLVFRXQWLVEDUUHGE\WKHILYH\HDUVWDWXWHRIOLPLWDWLRQV :DOVK)GG&LUFHUWGHQLHG86 8QLWHG6WDWHVY:LOOLDPV)GWK $OWKRXJKWKHSDUWLHVGRQRWUDLVHWKLVLVVXHZHILUVWPXVW &LUFHUWGHQLHG867KHFRXUW GHFLGH ZKHWKHU *UXELFK FDQ UDLVH D VWDWXWHRIOLPLWDWLRQV WKHQ FRQFOXGHG WKDW WKH %HQHV GHFLVLRQ PXVW EH FRQVWUXHG GHIHQVHIRUWKHILUVWWLPHRQDSSHDO,Q%HQHVY8QLWHG6WDWHV QDUURZO\  6HH LG  %HFDXVH WKH GHIHQGDQWV LQ 'HO 3HUFLR  )G   WK &LU  ZH VWDWHG WKDW mWKH H[SUHVVO\ KDG ZDLYHG WKH VWDWXWH RI OLPLWDWLRQV WKH FRXUW SXUSRVHRIVWDWXWHVRIOLPLWDWLRQVLVWRDIIRUGLPPXQLW\IURP IRXQGWKHVLWXDWLRQWREHIDFWXDOO\DQGOHJDOO\GLVWLQJXLVKDEOH SXQLVKPHQWl DQG WKXV mFUHDW>H@ D EDU WR WKH ULJKW RI IURP%HQHVDQGKHOGWKDWWKHGHIHQGDQWVKDGLQIDFWZDLYHG SURVHFXWLRQl  ,Q WKDW FDVH WKH SDUWLHV KDG HQWHUHG LQWR DQ WKHLUVWDWXWHRIOLPLWDWLRQVGHIHQVH6HHLGDW DJUHHPHQWXQGHUZKLFKWKHJRYHUQPHQWDJUHHGQRWWRSUHVHQW FHUWDLQHYLGHQFHUHJDUGLQJWD[HYDVLRQWRDJUDQGMXU\SHQGLQJ ,QWKLVFDVHXQOLNHWKHGHIHQGDQWV'HO3HUFLR*UXELFKGLG DQ DSSHDO RI D VHSDUDWH FLYLO VXLW ILOHG WR SUHYHQW WKH QRW H[SUHVVO\ ZDLYH WKH VWDWXWH RI OLPLWDWLRQV IRU KHU PDLO JRYHUQPHQWIURPSUHVHQWLQJWKLVHYLGHQFHDQGWKHVWDWXWHRI IUDXGRIIHQVH5DWKHUDVLQ%HQHVWKHVWDWXWHRIOLPLWDWLRQV OLPLWDWLRQVH[SLUHGGXULQJWKLVSHULRG7KHFRXUWVWDWHGWKDW H[SLUHGZLWKRXWWKHSDUWLHVDGGUHVVLQJWKLVLVVXH7KHUHIRUH WKHVWDWXWHRIOLPLWDWLRQVmLVQRWZDLYHGE\WKHIDFWWKDWWKH ZHPXVWIROORZWKHODZRIWKH%HQHVGHFLVLRQDQGKROGWKDW SURVHFXWLRQZDVZLWKKHOGRQDFFRXQWRIDQDJUHHPHQWZLWK DEVHQWDQH[SOLFLWZDLYHUWKHVWDWXWHRIOLPLWDWLRQVSUHVHQWVD WKH DFFXVHG RU E\ WKH IDFW WKDW WKH DFFXVHG SURFXUHG FRQWLQXDQFHV RI WKH SUHOLPLQDU\ KHDULQJ IURP WLPH WR WLPH XQWLOWKHSHULRGRIOLPLWDWLRQKDGH[SLUHGl,GDW7KH FRXUWWKHQGHWHUPLQHGWKDWWKHGHIHQGDQWjVFRQYLFWLRQKDGWR