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$SSHOOHH    1R Y  !  s())5( WKH@ SUHMXGLFLDO LPSDFWl RI WKH BBBBBBBBBBBBBBBBB SURVHFXWRUjVUHPDUNV,G 23,1,21 )LQDOO\UHFDOODJDLQWKHODQJXDJHLQ)UDQFLVZKLFKUHTXLUHV BBBBBBBBBBBBBBBBB WKDW WKH FRXUW mDGPRQLVK WKH MXU\l   )G DW  HPSKDVLVDGGHG7KHFRXUWjVUHEXNHZDVREYLRXVO\DLPHG 68+5+(,15,&+ &LUFXLW sXGJH  'HIHQGDQW$SSHOODQW DW WKH SURVHFXWRU QRW WKH MXU\  7KH FRXUW RUGHUHG WKH sHIIUH\*OHQQ*DOORZD\DSSHDOVIURPWKHMXGJPHQWHQWHUHGRQ SURVHFXWRUQRWWKHMXU\WRmPRYHRQl7KHMXU\XQGRXEWHGO\ )HEUXDU\LQWKH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH KHDUGWKHFRXUWVXVWDLQWKHGHIHQVHREMHFWLRQEXWQRRQHFDQ (DVWHUQ 'LVWULFW RI .HQWXFN\ RI FRQYLFWLRQ E\ MXU\ DQG SODXVLEO\FODLPWKDWWKHFRXUWGLUHFWHGLWVUHPDUNWRMXURUV VHQWHQFH LPSRVHG RQ WKUHH FRXQWV DULVLQJ RXW RI KLV ZKLFKLVZKDW)UDQFLVUHTXLUHV6HHLG LPSRUWDWLRQ DQG SRVVHVVLRQ RI HFVWDF\ LQ YLRODWLRQ RI  86&††DQGDQG86&† , ZRXOG UHYHUVH WKH FRQYLFWLRQ  6LQFH WKHUH ZDV QR DGPRQLVKPHQW IROORZLQJ WKH GHIHQVH REMHFWLRQ DQG WKH *DOORZD\UDLVHVWKUHHLVVXHVRQDSSHDO)LUVWKHFODLPVWKH JRYHUQPHQW GLG QRW SUHVHQW DQ RYHUZKHOPLQJ FDVH , GLVWULFWFRXUWHUUHGZKHQLWDGPLWWHGLQWRHYLGHQFHVWDWHPHQWV UHVSHFWIXOO\GLVVHQW6HHLG PDGHE\*DOORZD\WRD8QLWHG6WDWHV&XVWRPV,QVSHFWRULQ YLRODWLRQRI*DOORZD\jV)LIWKDQG6L[WK$PHQGPHQWULJKWV XQGHU 0LUDQGD Y $UL]RQD  86    6HFRQG *DOORZD\ FODLPV KH LV HQWLWOHG WR D QHZ WULDO EHFDXVH WKH SURVHFXWRU PDGH LPSURSHU UHPDUNV GXULQJ ILQDO DUJXPHQW 7KLUG*DOORZD\FODLPVKLVFRXQVHOZDVLQHIIHFWLYHEHFDXVH KLVFRXQVHOHOLFLWHGWHVWLPRQ\IURP*DOORZD\jVFRFRQVSLUDWRU ZKLFKWHQGHGWRLQFXOSDWH*DOORZD\VLQFHLWVKRZHGWKDWKH JHQHUDOO\SURPRWHVGUXJXVH :HGHQ\*DOORZD\jVFODLPDQGDIILUPRQDOOLVVXHV)LUVW DQGIRUHPRVWZHKROGWKDW0LUDQGDLVLQDSSOLFDEOHEHFDXVH D VHFRQGDU\ FXVWRPV LQVSHFWLRQ LV D URXWLQH QRQFXVWRGLDO  (FVWDF\ LV WKH PRVW FRPPRQ VWUHHW QDPH IRU WKH FKHPLFDO FRPSRVLWLRQ  PHWK\OHQHGLR[\DPSKHWDPLQH m0'0$l  *DOORZD\ DOWHUQDWLYHO\ FODLPV WKDW KLV FRXQVHO ZDV LQHIIHFWLYH LI KH IDLOHG WR SUHVHUYH *DOORZD\jV 0LUDQGD FODLP IRU DSSHOODWH UHYLHZ :H ILQG WKLV FODLP PRRW LQ OLJKW RI RXU DQDO\VLV RI *DOORZD\jV 0LUDQGD FODLP RQ WKH PHULWV  8QLWHG6WDWHVY*DOORZD\ 1R 1R 8QLWHG6WDWHVY*DOORZD\  SURYLGHVQRJXLGDQFHZKDWVRHYHU&I/DNHVY)RUG GHWHQWLRQ  6HFRQG WKH SURVHFXWRUjV VWDWHPHQWV DOWKRXJK )G   WK &LU  ILQGLQJ FXUDWLYH LPSURSHUGRQRWZDUUDQWDQHZWULDOLQWKHIDFHRIWKHRWKHU LQVWUXFWLRQLQDGHTXDWHZKHQLWRQO\FRQWUDGLFWHGDPDQGDWRU\ RYHUZKHOPLQJ HYLGHQFH  )LQDOO\ LQHIIHFWLYH DVVLVWDQFH RI SUHVXPSWLRQ UDWKHU WKDQ H[SODLQLQJ LWV LPSRUWDQFH DQG FRXQVHOFODLPVDUHJHQHUDOO\QRWKHDUGRQGLUHFWDSSHDODQG DSSOLFDELOLW\ WKHUHFRUGKHUHLVLQVXIILFLHQWWRSHUPLWXVWRKHDUWKHFODLP :KDWWKHPDMRULW\WHUPVDQDGPRQLVKPHQWZDVQRWRQO\ ,)DFWV XQDFFHSWDEO\ WHUVH LW ZDV KRSHOHVVO\ DPELJXRXV  7KH SURVHFXWRUjVREMHFWLRQDEOHVWDWHPHQWZDVRQHVHQWHQFHORQJ 2QsDQXDU\DQDUFRWLFVFDQLQHDOHUWHGRQDEDJDW ILIW\IRXU ZRUGV DQG RFFXUUHG LQ WKH PLGVW RI D OHQJWK\ WKH *UHDWHU &LQFLQQDWL 1RUWKHUQ .HQWXFN\ ,QWHUQDWLRQDO FORVLQJDUJXPHQW:LWKRXWJUHDWHUVSHFLILFLW\IURPWKHFRXUW $LUSRUWLQ&RYLQJWRQEHORQJLQJWR*DOORZD\jVFRGHIHQGDQW WKHMXU\PD\QRWKDYHXQGHUVWRRGSUHFLVHO\ZKDWZDUUDQWHG .ULVWLH .LUVFK ZKR KDG DUULYHG ZLWK *DOORZD\ RQ D IOLJKW WKHREMHFWLRQ(YHQDVVXPLQJWKHMXU\NQHZWKDWWKHFRXUWjV IURP %UXVVHOV %HOJLXP  2QFH .LUVFK LGHQWLILHG WKH EDJ VWDWHPHQWm6XVWDLQHG1RHYLGHQFH0RYHRQlPHDQWWKDW FXVWRPVLQVSHFWRUVUHPRYHGERWKKHUDQG*DOORZD\ WKH\ VKRXOG LJQRUH VRPHWKLQJ WKH SURVHFXWRU VDLG WKH MXU\ ZRXOGQRWNQRZZKDWWRLJQRUH,Q6LQJHUY8QLWHG6WDWHV &XVWRPV LQVSHFWRU sHIIUH\ 9DXJKQ WRRN 'HIHQGDQWV WR D 86WKH6XSUHPH&RXUWIRXQGWKHWULDOFRXUWjV VHFRQGDU\ LQVSHFWLRQ DUHD SXUVXDQW WR WKH 86 &XVWRPV OLPLWLQJ LQVWUXFWLRQ VXIILFLHQW EHFDXVH  WKH mFRXUWjV 6HUYLFHjV DXWKRULW\ WR VHDUFK WUDYHOHUV XQGHU  86& DGPRQLWLRQVWRWKHMXU\VHHPWRKDYHEHHQZHOOGHVLJQHGWR †   9DXJKQ EHJDQ KLV LQVSHFWLRQ E\ LQIRUPLQJ FXUH ZKDWHYHU SUHMXGLFLDO LPSDFW VRPH RI WKH SURVHFXWRUjV 'HIHQGDQWVWKDWDFDQLQHKDGDOHUWHGRQ.LUVFKjVEDJ$WWKLV WLPH9DXJKQQHLWKHUSODFHG'HIHQGDQWVXQGHUDUUHVWQRUUHDG WKHPWKHLU0LUDQGDULJKWV  7KH PDMRULW\ FODLPV WKDW WKLV &RXUWjV RSLQLRQ LQ 9DXJKQEHJDQKLVTXHVWLRQLQJE\DVNLQJ.LUVFKZK\VKH 8QLWHG 6WDWHV Y 6ROLYDQ  )G   WK &LU  mLQGLFDW>HV@ WKDW WKH WLPLQJ RI DQ DGPRQLWLRQ LV PRUH LPSRUWDQW WKDQ WKH ILUPQHVVl 6ROLYDQ GRHV WKRXJKWWKHFDQLQHKDGKLWRQKHUEDJ6KHUHVSRQGHGWKDWLW H[SODLQ WKDW m>E@RWK WKH WLPLQJ DQG WKH ILUPQHVV RI WKH WULDO FRXUW V ZDV EHFDXVH RI mWKRVH FDIHVl LQGLFDWLQJ mGRSH VPRNLQJ DGPRQLWLRQ DUH UHOHYDQW LQ HYDOXDWLQJ ZKHWKHU DQ DGPRQLWLRQ KDV EHHQ FDIHVl PRUH FRPPRQO\ UHIHUUHG WR DV KDVK EDUV  $V KH VXIILFLHQW WR PLWLJDWH SUHMXGLFLDO HUURUl ,G 6ROLYDQ KRZHYHU QHYHU VHDUFKHG'HIHQGDQWVjEDJV9DXJKQWXUQHGKLVTXHVWLRQLQJWR VXJJHVWV DV WKH PDMRULW\ GRHV WKDW WLPLQJ LV DOZD\V PRUH LPSRUWDQW WKDQ *DOORZD\DQGDVNHGKLPDVHULHVRITXHVWLRQVHDFKUHYROYLQJ DURXQG WKH SODFHV KH KDG EHHQ LQ (XURSH  6SHFLILFDOO\ ILUPQHVV RU WKDW WLPLQJ DQG ILUPQHVV DUH WKH RQO\ UHOHYDQW FRQVLGHUDWLRQV 6HH LG ,Q IDFW WKH mILUPQHVVl RI DQ DGPRQLVKPHQW LV GLIILFXOW WR HYDOXDWH RQ 9DXJKQZDVWU\LQJWRDVFHUWDLQZKHWKHU*DOORZD\DQG.LUVFK DSSHDO EHFDXVH WKH IRUFHIXOQHVV RI RUDO ODQJXDJH GHSHQGV KHDYLO\ RQ KDGEHHQWR$PVWHUGDPWKH1HWKHUODQGV,QUHVSRQVHWRWKHVH YROXPH WRQH FDGHQFH IDFLDO H[SUHVVLRQ DQG VR IRUWK 7LPLQJ LV TXHVWLRQV*DOORZD\PDGHVHYHUDOVWDWHPHQWVGHQ\LQJKHKDG mUHOHYDQWl DV 6ROLYDQ VD\V VHH LG EXW QRW GLVSRVLWLYH PDWWHUV JUHDWO\ EXW QR DGPRQLVKPHQW QR PDWWHU KRZ UDSLGO\ GHOLYHUHG ,Q IDFW WLPLQJ EHHQWR$PVWHUGDP VXIILFHV LI WKH LQVWUXFWLRQ ODFNV WKH FRQWHQW QHFHVVDU\ WR DSSURSULDWHO\ JXLGH WKH MXU\jV GHOLEHUDWLRQ 7KH PDMRULW\ DOVR FLWHV 6ROLYDQ IRU WKH QRWLRQ WKDW D FXUDWLYH LQVWUXFWLRQ LV RQO\ DGHTXDWH LI LW LV VZLIW DQG SURSRUWLRQDO WR WKH SRWHQWLDO  KDUP 6HH LG $V WKH PDMRULW\ ULJKWO\ FRQFHGHV WKH SURVHFXWRUjV 6HFWLRQ  SURYLGHV m>$@OO SHUVRQV FRPLQJ LQWR WKH 8QLWHG 6WDWHV VWDWHPHQW ZDV FOHDUO\ LPSURSHU DQG SUHMXGLFLDO ZKLFK PDNHV LW KDUG WR IURP IRUHLJQ FRXQWULHV VKDOO EH OLDEOH WR GHWHQWLRQ DQG VHDUFK E\ DFFHSW WKDW D ILYHZRUG VQLSSHW GHYRLG RI FRQWHQW ZDV SURSRUWLRQDO WR WKH DXWKRUL]HG RIILFHUV RU DJHQWV RI WKH *RYHUQPHQW XQGHU >7UHDVXU\@ SRWHQWLDO KDUP UHJXODWLRQVl  86& †  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s$ DW   7KH FRXUW KDG DQ REOLJDWLRQ WR SURSHUO\ VWDWHPHQWVKHKDGPDGHWR9DXJKQDWVHFRQGDU\LQVSHFWLRQ mDGPRQLVKWKHMXU\l)UDQFLV)GDW7KHFRXUW EHFDXVH WKH\ ZHUH REWDLQHG ZLWKRXW SURSHU 0LUDQGD VDLG RQO\ m6XVWDLQHG  1R HYLGHQFH  0RYH RQl  ,G ZDUQLQJV%DVLFDOO\WKHVWDWHPHQWVDPRXQWHGWR*DOORZD\ /LPLWLQJLQVWUXFWLRQVDQGVXVWDLQHGREMHFWLRQVDUHGLIIHUHQW GHQ\LQJKHKDGHYHUEHHQWRWKH1HWKHUODQGVHYHQZKHQIDFHG 7KHFRXUWjVUHPDUNGRHVQRWDSSHDUWREHDQDGPRQLVKPHQWRU ZLWKHYLGHQFHWRWKHFRQWUDU\IRXQGLQKLVEDJVXFKDV'XWFK OLPLWLQJLQVWUXFWLRQDWDOO PRQH\PHUFKDQGLVHEHDULQJDQ$PVWHUGDPORJRDQGWUDLQ WLFNHWVIURP%UXVVHOVWR$PVWHUGDP 5HWXUQLQJWRWKHGLFWLRQDU\RQFHPRUHDQDGPRQLWLRQLV mDQ\DXWKRULWDWLYHRUDOFRPPXQLFDWLRQRUVWDWHPHQWE\ZD\RI 7KH GLVWULFW FRXUW GHQLHG WKH PRWLRQ RQ 6HSWHPEHU  DGYLFHRUFDXWLRQE\WKHFRXUWWRWKHMXU\UHVSHFWLQJWKHLUGXW\ ILQGLQJWKDW0LUDQGDZDUQLQJVZHUHQRWUHTXLUHG7KH RUFRQGXFWDVMXURUVWKHDGPLVVLELOLW\RUQRQDGPLVVLELOLW\RI MXGJHUHDVRQHGWKDWWKHVHFRQGDU\LQVSHFWLRQZDVDURXWLQH HYLGHQFH RU WKH SXUSRVH IRU ZKLFK DQ\ HYLGHQFH DGPLWWHG FXVWRPV LQTXLU\ DQG DV VXFK QRW HQWLWOHG WR 0LUDQGD PD\EHFRQVLGHUHGE\WKHPl%/$&.j6 /$: ',&7,21$5 V@ VRPH JXLGDQFH WR WKH UHFHLYHG D UHGXFHG VHQWHQFH  .LUVFK WHVWLILHG WKDW VKH PHW *DOORZD\ ZKLOH VKH ZDV ZRUNLQJ DV D VHQWHQFHUl ZDLWUHVV DW D WRSOHVV EDU FDOOHG 7UHDVXUHV LQ +RXVWRQ 6KH IXUWKHU WHVWLILHG WKDW DIWHU VKH ORVW KHU MRE *DOORZD\ ZDV DZDUH WKDW VKH QHHGHG 6KHOOY0LVVLVVLSSL86TXRWLQJ:DOWRQY PRQH\ DQG DSSURDFKHG KHU DERXW VHUYLQJ DV D PXOH 6KH DJUHHG DQG $UL]RQD  86    HPSKDVLV LQ RULJLQDO *DOORZD\ SDLG IRU DOO KHU H[SHQVHV LQFOXGLQJ SD\LQJ IRU KHU SDVVSRUW DQG 7KLVPDNHVH[WUHPHO\FOHDUWKDWDOLPLWLQJLQVWUXFWLRQPXVW EX\LQJ KHU DLUIDUH KHU KRWHO DQG WKH FRDW LQ ZKLFK VKH ZDV FDUU\LQJ WKH HFVWDF\ 0RUHRYHU VKH FRXQWHUHG *DOORZD\jV DVVHUWLRQ WKDW VKH ZDV KLV SURYLGH JXLGDQFH \HW WKH WULDO FRXUWjV ODFRQLF UHVSRQVH JLUOIULHQG E\ LQVLVWLQJ VKH ZDV D OHVELDQ  8QLWHG6WDWHVY*DOORZD\ 1R 1R 8QLWHG6WDWHVY*DOORZD\  HJ8QLWHG6WDWHVY6ROLYDQ)GWK&LU .LUVFKZDVKLVJLUOIULHQGDQGWKDWKHKDGQRNQRZOHGJHRIWKH  GUXJVVKHZDVFDUU\LQJ7KHMXU\FRQYLFWHG*DOORZD\RQDOO WKUHHFRXQWVDQGKHZDVVHQWHQFHGWRQLQHW\VHYHQPRQWKV sXULHVKDYHJUHDWFRQILGHQFHLQZKDWSURVHFXWRUVVD\6LQFH MXULHVKDYHFRQILGHQFHLQWKHWUXVWZRUWKLQHVVRISURVHFXWRUV *DOORZD\ILOHGDWLPHO\QRWLFHRIDSSHDORQ)HEUXDU\ VHH %HUJHU ,,  86 DW  mLPSURSHU >SURVHFXWRULDO@  WKH VDPH GD\ WKH MXGJPHQW ZDV LPSRVHG DQG WKLV VXJJHVWLRQV LQVLQXDWLRQV DQG HVSHFLDOO\ DVVHUWLRQV RI PDWWHULVSURSHUO\EHIRUHWKLV&RXUW SHUVRQDONQRZOHGJHDUHDSWWRFDUU\PXFKZHLJKWDJDLQVWWKH DFFXVHGZKHQWKH\VKRXOGSURSHUO\FDUU\QRQHl,GVHHDOVR ,,*DOORZD\jV0LUDQGD5LJKWV %HVV)GDWWK&LUm$Q$VVLVWDQW8QLWHG 6WDWHV$WWRUQH\SXUSRUWVWRUHSUHVHQWWKH3HRSOHRIWKH8QLWHG :HUHYLHZDGLVWULFWFRXUWjVUXOLQJRQDPRWLRQWRVXSSUHVV 6WDWHV DQG WKXV FDUULHV D VSHFLDO DXUD RI OHJLWLPDF\ DERXW WKURXJK D PL[HG VWDQGDUG RI UHYLHZ  )LQGLQJV RI IDFW KLPl  5HO\LQJ RQ KLV RZQ H[SHULHQFH WKH SURVHFXWRU VXSSRUWLQJWKHFRXUW VGHFLVLRQDUHUHYHUVHGRQO\LIWKH\DUH H[SODLQHGWKDWPXOHVGRLQIDFWVRPHWLPHVWUDYHOZLWKWKHLU FOHDUO\HUURQHRXV7KHFRXUW VILQDOGHWHUPLQDWLRQDVWRWKH ERVVHV   ,I WKH MXU\ EHOLHYHG KLPnZKLFK LV QRW DQ UHDVRQDEOHQHVVRIWKHVHDUFKLVDTXHVWLRQRIODZUHYLHZHGGH XQUHDVRQDEOHDVVXPSWLRQnWKHQLWFDQQRWVDIHO\EHVDLGWKDW QRYR8QLWHG6WDWHVY+DUULV)GWK&LU WKHFRPPHQWmGLGQRWFRQWULEXWHlWR*DOORZD\jVFRQYLFWLRQ FHUWGHQLHGn86n6&W.QR[&RXQW\ 6ROLYDQ)GDW:KHWKHUORRNLQJDWWKHGLFWLRQDU\ (GXF$VVjQY.QR[&RXQW\%GRI(GXF)G GHILQLWLRQRImRYHUZKHOPLQJlWKHFDVHODZRUEDFNJURXQG WK &LU   :KHQ WKH GLVWULFW FRXUW KDV GHQLHG WKH OHJDO SULQFLSOHV WKH FDVH DJDLQVW *DOORZD\ LV VXIILFLHQW WR PRWLRQWRVXSSUHVVZHUHYLHZDOOHYLGHQFHLQDOLJKWPRVW VXSSRUWDFRQYLFWLRQEXWQRWRYHUZKHOPLQJ IDYRUDEOHWRWKH*RYHUQPHQW8QLWHG6WDWHVY*DU]D)G WK&LU 7KHPDMRULW\FRXOGFRQFHGHWKLVSRLQWKRZHYHU\HWVWLOO MXVWLI\WKHGHFLVLRQWRDIILUPEHFDXVHWKH)UDQFLVWHVWRQO\ *DOORZD\ FODLPV WKDW DQ\ VWDWHPHQWV PDGH E\ KLP WR UHTXLUHVUHYHUVDOHYHQZLWKRXWRYHUZKHOPLQJHYLGHQFHLIWKH 9DXJKQVKRXOGEHVXSSUHVVHGEHFDXVHWKH\ZHUHREWDLQHGLQ FRXUWIDLOHGWRFXUHWKHLPSURSULHW\E\IDLOLQJWRDGPRQLVKWKH YLRODWLRQRI0LUDQGD0LUDQGDZDUQLQJVDUHQHFHVVDU\RQO\ MXU\l  )GDW7KHPDMRULW\DUJXHVWKDWWKHWULDO LIWKHGHIHQGDQWLVVXEMHFWHGWRDmFXVWRGLDOLQWHUURJDWLRQl FRXUWmVDWLVILH>G@WKHFXUDWLYHLQVWUXFWLRQUHTXLUHPHQWl7KH 0LUDQGD86DW$FFRUGLQJO\*DOORZD\DUJXHVWKDW IROORZLQJ LV WKH HQWLUH UHOHYDQW H[FKDQJH LQFOXGLQJ WKH KH ZDV mLQ FXVWRG\l ZKHQ 9DXJKQ ZDV SHUIRUPLQJ WKH FRXUWjVUHVSRQVHDIWHUWKHGHIHQVHREMHFWHGWRWKHLPSURSHU VHFRQGDU\LQVSHFWLRQ SURVHFXWRULDOFRPPHQW :KHWKHU D SHUVRQ LV LQ FXVWRG\ IRU0LUDQGD SXUSRVHV LV 3URVHFXWRU , KDYH WULHG VHYHUDO FDVHV P\VHOI GHWHUPLQHGE\QHLWKHUWKHSHUFHSWLRQRIWKHGHIHQGDQWQRURI ZKHUHZHVHHWKHPXOHWHUPDQGZH WKHSROLFH,WLVGHWHUPLQHGE\WKHREMHFWLYHSHUFHSWLRQRID KDYHDGHIHQGDQWZKRFODLPVKHRU UHDVRQDEOH PDQ LQ WKH GHIHQGDQWjV VKRHV  6WDQVEXU\ Y VKHLVDPXOHDQG,KDYHKDGVHYHUDO &DOLIRUQLD  86     7KH VWDQGDUG LV FDVHV ZKHUH NLQG RI OLNH WKH SHUKDSVEHVWVWDWHGDQRWKHUZD\m7KHWHVWPXVWEHQRWZKDW ERG\JXDUG VFHQDULR ZKHUH WKH WKHGHIHQGDQWKLPVHOIDVDSRVVHVVRURIGUXJVDWWKHWLPHRI LQGLYLGXDOZKRLVUHVSRQVLEOHIRUWKH KLVGHWHQWLRQWKRXJKWEXWZKDWDUHDVRQDEOHPDQLQQRFHQW RI DQ\ FULPH ZRXOG KDYH WKRXJKW KDG KH EHHQ LQ WKH GHIHQGDQWjV VKRHVl  8QLWHG 6WDWHV Y 0F.HDWKDQ  )  8QLWHG6WDWHVY*DOORZD\ 1R 1R 8QLWHG6WDWHVY*DOORZD\  6XSS'LVW'&HPSKDVLVDGGHGVHHDOVR PXOH EHFDXVH KH WUDYHOHG ZLWK KHU  3XW UKHWRULFDOO\ ZK\ &RDWHVY8QLWHG6WDWHV)G'&&LU ZRXOG*DOORZD\SD\DPXOHWRLPSRUWGUXJVIURP(XURSHDQG 8QLWHG6WDWHVY&ROHPDQ)6XSS('0LFK ULVN DUUHVW XSRQ UHHQWU\ DQG WKHQ DFFRPSDQ\ WKH PXOH 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  7KH SDVVHQJHU LV XVXDOO\ DVNHG FDUU\LQJWKHGUXJV TXHVWLRQVUHJDUGLQJKLVWULSLQFOXGLQJWKHFRXQWULHVKHKDV YLVLWHGDQ\PHUFKDQGLVHKHKDVEURXJKWEDFNDQGWKHYDOXH s$ DW   7KH JRYHUQPHQW LQWURGXFHG QR HYLGHQFH RIVXFKPHUFKDQGLVH+LVDQVZHUVDUHFKHFNHGDJDLQVWKLV HVWDEOLVKLQJ WKH SURSHQVLW\ RI PXOHV WR WUDYHO ZLWK WKHLU FXVWRPVGHFODUDWLRQIRUPDQGXVXDOO\KHLVVHQWRQKLVZD\ ERVVHV,QVWHDGWKHSURVHFXWRUXVHGKLVSHUVRQDOH[SHULHQFH +RZHYHUDSRUWLRQRIWUDYHOHUVDUHKHOGRYHUIRUVHFRQGDU\ WR DQQLKLODWH WKH FUX[ RI WKH GHIHQVH  :LWKRXW WKH LQVSHFWLRQ  $Q LQVSHFWRU ZLOO UHFRPPHQG D WUDYHOHU IRU SURVHFXWRUjVWHVWLPRQ\DUHDVRQDEOHMXU\FRXOGKDYHDFFHSWHG VHFRQGDU\LQVSHFWLRQIRUVHYHUDOUHDVRQVnIRULQVWDQFHLIWKH *DOORZD\jVWKHRU\ WUDYHOHU LV VXVSHFWHG RI FDUU\LQJ QDUFRWLFV  0RUHRYHU D VHFRQGDU\LQVSHFWLRQPD\EHRUGHUHGLIWKHLQVSHFWRUVXVSHFWV  6HFRQG GXH SURFHVV FRQFHUQV LQIOXHQFH KRZ ZHGHILQH D WUDYHOHU RZHV FXVWRPV GXWLHV RU KDV XQGHFODUHG mRYHUZKHOPLQJl  $V WKH 6XSUHPH &RXUW H[SODLQHG LQ D FRPPHUFLDO RU SURKLELWHG PHUFKDQGLVH  )XUWKHUPRUH WKH KDEHDV FRQWH[Wm>W@KH UHOHYDQW TXHVWLRQ LV ZKHWKHU WKH 86 &XVWRPV 6HUYLFH KDV GHYHORSHG D SURJUDP FDOOHG SURVHFXWRUV FRPPHQWVµVRLQIHFWHGWKHWULDOZLWKXQIDLUQHVV &RPSOLDQFH([DPLQDWLRQ&203(;LQZKLFKLWUDQGRPO\ DVWRPDNHWKHUHVXOWLQJFRQYLFWLRQDGHQLDORIGXHSURFHVVjl VHOHFWVDGGLWLRQDOWUDYHOHUVIRUVHFRQGDU\LQVSHFWLRQEDVHGRQ 'DUGHQY:DLQZULJKW86 TXRWLQJ QRVXVSLFLRQZKDWVRHYHU'XULQJVHFRQGDU\LQVSHFWLRQWKH 'RQQHOO\Y'H&KULVWRIRUR867R SDVVHQJHULVDVNHGPRUHGHWDLOHGTXHVWLRQVDERXWKLVWULSDQG PDNHRXUWHVWFRQVLVWHQWZLWK'DUGHQWKHJRYHUQPHQWjVFDVH PD\KDYHKLVEDJDQGERG\VHDUFKHG7KHSURFHGXUHODVWVD FDQ RQO\ EH  mRYHUZKHOPLQJl DQG WKXV SUHFOXGLQJ UHWULDO IHZPLQXWHVDQGLIQRWKLQJLVIRXQGWKHWUDYHOHULVIUHH ZKHQWKHGHIHQGDQWjVGXHSURFHVVULJKWVZHUHQRWGLVWXUEHG WRJR6HH8 6 &867206 6(59,&(:+ W@KH TXHVWLRQ LV & 2 1 ' 8 & 7 6 ( ; $ 0 , 1 $ 7 , 2 1 6   D W ZKHWKHU WKHUH LV D UHDVRQDEOH SRVVLELOLW\ WKDW WKH KWWSZZZFXVWRPVXVWUHDVJRYWUDYHOH[DPLQDWLRQVKWP >LQDGPLVVLEOH@ HYLGHQFH FRPSODLQHG RI PLJKW KDYH >KHUHLQDIWHU&XVWRPV:HEVLWH@ FRQWULEXWHGWRWKHFRQYLFWLRQl)DK\Y&RQQHFWLFXW86 $SSO\LQJWKLVORJLFWKLV&RXUWKDVUHYHUVHG 8QGHU86&†WKH86&XVWRPV6HUYLFHKDVWKH FRQYLFWLRQVZKHQZHZHUHXQDEOHWRmFRQFOXGHWKDWWKHUHLV DXWKRULW\WRVXEMHFWHYHU\LQWHUQDWLRQDOWUDYHOHUWRDVHFRQGDU\ QR UHDVRQDEOH SRVVLELOLW\ WKDW WKH >LPSURSHU SURVHFXWRULDO@ LQVSHFWLRQEXWLWGRHVQRWGRVREHFDXVHUHVRXUFHVDUHOLPLWHG FRPPHQWVGLGQRWFRQWULEXWHWRGHIHQGDQWjVFRQYLFWLRQl6HH 6HH&XVWRPV:HEVLWH$VRSSRVHGWRMDLOKRXVHLQWHUURJDWLRQV  8QLWHG6WDWHVY*DOORZD\ 1R 1R 8QLWHG6WDWHVY*DOORZD\  $UPVWURQJ VH[FXVHVIRUWKHODUJHFDVKGHSRVLWVZHUHQRW DQG RWKHU VLWXDWLRQV ZH KDYH KHOG FXVWRGLDO WKHUH LV QR FUHGLEOHHJWKDWGUXJGHDOHUVSDLGKHUIRUOHWWLQJWKHP SUREDEOHFDXVHUHTXLUHGIRUWKH&XVWRPV6HUYLFHWRGHWDLQD XVHKHUGULYHZD\WRVHOOGUXJV WUDYHOHUIRUDVHFRQGDU\LQVSHFWLRQ6HH86&†FI 0LUDQGD86LQYROYLQJGHIHQGDQWVDOUHDG\SODFHG %OXH &URVV V\VWHPDWLFDOO\ DQG HOHFWURQLFDOO\ LQFOXGHG XQGHU DUUHVW  ,WV SRZHU WR VHDUFK LV YHVWHG LQ WKH YRXFKHUV GHVFULELQJ WKH VXEVFULEHU DQG WKH SURYLGHU YROXQWDULQHVVRIWKHWUDYHOHUjVDWWHPSWWRUHHQWHUWKHFRXQWU\ ZLWKLWVFKHFNVZKLFKFRQWUDGLFWV7RQH\ VWHVWLPRQ\WKDW 8QLWHG6WDWHVY5DPVH\86VHHDOVR QRYRXFKHUVZHUHDWWDFKHGWRDQ\RIKHUFKHFNV 8QLWHG 6WDWHV Y 6FKHHU  )G   G &LU  m>(@YHQWVZKLFKPLJKWEHHQRXJKWRVLJQDOµFXVWRG\jDZD\ 7RQH\DGPLWWHGQHYHUKDYLQJFRPSOHWHGDQ\SDSHUZRUN IURPWKHERUGHUZLOOQRWEHHQRXJKWRHVWDEOLVKµFXVWRG\jLQ IRUWKHDOOHJHGUHLPEXUVHPHQWDQGQHYHUKDYLQJSURYLGHG WKHFRQWH[WRIHQWU\LQWRWKHFRXQWU\l8QLWHG6WDWHVY0R\D $UPVWURQJZLWKDQ\GHWDLOVUHJDUGLQJWKHQDWXUHRIWKH )GWK&LU FDUHVKHSURYLGHGHJWKHGDLO\KRXUVVSHQWFDULQJIRU KHUIDWKHURUWKHWUDYHOGLVWDQFHVWRWKHKRVSLWDO :H KDYH KHOG WKDW URXWLQH FXVWRPV LQVSHFWLRQV DUH QRQ FXVWRGLDODQGGRQRWUHTXLUHWKHUHDGLQJRI0LUDQGDULJKWV,Q ,GDW:HIRXQGWKLVFDVHmRYHUZKHOPLQJlDQGWKXV 8QLWHG6WDWHVY2]XQD)GWK&LUDWD D QHZ WULDO XQZDUUDQWHG  ,G DW   7RQH\ LV DQ URXWLQH&DQDGLDQERUGHUVWRSLQVSHFWRUVDVNHGWKHGHIHQGDQW mRYHUZKHOPLQJl FDVH &DUUROO LV QRW DQG WKH FDVH DJDLQVW TXHVWLRQVLQDQDWWHPSWWRGHWHUPLQHKLVLGHQWLW\2]XQDOLHG *DOORZD\LVZHDNHUWKDQWKHFDVHDJDLQVW&DUUROORUDWOHDVW DQG SUHVHQWHG D IDOVH LGHQWLW\  $ VHDUFK RI WKH GHIHQGDQW HTXDOO\WKLQ7KHFDVHODZVXJJHVWVWKHUHIRUHWKDWWKHFDVH XOWLPDWHO\SURGXFHGVRPHGUXJVDQGWKHVWDWHPHQWV2]XQD DJDLQVW*DOORZD\LVQRWmRYHUZKHOPLQJl KDG PDGH ZHUH LQWURGXFHG DJDLQVW KLP  :H KHOG WKH VWDWHPHQWVDGPLVVLEOHEHFDXVHDSULPDU\FXVWRPVLQVSHFWLRQ 7ZR RWKHU DUJXPHQWV GHVHUYH PHQWLRQ  )LUVW ORJLFDOO\ LV QRW FXVWRGLDO VLQFH DOO WUDYHOHUV DUH VXEMHFW WR WKH VDPH mRYHUZKHOPLQJlPXVWPHDQVRPHWKLQJPRUHWKDQFHUWDLQW\ WUHDWPHQW DQG WKH UHDVRQDEOH PDQ YLHZV LW DV D FXUVRU\ mEH\RQGDUHDVRQDEOHGRXEWl2WKHUZLVHWKHILUVWSRUWLRQRI UHTXLUHPHQWRIUHHQWHULQJWKHFRXQWU\,GDW WKH WHVW ZKHWKHU mSURRI RI WKH GHIHQGDQW V JXLOW LV QRW RYHUZKHOPLQJl )UDQFLV  )G DW  ZRXOG EH 7KH GLVWULFW FRXUW IRXQG WKDW 2]XQD FRQWUROV KHUH VXSHUIOXRXV2QHFDQFRQFHLYHRIDVSHFWUXPRIVXVWDLQDEOH +RZHYHU *DOORZD\ DUJXHV WKDW 2]XQD DSSOLHV RQO\ WR JXLOW\YHUGLFWVUXQQLQJIURPHYLGHQFHSURYLQJJXLOWmEH\RQG SULPDU\ FXVWRPV LQVSHFWLRQV DQG GRHV QRW VSHDN WR PRUH DUHDVRQDEOHGRXEWlRQRQHHQGWRmRYHUZKHOPLQJlHYLGHQFH SDUWLFXODUL]HG VHFRQGDU\ LQVSHFWLRQV OLNH WKH RQH WR ZKLFK RIJXLOWRQWKHRWKHU$SSHOODWHFRXUWVGRQRWGLVWXUEDJXLOW\ *DOORZD\ ZDV VXEMHFWHG  *DOORZD\ DUJXHV WKDW WKH YHUGLFWLIDQ\mUDWLRQDOWULHURIIDFWFRXOGKDYHIRXQGSURRIRI DFFXVDWRULDO DQG IRFXVHG QDWXUH RI D VHFRQGDU\ LQVSHFWLRQ JXLOWEH\RQGDUHDVRQDEOHGRXEWlsDFNVRQY9LUJLQLD JRHVZHOOEH\RQGZKDWWKHUHDVRQDEOHWUDYHOHUZRXOGFRQVLGHU 86     7R NHHS mRYHUZKHOPLQJl HYLGHQFH URXWLQH RU QRQFXVWRGLDO  +RZHYHU WKH IDFW WKDW DQ DQDO\WLFDOO\ GLVWLQFW IURP HYLGHQFH RI JXLOW mEH\RQG D LQWHUURJDWLRQ LV QRW UDQGRP EXW IRFXVHG RQ D SDUWLFXODU UHDVRQDEOHGRXEWlDWWKHRWKHUHQGRIWKHVSHFWUXPLWPDNHV GHIHQGDQW GRHV QRW DXWRPDWLFDOO\ UHQGHU LW FXVWRGLDO  6HH VHQVH WKDW DQ mRYHUZKHOPLQJl FDVH LV RQH LQ ZKLFK QR 0DWKLDVRQY2UHJRQ86SHUFXULDP UHDVRQDEOHMXU\FRXOGDFTXLW VWDWLQJm>Q@RULVWKHUHTXLUHPHQWRIZDUQLQJVWREHLPSRVHG VLPSO\EHFDXVHWKHTXHVWLRQHGSHUVRQLVRQHZKRPWKH 7KLV LV FHUWDLQO\ QRW WUXH LQ *DOORZD\jV FDVH  *DOORZD\ SROLFH VXVSHFWl %HFNZLWK Y 8QLWHG 6WDWHV  86  DUJXHG WKDW .LUVFK FRXOG QRW SRVVLEO\ KDYH ZRUNHG DV KLV  8QLWHG6WDWHVY*DOORZD\ 1R 1R 8QLWHG6WDWHVY*DOORZD\    VWDWLQJ LW mZDV WKH FRPSXOVLYH DVSHFW RI $WWULDO$UPVWURQJWHVWLILHGRQ7RQH\jVEHKDOI,GDW FXVWRGLDOLQWHUURJDWLRQDQGQRWWKHVWUHQJWKRUFRQWHQWRIWKH $UPVWURQJ DGPLWWHG KHU RZQ FXOSDELOLW\ EXW GHQLHG DQ\ JRYHUQPHQWjV VXVSLFLRQV DW WKH WLPH WKH TXHVWLRQLQJ ZDV NQRZOHGJHRI7RQH\jVLQYROYHPHQW,G3URVHFXWRUVDWWDFNHG FRQGXFWHG ZKLFK OHG WKH &RXUW WR LPSRVH WKH 0LUDQGD $UPVWURQJjVFUHGLELOLW\E\TXHVWLRQLQJKHUDERXWLQFRQVLVWHQW UHTXLUHPHQWV ZLWK UHJDUG WR FXVWRGLDO TXHVWLRQLQJl  7KH RUDOVWDWHPHQWVVKHDOOHJHGO\PDGHWRWKH)%,DWWKHWLPHRI WRWDOLW\RIWKHFLUFXPVWDQFHVPXVWEHH[DPLQHGWRGHWHUPLQH KHUDUUHVW,G6SHFLILFDOO\$UPVWURQJZDVDVNHGZKHWKHUVKH ZKHWKHUWKHUHZDVDmIRUPDODUUHVWRUUHVWUDLQWRQIUHHGRPRI KDGSUHYLRXVO\WROGWKHJRYHUQPHQWWKDW7RQH\SDUWLFLSDWHGLQ PRYHPHQW RI WKH GHJUHH DVVRFLDWHG ZLWK D IRUPDO DUUHVWl WKHIUDXG,G$UPVWURQJGHQLHGPDNLQJVXFKVWDWHPHQWVDQG 7KRPSVRQY.HRKDQH86 WKHJRYHUQPHQWQHYHUSUHVHQWHGDQ\HYLGHQFHRWKHUZLVH,G 1HYHUWKHOHVVLQLWVFORVLQJDUJXPHQWWKHJRYHUQPHQWPDGH :H ILQG QR GLVWLQFWLRQ EHWZHHQ SULPDU\ DQG VHFRQGDU\ WKUHHUHIHUHQFHVWR$UPVWURQJjVDOOHJHGSULRUVWDWHPHQWV,G LQVSHFWLRQV DQ\ZKHUH LQ WKH FXVWRPV VWDWXWHV RU WKHLU DW7KH7RQH\RSLQLRQVXPPDUL]HVWKHHYLGHQFHDFWXDOO\ UHJXODWLRQV7KLVGLVWLQFWLRQLVPHUHO\DIXQFWLRQDODVSHFWRI SUHVHQWHGDJDLQVWWKHGHIHQGDQW WKH SDUWLFXODU QRPHQFODWXUH XVHG E\ WKH 86 &XVWRPV 6HUYLFH  $V HYLGHQFHG E\ WKH &XVWRPV 6HUYLFHj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 ZKHUH VKH LQFXUUHG D IHH RU DW YDULRXV EUDQFKHV RI 2]XQDGHPRQVWUDWHVWKDWWKLVVWDQGDUGLVQRWFRUUHFW7KHUH 0LFKLJDQ1DWLRQDO%DQNUDWKHUWKDQGHSRVLWLQJWKHPLQ ZHKHOGWKDWSULPDU\LQVSHFWLRQVDUHQRWFXVWRGLDODOWKRXJK KHURZQFKHFNLQJDFFRXQW WKHWUDYHOHULVQRWIUHHWRJR2]XQD)GDW 7KHFKHFNV7RQH\FDVKHGWRWDOHGDQGWKH (YHQLIDVHFRQGDU\LQVSHFWLRQLQJHQHUDOLVQRWFXVWRGLDO IRXU VKH IDLOHG WR QHJRWLDWH WRWDOHG  WKH *DOORZD\FODLPVWKDWKLVSDUWLFXODUGHWHQWLRQZDVEHFDXVHWKH FRPELQDWLRQ EHLQJ D YHU\ ODUJH VXP RI PRQH\ IRU FLUFXPVWDQFHVVXUURXQGLQJKLVLQVSHFWLRQPDGHLWDNLQWRDQ XQGRFXPHQWHGFDUHVKHSURYLGHGKHUIDWKHURYHUDQHLJKW DUUHVW+RZHYHUWKHTXHVWLRQV9DXJKQDVNHG*DOORZD\ZHUH PRQWKSHULRGRIWLPHWRVD\QRWKLQJRIWKHLPSUREDELOLW\ LQGLFDWLYH RI D URXWLQH FXVWRPV LQTXLU\ QR GLIIHUHQW WKDQ WKDWKHUIDWKHU VLQVXUDQFHZRXOGHYHQFRYHUVXFKFDUH WKRVH WKDW ZRXOG KDYH EHHQ DVNHG DW SULPDU\ LQVSHFWLRQ 9DXJKQDVNHGLQRUGHU 3HWW\DQG5HDUGRQNQHZWKHVFKHPHZDVIUDXGXOHQWDQG VSOLWWKHSURFHHGVZLWK$UPVWURQJ'XULQJWKHWLPHIUDPH 7RZKLFKFRXQWULHVGLG\RXWUDYHO" RI WKH VFKHPH D QXPEHU RI ODUJH FDVK GHSRVLWV ZHUH 'LG\RXJRWR*HUPDQ\$PVWHUGDPRU+ROODQG" PDGHLQWR$UPVWURQJ VDFFRXQWIRUZKLFKWKHUHZDVQR DSSDUHQWVRXUFHRWKHUWKDQWKH%OXH&URVVFKHFNVSD\DEOH WR7RQH\  8QLWHG6WDWHVY*DOORZD\ 1R 1R 8QLWHG6WDWHVY*DOORZD\  MHRSDUGL]HWKHPVHOYHVZLWKWKLVDJUHHPHQWWRGRDQ\WKLQJ  ,I \RX KDYHQjW EHHQ WR +ROODQG ZK\ GR \RX KDYH EXWWHOOWKHWUXWK JXLOGHUV" :KDWGLG\RXSXUFKDVHRQ\RXUWULS" ,G DW  Q  'HIHQVH FRXQVHO GLG QRW REMHFW  ,Q WKH ,VWKLVVZHDWVKLUWZLWKm$PVWHUGDPlZULWWHQDFURVV JRYHUQPHQWjVFORVLQJWKHSURVHFXWRUUHLWHUDWHGWKLVDUJXPHQW WKHIURQWWKHRQH\RXSXUFKDVHG" ZLWK UHVSHFW WR ERWK ZLWQHVVHV  ,G DW   7KLV WLPH ,I\RXZHUHQRWLQ+ROODQGWKHQZK\DUHWKHUHWUDLQ GHIHQVHFRXQVHOREMHFWHGEXWZDVRYHUUXOHG,G$OWKRXJK WLFNHWVIURP%UXVVHOVWR$PVWHUGDPLQ\RXUEDJ" WKH&DUUROO&RXUWIRXQGWKDWWKHLPSURSHUVWDWHPHQWZDVQRW mIODJUDQWlLWRUGHUHGDQHZWULDODQ\ZD\EHFDXVHWKHHYLGHQFH :H ILQG QRWKLQJ FRHUFLYH DERXW WKLV OLQH RI TXHVWLRQLQJ RI WKH GHIHQGDQWjV JXLOW ZDV QRW mRYHUZKHOPLQJl GHIHQVH 0RUHRYHU*DOORZD\ZDVVWDQGLQJWKHHQWLUHWLPHDQGLQSODLQ FRXQVHOREMHFWHGWRWKHRQHRIWKHSURVHFXWRUjVVWDWHPHQWV YLHZRIRWKHUWUDYHOHUVDQGQRWWDNHQWRDURRPRUDQRWKHU DQGWKHFRXUWGLGQRWFXUHWKHHUURU,GDW SDUWRIWKHDLUSRUW 7KH JRYHUQPHQW RIIHUHG RQO\ RQH DFFRPSOLFH DJDLQVW :HIXUWKHUILQGQRSUREOHPZLWKWKHOHQJWKRI*DOORZD\jV *DOORZD\ZKHUHDVSURVHFXWRUVRIIHUHGWZRLQ&DUUROO:LWK GHWHQWLRQ)LUVWWKHGHWHQWLRQZDVRQO\VHYHQWRWHQPLQXWHV DQH[WUDZLWQHVVRQHFRXOGDUJXHWKDWWKH&DUUROOSURVHFXWRUV LQ GXUDWLRQ  7KLV VHYHQ WR WHQ PLQXWHV LQFOXGHG QRW RQO\ KDGWKHLUFRQYLFWLRQUHYHUVHGGHVSLWHDVWURQJHUFDVHWKDQWKH 9DXJKQj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  LQ ZKLFK ZH IRXQG WKDW DQ WKH\ DVFHUWDLQHG KLV LGHQWLW\  /LNHZLVH *DOORZD\ OLHG WR LPSURSHUSURVHFXWRULDOUHPDUNZDVQRQIODJUDQWDQGGHFOLQHG 9DXJKQDERXWWKHFRXQWULHVKHKDGYLVLWHGWKHUHE\H[SRVLQJ WR RUGHU D QHZ WULDO EHFDXVH D SURSHU FXUDWLYH LQVWUXFWLRQ KLPVHOI WR WKH SRVVLELOLW\ RI D ORQJHU GHWHQWLRQ ZKLOH IROORZHG D GHIHQVH REMHFWLRQ DQG WKH HYLGHQFH ZDV LQVSHFWRUVVHDUFKHGIRUWKHWUXWK mRYHUZKHOPLQJl,GDW7RQH\ZDVSURVHFXWHGIRU SDUWLFLSDWLQJLQDVFKHPHWRGHIUDXGDQLQVXUDQFHSURYLGHU *DOORZD\ODVWO\DUJXHVWKDWKLVSDUWLFXODULQVSHFWLRQZDV %OXH&URVVE\FDVKLQJIDOVLILHGEHQHILWFKHFNV,GDW FXVWRGLDOEHFDXVHLWZDVLQLWLDWHGE\DFDQLQHDOHUW7KH1LQWK 7KHJRYHUQPHQWDOOHJHG7RQH\DFWHGLQFDKRRWVZLWKWKUHHRI &LUFXLWKDVDGGUHVVHGWKLVLVVXHDQGIRXQGWKDWWKHH[LVWHQFH KHUQHLJKERUV.ULVWHQ$UPVWURQJ L@IWKHFDVHDJDLQVW%HUJHUKDG DPXOHKHZRXOGQRWKDYHDFFRPSDQLHGKHURQWKHIOLJKWDQG EHHQ VWURQJ RU DV VRPH FRXUWV KDYH VDLG WKH HYLGHQFH RI WKURXJKFXVWRPV,QVWHDGKHZRXOGKDYHVHQWKHUDORQHRU JXLOW µRYHUZKHOPLQJj D GLIIHUHQW FRQFOXVLRQ PLJKW EH ZDWFKHG IURP D GLVWDQFH  ,Q LWV FORVLQJ DUJXPHQW UHDFKHGl,GDW *RYHUQPHQWFRXQVHODWWHPSWHGWRUHIXWHWKLVGHIHQVHVWDWLQJ %HUJHUGRHVQRWH[SUHVVO\GHILQHmRYHUZKHOPLQJlDQGWKH ,KDYHWULHGVHYHUDOFDVHVP\VHOIZKHUHZHVHHWKHPXOH DERYHTXRWHG VHQWHQFH LV UHDOO\ GLFWD  ,W LV VLJQLILFDQW WHUPDQGZHKDYHDGHIHQGDQWZKRFODLPVKHRUVKHLVD KRZHYHUWKDWWKHJRYHUQPHQWjVFDVHmGHSHQG>HG@XSRQ PXOHDQG,KDYHKDGVHYHUDOFDVHVZKHUHNLQGRIOLNHWKH WKHWHVWLPRQ\RI.DW]DQDFFRPSOLFHZLWKDORQJFULPLQDO ERG\JXDUG VFHQDULR ZKHUH WKH LQGLYLGXDO ZKR LV UHFRUGl,GDW7KH&RXUWFKDUDFWHUL]HGWKHJRYHUQPHQWjV UHVSRQVLEOH IRU WKH GUXJV WUDYHOV ZLWK WKH LQGLYLGXDO FDVHDVmZHDNl,G FDUU\LQJWKHGUXJV 7KH SUHVHQFH RI FRUURERUDWLQJ HYLGHQFH PDNHV WKH FDVH 7ULDO 1RY   DW 7U   *DOORZD\ FODLPV WKLV DJDLQVW *DOORZD\ VRPHZKDW VWURQJHU WKDQ WKH FDVH DJDLQVW VWDWHPHQW LV LPSURSHU EHFDXVH WKH SURVHFXWRU  LQMHFWHG KLV %HUJHUEXW%HUJHUQHYHUWKHOHVVVKRZVWKHVWUDLQWKHPDMRULW\ RZQ SHUVRQDO NQRZOHGJH LQWR WKH FDVH DQG KH WKHUHIRUH LV SODFHVRQWKHZRUGmRYHUZKHOPLQJlEHFDXVHERWKWKHFDVH HQWLWOHGWRDQHZWULDO DJDLQVW*DOORZD\DQGWKHFDVHDJDLQVW%HUJHUGHSHQGKHDYLO\ RQ TXHVWLRQDEOH DFFRPSOLFH WHVWLPRQ\  /LWHUDOO\ :KHQUHYLHZLQJDFODLPRISURVHFXWRULDOPLVFRQGXFWEDVHG RQLPSURSHUVWDWHPHQWVZHHPSOR\DWZRSDUWWHVW8QLWHG 6WDWHVY&DUUROO)GWK&LU7KH  %HUJHU LV DOVR GLVWLQJXLVKDEOH EHFDXVH WKH SURVHFXWRU PDGH VHYHUDO ILUVWSDUWRIWKHWHVWLVWRGHWHUPLQHZKHWKHUWKHUHPDUNVZHUH LPSURSHU VWDWHPHQWV DOWKRXJK WKH &RXUW IRFXVHG RQ WKH PRVW LPSRUWDQW LQGHHGLPSURSHU6HH8QLWHG6WDWHVY)UDQFLV)G RQH 7KH LQVWDQW FDVH LQYROYHV WKH DQDO\VLV RI D QRQIODJUDQW SURVHFXWRULDO WK&LU8QLWHG6WDWHVY.UHEV)G UHPDUN 7R GHWHUPLQH IODJUDQF\ WKLV &RXUW FRQVLGHUV  ZKHWKHU WKH  WK &LU   ,I WKH\ ZHUH  LPSURSHU ZH PXVW VWDWHPHQW PLVOHG WKH MXU\ RU SUHMXGLFHG WKH GHIHQGDQW  ZKHWKHU WKH GHWHUPLQHLIWKHUHPDUNVZHUHIODJUDQWDQGZDUUDQWUHYHUVDO UHPDUN ZDV LVRODWHG RU SDUW RI D VHULHV RI LPSURSHU VWDWHPHQWV  ZKHWKHU WKH UHPDUN ZDV GHOLEHUDWH DQG  WKH WRWDO VWUHQJWK RI WKH HYLGHQFH )UDQFLV)GDWFLWLQJ&DUUROO)GDW DJDLQVW WKH DFFXVHG )UDQFLV  )G DW  :H RQO\ UHDFK WKH 7KHUH DUH IRXU IDFWRUV WKDW ZH XWLOL]H WR GHWHUPLQH LI DQ  8QLWHG6WDWHVY*DOORZD\ 1R 1R 8QLWHG6WDWHVY*DOORZD\  LPSURSHUVWDWHPHQWZDVIODJUDQWZKHWKHUWKHVWDWHPHQWV 8QLWHG6WDWHV%HUJHU,,86RYHUUXOHGLQ WHQGHG WR PLVOHDG WKH MXU\ DQG SUHMXGLFH WKH GHIHQGDQW SDUWRQRWKHUJURXQGV6WLURQHY8QLWHG6WDWHV86  ZKHWKHU WKH VWDWHPHQWV ZHUH LVRODWHG RU SHUYDVLYH  KDV WKH 6XSUHPH &RXUW VXJJHVWHG WKDW DQ ZKHWKHUWKHVWDWHPHQWVZHUHGHOLEHUDWHO\SODFHGEHIRUHWKH mRYHUZKHOPLQJlFDVHPLJKWPLWLJDWHWKHSUREOHPVFDXVHGE\ MXU\ DQG  ZKHWKHU WKH HYLGHQFH DJDLQVW WKH DFFXVHG LV DQLPSURSHUSURVHFXWRULDOFRPPHQW,GDW%HUJHUWKXV RWKHUZLVHVWURQJ6HH)UDQFLV)GDW&DUUROO SURYLGHV PHDQLQJIXO JXLGDQFH LQ RXU DWWHPSW WR GHWHUPLQH )GDWFLWLQJ8QLWHG6WDWHVY/HRQ)G ZKHWKHUWKHFDVHDJDLQVW*DOORZD\ZDVmRYHUZKHOPLQJl WK&LU1RQHRIWKHVHIDFWRUVLVGLVSRVLWLYHEXW HYHQLIZHGRILQGWKHLPSURSHUVWDWHPHQWZDVQRWIODJUDQW ,Q%HUJHUWKHLQGLFWPHQWFKDUJHGWKHGHIHQGDQW%HUJHU ZHZLOOQRQHWKHOHVVUHYHUVHDFRQYLFWLRQXSRQDGHWHUPLQDWLRQ ZLWKKDYLQJFRQVSLUHGZLWKVHYHQRWKHUVWRXWWHUFRXQWHUIHLW WKDW  WKH SURRI RI WKH GHIHQGDQWjV JXLOW LV QRW IHGHUDO UHVHUYH QRWHV  ,G DW   7KH LQGLFWPHQW DOVR RYHUZKHOPLQJWKHGHIHQVHREMHFWHGWRWKHVWDWHPHQWVDQG FRQWDLQHGHLJKWDGGLWLRQDOVXEVWDQWLYHFRXQWVDQGQDPHGRWKHU  WKH WULDO MXGJH GLG QRW FXUH WKH LPSURSULHW\ WKURXJK DQ GHIHQGDQWVLQFOXGLQJ.DW]5LFHDQGsRQHV,GDW.DW] DGPRQLVKPHQWWRWKHMXU\)UDQFLV)GDW&DUUROO DFFHSWHGDJXLOW\SOHDRQWKHFRQVSLUDF\FRXQWDQGWHVWLILHGIRU )GDWFLWLQJ8QLWHG6WDWHVY%HVV)G WKHJRYHUQPHQWDWWKHWULDOLQH[FKDQJHIRUDQROOHSURVHTXLRQ WK&LU WKH VXEVWDQWLYH FRXQWV  ,G  %HUJHU ZDV FRQYLFWHG RQO\ RI FRQVSLUDF\ZKLOHKLVFRFRQVSLUDWRUVZHUHFRQYLFWHGRIWKH 7KH RQO\ DOOHJDWLRQ RI PLVFRQGXFW EHIRUH XV LV WKH VXEVWDQWLYHRIIHQVHV,GDW *RYHUQPHQWjVVWDWHPHQWGXULQJFORVLQJDUJXPHQWV6LQFHD SURVHFXWRUFDQQRWH[SUHVVKLVSHUVRQDORSLQLRQVEHIRUHWKH $FFRUGLQJWRWKH&RXUWWKHHYLGHQFHmWHQGHGWRHVWDEOLVK MXU\ KLV VWDWHPHQW WHQGLQJ WR JLYH FUHGHQFH WR .LUVFKjV QRWDVLQJOHFRQVSLUDF\DVFKDUJHGEXWWZRFRQVSLUDFLHVnRQH UHFLWDWLRQZDVQHFHVVDULO\LPSURSHU6HHHJ*DOOY3DUNHU EHWZHHQ5LFHDQG.DW]DQGDQRWKHUEHWZHHQ%HUJHUsRQHV )GWK&LUFHUWGHQLHG86 DQG.DW]l,G7KHRQO\OLQNEHWZHHQWKHWZRJURXSVZDV  WKDWHDFKZDVFRQQHFWHGZLWKWKHVDPHIUDXGXOHQWQRWHV,G 7KHUHZDVQRHYLGHQFHWKDW%HUJHUFRQVSLUHGZLWK5LFHDQG 8SRQ ILQGLQJ WKDW WKH VWDWHPHQW ZDV LPSURSHU ZH PXVW .DW],GDW GHWHUPLQHZKHWKHUWKHVWDWHPHQWZDVIODJUDQW,QXWLOL]LQJWKH /HRQEDODQFLQJWHVWZHILQGWKHSURVHFXWRUjVVWDWHPHQWZDV .DW]ZDVWKHRQO\ZLWQHVVZKRWHVWLILHGWR%HUJHUjVDOOHJHG LVRODWHG LQ QDWXUH  *DOORZD\ UDLVHV RQO\ RQH LVVXH RI UROHLQWKH%HUJHUsRQHV.DW]FRQVSLUDF\6HH8QLWHG6WDWHV SURVHFXWRULDOPLVFRQGXFWDQGGRHVQRWDOOHJHWKDWWKHWULDO Y %HUJHU %HUJHU ,  )G   G &LU  / ZDVULGGOHGZLWKLPSURSHUVWDWHPHQWV&I*DOO)GDW +DQG s H[SODLQLQJ WKH IDFWV LQ JUHDWHU GHWDLO UHYjG E\ VWDWLQJKRZSURVHFXWRULDOPLVFRQGXFWZDVSHUYDVLYHDW 8QLWHG 6WDWHV Y %HUJHU %HUJHU ,,  86   7KH DOOVWDJHVRIWULDO0RUHRYHUZHILQGQRHYLGHQFHWKDWWKH SURVHFXWLRQDOVRLQWURGXFHGDZRPDQ*ROGLH*ROGVWHLQWR VWDWHPHQWZDVGHOLEHUDWHDQGZHILQGWKDWLWZDVQRWPDGH LGHQWLI\ %HUJHU DV D PHPEHU RI WKH %HUJHUsRQHV.DW] ZLWKLQWHQWWRSUHMXGLFHWKHGHIHQGDQW6HH&DUUROO)G VFKHPHEXWZKHQRQWKHVWDQGVKHKDGGLIILFXOW\GRLQJVR DWVWDWLQJWKDWUHPDUNZDVQRWGHOLEHUDWHZKHQQR %HUJHU,,86DW5HIOHFWLQJDSDWWHUQRImXQGLJQLILHG HYLGHQFHH[LVWHGWRLQGLFDWHRWKHUZLVH$FFRUGLQJO\ZHILQG DQGLQWHPSHUDWHlEHKDYLRUWKHSURVHFXWRUDUJXHG WKHLPSURSHUUHPDUNZDVQRWIODJUDQW 0UV *ROGLH *ROGVWHLQ WDNHV WKH VWDQG 6KH VD\V VKH NQRZVsRQHVDQG\RXFDQEHW\RXUERWWRPGROODUVKH NQHZ %HUJHU  6KH VWRRG ULJKW ZKHUH , DP QRZ DQG  8QLWHG6WDWHVY*DOORZD\ 1R 1R 8QLWHG6WDWHVY*DOORZD\  ZRUNHGDV*DOORZD\jVmPXOHlPHDQLQJWKDW.LUVFKFDUULHG 8QGHU%HVVZHZLOOUHYHUVHWKHFRQYLFWLRQRQO\LIWKH WKHGUXJVDQGDVVXPHGWKHULVNRIDUUHVWIRU*DOORZD\$ RWKHUHYLGHQFHLVQRWRYHUZKHOPLQJ*DOORZD\REMHFWHGDW UHDVRQDEOHSHUVRQPLJKWUHDFKWKHLQWXLWLYHFRQFOXVLRQWKDWLW WULDO DQG  WKHUH ZDV QR FXUDWLYH DGPRQLVKPHQW E\ WKH ZRXOGGHIHDWWKHSXUSRVHRIWKHPXOHERVVUHODWLRQVKLSLIWKH MXGJH  6HH %HVV  )G DW   *DOORZD\ REMHFWHG ERVVDOOHJHGO\*DOORZD\WUDYHOHGZLWKWKHPXOHDOOHJHGO\ LPPHGLDWHO\DIWHUWKHSURVHFXWRUjVVWDWHPHQWDQGWKHMXGJH .LUVFK VXVWDLQHG WKH REMHFWLRQ VWDWLQJ m6XVWDLQHG 1R HYLGHQFH 0RYHRQl*DOORZD\GLGQRWDVNIRUIXUWKHULQVWUXFWLRQ:H $V TXRWHG DERYH WKH PDMRULW\ OLVWV IRXU RWKHU SLHFHV RI KDYHKHOGWKDWIRUDFXUDWLYHDGPRQLVKPHQWWREHVXIILFLHQW HYLGHQFHQRQHRIZKLFKFRQFOXVLYHO\HVWDEOLVKHV*DOORZD\jV LWPXVWEHVZLIWDQGLQSURSRUWLRQWRWKHSRWHQWLDOKDUP6HH JXLOW  )LUVW *DOORZD\ SDLG IRU .LUVFKjV WLFNHWV DQG 8QLWHG6WDWHVY6ROLYDQ)GWK&LU WUDQVSRUWDWLRQ*DOORZD\KRZHYHUFODLPHGWKDW.LUVFKZDV LQGLFDWLQJ WKDW WKH WLPLQJ RI WKH DGPRQLWLRQ LV PRUH KLVJLUOIULHQGZKLFKFRXOGH[SODLQKLVJHQHURVLW\6HFRQG LPSRUWDQWWKDQWKHILUPQHVVVHHDOVR%HVV)GDW *DOORZD\ KDG .LUVFKjV SDVVSRUW EDJJDJH FODLP VWXE DQG +HUH WKH MXGJH H[SUHVVHG GLVDSSURYDO RI WKH SURVHFXWRUjV WLFNHWVEXWLWLVVLPLODUO\UHDVRQDEOHWKDWVRPHRQHPLJKWFDUU\ VWDWHPHQWLPPHGLDWHO\XSRQWKHREMHFWLRQ&I6ROLYDQ YDULRXV SDSHUV IRU KLV JLUOIULHQG  7KLUG KH SDLG FDVK IRU )GDWKROGLQJWKDWDQDGPRQLWLRQWKDWFDPHDIWHUD HYHU\WKLQJDQGWROGWKHWUDYHODJHQWWRLQGLFDWHWKDWKHSDLGE\ WZHQW\ PLQXWH EUHDN ZDV QRW VZLIW HQRXJK IRU FXUDWLYH FKHFN  7KLV LV JHQXLQHO\ VXVSLFLRXV EHKDYLRU  )LQDOO\ LQVWUXFWLRQWREHVXIILFLHQWEHFDXVHLPSURSHUVWDWHPHQWKDG *DOORZD\ OLHG WR WKH FXVWRPV RIILFLDOV DERXW KLV WULS WR EHHQmHWFKHGLQJUDQLWHlLQWKHMXURUVjPLQGV0RUHRYHUZH $PVWHUGDP3HUKDSVKHGHQLHGYLVLWLQJ$PVWHUGDPEHFDXVH ILQGKLVDGPRQLWLRQZDVVXIILFLHQWO\ILUPWRDPHOLRUDWHWKH KHKDGXVHGGUXJVZKLOHWKHUHDQGEHFDPHIULJKWHQHGZKHQ QRQIODJUDQW FRQGXFW  &I LG  $FFRUGLQJO\ ZH KROG WKLV DLUSRUW GUXJ GRJV DOHUWHG WR KLV OXJJDJH  5HJDUGOHVV KLV DGPRQLWLRQDOWKRXJKEULHIVDWLVILHVWKHFXUDWLYHLQVWUXFWLRQ DWWHPSW WR PLVOHDG WKH FXVWRPV RIILFLDOV LV DOVR FOHDUO\ UHTXLUHPHQWXQGHU%HVV VXVSLFLRXV EHKDYLRU  7DNHQ DV D ZKROH WKHUHIRUH WKH JRYHUQPHQWjV FDVH FRQVLVWV RI .LUVFKjV KLJKO\ PRWLYDWHG 0RUHRYHUHYHQZLWKRXWDFXUDWLYHLQVWUXFWLRQZHILQGWKH WHVWLPRQ\ FRUURERUDWHG E\ VHYHUDO LQVWDQFHV RI VXVSLFLRXV UHTXLUHPHQWVRI%HVVDUHVDWLVILHGEHFDXVHWKHRWKHUHYLGHQFH EHKDYLRU8QGHU)UDQFLVZHPXVWLQLWLDOO\DVNZKHWKHUWKLV DJDLQVW*DOORZD\ZDVRYHUZKHOPLQJ*DOORZD\SDLGFDVKIRU LVmRYHUZKHOPLQJlHYLGHQFHDJDLQVW*DOORZD\)GDW HYHU\WKLQJnWKHDLUIDUHWKHKRWHODQGWKHWUDLQnIRUERWK  KLPVHOIDQG.LUVFK)XUWKHUPRUHKHXVHGWZRWUDYHODJHQWV LQSODQQLQJWKHWULSSD\LQJIRUDOODUUDQJHPHQWVLQFDVK\HW 7R GR VR ZH PXVW ILUVW GHFLGH ZKDW FRQVWLWXWHV DQ DVNLQJHDFKWUDYHODJHQWWRLQGLFDWHWKDWKHKDGSDLGE\FKHFN mRYHUZKHOPLQJlFDVH1HLWKHUWKH6XSUHPH&RXUWQRUDQ\ $OVRKHKDGSRVVHVVLRQRI.LUVFKjVSDVVSRUWEDJJDJHFODLP ORZHUFRXUWKDVH[SODLQHGSUHFLVHO\ZKDWTXDQWXPRIHYLGHQFH VWXE DQG WLFNHWV XSRQ WKHLU DUULYDO LQ &LQFLQQDWL  /DVWO\ LVmRYHUZKHOPLQJlHQRXJKWRPDNHSURVHFXWRULDOPLVFRQGXFW *DOORZD\UHSHDWHGO\OLHGDERXWWKHIDFWWKDWKHKDGEHHQWR HIIHFWLYHO\KDUPOHVVHUURUDWOHDVWZKHQFRPELQHGZLWKDQ $PVWHUGDP  ,Q WRWDO WKH HYLGHQFH DJDLQVW *DOORZD\ REMHFWLRQDQGFXUDWLYHLQVWUXFWLRQ2QO\RQFHLQ%HUJHUY QRWZLWKVWDQGLQJWKHSURVHFXWRUjVLPSURSHUVWDWHPHQWLVYDVW $FFRUGLQJO\ ZH ILQG WKDW WKH SURVHFXWRUjV VWDWHPHQW  8QVXUSULVLQJO\ WKH PDMRULW\ QHJOHFWV WR GHILQH mRYHUZKHOPLQJl WKRXJK LPSURSHU GRHV QRW ZDUUDQW D UHYHUVDO RI WKH ZKLFK LV WKH SLYRWDO WHUP /HDYLQJ mRYHUZKHOPLQJl DPELJXRXV PDNHV FRQYLFWLRQDQGDQHZWULDO GLVSDUDWH DSSOLFDWLRQ RI )UDQFLV LQHYLWDEOH EHFDXVH FRXUWV FDQ HPSOR\ WKH ODQJXDJH ZKHQHYHU QHFHVVDU\ WR UHDFK WKH RXWFRPH WKH\ GHVLUH  8QLWHG6WDWHVY*DOORZD\ 1R 1R 8QLWHG6WDWHVY*DOORZD\  ,9,QHIIHFWLYH$VVLVWDQFHRI&RXQVHO BBBBBBBBBBBBBBB 1H[W *DOORZD\ FODLPV KLV FRXQVHO ZDV LQHIIHFWLYH  +H ',66(17 DVVHUWV WKDW KLV FRXQVHO FDXVHG KLP SUHMXGLFH ZKHQ KH BBBBBBBBBBBBBBB TXHVWLRQHG.LUVFKDERXW*DOORZD\jVWDWWRREHFDXVHLWWHQGHG WRLQGLFDWHWKDW*DOORZD\DGYRFDWHVWKHXVHRIGUXJV &/$ W@RUHYHUVHDFRQYLFWLRQEHFDXVHRIDQ :HKDYHKHOGWKDWLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOFODLPV LPSURSHU QRQIODJUDQW VWDWHPHQW D UHYLHZLQJ FRXUW PXVW DUHJHQHUDOO\QRWKHDUGRQGLUHFWUHYLHZ6HH8QLWHG6WDWHVY GHWHUPLQH WKDW  WKH SURRI RI WKH GHIHQGDQW V JXLOW LV QRW 6KDED]])G8QLWHG6WDWHVYsDFNVRQ RYHUZKHOPLQJWKHGHIHQVHFRXQVHOREMHFWHGDQGWKH )GWK&LU6XFKLVVXHVDUHXVXDOO\ WULDO FRXUW IDLOHG WR FXUH WKH LPSURSULHW\ E\ IDLOLQJ WR KHDUG RQO\ RQ KDEHDV SHWLWLRQV XQGHU  86&  †  DGPRQLVKWKHMXU\l)GWK&LUVHH 8QLWHG6WDWHVY/RQJ)GWK&LU:H DOVR8QLWHG6WDWHVY%HVV)GWK&LU JHQHUDOO\GRQRWKHDUVXFKFODLPVRQGLUHFWUHYLHZEHFDXVH DUWLFXODWLQJ WKLV WHVW  6LQFH WKH JRYHUQPHQW ODFNHG DQ IRUWKHPRVWSDUWWKHUHFRUGEHIRUHXVZLOOEHLQVXIILFLHQWWR mRYHUZKHOPLQJl FDVH DQG WKH WULDO FRXUW GLG QRW RIIHU D HQDEOHXVWRHQWHUWDLQWKHFODLPEHFDXVHDVXFFHVVIXOFODLP FXUDWLYHLQVWUXFWLRQ,UHVSHFWIXOO\GLVVHQW QHFHVVDULO\UHTXLUHVDVKRZLQJRISUHMXGLFHDVHQXQFLDWHGLQ 6WULFNODQGY:DVKLQJWRQ868QLWHG6WDWHV 7KHPDMRULW\DPSO\VXPPDUL]HVWKHFDVHDJDLQVW*DOORZD\ Y$JXZD)GWK&LU:HILQGWKH ZKLFKWKH\FODLPLVmYDVWl$VWKHPDMRULW\H[SODLQV UHFRUGLQWKLVFDVHQRGLIIHUHQW *DOORZD\SDLGFDVKIRUHYHU\WKLQJnWKHDLUIDUHWKHKRWHO $FFRUGLQJO\ZHGHFOLQHWRDGGUHVVWKHLVVXHRILQHIIHFWLYH DQGWKHWUDLQnIRUERWKKHDQG.LUVFK)XUWKHUPRUHKH DVVLVWDQFHRIFRXQVHO XVHGWZRWUDYHODJHQWVLQSODQQLQJWKHWULSSD\LQJIRUDOO DUUDQJHPHQWV LQ FDVK \HW DVNLQJ HDFK WUDYHO DJHQW WR 9&RQFOXVLRQ LQGLFDWH WKDW KH KDG SDLG E\ FKHFN  $OVR KH KDG SRVVHVVLRQRI.LUVFKjVSDVVSRUWEDJJDJHFODLPVWXEDQG )RUWKHIRUHJRLQJUHDVRQVZHXSKROGWKHGHFLVLRQRIWKH WLFNHWVXSRQWKHLUDUULYDOLQ&LQFLQQDWL/DVWO\*DOORZD\ 8QLWHG  6WDWHV 'LVWULFW &RXUW IRU WKH (DVWHUQ 'LVWULFW RI UHSHDWHGO\ OLHG DERXW WKH IDFW WKDW KH KDG EHHQ WR .HQWXFN\DQG$)),50*DOORZD\jVFRQYLFWLRQDQGVHQWHQFH $PVWHUGDP ,QDGGLWLRQWRWKLVHYLGHQFHWKHSURVHFXWLRQDOVRRIIHUHGWKH WHVWLPRQ\ RI .LUVFK WKH ZRPDQ FDXJKW ZLWK WKH GUXJV .LUVFKWROGWKHMXU\WKDWVKHZRUNHGDV*DOORZD\jVmPXOHlRU KLVVXERUGLQDWHUHVSRQVLEOHIRUSK\VLFDOO\FDUU\LQJQDUFRWLFV WKDWDFWXDOO\EHORQJHGWR*DOORZD\ 7KHFDVHKDVVRPHZHDNQHVVHV.LUVFKWKHJRYHUQPHQWjV RQO\ZLWQHVVKDGDQREYLRXVPRWLYHWROLHnVKHH[FKDQJHG  KHUWHVWLPRQ\IRUDVXEVWDQWLDOO\UHGXFHGVHQWHQFH&XVWRPV DJHQWV IRXQG WKH GUXJV RQ .LUVFK QRW *DOORZD\ *DOORZD\jV WDWWRR FRQWDLQV WKH FRQFHDOHG LQVFULSWLRQ m/6'l LQ DQ HODERUDWH SDWWHUQ RQ KLV EDFN *DOORZD\jV FRXQVHO DVNHG DERXW DQG .LUVFK WHVWLILHG WR LWV H[LVWHQFH 6HH DOVR VXSUD QRWH  )XUWKHUPRUH WKH SURVHFXWRUV K\SRWKHVL]HG WKDW .LUVFK