Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 1 of 111

81,7(' 67$7(6 ',675,&7 &2857 
6287+(51 ',675,&7 2) 1(: <25. 
 
)5$1&,6&2 *8=0$1  526$5,2 $<$/$  
0$18(/ )/25(6 '20,1*8(=  1(/< 
2/026 )/25(6  (51(672 0(-,$ 
*21=$/(=  21(,'$ 7$&8%$ 0(-,$  
0$5,2 (15,48( 08f2=  *5(*25,2 
3(5(= 257(*$  3$75,&,$ 3$9,$  526$ 
3(5(=  $/,&,2 5$026  0$57,1 7255(6 
5(<(6  (',7+ '85$1  &$7$/,1$ 
52'5,*8(=  6$%,12 *8(55(52 
9,&725,2  /,',$ +(51$1'(= 
+(51$1'(=  *(5$5'2 9$5*$6 ',$=  
*/25,$ 9$//( 9(521,&$  -8$1 
3$8&$5  6 ) &   ' 3 &   % 5 (   2 & )   
5 0 )   $ 0 0   - 0   0 0   $ 0 2   ( * 5   
) 7 5   5 0 5   - & 5   ) 7 9   $1' 0$.( 
7+( 52$' 1(: <25.  
  
3ODLQWLIIV  
  
 DJDLQVW  
  
7+20$6 7  +(&+7 $1' /(21$5' +  
+(&+7   
'HIHQGDQWV  

 
 
 
 
 
       &LYLO $FWLRQ 1R     FY       
 
 
  
       

 
$0(1'(' &203/$,17  
 
 
 
 
 
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 2 of 111

7DEOH RI &RQWHQWV 
3DJH 
1$785( 2) 7+( $&7,21                                                                                                            
3$57,(6                                                                                                                                           
3ODLQWLIIV                                                                                                                                         
'HIHQGDQWV                                                                                                                                     
1RQ 3DUWLHV                                                                                                                                    
-85,6',&7,21 $1' 9(18(                                                                                                        
5,&2 &$86( 2) $&7,21                                                                                                              
7KH 5,&2 (QWHUSULVH                                                                                                                     
'HIHQGDQWV¶ 6FKHPH                                                                                                                      
7KH ³7HQ <HDU /DZ´ )UDXG                                                                                                          
2SHUDWLRQ RI WKH (QWHUSULVH                                                                                                           
3DWWHUQ RI 5DFNHWHHULQJ $FWLYLW\                                                                                                  
7KH 5,&2 &RQVSLUDF\                                                                                                                  
,QMXULHV 6XIIHUHG E\ 3ODLQWLIIV                                                                                                       
67$7(0(17 2) )$&76 63(&,),& 72 ($&+ 3/$,17,))                                                      
0U  *X]PDQ   0V  3DYLD                                                                                                             
0V  'XUDQ                                                                                                                                     
0U  3DXFDU                                                                                                                                    
0U  7RUUHV                                                                                                                                     
0U  3HUH] 2UWHJD DQG 0UV  3HUH]                                                                                                 
0V  $\DOD                                                                                                                                      
0U  )ORUHV 'RPLQJXH] DQG 0UV  2OPRV )ORUHV                                                                            
0V  5RGULJXH]                                                                                                                              

 

LL 

 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 3 of 111

0U  0XxR]                                                                                                                                    
0U  5DPRV                                                                                                                                    
0U  6DELQR *XHUUHUR   0V  +HUQDQGH]                                                                                       
0U  *HUDUGR 9DUJDV 'LD]   0V  *ORULD 9DOOH 9HURQLFD                                                              
0U  0HMLD DQG 0V  7DFXED                                                                                                           
6 ) &  DQG $ 0 2                                                                                                                         
' 3 &                                                                                                                                            
% 5 (                                                                                                                                            
$ 0 0                                                                                                                                          
- 0  DQG 0 0                                                                                                                               
( * 5                                                                                                                                            
) 7 5  DQG - & 5                                                                                                                           
5 0 5                                                                                                                                           
) 7 9                                                                                                                                             
2 & )  DQG 5 0 )                                                                                                                         
0DNH WKH 5RDG 1HZ <RUN                                                                                                            
121 5,&2 &$86(6 2) $&7,21                                                                                               
)UDXG DQG 'HFHLW                                                                                                                          
'HFHSWLYH %XVLQHVV 3UDFWLFHV  1< *HQHUDO %XVLQHVV /DZ †                                                   
8QMXVW (QULFKPHQW                                                                                                                       
%UHDFK RI )LGXFLDU\ 'XW\                                                                                                            
35$<(5 )25 5(/,()                                                                                                                  
 

 

LLL 

 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 4 of 111

3ODLQWLIIV )UDQFLVFR *X]PDQ  5RVDULR $\DOD  0DQXHO )ORUHV 'RPLQJXH]  1HO\ 2OPRV 
)ORUHV  (UQHVWR 0HMLD *RQ]DOH]  2QHLGD 7DFXED 0HMLD  0DULR (QULTXH 0XxR]  *UHJRULR 3HUH] 
2UWHJD  3DWULFLD 3DYLD  5RVD 3HUH]  $OLFLR 5DPRV  0DUWLQ 7RUUHV 5H\HV  (GLWK 'XUDQ  &DWDOLQD 
5RGULJXH]  6DELQR *XHUUHUR 9LFWRULR  /LGLD +HUQDQGH] +HUQDQGH]  *HUDUGR 9DUJDV 'LD]  *ORULD 
9DOOH 9HURQLFD  -XDQ 3DXFDU  6 ) &   ' 3 &   % 5 (   2 & )   5 0 )   $ 0 0   - 0   0 0   
$ 0 2   ( * 5   ) 7 5   5 0 5   - & 5   DQG ) 7 9   WKH ³3ODLQWLIIV´  DQG 3ODLQWLII 0DNH WKH 
5RDG 1HZ <RUN  ³3ODLQWLII 051<´   E\ DQG WKURXJK WKHLU XQGHUVLJQHG FRXQVHO  EULQJ WKLV DFWLRQ 
DJDLQVW 'HIHQGDQWV 7KRPDV 7  +HFKW DQG /HRQDUG +  +HFKW  DQG KHUHE\ DOOHJH DV IROORZV    
1$785( 2) 7+( $&7,21 
   

3ODLQWLII  051<  DQG  3ODLQWLIIV²D  JURXS  RI      QRQFLWL]HQ  ORQJWLPH  1HZ  <RUN 

UHVLGHQWV²EULQJ  WKLV  DFWLRQ  DJDLQVW  'HIHQGDQWV  7KRPDV  7   +HFKW  DQG  /HRQDUG  +   +HFKW   WKH 
³'HIHQGDQWV´    ZKR  GHIUDXGHG  3ODLQWLIIV  RXW  RI  WKRXVDQGV  RI  GROODUV     'HIHQGDQWV   WUXVWHG 
SURIHVVLRQDOV   XVHG  WKHLU  SRVLWLRQV  WR  WDNH  DGYDQWDJH  RI  3ODLQWLIIV¶  LQH[SHULHQFH   ODFN  RI  OHJDO 
H[SHUWLVH  OLPLWHG IRUPDO HGXFDWLRQ  DQG OLPLWHG DELOLW\ WR UHDG (QJOLVK LQ RUGHU WR ILQDQFLDOO\ SURILW   
   

'HIHQGDQWV HQJDJHG LQ D EDLW DQG VZLWFK   )LUVW  'HIHQGDQWV IDOVHO\ UHSUHVHQWHG WR 

3ODLQWLIIV WKH DYDLODELOLW\ RI DQ DIILUPDWLYH LPPLJUDWLRQ EHQHILW LQ WKH IRUP RI ZRUN DXWKRUL]DWLRQ 
DQG RU ODZIXO SHUPDQHQW UHVLGHQF\ EDVHG RQ 3ODLQWLIIV¶ UHVLGHQFH LQ WKH 8QLWHG 6WDWHV IRU WHQ \HDUV 
RU PRUH DQG RU 8 6  FLWL]HQ FKLOGUHQ  ZKHQ LQ IDFW QR VXFK DIILUPDWLYH LPPLJUDWLRQ UHOLHI H[LVWV    
   

7KHQ   DIWHU  LQGXFLQJ  3ODLQWLIIV  WR  SD\  'HIHQGDQWV  LQ  RUGHU  WR  SXUVXH  WKLV  QRQ 

H[LVWHQW  DIILUPDWLYH  UHOLHI   'HIHQGDQWV  GLG  QRW  ILOH  DSSOLFDWLRQV  IRU  WKH  QRQ H[LVWHQW  DIILUPDWLYH 
UHOLHI EXW LQVWHDG ILOHG DV\OXP DSSOLFDWLRQV RQ 3ODLQWLIIV¶ EHKDOI   %\ PLVUHSUHVHQWLQJ WR 3ODLQWLIIV 
WKH QDWXUH RI WKH DSSOLFDWLRQV WKH\ SODQQHG WR VXEPLW  DQG IDLOLQJ WR GLVFORVH WKDW  DV D UHVXOW RI 
'HIHQGDQWV¶  DFWLRQV   3ODLQWLIIV  ZRXOG  HYHQWXDOO\  EH  SODFHG  LQ  DGYHUVDULDO  UHPRYDO  SURFHHGLQJV 
  
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 5 of 111

ZKHUH  WKH  LPPLJUDWLRQ  FRXUW  ZRXOG  DGMXGLFDWH  WKHLU  DELOLW\  WR  UHPDLQ  LQ  WKH  8QLWHG  6WDWHV  DQG 
SRWHQWLDOO\ RUGHU WKHP GHSRUWHG  'HIHQGDQWV REWDLQHG WHQV RI WKRXVDQGV RI GROODUV IURP 3ODLQWLIIV  
   

'HIHQGDQWV¶  DFWLRQV  JR  EH\RQG  YLRODWLQJ  IXQGDPHQWDO  PRUDO  SULQFLSOHV  DQG  WKH 

JRYHUQLQJ  HWKLFDO  UXOHV  DQG  FRQVWLWXWH  IUDXG  LQ  WKH  SXUHVW  IRUP     'HIHQGDQWV  NQRZLQJO\  DQG 
LQWHQWLRQDOO\ GHYLVHG  LPSOHPHQWHG  DQG FRRUGLQDWHG D VFKHPH WR REWDLQ PRQH\ IURP YXOQHUDEOH 
QRQFLWL]HQV  E\  PLVUHSUHVHQWLQJ  WKH  DYDLODELOLW\  RI  D  IRUP  RI  DIILUPDWLYH  LPPLJUDWLRQ  UHOLHI  WKDW 
GRHV  QRW  H[LVW  DQG  PLVUHSUHVHQWLQJ  WKH  QDWXUH  RI  WKH  DSSOLFDWLRQV  WKH\  LQWHQGHG  WR  VXEPLW  RQ 
3ODLQWLIIV¶ EHKDOI DQG RU WKH FRQVHTXHQFHV RI WKRVH DSSOLFDWLRQV    
   

3ODLQWLIIV  DUH  RQO\  D  IUDFWLRQ  RI  WKH  SHRSOH  ZKR  KDYH  UHSRUWHG  IDOOLQJ  YLFWLP  WR 

'HIHQGDQWV¶ VFKHPH   3ODLQWLIIV EULQJ WKLV DFWLRQ WR UHFRYHU WKH PRQH\ WKH\ SDLG WR 'HIHQGDQWV 
XQGHU IDOVH SUHWHQVHV DQG WR SUHYHQW 'HIHQGDQWV IURP UHDSLQJ WKH ILQDQFLDO EHQHILWV RI WKLV IUDXG  
3$57,(6 
3ODLQWLIIV 
   

(DFK LQGLYLGXDO 3ODLQWLII LV DQ LPPLJUDQW ZKR UHVLGHG LQ 1HZ <RUN DW WKH WLPH KH 

RU VKH ZDV GHIUDXGHG E\ 'HIHQGDQWV    
   

3ODLQWLII  051<  LV  D  QRQSURILW   PHPEHUVKLS EDVHG  †      F      RUJDQL]DWLRQ 

GHGLFDWHG  WR  EXLOGLQJ  WKH  SRZHU  RI  LPPLJUDQW   /DWLQ[   DQG  ZRUNLQJ FODVV  FRPPXQLWLHV  LQ  1HZ 
<RUN VWDWH   :LWK RIILFHV LQ %URRNO\Q  4XHHQV  6WDWHQ ,VODQG  6XIIRON &RXQW\  DQG :HVWFKHVWHU 
&RXQW\  051< LQWHJUDWHV DGXOW DQG \RXWK HGXFDWLRQ  OHJDO DQG VXUYLYDO VHUYLFHV  DQG FRPPXQLW\ 
DQG FLYLF HQJDJHPHQW  LQ RUGHU WR VXSSRUW ORZ LQFRPH 1HZ <RUNHUV LQ LPSURYLQJ WKHLU RZQ OLYHV 
DQG QHLJKERUKRRGV  

  
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 6 of 111

'HIHQGDQWV 
   

8SRQ LQIRUPDWLRQ DQG EHOLHI  'HIHQGDQW 7KRPDV 7  +HFKW  ³'HIHQGDQW 7KRPDV´  

LV D OLFHQVHG DWWRUQH\ ZKR KDV EHHQ DGPLWWHG WR SUDFWLFH ODZ LQ WKH VWDWH RI 1HZ <RUN VLQFH $SULO 
            
   

8SRQ LQIRUPDWLRQ DQG EHOLHI  'HIHQGDQW /HRQDUG +  +HFKW  ³'HIHQGDQW /HRQDUG´  

LV  D  OLFHQVHG  DWWRUQH\  ZKR  KDV  EHHQ  DGPLWWHG  WR  SUDFWLFH  ODZ  LQ  WKH  VWDWH  RI  1HZ  <RUN  VLQFH 
'HFHPEHU            
    

$W DOO WLPHV UHOHYDQW KHUHWR  'HIHQGDQW 7KRPDV ZDV DFWLQJ RQ KLV RZQ EHKDOI DQG RU 

DV WKH &KLHI ([HFXWLYH 2IILFHU DQG RU DV DQ HPSOR\HH RI 7KRPDV 7  +HFKW  3 &  
    

$W  DOO  WLPHV  UHOHYDQW  KHUHWR   'HIHQGDQW  /HRQDUG  ZDV  DFWLQJ  RQ  KLV  RZQ  EHKDOI 

DQG RU DV DQ HPSOR\HH RI 7KRPDV 7  +HFKW  3 &    
1RQ 3DUWLHV 
    

7KRPDV  7   +HFKW   3 &    WKH  ³+HFKW  /DZ  )LUP´   LV  D  1HZ  <RUN  SURIHVVLRQDO 

FRUSRUDWLRQ   'HSDUWPHQW  RI  6WDWH  1XPEHU           ZLWK  LWV  SULQFLSDO  SODFH  RI  EXVLQHVV  DW 
    6HYHQWK $YHQXH    WK )ORRU  1HZ <RUN  1<         +HFKW /DZ )LUP¶V SULQFLSDO SODFH RI 
EXVLQHVV ZDV SUHYLRXVO\ ORFDWHG DW      $YHQXH RI WKH $PHULFDV  1HZ <RUN  1<        
    

'HIHQGDQWV 7KRPDV  DQG /HRQDUG UHJXODUO\ FRQGXFW EXVLQHVV LQ 1HZ <RUN  1HZ 

<RUN DQG WKH VXUURXQGLQJ ERURXJKV WKURXJK +HFKW /DZ )LUP  
    

+HFKW  /DZ  )LUP  ZDV  IRXQGHG  E\  'HIHQGDQW  7KRPDV  LQ        DQG  RIIHUV  OHJDO 

UHSUHVHQWDWLRQ RQ LPPLJUDWLRQ PDWWHUV  DV ZHOO DV D YDULHW\ RI RWKHU SUDFWLFH DUHDV    
    

+HFKW /DZ )LUP DGYHUWLVHV RQ LWV ZHEVLWH WKDW LW KDV PDQ\ FOLHQWV IURP DOO RYHU WKH 

FRXQWU\ DQG WKH ZRUOG  LQFOXGLQJ WKH 6SDQLVK VSHDNLQJ FRPPXQLW\  
    

6\OYLD¶V 7UDQVODWLRQ 6HUYLFH LV DQ XQLQFRUSRUDWHG EXVLQHVV HQWLW\ G E D +HFKW /DZ 

)LUP WKDW SURYLGHV WUDQVODWLRQ VHUYLFHV IURP 6SDQLVK WR (QJOLVK   6\OYLD¶V 7UDQVODWLRQ 6HUYLFH¶V 
  
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 7 of 111

SULQFLSDO SODFH RI EXVLQHVV LV RSHUDWHG RXW RI WKH VDPH RIILFH DV +HFKW /DZ )LUP      6HYHQWK 
$YHQXH    WK )ORRU  1HZ <RUN  1<          
    

8SRQ LQIRUPDWLRQ DQG EHOLHI  0U  /XLV *XHUUHUR LV DQG RU KDV EHHQ D UHJLVWHUHG WD[ 

SUHSDUHU LQ WKH VWDWH RI 1HZ <RUN    
    

0U  /XLV *XHUUHUR LV WKH RZQHU RI D IUDQFKLVH RI $7$; $FFRXQWLQJ   )LQDQFLDO 

6HUYLFHV   ³$7$;´    ZLWK  LWV  SULQFLSDO  SODFH  RI  EXVLQHVV  DW        &  9LFWRU\  %RXOHYDUG   6WDWHQ 
,VODQG  1<        
    

0U  /XLV *XHUUHUR UHJXODUO\ DVVLVWV LQGLYLGXDOV ZLWK WKH SUHSDUDWLRQ DQG ILOLQJ RI 

WKHLU LQFRPH WD[HV    
-85,6',&7,21 $1' 9(18( 
    

7KLV &RXUW KDV VXEMHFW PDWWHU MXULVGLFWLRQ RYHU WKLV DFWLRQ XQGHU    8 6 &  †        

7KLV LV D FLYLO DFWLRQ DULVLQJ XQGHU    8 6 &  ††            †     D  RI 7LWOH ,; RI WKH 2UJDQL]HG 
&ULPH &RQWURO $FW RI       DV DPHQGHG  RWKHUZLVH NQRZQ DV WKH 5DFNHWHHU ,QIOXHQFHG DQG &RUUXSW 
2UJDQL]DWLRQV  $FW   ³5,&2´    DQG  LQ  SDUWLFXODU  XQGHU     8 6 &   †      F  DQG RWKHU FDXVHV  RI 
DFWLRQ DV VHW IRUWK KHUHDIWHU  
    

7KLV &RXUW KDV VXSSOHPHQWDO VXEMHFW PDWWHU MXULVGLFWLRQ RYHU 3ODLQWLIIV¶ VWDWH ODZ 

FODLPV SXUVXDQW WR    8 6 &  †      D   
    

9HQXH  LV  SURSHU  LQ  WKLV  MXGLFLDO  GLVWULFW  XQGHU      8 6 &   †        DQG      8 6 &  

†      EHFDXVH D VXEVWDQWLDO SDUW RI WKH HYHQWV JLYLQJ ULVH WR 3ODLQWLIIV¶ FODLPV RFFXUUHG ZLWKLQ WKLV 
MXGLFLDO GLVWULFW  
    

'HIHQGDQWV   HLWKHU  RQ  WKHLU  RZQ  RU  WKURXJK  WKHLU  DJHQWV   DW  WKH  WLPH  RI  WKH 

FRPPLVVLRQ RI WKH DFWV DOOHJHG KHUHLQ  ZHUH IRXQG LQ  DQG RU WUDQVDFWHG EXVLQHVV LQ  WKH 6WDWH RI 
1HZ <RUN  DQG WKH FDXVH RI DFWLRQ ZKLFK LV WKH REMHFW RI WKLV &RPSODLQW DULVHV RXW RI EXVLQHVV 
WUDQVDFWLRQV DQG VSHFLILF DFWV WKDW WRRN SODFH ZLWKLQ WKLV MXGLFLDO GLVWULFW  
  
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 8 of 111

    

'HIHQGDQWV  HLWKHU RQ WKHLU RZQ RU WKURXJK WKHLU DJHQWV  FRQVSLUHG WR FRPPLW WKH 

ZURQJIXO  DFWV  DOOHJHG  LQ  WKLV  &RPSODLQW  ZLWKLQ  WKH  6WDWH  RI  1HZ  <RUN  DQG RU  FRPPLWWHG  RU 
SDUWLFLSDWHG LQ WKH FRPPLVVLRQ RI WKRVH DFWV ZLWKLQ WKH 6WDWH RI 1HZ <RUN  SXUSRVHIXOO\ GLUHFWLQJ 
WKHLU ZURQJIXO DFWV WRZDUG WKLV MXGLFLDO GLVWULFW DQG FDXVLQJ LQ WKLV GLVWULFW WKH YLRODWLRQV RI 5,&2 
DQG WKH RWKHU FDXVHV RI DFWLRQ VHW IRUWK KHUHLQ DV ZHOO DV 3ODLQWLIIV¶ UHVXOWDQW LQMXULHV  
    

'HIHQGDQWV¶ UDFNHWHHULQJ DFWLYLWLHV ZHUH FRQGXFWHG WKURXJK D SDWWHUQ RI DFWV DQG 

WUDQVDFWLRQV ZKLFK RFFXUUHG RU KDG WKHLU HIIHFW ZLWKLQ WKH 6WDWH RI 1HZ <RUN  LQFOXGLQJ LQ WKLV 
MXGLFLDO GLVWULFW  
    

,Q  FRQQHFWLRQ  ZLWK  WKH  ZURQJIXO  DFWV  DQG  IUDXGXOHQW  FRQGXFW  GHVFULEHG  KHUHLQ  

'HIHQGDQWV GLUHFWO\ RU LQGLUHFWO\ XVHG WKH PHDQV RI LQWHUVWDWH FRPPHUFH  LQFOXGLQJ WKH PDLOV  
5,&2 &$86( 2) $&7,21 
7KH 5,&2 (QWHUSULVH 
    

(DFK LQGLYLGXDO 3ODLQWLII LV D ³SHUVRQ´ ZLWKLQ WKH PHDQLQJ RI    8 6 &  †      F   

    

051< LV D ³SHUVRQ´ ZLWKLQ WKH PHDQLQJ RI    8 6 &  †      F   

    

3ODLQWLIIV DQG 'HIHQGDQWV DUH ³SHUVRQV´ ZLWKLQ WKH PHDQLQJ RI    8 6 &  †          

    

+HFKW /DZ )LUP FRQVWLWXWHV DQ ³HQWHUSULVH´ DV GHILQHG LQ    8 6 &  †          WKH 

³(QWHUSULVH´     
    

'HIHQGDQWV  7KRPDV  DQG  /HRQDUG  FRQGXFWHG  DQG  SDUWLFLSDWHG  LQ  WKH  FRQGXFW  RI 

+HFKW /DZ )LUP¶V DIIDLUV WKURXJK D SDWWHUQ RI UDFNHWHHULQJ DFWLYLW\  
    

7KH (QWHUSULVH HQJDJHG LQ LQWHUVWDWH FRPPHUFH  DQG LWV DFWLYLWLHV DIIHFW LQWHUVWDWH 

FRPPHUFH  LQFOXGLQJ EHFDXVH WKH (QWHUSULVH UHSUHVHQWV LQGLYLGXDOV RXWVLGH RI 1HZ <RUN 6WDWH DQG 
EHFDXVH  LWV  DFWLYLWLHV  DIIHFW   DQG  GLUHFWO\  LPSDFW   WKH  DELOLW\  RI  3ODLQWLIIV  DQG  RWKHUV  VLPLODUO\ 

  
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 9 of 111

VLWXDWHG WR OLYH DQG ZRUN LQ WKH 8QLWHG 6WDWHV  LQFOXGLQJ LQ 6WDWHV RXWVLGH RI 1HZ <RUN   ,Q DGGLWLRQ  
'HIHQGDQWV XVHG LQWHUVWDWH PDLOV WR SHUSHWUDWH WKH VFKHPH    
'HIHQGDQWV¶ 6FKHPH  
    

,Q RUGHU WR LQGXFH 3ODLQWLIIV WR KLUH WKHP  'HIHQGDQWV PLVUHSUHVHQWHG WKHLU VHUYLFHV 

WR 3ODLQWLIIV²'HIHQGDQWV WROG 3ODLQWLIIV WKDW WKH\ ZRXOG SUHSDUH DIILUPDWLYH DSSOLFDWLRQV IRU WKHP 
WR UHFHLYH LPPLJUDWLRQ EHQHILWV LQ WKH IRUP RI ZRUN DXWKRUL]DWLRQ DQG RU OHJDO SHUPDQHQW UHVLGHQF\ 
EDVHG RQ 3ODLQWLIIV¶ WHQ \HDU UHVLGHQFH LQ WKH 8QLWHG 6WDWHV DQG RU 8 6  FLWL]HQ FKLOGUHQ  VRPHWLPHV 
UHIHUUHG WR E\ 'HIHQGDQWV DV WKH ³WHQ  \HDU ODZ´  WKH ³7HQ <HDU 6FKHPH´    'HIHQGDQWV GLG QRW 
GLVFORVH WKDW WKH\ LQWHQGHG WR FDXVH 3ODLQWLIIV WR EH SODFHG LQ DGYHUVDULDO UHPRYDO SURFHHGLQJV E\ 
ILOLQJ DV\OXP DSSOLFDWLRQV   'HIHQGDQWV GLG QRW LQWHQG WR  DQG FRXOG QRW  SURYLGH WKH VHUYLFHV WKH\ 
SURPLVHG  EHFDXVH  QR  VXFK  DIILUPDWLYH  LPPLJUDWLRQ  UHOLHI  H[LVWV   DQG  WKHUH  ZDV  QR  EDVLV  IRU 
'HIHQGDQWV WR EHOLHYH LW ZRXOG H[LVW  
    

&RQWUDU\ WR 'HIHQGDQWV¶ UHSUHVHQWDWLRQV WR 3ODLQWLIIV  'HIHQGDQWV LQWHQGHG WR  DQG 

GLG   VXEPLW²QRW  DIILUPDWLYH  DSSOLFDWLRQV  IRU  ZRUN  DXWKRUL]DWLRQ  RU  OHJDO  SHUPDQHQW  UHVLGHQF\ 
EDVHG  RQ  WKH  FULWHULD  LGHQWLILHG²EXW  LQVWHDG  ERLOHUSODWH  DV\OXP  DSSOLFDWLRQV  ZLWKRXW  3ODLQWLIIV¶ 
NQRZOHGJH RI WKH QDWXUH RI WKH DSSOLFDWLRQ  ZLWK WKH HIIHFW DQG REMHFWLYH RI SODFLQJ 3ODLQWLIIV LQ 
UHPRYDO  SURFHHGLQJV  ZKHUH  WKH  LPPLJUDWLRQ  FRXUW  ZRXOG  GHWHUPLQH  ZKHWKHU  WKH\  VKRXOG  EH 
UHPRYHG IURP WKH 8QLWHG 6WDWHV  
    

'HIHQGDQWV¶  UDFNHWHHULQJ  DFWLYLWLHV  FDXVHG  WKH  LQGLYLGXDO  3ODLQWLIIV  FROOHFWLYH 

ILQDQFLDO LQMXU\ RI DW OHDVW          WKH DPRXQW WKH\ SDLG WR 'HIHQGDQWV LQ MXVWLILHG UHOLDQFH RQ 
'HIHQGDQWV¶  PLVUHSUHVHQWDWLRQV  DQG  RPLVVLRQV   DQG  WKH  DPRXQW  WKH\  KDYH  KDG  WR  SD\  IRU  QHZ 
FRXQVHO DV D UHVXOW RI 'HIHQGDQWV¶ DFWLRQV  LQFOXGLQJ DGGLWLRQDO OHJDO FRVWV   'HIHQGDQWV¶ DFWLRQV 
FDXVHG  3ODLQWLII  051<  WR  H[SHQG  VLJQLILFDQW  UHVRXUFHV  WR  PLWLJDWH  WKH  FRQVHTXHQFHV  RI 

  
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 10 of 111

'HIHQGDQWV¶  UDFNHWHHULQJ  DFWLYLWLHV     %XW  IRU  'HIHQGDQWV¶  FRQGXFW   3ODLQWLII  051<  FRXOG  KDYH 
XWLOL]HG WKHVH UHVRXUFHV IRU RWKHU SXUSRVHV  
$IILUPDWLYH $SSOLFDWLRQV DQG 'HIHQVHV WR 5HPRYDO 
    

$Q DIILUPDWLYH DSSOLFDWLRQ LQYROYHV D QRQFLWL]HQ DSSOLFDQW PDNLQJ DQ HOHFWLRQ WR 

SHWLWLRQ  WKH  8QLWHG  6WDWHV  &LWL]HQVKLS  DQG  ,PPLJUDWLRQ  6HUYLFHV   ³86&,6´    WKURXJK  D 
³QRQ DGYHUVDULDO´  SURFHVV   IRU  DQ  LPPLJUDWLRQ  EHQHILW     ,QGLYLGXDOV  PD\  ILOH  DQ  DIILUPDWLYH 
DSSOLFDWLRQ HYHQ LI WKH\ DUH QRW LQ DGYHUVDULDO UHPRYDO SURFHHGLQJV   $V\OXP LV MXVW RQH RI VHYHUDO 
GLIIHUHQW  W\SHV  RI  LPPLJUDWLRQ  EHQHILWV  IRU  ZKLFK  LQGLYLGXDOV  FDQ  DIILUPDWLYHO\  DSSO\  DQG   LI 
VXFFHVVIXO  EH JUDQWHG ODZIXO VWDWXV    
    

$ GHIHQVH WR UHPRYDO  E\ FRQWUDVW  LV DVVHUWHG E\ D QRQFLWL]HQ UHVSRQGHQW ZKR KDV 

EHHQ  SODFHG  LQ  DGYHUVDULDO  UHPRYDO  SURFHHGLQJV     5HPRYDO  SURFHHGLQJV  DUH  KHOG  EHIRUH  DQ 
LPPLJUDWLRQ  MXGJH  DQG  DUH  SURVHFXWHG  E\  ,PPLJUDWLRQ  DQG  &XVWRPV  (QIRUFHPHQW   ³,&(´  
DWWRUQH\V  ZKR  VHHN  WR  GHSRUW  QRQFLWL]HQV  IURP  WKH  8QLWHG  6WDWHV     7KHUH  DUH  OLPLWHG  W\SHV  RI 
GHIHQVHV WR UHPRYDO  DQG VRPH DUH GLIILFXOW WR VDWLVI\   ,I DOO RI D UHVSRQGHQW¶V GHIHQVHV WR UHPRYDO 
DUH GHQLHG E\ DQ LPPLJUDWLRQ MXGJH  KH RU VKH ZLOO JHQHUDOO\ EH RUGHUHG UHPRYHG IURP WKH 8QLWHG 
6WDWHV      
    

2QH ZD\ WKDW D QRQFLWL]HQ PD\ EH SODFHG LQ UHPRYDO SURFHHGLQJV LV LI 86&,6 GRHV 

QRW JUDQW DQ DIILUPDWLYH DV\OXP DSSOLFDWLRQ DQG WKH QRQFLWL]HQ GRHV QRW KDYH RWKHU ODZIXO VWDWXV RU 
LV QRW RQ YDOLG SDUROH   )RU DV\OXP DSSOLFDQWV LQ SDUWLFXODU  WKLV UHIHUUDO WR UHPRYDO SURFHHGLQJV LV 
DXWRPDWLF EHFDXVH LW LV 86&,6¶ SROLF\ WR UHIHU DOO DV\OXP DSSOLFDQWV ZKRVH DV\OXP DSSOLFDWLRQV 
DUH QRW JUDQWHG  DQG ZKR GR QRW KDYH RWKHU ODZIXO VWDWXV RU YDOLG SDUROH  IRU UHPRYDO SURFHHGLQJV 
SXUVXDQW WR   & ) 5  †        F             

  
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 11 of 111

$V\OXP 
    

$V\OXP  LV  D  IRUP  RI  KXPDQLWDULDQ  LPPLJUDWLRQ  UHOLHI  WKDW  DIIRUGV  SURWHFWLRQ  WR 

QRQFLWL]HQV ZKR IHDU SHUVHFXWLRQ LQ WKHLU KRPH FRXQWU\ RQ DFFRXQW RI D SURWHFWHG JURXQG  
    

7R EH HOLJLEOH IRU DV\OXP  QRQFLWL]HQV PXVW HVWDEOLVK HLWKHU SDVW SHUVHFXWLRQ RU D 

ZHOO IRXQGHG IHDU RI IXWXUH SHUVHFXWLRQ LQ WKHLU KRPH FRXQWU\ RQ DFFRXQW RI WKHLU UDFH  UHOLJLRQ  
QDWLRQDOLW\  PHPEHUVKLS LQ D SDUWLFXODU VRFLDO JURXS  RU SROLWLFDO RSLQLRQ  DQG WKDW WKH JRYHUQPHQW 
LV XQDEOH RU XQZLOOLQJ WR SURWHFW WKHP     8 6 &  †      E     %  L    
    

)HDU RI KDUP WR D 8 6  FLWL]HQ FKLOG XSRQ UHWXUQ WR D KRPH FRXQWU\ LV QRW D SURWHFWHG 

JURXQG IRU DV\OXP     
    

,QGLYLGXDOV PXVW DSSO\ IRU DV\OXP ZLWKLQ RQH \HDU RI HQWHULQJ WKH 8QLWHG 6WDWHV   

7KHUH DUH WZR QDUURZ H[FHSWLRQV WR WKLV UXOH   ³HLWKHU WKH H[LVWHQFH RI FKDQJHG FLUFXPVWDQFHV ZKLFK 
PDWHULDOO\ DIIHFW WKH DSSOLFDQW¶V HOLJLELOLW\ IRU DV\OXP RU H[WUDRUGLQDU\ FLUFXPVWDQFHV UHODWLQJ WR 
WKH  GHOD\  LQ  ILOLQJ  DQ  DSSOLFDWLRQ ´       8 6 &   ††      D     %     '      :KHWKHU  DQ  DSSOLFDQW 
HVWDEOLVKHV  DQ  H[FHSWLRQ  IRU  D  ODWH  ILOLQJ LV D WKUHVKROG LQTXLU\ LQ  86&,6¶ UHYLHZ RI DQ DV\OXP 
DSSOLFDWLRQ    
    

1RQFLWL]HQV FDQ ILOH DIILUPDWLYH DSSOLFDWLRQV IRU DV\OXP ZLWK 86&,6 RU  LI WKH\ DUH 

SXW LQWR UHPRYDO SURFHHGLQJV  VHHN DV\OXP DV D GHIHQVH WR UHPRYDO    
)RUP ,      
    

7R ILOH DQ DSSOLFDWLRQ IRU DV\OXP  D QRQFLWL]HQ FRPSOHWHV DQG VXEPLWV D )RUP ,      

$SSOLFDWLRQ IRU $V\OXP   7KH )RUP ,     LV LQ (QJOLVK  DQG 86&,6 GRHV QRW SXEOLVK RU SURYLGH 
WKH )RUP ,     LQ DQ\ RWKHU ODQJXDJHV    
    

,Q WKH )RUP ,      DQ DSSOLFDQW PXVW VSHFLI\ ZKHWKHU KH RU VKH VHHNV DV\OXP RQ 

DFFRXQW RI KLV RU KHU UDFH  UHOLJLRQ  QDWLRQDOLW\  PHPEHUVKLS LQ D SDUWLFXODU VRFLDO JURXS  RU SROLWLFDO 
RSLQLRQ    
  
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 12 of 111

    

7KH )RUP ,     DOVR LQFOXGHV  LQ UHOHYDQW SDUW  WKH IROORZLQJ TXHVWLRQV       ³'R 

\RX IHDU KDUP RU PLVWUHDWPHQW LI \RX UHWXUQ WR \RXU KRPH FRXQWU\" ´ DQG     ³$UH \RX ILOLQJ WKLV 
DSSOLFDWLRQ PRUH WKDQ   \HDU DIWHU \RXU ODVW DUULYDO LQ WKH 8QLWHG 6WDWHV"  ,I µ<HV ¶ H[SODLQ ZK\ \RX 
GLG QRW ILOH ZLWKLQ WKH ILUVW \HDU DIWHU \RX DUULYHG ´  
    

)LQDOO\  WKH )RUP ,     FRQWDLQV DQ DWWHVWDWLRQ WKDW UHTXLUHV WKH SUHSDUHU WR DWWHVW 

XQGHU  WKH  KHDGLQJ  ³'HFODUDWLRQ  RI  3HUVRQ  3UHSDULQJ  )RUP   LI  2WKHU  7KDQ  $SSOLFDQW   6SRXVH  
3DUHQW  RU &KLOG´    

    

, GHFODUH WKDW , KDYH SUHSDUHG WKLV DSSOLFDWLRQ DW WKH UHTXHVW RI WKH 
>DSSOLFDQW@  WKDW WKH UHVSRQVHV SURYLGHG DUH EDVHG RQ DOO LQIRUPDWLRQ 
RI  ZKLFK  ,  KDYH  NQRZOHGJH  RU ZKLFK ZDV  SURYLGHG WR PH E\ WKH 
DSSOLFDQW   DQG  WKDW  WKH  FRPSOHWHG  DSSOLFDWLRQ  ZDV  UHDG  WR  WKH 
DSSOLFDQW  LQ  KLV  RU  KHU  QDWLYH  ODQJXDJH  RU  D  ODQJXDJH  KH  RU  VKH 
XQGHUVWDQGV IRU YHULILFDWLRQ EHIRUH KH RU VKH VLJQHG WKH DSSOLFDWLRQ 
LQ P\ SUHVHQFH     , DP  DZDUH WKDW WKH NQRZLQJ SODFHPHQW RI  IDOVH 
LQIRUPDWLRQ RQ WKH )RUP ,     PD\ DOVR VXEMHFW PH WR FLYLO SHQDOWLHV 
XQGHU     8 6 &       F  DQG RU  FULPLQDO  SHQDOWLHV  XQGHU      8 6 &  
     D   
 
$V FOHDUO\ LQGLFDWHG LQ WKH DWWHVWDWLRQ  LW LV D FULPH IRU WKH SUHSDUHU WR NQRZLQJO\ 

VXEPLW DQ DV\OXP DSSOLFDWLRQ WKDW FRQWDLQV D IDOVH VWDWHPHQW RU IDLOV WR FRQWDLQ D UHDVRQDEOH EDVLV 
LQ ODZ RU IDFW   7KDW FRQGXFW FRQVWLWXWHV WKH FULPH RI YLVD IUDXG XQGHU    8 6 &  †      D   ZKLFK 
LV D SUHGLFDWH DFW XQGHU 5,&2     8 6 &  †         %   
    

,I DQ DV\OXP DSSOLFDWLRQ LV VXEPLWWHG DV DQ DIILUPDWLYH DSSOLFDWLRQ  WKH DSSOLFDQW 

ZLOO  UHFHLYH  DQ  (QJOLVK ODQJXDJH  )RUP  ,      UHFHLSW  WKDW  VHUYHV  DV  QRWLILFDWLRQ  WKDW  86&,6 
UHFHLYHG WKH DSSOLFDWLRQ DQG ZLOO WKHUHDIWHU VFKHGXOH DQ DSSRLQWPHQW IRU ELRPHWULFV FROOHFWLRQ    

  
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 13 of 111

7HPSRUDU\ (PSOR\PHQW $XWKRUL]DWLRQ 
    

2QFH DQ DV\OXP DSSOLFDWLRQ KDV EHHQ SHQGLQJ IRU     GD\V  DQ DSSOLFDQW EHFRPHV 

HOLJLEOH  IRU  DQ  (PSOR\PHQW  $XWKRUL]DWLRQ  'RFXPHQW   ³($'´  RU  ³ZRUN  SHUPLW´    ZKLFK²LI 
JUDQWHG²DOORZV WKH DSSOLFDQW WHPSRUDULO\ WR ZRUN OHJDOO\ ZKLOH ZDLWLQJ IRU WKH DV\OXP LQWHUYLHZ   
  8 6 &  †      G   
    

7KH SURFHGXUH WR REWDLQ DQ ($' LQ FRQQHFWLRQ ZLWK D ODZIXOO\ ILOHG )RUP ,     LV 

WR ILOH WKH $SSOLFDWLRQ IRU (PSOR\PHQW $XWKRUL]DWLRQ  86&,6 )RUP ,      WRJHWKHU ZLWK SURRI WKDW 
WKH )RUP ,     KDV EHHQ SHQGLQJ IRU VXIILFLHQW WLPH  W\SLFDOO\ D FRS\ RI WKH )RUP ,     UHFHLSW    
    

6XEVHTXHQWO\   WKH  DSSOLFDQW  ZLOO  EH  VFKHGXOHG  IRU  DQ  DSSRLQWPHQW  WR  KDYH 

ELRPHWULFV WDNHQ DQG ZLOO EH LVVXHG DQ ($'   7KH DSSOLFDQW PD\ WKHQ XVH WKH ($' WR REWDLQ D 
VRFLDO VHFXULW\ QXPEHU IURP WKH 6RFLDO 6HFXULW\ $GPLQLVWUDWLRQ DQG D GULYHU¶V OLFHQVH RU 1HZ <RUN 
6WDWH 1RQ 'ULYHU ,GHQWLILFDWLRQ IURP WKH 'HSDUWPHQW RI 0RWRU 9HKLFOHV    
$V\OXP ,QWHUYLHZ  
    

$W VRPH SRLQW DIWHU WKH DV\OXP DSSOLFDWLRQ LV ILOHG  86&,6 ZLOO FRQWDFW WKH DSSOLFDQW 

IRU DQ LQWHUYLHZ ZLWK D 86&,6 $V\OXP 2IILFHU     & ) 5  †         2Q LQIRUPDWLRQ DQG EHOLHI  GXH 
WR  D  VHULRXV  EDFNORJ  LQ  SURFHVVLQJ  WKH  DSSOLFDWLRQV  DQG  D  FKDQJH  LQ  WKH  RUGHU  LQ  ZKLFK  86&,6 
SURFHVVHG DV\OXP DSSOLFDWLRQV  EHWZHHQ 'HFHPEHU      DQG -DQXDU\       LQWHUYLHZV VFKHGXOHG 
LQ WKH 1HZ <RUN DUHD W\SLFDOO\ RFFXUUHG PRUH WKDQ WZR \HDUV DIWHU D QHZ DSSOLFDWLRQ ZDV ILOHG  
    

$VLGH IURP UHFHLYLQJ WKH )RUP ,     UHFHLSW DQG LQWHUYLHZ QRWLFHV  WKLV LQWHUYLHZ 

LV  XVXDOO\  WKH  ILUVW  WLPH  WKDW  LQGLYLGXDOV  ZKR  KDYH  DIILUPDWLYHO\  DSSOLHG  IRU  DV\OXP  FRPH  LQWR 
FRQWDFW ZLWK WKH DV\OXP RIILFH    
    

7KH LQWHUYLHZ LV 86&,6¶ DGMXGLFDWRU\ SURFHGXUH IRU PDNLQJ D GHWHUPLQDWLRQ RQ WKH 

DV\OXP DSSOLFDWLRQ   7KH LQWHUYLHZ LV FRQGXFWHG E\ DQ DV\OXP RIILFHU DW D 86&,6 DV\OXP RIILFH    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 14 of 111

    

,I 86&,6 JUDQWV WKH DSSOLFDWLRQ  WKH DSSOLFDQW KDV WKH ULJKW WR UHPDLQ ODZIXOO\ LQ 

WKH 8QLWHG 6WDWHV ZLWK DV\OXP VWDWXV DQG HPSOR\PHQW DXWKRUL]DWLRQ     8 6 &  †      F        
    

,I  86&,6  GRHV  QRW  JUDQW  WKH  DSSOLFDWLRQ  DQG  WKH  DSSOLFDQW  LV  QRW  LQ  RWKHU ODZIXO 

VWDWXV  RU  RQ  YDOLG  SDUROH   KRZHYHU   86&,6 WDNHV WKH SRVLWLRQ WKDW  LW  PXVW UHIHU  WKH  DSSOLFDQW WR 
LPPLJUDWLRQ FRXUW IRU UHPRYDO SURFHHGLQJV SXUVXDQW WR   & ) 5  †        F        
    

,W LV WKH $V\OXP 2IILFH¶V JHQHUDO SUDFWLFH WKDW  LI WKH DV\OXP DSSOLFDWLRQ LQFOXGHV D 

VSRXVH RU FKLOG ZKR GRHV QRW KDYH ODZIXO VWDWXV LQ WKH 8QLWHG 6WDWHV  WKDW VSRXVH RU FKLOG DOVR ZLOO 
EH SODFHG LQWR UHPRYDO SURFHHGLQJV    
    

,Q UHPRYDO SURFHHGLQJV  WKH QRQFLWL]HQ PD\ DVVHUW GHIHQVHV WR UHPRYDO  LQFOXGLQJ 

DV\OXP  EXW LI WKH QRQFLWL]HQ LV XQVXFFHVVIXO LQ HVWDEOLVKLQJ KLV RU KHU GHIHQVHV  VKH RU KH ZLOO EH 
RUGHUHG UHPRYHG DQG XOWLPDWHO\ VXEMHFW WR GHSRUWDWLRQ IURP WKH 8QLWHG 6WDWHV    
&DQFHOODWLRQ RI 5HPRYDO 
    

6ROHO\ LQ WKH FRQWH[W RI UHPRYDO SURFHHGLQJV  D QRQ SHUPDQHQW UHVLGHQW LPPLJUDQW 

FDQ UDLVH D GHIHQVH WR UHPRYDO FDOOHG FDQFHOODWLRQ RI UHPRYDO  DV VHW IRUWK LQ   8 6 &  †     E %    
7KH HOLJLELOLW\ UHTXLUHPHQWV IRU FDQFHOODWLRQ RI UHPRYDO DUH VWULQJHQW DQG LQFOXGH       WHQ \HDUV RI 
FRQWLQXRXV  SUHVHQFH  LQ  WKH  8QLWHG  6WDWHV  SULRU  WR  WKH  LQLWLDWLRQ  RI  UHPRYDO  SURFHHGLQJV  RU 
FRPPLVVLRQ RI FHUWDLQ RIIHQVHV  DQG     WKDW UHPRYDO ZRXOG UHVXOW LQ ³H[FHSWLRQDO DQG H[WUHPHO\ 
XQXVXDO KDUGVKLS WR WKH >UHVSRQGHQW¶V@ VSRXVH  SDUHQW  RU FKLOG  ZKR LV D FLWL]HQ RI WKH 8QLWHG 6WDWHV 
RU       ODZIXOO\ DGPLWWHG IRU SHUPDQHQW UHVLGHQFH ´  ,G   ,W LV DOVR D UHTXLUHPHQW WKDW WKH UHVSRQGHQW 
KDYH JRRG PRUDO FKDUDFWHU  DQG FHUWDLQ FULPLQDO FRQYLFWLRQV DQG RWKHU QHJDWLYH HTXLWLHV ZLOO HLWKHU 
GLVTXDOLI\ WKH UHVSRQGHQW DV D PDWWHU RI ODZ RU UHVXOW LQ GHQLDO LQ WKH MXGJH¶V GLVFUHWLRQ    
7KH ³7HQ <HDU /DZ´ )UDXG 
    

3ODLQO\   QR  ODZ  SHUPLWV  LQGLYLGXDOV  WR  DIILUPDWLYHO\  DSSO\  IRU  EHQHILWV  VLPSO\ 

EHFDXVH WKH\ KDYH WHQ \HDUV UHVLGHQFH DQG RU 8 6  FLWL]HQ FKLOGUHQ  
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 15 of 111

    

7KH  WHUP  ³WHQ  \HDU  ODZ´  DSSHDUV  WR  EH  D  PLVOHDGLQJ  UHIHUHQFH  WR  RQH  RI  WKH 

UHTXLUHPHQWV IRU HOLJLELOLW\ IRU FDQFHOODWLRQ RI UHPRYDO  ZKLFK  DV GHVFULEHG DERYH  LV D GHIHQVH IRU 
DQ LQGLYLGXDO ZKR LV DOUHDG\ LQ UHPRYDO SURFHHGLQJV DQG LV QRW VRPHWKLQJ IRU ZKLFK DQ\RQH FDQ 
DIILUPDWLYHO\ DSSO\    
    

$V H[SHULHQFHG LPPLJUDWLRQ ODZ SUDFWLWLRQHUV  'HIHQGDQWV NQHZ WKDW 8QLWHG 6WDWHV 

LPPLJUDWLRQ  ODZV  GR  QRW  SHUPLW  LQGLYLGXDOV  WR  DIILUPDWLYHO\  DSSO\  IRU  DQG  REWDLQ  ZRUN 
DXWKRUL]DWLRQ  DQG RU  DQ\  IRUP  RI  ODZIXO VWDWXV EDVHG VROHO\ RQ KDYLQJ WHQ  \HDUV RI SUHVHQFH RU 
UHVLGHQFH LQ WKH 8QLWHG 6WDWHV DQG RU 8 6  FLWL]HQ FKLOGUHQ  
    

1HYHUWKHOHVV  'HIHQGDQWV NQRZLQJO\ DQG LQWHQWLRQDOO\ GHYLVHG  LPSOHPHQWHG  DQG 

FRRUGLQDWHG D VFKHPH WR REWDLQ PRQH\ IURP YXOQHUDEOH QRQFLWL]HQV E\ PLVUHSUHVHQWLQJ WR 3ODLQWLIIV 
WKDW WKH\ ZHUH HOLJLEOH IRU DQG FRXOG REWDLQ ZRUN DXWKRUL]DWLRQ DQG RU ODZIXO SHUPDQHQW UHVLGHQW 
VWDWXV YLD DQ DIILUPDWLYH DSSOLFDWLRQ EDVHG RQ KDYLQJ WHQ \HDUV RI UHVLGHQFH LQ WKH 8QLWHG 6WDWHV 
DQG RU 8 6  FLWL]HQ FKLOGUHQ  
    

(DFK 3ODLQWLII ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH    
,QLWLDO 0HHWLQJV 

    

'HIHQGDQWV¶  IUDXG  DQG  GHFHSWLRQ  EHJDQ  ZLWK  WKHLU  ILUVW  PHHWLQJV  ZLWK  WKHLU 

SURVSHFWLYH FOLHQWV   )RU WKH YDVW PDMRULW\ RI 3ODLQWLIIV  WKHLU LQWHUDFWLRQ ZLWK 'HIHQGDQWV JHQHUDOO\ 
SURFHHGHG DV IROORZV    
D   3ODLQWLIIV EULHIO\ PHW ZLWK 'HIHQGDQWV RU WKHLU DJHQWV DQG WUXWKIXOO\ DQVZHUHG DQ\ 
TXHVWLRQV 'HIHQGDQWV DVNHG WKHP   0RVW 3ODLQWLIIV UHSRUW WKDW WKHVH PHHWLQJV ODVWHG 
EHWZHHQ ILYH WR WKLUW\ PLQXWHV  
E   'XULQJ WKHVH PHHWLQJV  DQG RQ PRVW RFFDVLRQV SULRU WR 3ODLQWLIIV SD\LQJ 'HIHQGDQWV 
DQ\  PRQH\   'HIHQGDQWV  RU  WKHLU  DJHQWV  UHSUHVHQWHG  WR  3ODLQWLIIV  WKDW  WKH\  ZHUH 
HOLJLEOH IRU ODZIXO SHUPDQHQW UHVLGHQF\ EHFDXVH WKH\ KDG WHQ \HDUV RI UHVLGHQFH LQ 
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 16 of 111

WKH  8QLWHG  6WDWHV  DQG RU  8 6   FLWL]HQ  FKLOGUHQ   ZKLFK  'HIHQGDQWV  VRPHWLPHV 
UHIHUUHG WR DV WKH ³OH\ GH GLH] DxRV´  ³WHQ \HDU ODZ´   RU  LQ VRPH LQVWDQFHV  WKH ³WHQ 
\HDU  YLVD ´    'HIHQGDQWV  RIWHQ  UHTXHVWHG  DQ  LQLWLDO  IHH  DW  WKHLU  ILUVW  PHHWLQJ  DIWHU 
UHSUHVHQWLQJ WR 3ODLQWLIIV WKDW WKH\ ZHUH HOLJLEOH IRU D EHQHILW XQGHU WKH ³WHQ \HDU 
ODZ ´ 
F   *HQHUDOO\  DW  WKH  ILUVW  PHHWLQJ  RU  D  VXEVHTXHQW  PHHWLQJ   'HIHQGDQWV  LQVWUXFWHG 
3ODLQWLIIV WR VLJQ VHYHUDO GRFXPHQWV ZULWWHQ LQ (QJOLVK WKDW 'HIHQGDQWV WROG WKHP 
ZHUH  QHFHVVDU\  WR  DSSO\  IRU  ODZIXO  SHUPDQHQW  UHVLGHQF\     'HIHQGDQWV  GLG  QRW 
H[SODLQ WKH FRQWHQWV RI RU WUDQVODWH WKHVH GRFXPHQWV    
G   'HIHQGDQWV JHQHUDOO\ DOVR UHIXVHG WR DQVZHU TXHVWLRQV IURP 3ODLQWLIIV DERXW WKHLU 
DSSOLFDWLRQV   :KHQ 3ODLQWLIIV DVNHG TXHVWLRQV DERXW WKHLU DSSOLFDWLRQV  'HIHQGDQWV 
JHQHUDOO\  EHFDPH  DQJU\  RU  FXUW   RIWHQ  \HOOLQJ  DW  3ODLQWLIIV  RU  XVLQJ  SURIDQLWLHV   
,QVWHDG  RI  DGGUHVVLQJ  3ODLQWLIIV¶  TXHVWLRQV   'HIHQGDQWV  W\SLFDOO\  LQVWUXFWHG 
3ODLQWLIIV WR WUXVW WKHP EHFDXVH WKH\ ZHUH DWWRUQH\V  
H   'HIHQGDQWV PLVUHSUHVHQWHG WKH QDWXUH RI WKH DSSOLFDWLRQV WKH\ RIIHUHG WR VXEPLW IRU 
3ODLQWLIIV  
I   3ODLQWLIIV W\SLFDOO\ YLVLWHG +HFKW /DZ )LUP VHYHUDO WLPHV DQG QRWHG WKH UHDVRQ IRU 
WKHLU UH YLVLW DV WKH ³GLH] DxRV´  ³WHQ \HDUV´  RU ³SRU WLHPSR´  ³IRU WLPH´  RQ WKH 
RIILFH¶V VLJQ LQ VKHHW  
J   'HIHQGDQWV  FKDUJHG  3ODLQWLIIV  IHHV   JHQHUDOO\  LQ  YDU\LQJ VL]HG  LQVWDOOPHQWV 
EHJLQQLQJ  ZLWK  DQ  LQLWLDO  SD\PHQW  DW  WKHLU  ILUVW  YLVLW     $W  VXEVHTXHQW  YLVLWV  
'HIHQGDQWV  DVNHG  3ODLQWLIIV  WR  PDNH  DGGLWLRQDO  SD\PHQWV     %DVHG  RQ  WKH 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 17 of 111

UHSUHVHQWDWLRQ WKDW 'HIHQGDQWV ZRXOG VXEPLW DQ DIILUPDWLYH DSSOLFDWLRQ XQGHU WKH 
³WHQ \HDU ODZ ´ 3ODLQWLIIV PDGH WKHVH DGGLWLRQDO SD\PHQWV            
    

7KH 7HQ <HDU 6FKHPH IXQFWLRQV WKURXJK D IODW RXW PLVUHSUHVHQWDWLRQ RI WKH VHUYLFHV 

'HIHQGDQWV FRXOG DQG SODQQHG WR SURYLGH   ,W LV QRW D PDWWHU RI 'HIHQGDQWV SURYLGLQJ XQVRXQG OHJDO 
DGYLFH RU XQGHUHVWLPDWLQJ WKH ULVN RI WKH SURFHVV UHSUHVHQWHG WR 3ODLQWLIIV²WKH PLVUHSUHVHQWDWLRQV 
ZHUH WKH PHDQV E\ ZKLFK 'HIHQGDQWV LQGXFHG 3ODLQWLIIV WR KLUH DQG SD\ WKHP   ,I 'HIHQGDQWV KDG 
GLVFORVHG WR 3ODLQWLIIV WKDW WKHUH ZDV QR DIILUPDWLYH DSSOLFDWLRQ IRU EHQHILWV EDVHG RQ WKH HOLJLELOLW\ 
FULWHULD  'HIHQGDQWV  GHVFULEHG   DQG  WKDW  WKH\  LQWHQGHG  WR  ILOH  ERLOHUSODWH  DV\OXP  DSSOLFDWLRQV  LQ 
RUGHU WR SODFH 3ODLQWLIIV LQ DGYHUVDULDO UHPRYDO SURFHHGLQJV ZKHUH WKH LPPLJUDWLRQ FRXUW ZRXOG 
GHWHUPLQH ZKHWKHU 3ODLQWLIIV FRXOG UHPDLQ LQ WKH 8QLWHG 6WDWHV  3ODLQWLIIV ZRXOG KDYH ZDONHG RXW 
RI WKHLU RIILFH ZLWKRXW SD\LQJ DQ\ IHH  
    

$ FRXSOH H[DPSOHV GHPRQVWUDWH WKH QDWXUH RI 'HIHQGDQWV¶ IUDXG    

    

3ULRU  WR  ILUVW  YLVLWLQJ  'HIHQGDQWV   3ODLQWLII  )UDQFLVFR  *X]PDQ   ³0U   *X]PDQ´  

YLVLWHG  DQRWKHU  LPPLJUDWLRQ  ODZ  ILUP  WKDW  KH  KDG  VHHQ  DGYHUWLVHG  RQ  WHOHYLVLRQ     7KH  ODZ\HU 
0U  *X]PDQ PHW ZLWK DW WKH ODZ ILUP LQIRUPHG 0U  *X]PDQ WKDW KH FRXOG VHHN ODZIXO SHUPDQHQW 
UHVLGHQW VWDWXV  EXW ZRXOG QHHG WR ILUVW EH SODFHG LQ UHPRYDO SURFHHGLQJV  ZKLFK KH FRXOG GR E\ 
ILOLQJ DQ DV\OXP DSSOLFDWLRQ   $W WKH PHQWLRQ RI DV\OXP  0U  *X]PDQ GHFLGHG QRW WR FRQWLQXH ZLWK 
WKH DSSRLQWPHQW DQG OHIW EHFDXVH KH GLG QRW ZDQW WR DSSO\ IRU DV\OXP  
    

:KHQ 0U  *X]PDQ PHW ZLWK 'HIHQGDQW /HRQDUG  KRZHYHU  'HIHQGDQW /HRQDUG WROG 

KLP WKDW KH  ZDV  HOLJLEOH WR ODZIXOO\  ZRUN  LQ  WKH  8QLWHG  6WDWHV  DQG  WR  REWDLQ  ODZIXO SHUPDQHQW 
UHVLGHQF\  WKURXJK  DQ  DIILUPDWLYH  DSSOLFDWLRQ  ³SRU  ORV  GLH]  DxRV´   ³EHFDXVH  RI  WKH  WHQ  \HDUV´    
'HIHQGDQW /HRQDUG GLG QRW GLVFORVH WKDW 0U  *X]PDQ ZRXOG QHHG WR ILOH DQ DV\OXP DSSOLFDWLRQ RU 
EH SODFHG LQ UHPRYDO SURFHHGLQJV LQ RUGHU WR TXDOLI\   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 18 of 111

    

3ODLQWLII - 0  ZDV VNHSWLFDO RI WKH ³WHQ \HDU ODZ´ ZKHQ 'HIHQGDQWV H[SODLQHG LW WR 

KLP DW WKHLU ILUVW PHHWLQJ   - 0  WROG 'HIHQGDQWV WKDW KH GLG QRW ZDQW WR SXUVXH WKH ³WHQ \HDU ODZ´ 
LI LW ZDV QRW D YDOLG RU FHUWDLQ IRUP RI UHOLHI RU ZRXOG FDXVH KLP DQ\ SUREOHPV LQ WKH IXWXUH      
    

'HIHQGDQWV DVVXUHG - 0  WKDW EHFDXVH KH KDG OLYHG LQ WKH 8QLWHG 6WDWHV IRU WHQ \HDUV 

DQG KDG 8 6  FLWL]HQ FKLOGUHQ  KH ZRXOG KDYH KLV OHJDO SHUPDQHQW UHVLGHQFH ³SDSHUV´ LQ D \HDU DQG 
D KDOI    
    

7KH RWKHU 3ODLQWLIIV ZHUH VLPLODUO\ GHIUDXGHG DV ODLG RXW LQ SDUDJUDSKV     WR     

EHORZ  
$V\OXP $SSOLFDWLRQV 
    

)ROORZLQJ  WKHVH  PHHWLQJV  ZLWK  3ODLQWLIIV   'HIHQGDQWV  VXEPLWWHG  DV\OXP 

DSSOLFDWLRQV IRU 3ODLQWLIIV   'HIHQGDQWV GLG WKLV HYHQ WKRXJK 3ODLQWLIIV KLUHG 'HIHQGDQWV WR SHUIRUP 
DQ  HQWLUHO\  GLIIHUHQW  VHUYLFH  RQ  WKHLU  EHKDOI     3ODLQWLIIV  KDG  UHWDLQHG  'HIHQGDQWV  WR  DSSO\  IRU 
DIILUPDWLYH LPPLJUDWLRQ UHOLHI WKDW 'HIHQGDQWV PLVUHSUHVHQWHG WR 3ODLQWLIIV DV EHLQJ DYDLODEOH WR 
WKHP EDVHG RQ WKHLU WHQ \HDU UHVLGHQFH LQ WKH 8QLWHG 6WDWHV DQG RU 8 6  FLWL]HQ FKLOGUHQ   1R VXFK 
DIILUPDWLYH UHOLHI H[LVWV  KRZHYHU   3ODLQWLIIV GLG QRW UHWDLQ 'HIHQGDQWV WR DSSO\ IRU DV\OXP RQ WKHLU 
EHKDOI DQG WR SXW WKHP LQWR UHPRYDO SURFHHGLQJV ZKHUH WKH LPPLJUDWLRQ FRXUW ZRXOG GHWHUPLQH 
ZKHWKHU WKH\ FRXOG UHPDLQ LQ WKH 8QLWHG 6WDWHV  
    

'HIHQGDQWV  GLG  QRW  WUDQVODWH  WKH  (QJOLVK  DV\OXP  DSSOLFDWLRQV   QRU  GLG  WKH\  UHDG 

WKHP WR 3ODLQWLIIV LQ D ODQJXDJH WKH\ XQGHUVWRRG   (YHQ ZRUVH  H[FHSW IRU RQH OLPLWHG H[FHSWLRQ 
IXUWKHU  H[SODLQHG  EHORZ     'HIHQGDQWV  GLG  QRW  WHOO  3ODLQWLIIV  WKDW  WKH\  ZHUH  VXEPLWWLQJ  DV\OXP 
                                                 
 

  
$V GHVFULEHG EHORZ LQ SDUDJUDSK      'HIHQGDQW 7KRPDV WROG 3ODLQWLIIV (UQHVWR 0HMLD *RQ]DOH] 
 ³0U  0HMLD´  DQG 2QHLGD 7DFXED 0HMLD  ³0V  7DFXED´  WKDW 'HIHQGDQW 7KRPDV ZRXOG ILOH DQ DV\OXP DSSOLFDWLRQ 
RQ WKHLU EHKDOI EHFDXVH DQ DV\OXP DSSOLFDWLRQ ZDV SDUW RI WKH SURFHVV  DQG WKDW ODWHU KH ZDV JRLQJ WR FKDQJH WKH 
DSSOLFDWLRQ WR RQH IRU WKH ³WHQ \HDU YLVD ´  +RZHYHU  'HIHQGDQWV GLG QRW DGYLVH 0U  0HMLD DQG 0V  7DFXED WKDW 
'HIHQGDQWV LQWHQGHG WR FDXVH 0U  0HMLD DQG 0V  7DFXED WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH DV\OXP 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 19 of 111

DSSOLFDWLRQV  RQ  WKHLU  EHKDOI     ,Q  VRPH  FDVHV   'HIHQGDQWV  LQVWUXFWHG  3ODLQWLIIV  WR  VLJQ  EODQN  RU 
LQFRPSOHWH DSSOLFDWLRQ IRUPV   1RQHWKHOHVV  'HIHQGDQWV IDOVHO\ DWWHVWHG RQ WKH )RUPV ,     WKDW 
WKH\ SUHSDUHG WKH DSSOLFDWLRQV DW WKH UHTXHVW RI 3ODLQWLIIV DQG RU WKDW WKH DSSOLFDWLRQV ZHUH UHDG WR 
3ODLQWLIIV LQ D ODQJXDJH WKDW 3ODLQWLIIV XQGHUVWRRG  
    

'HIHQGDQWV  DOVR  SUHSDUHG  WKH  DV\OXP  DSSOLFDWLRQV  ZLWKRXW  UHJDUG  WR  WKH  WUXWK  RU 

IDOVLW\  RI  WKH  LQIRUPDWLRQ  FRQWDLQHG  WKHUHLQ     'HIHQGDQWV  GLG  QRW  DVN  TXHVWLRQV  WR  GHWHUPLQH 
ZKHWKHU 3ODLQWLIIV ZHUH HOLJLEOH IRU DV\OXP RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU 
DV\OXP EHIRUH VXEPLWWLQJ DV\OXP DSSOLFDWLRQV RQ WKHLU EHKDOI   ,QVWHDG  'HIHQGDQWV LQFOXGHG WKH 
VDPH JHQHULF  ERLOHUSODWH LQIRUPDWLRQ UHJDUGLQJ WKH EDVLV RI WKH DV\OXP FODLP LQ HDFK DSSOLFDWLRQ 
DQG  XQLYHUVDOO\  SURYLGHG  ³FKDQJHG  FLUFXPVWDQFHV ´  ZLWKRXW  DQ\  IXUWKHU  GHWDLO   DV  WKH  UHDVRQ 
3ODLQWLIIV ILOHG RXWVLGH RI WKH RQH \HDU ILOLQJ GHDGOLQH HYHQ WKRXJK 'HIHQGDQWV GLG QRW GLVFXVV WKH 
QDWXUH  DQG RU  FRQWHQWV  RI  WKH  DSSOLFDWLRQV²OHW  DORQH  WKH  UHDVRQV  QRWHG  IRU  WKH  GHOD\²ZLWK 
3ODLQWLIIV      
    

7KH  DV\OXP  DSSOLFDWLRQV  XQLYHUVDOO\  LQFOXGHG  WKH  VDPH  XQYHULILHG  ODQJXDJH 

LQGLFDWLQJ WKDW    
D   3ODLQWLIIV VRXJKW DV\OXP EDVHG RQ WKHLU PHPEHUVKLS RI D SDUWLFXODU VRFLDO JURXS   
E   3ODLQWLIIV  VRXJKW  DV\OXP  EDVHG  RQ  ³KDUP  RU  PLVWUHDWPHQW´  WR  ³8QLWHG  6WDWHV  FLWL]HQ 
FKLOGUHQ´ LI UHWXUQHG WR WKHLU KRPH FRXQWU\  DQG  
F   7KHLU RWKHUZLVH WLPH EDUUHG DSSOLFDWLRQ ZDV MXVWLILHG E\ ³FKDQJHG FLUFXPVWDQFHV´²
ZLWK QR HODERUDWLRQ    
                                                 
DSSOLFDWLRQ ZDV QRW DSSURYHG   5DWKHU  OLNH DOO RI WKH RWKHU 3ODLQWLIIV  0U  0HMLD DQG 0V  7DFXED XQGHUVWRRG WKDW 
'HIHQGDQWV ZRXOG DSSO\ IRU DQ DIILUPDWLYH LPPLJUDWLRQ EHQHILW VROHO\ EDVHG RQ 3ODLQWLIIV¶ UHVLGHQFH LQ WKH 8QLWHG 
6WDWHV IRU WHQ \HDUV RU PRUH DQG RU 8 6  FLWL]HQ FKLOGUHQ  ZKHQ LQ IDFW QR VXFK DIILUPDWLYH LPPLJUDWLRQ UHOLHI H[LVWV  
 
  
:LWK YHU\ VOLJKW YDULDWLRQV  WKLV LV WUXH RI DOO RI WKH DV\OXP DSSOLFDWLRQV 3ODLQWLIIV¶ FRXQVHO ZDV DEOH WR 
REWDLQ  DSSOLFDWLRQV IRU    RI    3ODLQWLIIV    7KH UHPDLQLQJ 3ODLQWLIIV KDYH QRW EHHQ DEOH WR REWDLQ WKHLU DSSOLFDWLRQV  
DQG 'HIHQGDQWV KDYH UHIXVHG WR SURYLGH FRPSOHWHG YHUVLRQV RI WKH DSSOLFDWLRQV WR VRPH RI WKRVH 3ODLQWLIIV  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 20 of 111

    

'HIHQGDQWV  RIWHQ  LQVWUXFWHG  3ODLQWLIIV  WR  WUDQVODWH  ELUWK  FHUWLILFDWHV  DQG  RWKHU 

VXSSRUWLQJ GRFXPHQWV WKURXJK 6\OYLD¶V 7UDQVODWLRQ 6HUYLFH IRU DQ DGGLWLRQDO IHH    
    

'HIHQGDQWV VXEPLWWHG WKH DV\OXP DSSOLFDWLRQV E\ PDLO DFURVV VWDWH OLQHV WR 86&,6¶ 

9HUPRQW 6HUYLFH &HQWHU LQ 6W  $OEDQV  9HUPRQW  
    

'HIHQGDQWV  W\SLFDOO\  DSSOLHG  IRU  3ODLQWLIIV  WR  UHFHLYH  DQ  LQLWLDO  ($'   ZKLFK 

3ODLQWLIIV FRXOG UHQHZ ZKLOH WKHLU DSSOLFDWLRQV UHPDLQHG SHQGLQJ  
'HIHQGDQWV¶ &RQWLQXHG 0LVUHSUHVHQWDWLRQV 
    

6RPH  3ODLQWLIIV  ILUVW  UHDOL]HG  DQ  DV\OXP  DSSOLFDWLRQ  KDG  EHHQ  ILOHG  ZKHQ  WKH\ 

UHFHLYHG  QRWLFHV  IURP  86&,6  RU  FRUUHVSRQGHQFH  IURP  'HIHQGDQWV  UHJDUGLQJ  WKH  UHFHLSW  RI  DQ 
DV\OXP DSSOLFDWLRQ RU DQ XSFRPLQJ DV\OXP LQWHUYLHZ   2WKHU 3ODLQWLIIV KDG WURXEOH UHDGLQJ QRWLFHV 
IURP 86&,6 RU FRUUHVSRQGHQFH IURP 'HIHQGDQWV DQG ILUVW OHDUQHG E\ RWKHU PHDQV WKDW WKH\ KDG 
XQNQRZLQJO\ DSSOLHG IRU DV\OXP    
    

:KHQ  3ODLQWLIIV  OHDUQHG  DERXW  WKH  DV\OXP  DSSOLFDWLRQV   WKH\  ZHUH  FRQIXVHG  DQG 

FRQFHUQHG EHFDXVH WKH\ KDG UHWDLQHG 'HIHQGDQWV WR DSSO\ IRU DIILUPDWLYH LPPLJUDWLRQ UHOLHI EDVHG 
RQ WKH ³WHQ \HDU ODZ ´ DQG QRW ³DV\OXP´ RU ³DVLOR ´  6RPH 3ODLQWLIIV LPPHGLDWHO\ EHFDPH ZRUULHG 
EHFDXVH WKHLU XQGHUVWDQGLQJ ZDV WKDW SHRSOH IURP WKHLU KRPH FRXQWULHV W\SLFDOO\ GR QRW TXDOLI\ IRU 
DV\OXP   2WKHU 3ODLQWLIIV FDOOHG RU YLVLWHG 'HIHQGDQWV DQG RU +HFKW /DZ )LUP EHFDXVH WKH\ ZHUH 
FRQIXVHG E\ WKH QRWLILFDWLRQV    
    

3ODLQWLIIV ' 3 &   ( * 5   )UDQFLVFR *X]PDQ  3DWULFLD 3DYLD  ) 7 5   - & 5   (GLWK 

'XUDQ  DQG &DWDOLQD 5RGULJXH] FDOOHG RU YLVLWHG +HFKW /DZ )LUP WR DVN DERXW WKHVH QRWLFHV   7KH 
LQGLYLGXDOV  WKHVH  3ODLQWLIIV  VSRNH  ZLWK  DW  +HFKW  /DZ  )LUP²LQ  DW  OHDVW  RQH  LQVWDQFH  'HIHQGDQW 
7KRPDV²DGPLWWHG IRU WKH ILUVW WLPH WKDW 'HIHQGDQWV ILOHG DQ DV\OXP DSSOLFDWLRQ RQ WKHLU EHKDOI  
EXW DVVXUHG WKHVH 3ODLQWLIIV  LQ VXEVWDQFH  WKDW WKH DV\OXP DSSOLFDWLRQ ZDV MXVW D VWDQGDUG ILUVW VWHS 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 21 of 111

LQ WKH SURFHVV XQGHU WKH ³WHQ \HDU ODZ ´  ,Q DW OHDVW RQH FDVH  DQ HPSOR\HH RI +HFKW /DZ )LUP WROG 
D 3ODLQWLII WKDW WKH DV\OXP DSSOLFDWLRQ ZDV MXVW WKH ³QDPH´ RI WKH ³IRUP´ IRU WKH ³WHQ \HDU ODZ´ 
DSSOLFDWLRQ  
    

:KHQ 3ODLQWLII $ 0 0  YLVLWHG +HFKW /DZ )LUP ZLWK KHU GDXJKWHU  WKH GDXJKWHU 

DVNHG  'HIHQGDQW  /HRQDUG  ZK\  WKH  SDSHUZRUN  $ 0 0   UHFHLYHG  IURP  86&,6  VDLG  ³DV\OXP ´ 
ZKHUHDV 'HIHQGDQW /HRQDUG KDG WROG WKHP WKDW KH ZDV ILOLQJ DQ DSSOLFDWLRQ EDVHG RQ 3ODLQWLII¶V 
OHQJWK  RI  UHVLGHQF\  DQG  FKLOGUHQ     'HIHQGDQW  /HRQDUG  UHVSRQGHG  WKDW  KH  ZDV  WKH  ODZ\HU   QRW 
3ODLQWLII RU KHU GDXJKWHU  DQG VDLG WKDW KH NQHZ ZKDW KH ZDV GRLQJ  
    

:KHQ 3ODLQWLIIV UDLVHG FRQFHUQV  'HIHQGDQWV DQG RWKHU HPSOR\HHV RI +HFKW  /DZ 

)LUP WROG 3ODLQWLIIV  IRU WKH ILUVW WLPH  WKDW 'HIHQGDQWV ILOHG DQ DV\OXP DSSOLFDWLRQ RQ 3ODLQWLIIV¶ 
EHKDOI  WKDW WKH DSSOLFDWLRQ WKDW 'HIHQGDQWV KDG VXEPLWWHG ZDV MXVW WKH ILUVW VWHS LQ WKH SURFHVV IRU 
REWDLQLQJ ODZIXO SHUPDQHQW UHVLGHQW VWDWXV  DQG WKDW WKH\ VKRXOG QRW ZRUU\   'HIHQGDQWV GLG QRW 
GLVFORVH  WKDW   LQ  IDFW   WKH  DV\OXP  DSSOLFDWLRQV  ZHUH  LQWHQGHG  WR  UHVXOW  LQ  3ODLQWLIIV¶  UHIHUUDO  WR 
UHPRYDO SURFHHGLQJV   (YHQ DIWHU OHDUQLQJ WKDW 'HIHQGDQWV KDG ILOHG DV\OXP DSSOLFDWLRQV RQ WKHLU 
EHKDOI  3ODLQWLIIV UHPDLQHG XQDZDUH RI 'HIHQGDQWV¶ LQWHQGHG SXUSRVH IRU WKH DSSOLFDWLRQV  
    

3ODLQWLIIV  QHYHU  ZRXOG  KDYH  UHWDLQHG  RU  SDLG  'HIHQGDQWV  KDG  WKH\  NQRZQ 

'HIHQGDQWV LQWHQGHG WR ILOH DV\OXP DSSOLFDWLRQV RQ WKHLU EHKDOI IRU WKH SXUSRVH RI SODFLQJ WKHP 
LQWR UHPRYDO SURFHHGLQJV DQG QRW WR  DSSO\ IRU WKH  QRQ H[LVWHQW  DIILUPDWLYH LPPLJUDWLRQ  UHOLHI 
EDVHG RQ WKH ³WHQ \HDU ODZ´ WKDW ZDV PLVUHSUHVHQWHG WR WKHP E\ 'HIHQGDQWV    
    

'HIHQGDQWV H[SORLWHG 3ODLQWLIIV¶ WUXVW LQ WKHP DV DWWRUQH\V  DV ZHOO DV 3ODLQWLIIV¶ ODFN 

RI OHJDO H[SHUWLVH  OLPLWHG DELOLW\ WR UHDG DQG XQGHUVWDQG (QJOLVK  OLPLWHG IRUPDO HGXFDWLRQ  DQG 
XQIDPLOLDULW\ ZLWK WKH FRPSOLFDWHG 8 6  LPPLJUDWLRQ V\VWHP  WR FDUU\ RXW WKH 7HQ <HDU 6FKHPH  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 22 of 111

,QWHUDFWLRQV ZLWK 0U  /XLV *XHUUHUR 
    

,Q DGGLWLRQ WR PDNLQJ PLVUHSUHVHQWDWLRQV WR 3ODLQWLIIV  'HIHQGDQWV IXUWKHUHG WKHLU 

VFKHPH E\ PDNLQJ LQDFFXUDWH VWDWHPHQWV DERXW LPPLJUDWLRQ ODZ WR 0U  /XLV *XHUUHUR    
    

0U  /XLV *XHUUHUR  WKH RZQHU RI D IUDQFKLVH RI $7$;  DQ DFFRXQWLQJ DQG ILQDQFLDO 

VHUYLFHV RIILFH  OHDUQHG RI 'HIHQGDQWV DQG +HFKW /DZ )LUP WKURXJK D FOLHQW  
    

,Q  RU  DURXQG  ODWH         D  FOLHQW  ZKR  KDG  SUHYLRXVO\  XVHG  0U   /XLV  *XHUUHUR  WR 

SUHSDUH KLV WD[HV UHWXUQHG WR 0U  /XLV *XHUUHUR¶V RIILFH   7KH FOLHQW UHSRUWHG WR 0U  /XLV *XHUUHUR 
WKDW  'HIHQGDQWV   WKURXJK  +HFKW  /DZ  )LUP   KHOSHG  KLP  REWDLQ  D  6RFLDO  6HFXULW\  QXPEHU  DQG 
HPSOR\PHQW DXWKRUL]DWLRQ   7KH FOLHQW WROG 0U  /XLV *XHUUHUR WKDW KH ZDV HOLJLEOH IRU WKH EHQHILWV 
EHFDXVH KH KDG OLYHG LQ WKH 8QLWHG 6WDWHV IRU DW OHDVW WHQ \HDUV DQG SDLG KLV WD[HV  
    

$IWHU WKDW  0U  /XLV *XHUUHUR KHDUG IURP RWKHU FOLHQWV WKDW 'HIHQGDQWV KDG VHFXUHG 

HPSOR\PHQW DXWKRUL]DWLRQV DQG 6RFLDO 6HFXULW\ QXPEHUV IRU WKHP EDVHG RQ WKH VDPH FULWHULD    
    

%DVHG  RQ  WKHVH  UHSRUWV   0U   /XLV  *XHUUHUR  EHJDQ  UHIHUULQJ  PDQ\  FOLHQWV  WR 

'HIHQGDQWV  EHFDXVH  HPSOR\PHQW  DXWKRUL]DWLRQ  DQG  6RFLDO  6HFXULW\  QXPEHUV  ZRXOG  DOORZ  KLV 
FOLHQWV WR TXDOLI\ IRU DGGLWLRQDO WD[ FUHGLWV DQG JHW SDLG WKURXJK DQ RIILFLDO SD\UROO  
    

2Q  D  IHZ  RFFDVLRQV   FOLHQWV  ZKRP  KH  KDG  UHIHUUHG  WR  'HIHQGDQWV  WROG  0U   /XLV 

*XHUUHUR WKDW WKH\ ZHUH WXUQHG DZD\ E\ 'HIHQGDQWV EHFDXVH WKH\ GLG QRW TXDOLI\ IRU HPSOR\PHQW 
DXWKRUL]DWLRQ DQG D 6RFLDO 6HFXULW\ QXPEHU   7KURXJK RQH RI WKHVH UHWXUQHG UHIHUUDOV  'HIHQGDQWV 
UHOD\HG WR 0U  /XLV *XHUUHUR WKDW WKH\ ZDQWHG WR PHHW    
    

,Q  RU  DURXQG  0DUFK         0U   /XLV  *XHUUHUR  PHW  ZLWK  'HIHQGDQW  /HRQDUG   

'HIHQGDQW 7KRPDV ZDV QRW SUHVHQW IRU WKH PHHWLQJ    
    

,Q  RUGHU  WR  DWWUDFW  VWLOO  PRUH  FOLHQWV   'HIHQGDQW  /HRQDUG  IDOVHO\  UHSUHVHQWHG  WR 

0U  /XLV *XHUUHUR WKDW LPPLJUDQWV ZLWKRXW SHUPDQHQW OHJDO VWDWXV ZHUH HOLJLEOH IRU HPSOR\PHQW 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 23 of 111

DXWKRUL]DWLRQ DQG WR DSSO\ IRU D JUHHQ FDUG LI WKH\ KDG OLYHG LQ WKH 8QLWHG 6WDWHV IRU WHQ \HDUV DQG 
KDG  ILOHG  WKHLU  WD[  UHWXUQV  IRU  WKRVH  \HDUV     'HIHQGDQW  /HRQDUG  GLG  QRW  PHQWLRQ  ILOLQJ  DV\OXP 
DSSOLFDWLRQV RU UHPRYDO SURFHHGLQJV   
    

%DVHG  RQ  WKRVH  LQDFFXUDWH  VWDWHPHQWV   DQG  ZLWKRXW  NQRZLQJ  WKDW  WKH\  ZHUH 

LQDFFXUDWH  E\ 2FWREHU       0U  /XLV *XHUUHUR KDG UHIHUUHG DQ HVWLPDWHG RQH KXQGUHG SHRSOH WR 
+HFKW /DZ )LUP  
    

,Q 2FWREHU       0U  /XLV *XHUUHUR DWWHQGHG D WZR GD\ FRXUVH RQ LPPLJUDWLRQ ODZ 

LQ &DOLIRUQLD   'XULQJ WKDW FRXUVH  KH OHDUQHG WKDW KDYLQJ WHQ \HDUV RI SUHVHQFH LQ WKH 8QLWHG 6WDWHV 
DQG 8 6  FLWL]HQ FKLOGUHQ GRHV QRW DORQH HVWDEOLVK HOLJLELOLW\ IRU LPPLJUDWLRQ EHQHILWV    
    

$IWHU  WKH  FODVV  DQG  EDVHG  RQ  KLV  QHZO\ DFTXLUHG  NQRZOHGJH  WKDW  'HIHQGDQWV¶ 

VWDWHPHQWV  ZHUH  LQDFFXUDWH   0U   /XLV  *XHUUHUR  VWRSSHG  UHIHUULQJ  KLV  FOLHQWV  WR  'HIHQGDQWV  DQG 
+HFKW /DZ )LUP  
2SHUDWLRQ RI WKH (QWHUSULVH 
    

'HIHQGDQWV  7KRPDV  DQG  /HRQDUG  DW  DOO  UHOHYDQW  WLPHV  GLUHFWHG  DQG  FRQWLQXH  WR 

GLUHFW WKH RSHUDWLRQV RI WKH (QWHUSULVH DQG FRQGXFW DQG SDUWLFLSDWH LQ WKH DIIDLUV RI WKH (QWHUSULVH  
      'HIHQGDQWV 7KRPDV DQG /HRQDUG XVHG WKHLU ODZ OLFHQVHV DV D JXLVH RI OHJLWLPDF\ WR 
FDUU\ RXW WKH 7HQ <HDU 6FKHPH DQG GHIUDXG LPPLJUDQWV LQ WKH 1HZ <RUN &LW\ DUHD    
      6SHFLILFDOO\   'HIHQGDQWV  7KRPDV  DQG  /HRQDUG  PDGH  PLVUHSUHVHQWDWLRQV  WR 
LPPLJUDQWV WR LQGXFH WKHP WR KLUH +HFKW /DZ )LUP DQG WR SD\ LW WR SURYLGH D QRQ H[LVWHQW VHUYLFH  
      'HIHQGDQWV GLUHFWHG +HFKW /DZ )LUP DQG LWV HPSOR\HHV WR FRPSOHWH DQG VXEPLW WKH 
DV\OXP DSSOLFDWLRQV  FRPPXQLFDWH ZLWK FOLHQWV  DQG FROOHFW DQG SURFHVV SD\PHQWV  
      %\  ZD\  RI  H[DPSOH   6\OYLD¶V  7UDQVODWLRQ  6HUYLFH  LV  DQ  XQLQFRUSRUDWHG  EXVLQHVV 
HQWLW\ G E D  +HFKW /DZ )LUP WKDW SURYLGHV WUDQVODWLRQ VHUYLFHV IURP 6SDQLVK WR (QJOLVK    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 24 of 111

      'HIHQGDQWV LQIRUPHG 3ODLQWLIIV WKDW (QJOLVK WUDQVODWLRQV RI FHUWDLQ GRFXPHQWV ZHUH 
UHTXLUHG IRU WKHLU FDVHV  DQG WKHQ GLUHFWHG 6\OYLD¶V 7UDQVODWLRQ 6HUYLFH WR SURYLGH WKRVH WUDQVODWLRQV 
WR 3ODLQWLIIV LQ H[FKDQJH IRU DGGLWLRQDO SD\PHQWV   7KLV ZDV D QHFHVVDU\ VWHS LQ 'HIHQGDQWV¶ 7HQ 
<HDU 6FKHPH    
3DWWHUQ RI 5DFNHWHHULQJ $FWLYLW\ 
      $W DOO WLPHV UHOHYDQW DQG LQ YLRODWLRQ RI    8 6 &  †      F   'HIHQGDQWV FRQGXFWHG 
WKH  DIIDLUV  RI  WKH  (QWHUSULVH  WKURXJK  D  SDWWHUQ  RI  UDFNHWHHULQJ  DFWLYLW\   DV  GHILQHG  LQ  5,&2      
8 6 &  †          E\ YLUWXH RI WKH FRQGXFW GHVFULEHG KHUHLQ    
      'HIHQGDQWV IXUWKHUHG WKH 7HQ <HDU 6FKHPH WKURXJK  DPRQJ RWKHU LOOHJDO DFWLYLW\  
HQJDJLQJ LQ IUDXG DQG VZLQGOHV  KHUHDIWHU ³PDLO IUDXG´  XQGHU    8 6 &  †      DQG IUDXG DQG 
PLVXVH RI YLVDV  SHUPLWV  DQG RWKHU GRFXPHQWV  KHUHDIWHU ³YLVD IUDXG´  XQGHU    8 6 &  †       
0DLO )UDXG 
      'HIHQGDQWV HQJDJHG LQ PDLO IUDXG EHFDXVH WKH\ XVHG WKH LQWHUVWDWH PDLOV RU FDXVHG 
WKH LQWHUVWDWH PDLOV WR EH XVHG IRU WKH SXUSRVH RI IXUWKHULQJ DQG H[HFXWLQJ WKH 7HQ <HDU 6FKHPH    
      ([DPSOHV RI PDLO IUDXG LQFOXGH PDLOLQJV RI DV\OXP DQG ($' DSSOLFDWLRQV EHWZHHQ 
      DQG        IURP  +HFKW  /DZ  )LUP  LQ  1HZ  <RUN  WR  WKH  86&,6  6HUYLFH  &HQWHU  LQ  9HUPRQW  
ORFDWHG DW    /RZHU :HOGHQ 6WUHHW LQ 6W $OEDQV &LW\  DQG DUH VHW IRUWK EHORZ LQ SDUDJUDSKV     WR 
       
      ,Q DGGLWLRQ  'HIHQGDQWV XVHG WKH PDLOV DV WKH SULPDU\ PHWKRG WR FRPPXQLFDWH ZLWK 
3ODLQWLIIV   7KLV LQFOXGHG PDLOLQJ OHWWHUV WR 3ODLQWLIIV ZKHQ 'HIHQGDQWV KDG DQ XSGDWH RQ WKHLU FDVH  
LQIRUPLQJ 3ODLQWLIIV RI VFKHGXOHG ELRPHWULFV DSSRLQWPHQWV DQG HOLJLELOLW\ WR DSSO\ IRU DQ ($' DQG  
DW OHDVW IRU VRPH 3ODLQWLIIV  LQIRUPLQJ WKHP RI DV\OXP LQWHUYLHZV    
      'HIHQGDQWV RPLWWHG IURP WKHVH PDLOLQJV WKDW WKH\ LQWHQGHG WR FDXVH 3ODLQWLIIV WR EH 
SODFHG LQ UHPRYDO SURFHHGLQJV  
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 25 of 111

      'HIHQGDQWV¶  XVH  RI  WKH  PDLOV  ZDV  LQFLGHQW  WR  DQ  HVVHQWLDO  SDUW  RI  WKH  VFKHPH  WR 
GHIUDXG  QDPHO\ WR GHFHLYH DQG RU GHIUDXG 3ODLQWLIIV LQWR SD\LQJ DQG FRQWLQXLQJ WR SD\ 'HIHQGDQWV 
IRU D QRQ H[LVWHQW DIILUPDWLYH LPPLJUDWLRQ EHQHILW  
      3ODLQWLIIV UHOLHG RQ 'HIHQGDQWV¶ IUDXGXOHQW H[SODQDWLRQ RI D QRQ H[LVWHQW DIILUPDWLYH 
LPPLJUDWLRQ EHQHILW LQ SD\LQJ 'HIHQGDQWV IRU SXUSRUWHG OHJDO VHUYLFHV    
9LVD )UDXG 
      'HIHQGDQWV  HQJDJHG  LQ  YLVD  IUDXG  EHFDXVH  WKH\  NQRZLQJO\  SUHVHQWHG  DV\OXP 
DSSOLFDWLRQV  WR  86&,6  ZKLFK  FRQWDLQHG  IDOVH  VWDWHPHQWV  DQG RU  GLG  QRW  FRQWDLQ  DQ\  UHDVRQDEOH 
EDVLV LQ ODZ RU IDFW    
      ([DPSOHV RI YLVD IUDXG LQFOXGH VLJQLQJ WKH DWWHVWDWLRQ VZHDULQJ WKDW WKH IROORZLQJ 
VWDWHPHQWV  ZHUH  WUXH   ZKHQ  LQ  IDFW  RQH  RU  ERWK  VWDWHPHQWV  ZHUH  QRW          'HIHQGDQWV  ILOHG  WKH 
DV\OXP  DSSOLFDWLRQV DW WKH UHTXHVW RI 3ODLQWLIIV  DQG     'HIHQGDQWV  UHDG  WKH  FRPSOHWHG  DV\OXP 
DSSOLFDWLRQ WR WKH DSSOLFDQW LQ KLV RU KHU QDWLYH ODQJXDJH RU D ODQJXDJH KH RU VKH XQGHUVWRRG IRU 
YHULILFDWLRQ   'HIHQGDQWV VZRUH WR WKHVH DWWHVWDWLRQV  NQRZLQJ WKDW WKH\ ZHUH QRW DOO WUXH  
      ,Q HDFK DSSOLFDWLRQ  'HIHQGDQW 7KRPDV  ZLWKRXW LQIRUPLQJ DOO EXW RQH 3ODLQWLII WKDW 
'HIHQGDQWV  ZHUH  ILOLQJ  DQ  DV\OXP  DSSOLFDWLRQ  RQ  3ODLQWLIIV¶  EHKDOI   DQG  ZLWKRXW  UHYLHZLQJ  WKH 
DSSOLFDWLRQ ZLWK DQ\ 3ODLQWLII LQ (QJOLVK RU 6SDQLVK  VLJQHG WKH SUHSDUHU DWWHVWDWLRQ WKDW SURYLGHV    
, GHFODUH WKDW , KDYH SUHSDUHG WKLV DSSOLFDWLRQ DW WKH UHTXHVW RI WKH 
>3ODLQWLII@  WKDW WKH UHVSRQVHV SURYLGHG DUH EDVHG RQ DOO LQIRUPDWLRQ 
RI  ZKLFK  ,  KDYH  NQRZOHGJH  RU ZKLFK ZDV  SURYLGHG WR PH E\ WKH 
DSSOLFDQW   DQG  WKDW  WKH  FRPSOHWHG  DSSOLFDWLRQ  ZDV  UHDG  WR  WKH 
DSSOLFDQW  LQ  KLV  RU  KHU  QDWLYH  ODQJXDJH  RU  D  ODQJXDJH  KH  RU  VKH 
XQGHUVWDQGV IRU YHULILFDWLRQ EHIRUH KH RU VKH VLJQHG WKH DSSOLFDWLRQ 
LQ P\ SUHVHQFH     , DP DZDUH WKDW WKH NQRZLQJ SODFHPHQW RI  IDOVH 
LQIRUPDWLRQ RQ WKH )RUP ,     PD\ DOVR VXEMHFW PH WR FLYLO SHQDOWLHV 
XQGHU     8 6 &       F  DQG RU  FULPLQDO  SHQDOWLHV  XQGHU     8 6 &  
     D   
 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 26 of 111

      ,Q  DGGLWLRQ   'HIHQGDQWV  NQRZLQJO\  SUHSDUHG  DV\OXP  DSSOLFDWLRQV  RQ  EHKDOI  RI 
3ODLQWLIIV  ZLWKRXW  UHJDUG  WR  WKH  WUXWK  RU  IDOVLW\  RI  WKH  LQIRUPDWLRQ  FRQWDLQHG  WKHUHLQ   DQG 
LQWHQWLRQDOO\ PDLOHG WKRVH DV\OXP DSSOLFDWLRQV WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  
,QWHQW DQG 3DWWHUQ 
      'HIHQGDQWV  HDFK  SDUWLFLSDWHG  LQ  WKH  7HQ  <HDU  6FKHPH  NQRZLQJO\   ZLOOIXOO\   DQG 
ZLWK D VSHFLILF LQWHQW WR GHIUDXG 3ODLQWLIIV    
      'HIHQGDQWV  LQGXFHG  3ODLQWLIIV  WR  SD\  WKHP  E\  NQRZLQJO\  PLVUHSUHVHQWLQJ  WKH 
H[LVWHQFH RI WKH ³WHQ \HDU ODZ´ DV DQ DIILUPDWLYH LPPLJUDWLRQ EHQHILW    
      7KLV  PLVUHSUHVHQWDWLRQ  FDSLWDOL]HG  RQ  WKH  VLJQLILFDQW  WLPH GHOD\  LQ  86&,6¶ 
SURFHVVLQJ RI DV\OXP DSSOLFDWLRQV  ZKLFK 'HIHQGDQWV NQHZ DQG EHOLHYHG ZRXOG GHOD\ 3ODLQWLIIV 
IURP HYHU GLVFRYHULQJ WKH QDWXUH RI WKH IUDXG WKDW KDG EHHQ SHUSHWUDWHG RQ WKHP RU IURP DFWLQJ RQ 
WKDW  IUDXG  RQFH  LW  ZDV  GLVFRYHUHG     6SHFLILFDOO\   'HIHQGDQWV  FDSLWDOL]HG  RQ  WKH  IDFWV  WKDW      
3ODLQWLIIV¶ UHFHLSW RI DQ LQLWLDO ($' DQG DQ\ VXEVHTXHQW UHQHZDOV ZRXOG JLYH 3ODLQWLIIV WKH IDOVH 
LPSUHVVLRQ  WKDW  WKHLU  FDVH  ZDV  RQ  WUDFN  DQG       D  FKDQJH  LQ  86&,6  SROLF\  DQG  WKH  VLJQLILFDQW 
EDFNORJ LQ 86&,6 SURFHVVLQJ DV\OXP DSSOLFDWLRQV  EHWZHHQ 'HFHPEHU      DQG -DQXDU\       
ZRXOG GHOD\ 3ODLQWLIIV¶ GLVFRYHU\ RI WKH IUDXG WKDW KDG EHHQ SHUSHWUDWHG RQ WKHP DQG WKH DFWXDO 
QDWXUH RI WKH DSSOLFDWLRQV WKDW 'HIHQGDQWV KDG ILOHG RQ WKHLU EHKDOI GXULQJ WKDW SHULRG   ,Q DGGLWLRQ  
HYHQ LI XQFRYHUHG  'HIHQGDQWV NQHZ DQG EHOLHYHG WKDW 3ODLQWLIIV ZHUH XQOLNHO\ WR ILUH 'HIHQGDQWV 
RU  UHSRUW  WKH  IUDXG  RXW  RI  IHDU  WKDW   DPRQJ  RWKHU  WKLQJV   WKH\  ZRXOG  IDFH  UHPRYDO  SURFHHGLQJV 
ZLWKRXW DQ\ FRXQVHO  ZKLFK ZRXOG VLJQLILFDQWO\ LQFUHDVH WKH OLNHOLKRRG WKDW WKH\ ZRXOG EH RUGHUHG 
UHPRYHG     
      $W WKH OHDVW  'HIHQGDQWV ZHUH FRQVFLRXVO\ UHFNOHVV LQ UHSUHVHQWLQJ WKDW WKH ³WHQ \HDU 
ODZ´  ZDV  DQ  DIILUPDWLYH  IRUP  RI  LPPLJUDWLRQ  UHOLHI  DQG  IDLOLQJ  WR  H[SODLQ  WKH  QDWXUH  RI  WKH 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 27 of 111

DSSOLFDWLRQV WKH\ ZHUH DFWXDOO\ ILOLQJ RQ 3ODLQWLIIV¶ EHKDOI  VSHFLILFDOO\ WKDW WKH DSSOLFDWLRQ ZDV 
RQH IRU DV\OXP WKDW ZRXOG UHVXOW LQ 3ODLQWLIIV EHLQJ SXW LQ UHPRYDO SURFHHGLQJV      
      7KH  (QWHUSULVH   DV  ZHOO  DV  HDFK  'HIHQGDQW   UHFHLYHG  PRQHWDU\  EHQHILWV  IURP 
GHIUDXGLQJ  DQG  H[SORLWLQJ  3ODLQWLIIV     7KHVH  EHQHILWV  ZHUH  SULPDULO\  LQ  WKH  IRUP  RI  SD\PHQWV 
UHFHLYHG   LQFUHDVHG  UHIHUUDOV   DQG  RYHUDOO  LQFUHDVHG  SURILWV  DQG  LQFRPH  JHQHUDWHG  IURP  WKH 
LOOHJLWLPDWH 7HQ <HDU 6FKHPH   3ODLQWLIIV ZHUH LQMXUHG LQ WKH DPRXQW WKDW WKH\ ZHUH LQGXFHG WR SD\ 
'HIHQGDQWV EDVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV    
      'HIHQGDQWV¶  FRQGXFW  FRQVWLWXWHV  D  SDWWHUQ  RI  UDFNHWHHULQJ  DFWLYLW\  ZLWKLQ  WKH 
PHDQLQJ  RI      8 6 &   †           EHFDXVH  'HIHQGDQWV   WKURXJK  LQWHUVWDWH  FRPPHUFH   FRPPLWWHG 
PXOWLSOH UHODWHG DFWV RI PDLO DQG RU YLVD IUDXG  
      7KH  SUHGLFDWH  DFWV  ZHUH  QRW  LVRODWHG  HYHQWV   EXW  ZHUH  UHODWHG  DFWV  DLPHG  DW  WKH 
FRPPRQ SXUSRVH DQG JRDO RI GHIUDXGLQJ 3ODLQWLIIV IRU SURILW   7KH SUHGLFDWH DFWV LQYROYHG WKH VDPH 
RU  VLPLODU  PHWKRGV  RI  FRPPLVVLRQ     7KH\  LQYROYH  'HIHQGDQWV¶  NQRZLQJ  DQG  SXUSRVHIXO 
PLVUHSUHVHQWDWLRQV WR 3ODLQWLIIV DERXW VRPH RU DOO RI WKH IROORZLQJ    L  WKH VHUYLFHV 'HIHQGDQWV 
LQWHQGHG WR SURYLGH WR 3ODLQWLIIV   LL  WKH H[LVWHQFH RI DQ DIILUPDWLYH LPPLJUDWLRQ EHQHILW EDVHG RQ 
DQ LQGLYLGXDO¶V WHQ \HDU UHVLGHQFH LQ WKH 8QLWHG 6WDWHV DQG RU 8 6  FLWL]HQ FKLOGUHQ   LLL  3ODLQWLIIV¶ 
HOLJLELOLW\  IRU  ZRUN  DXWKRUL]DWLRQ  DQG  ODZIXO  SHUPDQHQW  UHVLGHQF\  DQG  WKH  UHTXLUHPHQWV  IRU 
TXDOLI\LQJ IRU WKHVH EHQHILWV   LY  WKH FRQWH[W LQ ZKLFK 3ODLQWLIIV¶ WHQ \HDU UHVLGHQFH LQ WKH 8QLWHG 
6WDWHV  DQG RU  8 6   FLWL]HQ  FKLOGUHQ  FRXOG  SRWHQWLDOO\  EH  FRQVLGHUHG  LQ  FRQQHFWLRQ  WR  WKHLU 
LPPLJUDWLRQ PDWWHUV   Y  WKH W\SH RI DSSOLFDWLRQ 'HIHQGDQWV LQWHQGHG WR  DQG GLG  ILOH RQ EHKDOI RI 
3ODLQWLIIV  DQG  YL  WKH ULVNV DQG SXUSRVH RI WKH DSSOLFDWLRQV 'HIHQGDQWV DFWXDOO\ LQWHQGHG WR  DQG 
GLG   ILOH  RQ  3ODLQWLIIV¶  EHKDOI     7KH  SUHGLFDWH  DFWV  DOVR  LQYROYHG  'HIHQGDQWV¶  ILOLQJ  RI  DV\OXP 
DSSOLFDWLRQV RQ EHKDOI RI 3ODLQWLIIV ZLWK WKH IDOVH SUHSDUHU DWWHVWDWLRQV  'HIHQGDQWV¶ ILOLQJ RI WKH 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 28 of 111

DSSOLFDWLRQV LQFOXGLQJ WKH VDPH ERLOHUSODWH ODQJXDJH ZLWKRXW UHJDUG WR WKH WUXWK RU IDOVLW\ RI WKH 
LQIRUPDWLRQ FRQWDLQHG WKHUHLQ  DQG 'HIHQGDQWV¶ ILOLQJ RI ($' DSSOLFDWLRQV WR IXUWKHU DQG FRQFHDO 
WKH VFKHPH       
      'HIHQGDQWV¶  DFWLYLWLHV  DPRXQWHG  WR  D  FRPPRQ  FRXUVH  RI  DFWLRQ  ZLWK  D  VLPLODU 
SDWWHUQ DQG SXUSRVH WR GHIUDXG ODUJH QXPEHUV RI VLPLODUO\ VLWXDWHG YLFWLPV RQ D IUHTXHQW EDVLV RYHU 
D SHULRG RI PXOWLSOH \HDUV    
      'HIHQGDQWV  KROG  WKHPVHOYHV  DQG  +HFKW  /DZ  )LUP  RXW  WR  WKH  FRPPXQLW\  DV 
H[SHULHQFHG LPPLJUDWLRQ ODZ SUDFWLWLRQHUV  SRVVHVVLQJ WKH VNLOOV DQG NQRZOHGJH WR DVVLVW FOLHQWV LQ 
REWDLQLQJ  LPPLJUDWLRQ  EHQHILWV     7KH SUHGLFDWH DFWV ZHUH 'HIHQGDQWV¶  UHJXODU  ZD\  RI  RSHUDWLQJ 
+HFKW  /DZ  )LUP   VXFK  WKDW  WKH  VFDOH  RI WKH KDUP FDXVHG E\ 'HIHQGDQWV  JRHV  EH\RQG  3ODLQWLIIV 
QDPHG KHUHLQ    
7KH 5,&2 &RQVSLUDF\ 
      7KURXJK WKH (QWHUSULVH  'HIHQGDQWV FRQVSLUHG WR FRPPLW IUDXG DQG FDUU\ RXW WKH 
7HQ <HDU 6FKHPH WR GHIUDXG 3ODLQWLIIV DV VHW IRUWK KHUHLQ    
      'HIHQGDQWV NQRZLQJO\ DJUHHG WR WKH RYHUDOO REMHFWLYH RI WKH FRQVSLUDF\ WR SURILW E\ 
WDNLQJ DGYDQWDJH RI LPPLJUDQWV  DQG DJUHHG WR FRPPLW PDLO IUDXG DQG YLVD IUDXG LQ IXUWKHUDQFH RI 
WKDW VFKHPH  
      8SRQ  LQIRUPDWLRQ  DQG  EHOLHI   'HIHQGDQWV¶  FRQVSLUDF\  LQFOXGHV  PHPEHUV  RI  WKH 
(QWHUSULVH  DV ZHOO DV YDULRXV XQNQRZQ HPSOR\HHV DQG DJHQWV RI +HFKW /DZ )LUP    
      'HIHQGDQWV  NQRZLQJO\  DQG  ZLOOLQJO\  FRPELQHG   FRQVSLUHG   FRQIHGHUDWHG   DQG 
DJUHHG WRJHWKHU DQG ZLWK RWKHUV WR YLRODWH    8 6 &  †      F  DQG FRQGXFW DQG SDUWLFLSDWH LQ WKH 
DIIDLUV RI WKH (QWHUSULVH WKURXJK D SDWWHUQ RI UDFNHWHHULQJ DFWLYLW\  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 29 of 111

      'HIHQGDQWV KDYH HQJDJHG LQ RYHUW DFWV LQ IXUWKHUDQFH RI WKH FRQVSLUDF\  LQFOXGLQJ 
HQJDJLQJ LQ  RU VXSSRUWLQJ HDFK RWKHU LQ HQJDJLQJ LQ  D SDWWHUQ RI UDFNHWHHULQJ DFWLYLW\ WKDW LQYROYHV 
FRQGXFW WKDW FRQVWLWXWHV PDLO IUDXG XQGHU    8 6 &  †       DQG YLVD IUDXG XQGHU    8 6 &  †       
      'HIHQGDQWV  KDYH  HQJDJHG  LQ  RWKHU  RYHUW  DFWV  LQ  IXUWKHUDQFH  RI  WKH  FRQVSLUDF\  
LQFOXGLQJ PDNLQJ IDOVH DQG PLVOHDGLQJ UHSUHVHQWDWLRQV WR 3ODLQWLIIV DQG RWKHUZLVH SDUWLFLSDWLQJ LQ 
WKH GDLO\ RSHUDWLRQV RI WKH (QWHUSULVH  
      'HIHQGDQWV  NQHZ  WKDW  WKHLU  SUHGLFDWH  DFWV  ZHUH  SDUW  RI  D  SDWWHUQ  RI  UDFNHWHHULQJ 
DFWLYLW\ DQG DJUHHG WR WKH FRPPLVVLRQ RI WKRVH DFWV WR IXUWKHU WKH 7HQ <HDU 6FKHPH  
      'HIHQGDQWV¶ FRQGXFW FRQVWLWXWHV D FRQVSLUDF\ WR YLRODWH    8 6 &  †      F    
      )XUWKHUPRUH   XSRQ  LQIRUPDWLRQ  DQG  EHOLHI   'HIHQGDQWV  NQRZLQJO\  DQG  ZLOOIXOO\ 
FRQVSLUHG WR FRQFHDO WKH 7HQ <HDU 6FKHPH    
      3ODLQWLIIV  H[HUFLVHG  UHDVRQDEOH  GLOLJHQFH  LQ  DWWHPSWLQJ  WR  XQFRYHU  'HIHQGDQWV¶ 
IUDXG  E\  FRQIURQWLQJ  'HIHQGDQWV  DERXW  WKHLU  DFWLYLWLHV  DQG  PLVUHSUHVHQWDWLRQV   VHHNLQJ  RXW 
DGGLWLRQDO LQIRUPDWLRQ IURP RWKHU VRXUFHV  DQG RU ILULQJ +HFKW /DZ )LUP   :KHQ FRQIURQWHG E\ 
3ODLQWLIIV DERXW WKH PLVUHSUHVHQWDWLRQV  'HIHQGDQWV EHFDPH GLVPLVVLYH DQG DQJU\ ZLWK 3ODLQWLIIV 
DQG PLVOHG 3ODLQWLIIV LQ RUGHU WR FRQFHDO WKH 7HQ <HDU 6FKHPH  
      0RVW 3ODLQWLIIV ZHUH RQO\ DEOH WR GLVFRYHU WKH IUDXGXOHQW QDWXUH RI WKH 7HQ <HDU 
6FKHPH ZLWK DVVLVWDQFH IURP XQDIILOLDWHG DWWRUQH\V    
,QMXULHV 6XIIHUHG E\ 3ODLQWLIIV 
      $V  D  GLUHFW  DQG  SUR[LPDWH  UHVXOW  RI  'HIHQGDQWV¶  UDFNHWHHULQJ  DFWLYLWLHV  DQG 
YLRODWLRQV RI    8 6 &  †      F  DQG  G   3ODLQWLIIV KDYH EHHQ LQMXUHG LQ WKHLU EXVLQHVV RU SURSHUW\ 
LQ WKDW WKH\ KDYH FROOHFWLYHO\ EHHQ GHIUDXGHG RXW RI WKRXVDQGV RI GROODUV LQ SD\PHQWV WR 'HIHQGDQWV 
DQG   LQ  VRPH  FDVHV   VXEVHTXHQWO\  LQFXUUHG  OHJDO  FRVWV  WR  GHIHQG  DJDLQVW  UHIHUUDO  WR  UHPRYDO 
SURFHHGLQJV DQG RU UHPRYDO SURFHHGLQJV LQLWLDWHG  LQ HLWKHU FDVH  DV D GLUHFW UHVXOW RI 'HIHQGDQWV¶ 
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 30 of 111

VXEPLVVLRQ RI DV\OXP DSSOLFDWLRQV RQ 3ODLQWLIIV¶ EHKDOI DV SDUW RI 'HIHQGDQWV¶ IUDXG   )RU 3ODLQWLIIV  
ZKR  DUH  PHPEHUV  RI  ORZ LQFRPH  IDPLOLHV   WKH  ORVV  RI  WKLV  PRQH\  KDV  EHHQ  HFRQRPLFDOO\ 
GHYDVWDWLQJ   
      3ODLQWLIIV¶ LQMXULHV ZHUH  D GLUHFW  SUR[LPDWH  DQG UHDVRQDEO\ IRUHVHHDEOH UHVXOW RI 
'HIHQGDQWV¶ YLRODWLRQV RI    8 6 &  †      F  DQG  G   
      3XUVXDQW  WR      8 6 &   †       F   DQG   G    3ODLQWLIIV  DUH  HQWLWOHG  WR  UHFRYHU  WUHEOH 
GDPDJHV SOXV FRVWV DQG DWWRUQH\V¶ IHHV IURP 'HIHQGDQWV   
67$7(0(17 2) )$&76 63(&,),& 72 ($&+ 3/$,17,)) 
0U  *X]PDQ   0V  3DYLD 
      3ODLQWLIIV )UDQFLVFR *X]PDQ  ³0U  *X]PDQ´  DQG 3DWULFLD 3DYLD  ³0V  3DYLD´  DUH 
PDUULHG DQG OLYH ZLWK WKHLU WZR 8 6  FLWL]HQ FKLOGUHQ LQ 6WDWHQ ,VODQG  1HZ <RUN   0U  *X]PDQ¶V 
DQG  0V   3DYLD¶V  QDWLYH  ODQJXDJH  LV  6SDQLVK     7KH\  VSHDN   UHDG   DQG  XQGHUVWDQG  YHU\  OLPLWHG 
(QJOLVK  
      ,Q RU DURXQG ODWH       0U  *X]PDQ KHDUG IURP IULHQGV LQ WKH FRPPXQLW\ WKDW ³(O 
3DSD \ (O +LMR´  ³WKH )DWKHU DQG WKH 6RQ´   UHIHUULQJ WR 'HIHQGDQWV  ZHUH JXDUDQWHHLQJ YLVDV WR 
PDQ\ LPPLJUDQWV EDVHG RQ WKH ³WHQ \HDU ODZ ´  0U  *X]PDQ  LQWHUHVWHG WR OHDUQ PRUH  EULHIO\ PHW 
ZLWK  'HIHQGDQW  /HRQDUG  DW  +HFKW  /DZ  )LUP     'XULQJ  WKH  ILUVW  PHHWLQJ   DQG  LQ  DOO  VXEVHTXHQW 
PHHWLQJV  0U  *X]PDQ WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG E\ 'HIHQGDQW /HRQDUG   'HIHQGDQW 
/HRQDUG  GLG QRW DVN IRU  WKH LQIRUPDWLRQ QHFHVVDU\  WR GHWHUPLQH ZKHWKHU  0U   *X]PDQ  DQG  0V  
3DYLD ZHUH HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP  
      'HIHQGDQW /HRQDUG IDOVHO\ UHSUHVHQWHG WR 0U  *X]PDQ WKDW KH DQG 0V  3DYLD ZHUH 
HOLJLEOH  WR  DSSO\  IRU  D  ZRUN  SHUPLW  DQG  ODZIXO  SHUPDQHQW  UHVLGHQF\  WKURXJK  DQ  DIILUPDWLYH 
DSSOLFDWLRQ ³SRU ORV GLH] DxRV´  ³EHFDXVH RI WKH WHQ \HDUV´  EHFDXVH 0U  *X]PDQ KDG OLYHG LQ WKH 
8QLWHG 6WDWHV IRU PRUH WKDQ WHQ \HDUV DQG KDG 8 6  FLWL]HQ FKLOGUHQ    
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 31 of 111

      ,PPHGLDWHO\  DIWHU  WKH  PHHWLQJ   0U   *X]PDQ  VSRNH  ZLWK  'HIHQGDQW  /HRQDUG¶V 
VHFUHWDU\   ZKR  JDYH  0U   *X]PDQ  D  OLVW  RI  GRFXPHQWV  WR  EULQJ  WR  KLV  QH[W  DSSRLQWPHQW  DQG 
H[SODLQHG WKH FRVW DQG SD\PHQW PHWKRG IRU WKH UHSUHVHQWDWLRQ  
      'HIHQGDQW  /HRQDUG¶V  UHSUHVHQWDWLRQV  FDXVHG  0U   *X]PDQ  WR  UHDVRQDEO\  EHOLHYH 
WKDW KH DQG 0V  3DYLD ZHUH HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO SHUPDQHQW UHVLGHQF\ WKURXJK DQ 
DIILUPDWLYH  DSSOLFDWLRQ  EDVHG  RQ  WKH  HOLJLELOLW\  FULWHULD  RI  OHQJWK  RI  UHVLGHQF\  DQG  8 6   FLWL]HQ 
FKLOGUHQ    
      'HIHQGDQW /HRQDUG DVNHG 0U  *X]PDQ DQG 0V  3DYLD IRU VHYHUDO GRFXPHQWV ZKLFK 
KH  VDLG  ZHUH  QHFHVVDU\  WR  REWDLQ  D  ZRUN SHUPLW    'HIHQGDQW  /HRQDUG  WROG 0U  *X]PDQ WKDW  KH 
ZRXOG UHFHLYH KLV ZRUN SHUPLW LQ VL[ PRQWKV   0U  *X]PDQ GRHV QRW UHFDOO ZKHWKHU KH VLJQHG DQ\ 
GRFXPHQWV  LQ  KLV  LQLWLDO  PHHWLQJV   DQG  0V   3DYLD  GLG  QRW  JR  WR  +HFKW  /DZ  )LUP  RU  PHHW  ZLWK 
'HIHQGDQWV      
      :KHQ  0U   *X]PDQ  DVNHG  'HIHQGDQW  /HRQDUG  TXHVWLRQV  DERXW  WKH  OHJDO  SURFHVV  
'HIHQGDQW /HRQDUG UHIXVHG WR DQVZHU KLV TXHVWLRQV DQG WROG 0U  *X]PDQ WKDW KH GLG WKLV NLQG RI 
DSSOLFDWLRQ DOO WKH WLPH    
      'HIHQGDQWV GLG QRW DGYLVH 0U  *X]PDQ WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ 
IRU DV\OXP RQ KLV EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW 
WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 0U  *X]PDQ DQG 0V  3DYLD WR EH SXW LQ UHPRYDO SURFHHGLQJV LI 
DQG ZKHQ WKH DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG    
      ,Q IDFW  SULRU WR ILUVW YLVLWLQJ 'HIHQGDQWV  0U  *X]PDQ YLVLWHG DQRWKHU LPPLJUDWLRQ 
ODZ ILUP WKDW KH KDG VHHQ DGYHUWLVHG RQ WHOHYLVLRQ   7KH ODZ\HU 0U  *X]PDQ PHW ZLWK DW WKH ODZ 
ILUP LQIRUPHG 0U  *X]PDQ WKDW KH FRXOG VHHN ODZIXO SHUPDQHQW UHVLGHQW VWDWXV  EXW KH ZRXOG QHHG 
WR ILUVW EH SODFHG LQ UHPRYDO SURFHHGLQJV  ZKLFK KH FRXOG GR E\ ILOLQJ DQ DV\OXP DSSOLFDWLRQ   $W 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 32 of 111

WKH PHQWLRQ RI DV\OXP  0U  *X]PDQ GHFLGHG QRW WR FRQWLQXH ZLWK WKH DSSRLQWPHQW DQG OHIW EHFDXVH 
KH GLG QRW ZDQW WR DSSO\ IRU DV\OXP    
      ,Q RU DURXQG 0DUFK       'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ RQ EHKDOI 
RI 0U  *X]PDQ  ZLWK 0V  3DYLD DV D GHULYDWLYH RQ WKH DSSOLFDWLRQ  DQG XVHG D PDLO FDUULHU WR VHQG 
LW DFURVV VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  
      ,Q IDFW  'HIHQGDQWV VXEPLWWHG WKH DV\OXP DSSOLFDWLRQ ZLWKRXW WHOOLQJ 0U  *X]PDQ 
RU 0V  3DYLD RU UHYLHZLQJ WKH DSSOLFDWLRQ ZLWK WKHP   1HYHUWKHOHVV  XSRQ LQIRUPDWLRQ DQG EHOLHI  
'HIHQGDQW 7KRPDV VLJQHG WKH SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH 
ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ DW WKH UHTXHVW RI 0U  *X]PDQ DQG 0V  3DYLD DQG WKDW KH UHDG WKH 
FRPSOHWHG DSSOLFDWLRQ WR WKHP LQ D ODQJXDJH WKH\ XQGHUVWRRG IRU YHULILFDWLRQ   7KHLU DSSOLFDWLRQ 
FRQWDLQHG WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV     
      ,Q RU DURXQG 0DUFK       0U  *X]PDQ DQG 0V  3DYLD UHFHLYHG D QRWLFH LQ WKH PDLO 
WKDW  WKHLU  DV\OXP  DSSOLFDWLRQ  KDG  EHHQ  UHFHLYHG  E\  86&,6     0U   *X]PDQ  DQG  0V   3DYLD  ZHUH 
FRQIXVHG E\ WKLV QRWLFH EHFDXVH WKH\ GLG QRW LQWHQG WR DSSO\ IRU DV\OXP  
      0U   *X]PDQ  ZHQW  WR  +HFKW  /DZ  )LUP  WR  VSHDN  ZLWK  'HIHQGDQW  /HRQDUG   EXW 
'HIHQGDQW /HRQDUG ZDV QRW WKHUH   $QRWKHU HPSOR\HH RI +HFKW /DZ )LUP WROG 0U  *X]PDQ QRW WR 
ZRUU\ DERXW LW  EHFDXVH WKLV LV KRZ 'HIHQGDQW /HRQDUG GRHV WKH DSSOLFDWLRQV  DQG KH NQRZV ZKDW 
KH LV GRLQJ  
      ,Q RU DURXQG 2FWREHU       0U  *X]PDQ DWWHQGHG D PHHWLQJ DW 051<  ZKHUH KH 
OHDUQHG  WKDW  'HIHQGDQWV  KDG  SURPLVHG  KLP  ODZIXO  VWDWXV  WKURXJK  DQ  DIILUPDWLYH  LPPLJUDWLRQ 
DSSOLFDWLRQ WKDW GLG QRW H[LVW    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 33 of 111

      $IWHU GLVFRYHULQJ WKDW WKH\ ZHUH YLFWLPV RI WKH 7HQ <HDU 6FKHPH  0U  *X]PDQ DQG 
0V  3DYLD ILUHG +HFKW /DZ )LUP DQG KDYH PHW ZLWK RWKHU LPPLJUDWLRQ DWWRUQH\V LQ UHODWLRQ WR WKHLU 
LPPLJUDWLRQ FDVH  
,QMXU\ 6XIIHUHG 
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  0U  *X]PDQ DJUHHG WR SD\ D WRWDO RI 
       WR 'HIHQGDQWV    
      $V  RI  WRGD\   0U   *X]PDQ  DQG  0V   3DYLD  KDYH  SDLG  DW  OHDVW          LQ  PXOWLSOH 
SD\PHQWV E\ FDVK DQG PRQH\ RUGHU   0U  *X]PDQ DQG 0V  3DYLD PDGH WKHVH SD\PHQWV WR VWDII DW 
+HFKW /DZ )LUP    
      0U  *X]PDQ DQG 0V  3DYLD DOVR SDLG +HFKW /DZ )LUP      IRU WKH WUDQVODWLRQ RI 
FHUWDLQ  GRFXPHQWV  IRU  WKHLU  FDVH     7KH  LQYRLFH  SURYLGHG  WR  0U   *X]PDQ  DQG  0V   3DYLD  LV  RQ 
6\OYLD¶V 7UDQVODWLRQ 6HUYLFH OHWWHUKHDG    
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQW /HRQDUG  0U  *X]PDQ ZRXOG 
QRW KDYH KLUHG RU SDLG 'HIHQGDQWV   $V D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG 
SUHGDWRU\ DFWV  0U  *X]PDQ DQG 0V  3DYLD VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW         
0V  'XUDQ 
      3ODLQWLII (GLWK 'XUDQ  ³0V  'XUDQ´  OLYHV ZLWK KHU KXVEDQG DQG 8 6  FLWL]HQ FKLOG 
LQ 5RRVHYHOW  1HZ <RUN   0V  'XUDQ¶V QDWLYH ODQJXDJH LV 6SDQLVK   6KH UHDGV  XQGHUVWDQGV  DQG 
VSHDNV (QJOLVK SURILFLHQWO\  
      ,Q RU DURXQG )HEUXDU\       DW WKH UHFRPPHQGDWLRQ RI KHU FRXVLQ  0V  'XUDQ PHW 
ZLWK  'HIHQGDQW  /HRQDUG  DW  +HFKW  /DZ  )LUP     'XULQJ  0V   'XUDQ¶V  ILUVW  PHHWLQJ   DQG  LQ  DOO 
VXEVHTXHQW PHHWLQJV  0V  'XUDQ WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG E\ 'HIHQGDQW /HRQDUG   
'HIHQGDQW /HRQDUG GLG QRW DVN IRU WKH LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH ZKHWKHU 0V  'XUDQ ZDV 
HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP  
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 34 of 111

      'HIHQGDQW /HRQDUG IDOVHO\ UHSUHVHQWHG WR 0V  'XUDQ WKDW VKH ZDV HOLJLEOH WR DSSO\ 
IRU ODZIXO SHUPDQHQW UHVLGHQF\ XQGHU WKH ³WHQ \HDU ODZ ´   
      'HIHQGDQW /HRQDUG¶V UHSUHVHQWDWLRQV FDXVHG 0V  'XUDQ WR UHDVRQDEO\ EHOLHYH WKDW 
VKH  ZDV  HOLJLEOH  IRU  D  ZRUN  SHUPLW  DQG  ODZIXO  SHUPDQHQW  UHVLGHQF\  WKURXJK  DQ  DIILUPDWLYH 
DSSOLFDWLRQ EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  FLWL]HQ FKLOGUHQ    
      :KHQ 0V  'XUDQ ZRXOG VLJQ LQ IRU KHU DSSRLQWPHQWV  VKH QRWHG RQ WKH VLJQ LQ VKHHW 
WKDW WKH SXUSRVH IRU KHU YLVLW ZDV ³SRU ORV GLH] DxRV´  ³IRU WKH WHQ \HDUV´     
      'HIHQGDQW /HRQDUG DVNHG 0V  'XUDQ WR EULQJ WR KHU QH[W DSSRLQWPHQW HYLGHQFH WR 
VKRZ WKDW VKH KDG OLYHG LQ WKH 8QLWHG 6WDWHV IRU WHQ \HDUV   'XULQJ WKH QH[W PHHWLQJ  'HIHQGDQW 
/HRQDUG LQVWUXFWHG 0V  'XUDQ WR VLJQ VHYHUDO GRFXPHQWV  ZKLFK KH VDLG ZHUH QHFHVVDU\ WR DSSO\ 
IRU ODZIXO SHUPDQHQW UHVLGHQF\   'HIHQGDQW /HRQDUG GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV  
      :KHQ 0V  'XUDQ DVNHG 'HIHQGDQW /HRQDUG TXHVWLRQV DERXW WKH OHJDO SURFHVV RU WKH 
GRFXPHQWV VKH ZDV VLJQLQJ  'HIHQGDQW /HRQDUG UHIXVHG WR DQVZHU KHU TXHVWLRQV DQG WROG KHU WKDW 
KH GLG WKLV NLQG RI DSSOLFDWLRQ DOO WKH WLPH    
      'HIHQGDQWV GLG QRW DGYLVH 0V  'XUDQ WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ 
IRU DV\OXP RQ KHU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW 
WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 0V  'XUDQ WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH 
DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG   
      ,Q RU DURXQG 2FWREHU       'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ RQ EHKDOI 
RI 0V  'XUDQ DQG XVHG D PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 
9HUPRQW  
      ,Q IDFW  'HIHQGDQWV VXEPLWWHG WKH DV\OXP DSSOLFDWLRQ ZLWKRXW WHOOLQJ 0V  'XUDQ RU 
UHYLHZLQJ WKH DSSOLFDWLRQ ZLWK KHU   1HYHUWKHOHVV  XSRQ LQIRUPDWLRQ DQG EHOLHI  'HIHQGDQW 7KRPDV 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 35 of 111

VLJQHG WKH SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP 
DSSOLFDWLRQ DW WKH UHTXHVW RI 0V  'XUDQ   DQG  WKDW  KH  UHDG  WKH  FRPSOHWHG DSSOLFDWLRQ WR KHU  LQ  D 
ODQJXDJH VKH XQGHUVWRRG IRU YHULILFDWLRQ   8SRQ LQIRUPDWLRQ DQG EHOLHI  WKH DV\OXP DSSOLFDWLRQ 
ZDV VLJQHG E\ 'HIHQGDQW 7KRPDV  DOWKRXJK 0V  'XUDQ RQO\ PHW ZLWK 'HIHQGDQW /HRQDUG  DQG WKH 
DSSOLFDWLRQ FRQWDLQHG WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV    
      :KHQ 0V  'XUDQ UHFHLYHG D QRWLFH LQ WKH PDLO WKDW KHU DV\OXP DSSOLFDWLRQ KDG EHHQ 
UHFHLYHG E\ 86&,6  VKH EHOLHYHG WKH QRWLFH ZDV UHODWHG WR WKH ³WHQ \HDU ODZ ´  $V 0V  'XUDQ GLG 
QRW XQGHUVWDQG WKLV QRWLFH  VKH EURXJKW LW WR +HFKW /DZ )LUP WR DVN DERXW LW   'HIHQGDQW /HRQDUG 
VDLG QRW WR ZRUU\ DERXW WKLV QRWLFH DQG WKDW 0V  'XUDQ MXVW QHHGHG WR ZDLW IRU DQ LQWHUYLHZ GDWH   
'HIHQGDQW /HRQDUG GLG QRW LQIRUP 0V  'XUDQ WKDW WKH QRWLFH ZDV UHODWHG WR WKH DV\OXP DSSOLFDWLRQ 
'HIHQGDQWV KDG VXEPLWWHG   $W WKLV WLPH  0V  'XUDQ XQGHUVWRRG WKDW VKH ZDV WR KDYH DQ LQWHUYLHZ 
UHODWHG WR WKH ³WHQ \HDU ODZ ´ 
      :KHQ 0V  'XUDQ UHFHLYHG D ILQJHUSULQWLQJ DSSRLQWPHQW QRWLFH DQG D ZRUN SHUPLW 
UHODWHG WR WKH DV\OXP DSSOLFDWLRQ ILOHG RQ KHU EHKDOI  VKH EHOLHYHG WKHVH GRFXPHQWV ZHUH UHODWHG WR 
WKH ³WHQ \HDU ODZ ´ DQG GLG QRW XQGHUVWDQG WKDW WKH\ ZHUH UHODWHG WR DQ DV\OXP DSSOLFDWLRQ ILOHG RQ 
KHU EHKDOI   
      ,Q  RU  DURXQG  -XO\         0V   'XUDQ  UHFHLYHG  QRWLFH  IURP  86&,6  WKDW  DQ  DV\OXP 
LQWHUYLHZ KDG EHHQ VFKHGXOHG IRU KHU   0V  'XUDQ FDOOHG 'HIHQGDQWV DQG VSRNH ZLWK D VHFUHWDU\ 
HPSOR\HG E\ +HFKW /DZ )LUP   7KLV VHFUHWDU\ LQIRUPHG 0V  'XUDQ WKDW VKH VKRXOG JR E\ KHUVHOI 
WR WKH LQWHUYLHZ DQG EULQJ KHU RZQ LQWHUSUHWHU  
      ,Q RU DURXQG $XJXVW       0V  'XUDQ DWWHQGHG DQ DV\OXP LQWHUYLHZ LQ %HWKSDJH  
/RQJ ,VODQG   6KH DQVZHUHG DOO TXHVWLRQV WUXWKIXOO\   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 36 of 111

      ,Q  RU  DURXQG  $XJXVW         0V   'XUDQ  UHFHLYHG  D  QRWLFH  VWDWLQJ  WKDW  KHU  DV\OXP 
DSSOLFDWLRQ  ZDV  QRW  DSSURYHG     0V   'XUDQ  EURXJKW  WKH  QRWLFH  WR  +HFKW  /DZ  )LUP     'HIHQGDQW 
/HRQDUG LQIRUPHG 0V  'XUDQ WKDW VKH ZRXOG UHFHLYH D QRWLILFDWLRQ LQ WKH PDLO IRU D FRXUW GDWH   
'HIHQGDQW /HRQDUG LQVWUXFWHG 0V  'XUDQ WR UHWXUQ WR KLV RIILFH ZLWK D PRQH\ RUGHU WR ³VWRS WKH 
GHSRUWDWLRQ ´  'HIHQGDQW /HRQDUG LQVWUXFWHG 0V  'XUDQ WR VLJQ DGGLWLRQDO GRFXPHQWV   'HIHQGDQW 
/HRQDUG GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV   
      0V  'XUDQ ZDV SODFHG LQWR UHPRYDO SURFHHGLQJV LQ RU DURXQG $XJXVW        
      ,Q  RU  DURXQG  $SULO         QHLWKHU  'HIHQGDQW  7KRPDV  QRU  'HIHQGDQW  /HRQDUG 
DFFRPSDQLHG  0V   'XUDQ  WR  KHU  LQLWLDO  LPPLJUDWLRQ  FRXUW  GDWH   LQVWHDG   ZLWKRXW  QRWLI\LQJ  0V  
'XUDQ  WKH\ VHQW D UHSUHVHQWDWLYH WKDW 0V  'XUDQ KDG QHYHU PHW EHIRUH   0V  'XUDQ¶V KHDULQJ ZDV 
DW      LQ WKH PRUQLQJ DQG VKH DUULYHG RQ WLPH   %XW WKH UHSUHVHQWDWLYH RI 'HIHQGDQWV GLG QRW DUULYH 
XQWLO WKH DIWHUQRRQ  DIWHU 0V  'XUDQ KDG FDOOHG +HFKW /DZ )LUP WR DVN ZKHQ 'HIHQGDQW /HRQDUG 
ZRXOG EH DUULYLQJ   
      'HIHQGDQW  /HRQDUG  LQIRUPHG  0V   'XUDQ  WKDW  KH  ZRXOG  UHSUHVHQW  KHU  LQ  KHU 
LQGLYLGXDO KHDULQJ RQ -XQH             
      2Q  RU  DURXQG  -XQH              'HIHQGDQWV  VHQW  D  GLIIHUHQW  FRQWUDFW  DWWRUQH\  0V  
'XUDQ KDG QHYHU PHW EHIRUH LQ WKHLU VWHDG   7KLV LQGLYLGXDO DUULYHG OHVV WKDQ ILYH PLQXWHV EHIRUH 
0V  'XUDQ¶V KHDULQJ EHJDQ DQG UHSUHVHQWHG KHU LQ WKH FDQFHOODWLRQ RI UHPRYDO KHDULQJ   0V  'XUDQ 
ZDV QRW PDGH DZDUH WKDW LI KHU FDVH ZDV GHQLHG VKH ZRXOG UHFHLYH DQ RUGHU RI UHPRYDO DQG PD\ 
KDYH WR OHDYH WKH FRXQWU\   'XULQJ WKH KHDULQJ  0V  'XUDQ DQVZHUHG DOO TXHVWLRQV WUXWKIXOO\   $IWHU 
WKH FRQFOXVLRQ RI 0V  'XUDQ¶V KHDULQJ  WKH LPPLJUDWLRQ MXGJH LVVXHG DQ RUDO GHFLVLRQ GHQ\LQJ KHU 
FDQFHOODWLRQ RI UHPRYDO FDVH DQG HQWHULQJ DQ RUGHU RI UHPRYDO WR OHDYH WKH FRXQWU\  
      0V  'XUDQ ZDV RUGHUHG UHPRYHG IURP WKH 8QLWHG 6WDWHV RQ -XQH           

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 37 of 111

      0V  'XUDQ ODWHU GLVFRYHUHG WKDW VKH ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH  DQG VKH 
ILUHG +HFKW /DZ )LUP DQG UHWDLQHG SUR ERQR FRXQVHO WR UHSUHVHQW KHU LQ KHU DSSHDO  
,QMXU\ 6XIIHUHG 
      %DVHG  RQ  'HIHQGDQWV¶  IDOVH  UHSUHVHQWDWLRQV   0V   'XUDQ  DJUHHG  WR  SD\  D  WRWDO  RI 
       WR 'HIHQGDQWV   
      $V RI WRGD\  0V  'XUDQ KDV SDLG 'HIHQGDQWV WKH HQWLUH DPRXQW RI        LQ DW OHDVW 
VL[ VHSDUDWH SD\PHQWV   0V  'XUDQ PDGH DOO RI WKHVH SD\PHQWV WR HPSOR\HHV RI +HFKW /DZ )LUP 
SULRU WR KHU LPPLJUDWLRQ FRXUW GDWH RI -XQH            
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQW /HRQDUG  0V  'XUDQ ZRXOG QRW 
KDYH KLUHG RU SDLG 'HIHQGDQWV   
      $V D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  0V  
'XUDQ VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW         
0U  3DXFDU 
      3ODLQWLII -XDQ 3DXFDU  ³0U  3DXFDU´  OLYHV ZLWK KLV ZLIH DQG WKHLU WZR 8 6  FLWL]HQ 
GDXJKWHUV LQ /RQJ ,VODQG  1HZ <RUN   0U  3DXFDU¶V QDWLYH ODQJXDJH LV 6SDQLVK   +H VSHDNV  UHDGV  
DQG XQGHUVWDQGV YHU\ OLPLWHG (QJOLVK  
      ,Q RU DURXQG )HEUXDU\       0U  3DXFDU KHDUG RI +HFKW /DZ )LUP WKURXJK IULHQGV 
DQG PDGH DQ DSSRLQWPHQW WKHUH   'XULQJ WKH ILUVW PHHWLQJ  DQG LQ DOO VXEVHTXHQW PHHWLQJV  0U  
3DXFDU  WUXWKIXOO\  DQVZHUHG  DOO  TXHVWLRQV  DVNHG  E\  'HIHQGDQWV     'HIHQGDQWV  GLG  QRW  DVN  IRU  WKH 
LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH ZKHWKHU 0U  3DXFDU ZDV HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV 
LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP  
      'HIHQGDQW /HRQDUG IDOVHO\ UHSUHVHQWHG WR 0U  3DXFDU WKDW KH ZDV HOLJLEOH WR DSSO\ 
IRU ODZIXO SHUPDQHQW UHVLGHQF\ ³SRU ORV GLH] DxRV´  ³EHFDXVH RI WKH WHQ \HDUV´   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 38 of 111

      'HIHQGDQW /HRQDUG¶V UHSUHVHQWDWLRQV FDXVHG 0U  3DXFDU WR UHDVRQDEO\ EHOLHYH WKDW 
KH  ZDV  HOLJLEOH  IRU  D  ZRUN  SHUPLW  DQG  ODZIXO  SHUPDQHQW  UHVLGHQF\  WKURXJK  DQ  DIILUPDWLYH 
DSSOLFDWLRQ EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  FLWL]HQ FKLOGUHQ  
      'HIHQGDQW /HRQDUG LQVWUXFWHG 0U  3DXFDU WR VLJQ VHYHUDO GRFXPHQWV  ZKLFK KH VDLG 
ZHUH QHFHVVDU\ WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\   'HIHQGDQW /HRQDUG GLG QRW H[SODLQ RU 
WUDQVODWH WKH GRFXPHQWV  
      :KHQ 0U  3DXFDU DVNHG 'HIHQGDQW /HRQDUG TXHVWLRQV DERXW WKH OHJDO SURFHVV RU 
WKH GRFXPHQWV KH ZDV VLJQLQJ  'HIHQGDQW /HRQDUG UHIXVHG WR DQVZHU KLV TXHVWLRQV DQG WROG 0U  
3DXFDU QRW WR ZRUU\ DQG WKDW HYHU\WKLQJ ZRXOG EH ILQH  
      'HIHQGDQWV GLG QRW DGYLVH 0U  3DXFDU WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ 
IRU DV\OXP RQ KLV EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW 
WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 0U  3DXFDU WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ KLV 
DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG  
      ,Q RU DURXQG -XQH       'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ RQ EHKDOI RI 
0U  3DXFDU  DQG XVHG D PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 
9HUPRQW  
      ,Q IDFW  'HIHQGDQWV VXEPLWWHG WKH DV\OXP DSSOLFDWLRQ ZLWKRXW WHOOLQJ 0U  3DXFDU  RU 
UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  KLP     1HYHUWKHOHVV   'HIHQGDQW  7KRPDV  VLJQHG  WKH  SUHSDUHU 
DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ DW WKH 
UHTXHVW  RI  0U   3DXFDU   DQG  WKDW  KH  UHDG  WKH  FRPSOHWHG  DSSOLFDWLRQ  WR  KLP  LQ  D  ODQJXDJH  KH 
XQGHUVWRRG IRU YHULILFDWLRQ   7KH DSSOLFDWLRQ FRQWDLQHG WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV 
WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 39 of 111

      ,Q  RU  DURXQG  PLG        'HIHQGDQW  /HRQDUG  LQIRUPHG  0U   3DXFDU  WKDW  KH  ZRXOG 
QHHG WR DWWHQG DQ LQWHUYLHZ DW DQ LPPLJUDWLRQ RIILFH   1HLWKHU 'HIHQGDQW DFFRPSDQLHG 0U  3DXFDU 
WR WKLV LQWHUYLHZ   $IWHU WKH LQWHUYLHZ  'HIHQGDQW /HRQDUG WROG 0U  3DXFDU WKDW 'HIHQGDQWV ZRXOG 
DVN D MXGJH WR JUDQW 0U  3DXFDU¶V JUHHQ FDUG DSSOLFDWLRQ  
      'HIHQGDQW 7KRPDV PHW ZLWK 0U  3DXFDU WR JDWKHU GRFXPHQWV DQG DWWHQGHG PXOWLSOH 
FRXUW DSSHDUDQFHV ZLWK 0U  3DXFDU   +H QHYHU H[SODLQHG WR 0U  3DXFDU WKDW KH ZDV QRZ LQ UHPRYDO 
SURFHHGLQJV DQG DW ULVN RI EHLQJ RUGHUHG WR OHDYH WKH FRXQWU\   $IWHU 0U  3DXFDU¶V ILQDO KHDULQJ  
'HIHQGDQW 7KRPDV DVVXUHG KLP WKDW KH ZRXOG REWDLQ KLV JUHHQ FDUG  
      2Q  0D\             WKH  ,PPLJUDWLRQ  -XGJH  LVVXHG  DQ  RUGHU  GHQ\LQJ  0U   3DXFDU¶V 
DSSOLFDWLRQ IRU FDQFHOODWLRQ RI UHPRYDO DQG RUGHULQJ KLP WR OHDYH WKH FRXQWU\ ZLWKLQ VL[W\ GD\V   
2Q  RU  DURXQG  0D\              0U   3DXFDU  PHW  ZLWK  'HIHQGDQW  /HRQDUG  DW  +HFKW  /DZ  )LUP   
'HIHQGDQW /HRQDUG WROG 0U  3DXFDU WKDW KLV DSSOLFDWLRQ KDG EHHQ GHQLHG  EXW GLG QRW H[SODLQ WKDW 
KH  KDG  EHHQ  LQ  UHPRYDO  SURFHHGLQJV  RU  WKDW  KH  KDG  EHHQ  RUGHUHG  WR  OHDYH  WKH  FRXQWU\  ZLWKLQ 
VL[W\ GD\V  
      $IWHU WKHVH HYHQWV  0U  3DXFDU VDZ QHZV FRYHUDJH DERXW WKLV FDVH DQG OHDUQHG DERXW 
051<   0U  3DXFDU DWWHQGHG D ZRUNVKRS DW 051< DERXW WKH 7HQ <HDU 6FKHPH   7KURXJK WKLV 
ZRUNVKRS DQG FRQVXOWDWLRQV ZLWK LPPLJUDWLRQ DWWRUQH\V  0U  3DXFDU OHDUQHG WKDW 'HIHQGDQWV KDG 
SURPLVHG KLP ODZIXO VWDWXV WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW  WKDW 
KH KDG EHHQ LQ UHPRYDO SURFHHGLQJV  DQG WKDW KH KDG EHHQ RUGHUHG WR OHDYH WKH FRXQWU\  
      $IWHU GLVFRYHULQJ WKDW KH ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH  0U  3DXFDU ILUHG 
+HFKW  /DZ  )LUP   UHWDLQHG  SUR  ERQR  FRXQVHO  WR  UHSUHVHQW  KLP  LQ  KLV  DSSHDO   DQG  ILOHG  DWWRUQH\ 
JULHYDQFH FRPSODLQWV DJDLQVW 'HIHQGDQWV    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 40 of 111

,QMXU\ 6XIIHUHG 
      %DVHG  RQ  'HIHQGDQWV¶  IDOVH  UHSUHVHQWDWLRQV   0U   3DXFDU  DJUHHG  WR  SD\  D  WRWDO  RI 
       WR 'HIHQGDQWV  
      $V RI WRGD\  0U  3DXFDU KDV SDLG DW OHDVW        LQ PXOWLSOH SD\PHQWV E\ FKHFN DQG 
PRQH\ RUGHU IRU KLV FDVH   0U  3DXFDU PDGH WKHVH SD\PHQWV WR VWDII DW +HFKW /DZ )LUP  
      $IWHU GLVFRYHULQJ WKDW KH ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH  0U  3DXFDU SDLG 
DQRWKHU LPPLJUDWLRQ DWWRUQH\      WR ILOH D QRWLFH RI DSSHDO LQ KLV FDVH   0U  3DXFDU SDLG DQRWKHU 
DWWRUQH\        WR ILOH D 0RWLRQ WR 5HRSHQ KLV UHPRYDO SURFHHGLQJV  
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQW /HRQDUG  0U  3DXFDU ZRXOG 
QRW KDYH KLUHG RU SDLG 'HIHQGDQWV   $V D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG 
SUHGDWRU\ DFWV  0U  3DXFDU VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW         
0U  7RUUHV   
      3ODLQWLII 0DUWLQ 7RUUHV 5H\HV  ³0U  7RUUHV´  LV PDUULHG DQG OLYHV ZLWK KLV WZR 8 6  
FLWL]HQ FKLOGUHQ LQ 6WDWHQ ,VODQG  1HZ <RUN   0U  7RUUHV¶ QDWLYH ODQJXDJH LV 6SDQLVK   +H VSHDNV  
UHDGV  DQG XQGHUVWDQGV OLPLWHG (QJOLVK   
      ,Q RU DURXQG 0DUFK       DW WKH UHFRPPHQGDWLRQ RI DQ DFTXDLQWDQFH  0U  7RUUHV 
ILUVW YLVLWHG +HFKW /DZ )LUP   :KHQ KH HQWHUHG +HFKW /DZ )LUP  KH QRWLFHG D VLJQ LQ VKHHW ZKHUH 
HDFK YLVLWRU SXW WKH GDWH  WKHLU QDPH  DQG WKH UHDVRQ IRU WKHLU YLVLW   :KHQ KH DUULYHG  WKHUH ZDV 
DOUHDG\ D ORQJ OLVW RI QDPHV DQG PRVW RI WKHP OLVWHG HLWKHU ³GLH] DxRV´  ³WHQ \HDUV´  RU ³SRU HO 
WLHPSR´  ³IRU WLPH´  DV WKH UHDVRQ IRU WKHLU YLVLW   
      0U   7RUUHV  ZDLWHG  IRU  DSSUR[LPDWHO\  WKUHH  KRXUV  EHIRUH  KH  PHW  ZLWK  'HIHQGDQW 
7KRPDV   $IWHU D EULHI GLVFXVVLRQ  'HIHQGDQW 7KRPDV WROG 0U  7RUUHV WKDW KH KDG D ³JRRG FDVH´ 
DQG WKDW LW ZRXOG FRVW      WR VWDUW   'XULQJ WKH ILUVW PHHWLQJ  DQG LQ DOO VXEVHTXHQW PHHWLQJV  0U  
7RUUHV WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG E\ 'HIHQGDQWV 7KRPDV DQG /HRQDUG   'HIHQGDQWV 
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 41 of 111

GLG QRW DVN IRU WKH LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH ZKHWKHU 0U  7RUUHV ZDV HOLJLEOH IRU  RU KDG 
D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP  
      ,Q  RU  DURXQG  0D\         0U   7RUUHV¶  ZLIH  DQG  FKLOGUHQ  DFFRPSDQLHG  KLP  IRU  D 
VHFRQG PHHWLQJ DW +HFKW /DZ )LUP   'HIHQGDQW /HRQDUG IDOVHO\ UHSUHVHQWHG WR 0U  7RUUHV WKDW KH 
ZDV HOLJLEOH IRU ODZIXO LPPLJUDWLRQ VWDWXV EHFDXVH KH KDG OLYHG LQ WKH 8QLWHG 6WDWHV IRU PRUH WKDQ 
WHQ \HDUV DQG KDG 8 6  FLWL]HQ FKLOGUHQ   'HIHQGDQW /HRQDUG WROG 0U  7RUUHV¶ ZLIH WKDW VKH ZDV QRW 
HOLJLEOH IRU ODZIXO LPPLJUDWLRQ VWDWXV  EHFDXVH VKH KDG QRW \HW OLYHG LQ WKH 8QLWHG 6WDWHV IRU WHQ 
FRQWLQXRXV \HDUV   'HIHQGDQW /HRQDUG FKDUJHG 0U  7RUUHV      IRU WKLV YLVLW   'HIHQGDQW /HRQDUG 
DOVR WROG 0U  7RUUHV WKDW KH VKRXOG FRPH EDFN VL[ PRQWKV DIWHU KH ZDV ILQJHUSULQWHG E\ 86&,6 WR 
FRPSOHWH SDSHUZRUN IRU ZRUN DXWKRUL]DWLRQ    
      'HIHQGDQW /HRQDUG¶V UHSUHVHQWDWLRQV FDXVHG 0U  7RUUHV WR UHDVRQDEO\ EHOLHYH WKDW 
KH ZDV HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO LPPLJUDWLRQ VWDWXV WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ 
EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  FLWL]HQ FKLOGUHQ  
      'XULQJ  RQH  RI  WKHLU  PHHWLQJV   'HIHQGDQW  /HRQDUG  LQVWUXFWHG  0U   7RUUHV  WR  VLJQ 
VHYHUDO  GRFXPHQWV   ZKLFK  KH  VDLG  ZHUH  QHFHVVDU\  WR  DSSO\  IRU  ODZIXO  SHUPDQHQW  UHVLGHQF\   
'HIHQGDQW /HRQDUG GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV   
      'HIHQGDQWV GLG QRW DGYLVH 0U  7RUUHV WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ 
IRU DV\OXP RQ KLV EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW 
WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 0U  7RUUHV WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH 
DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG    
      ,Q  RU  DURXQG  $XJXVW         'HIHQGDQWV  VXEPLWWHG  DQ  DV\OXP  DSSOLFDWLRQ  IRU  0U  
7RUUHV  DQG XVHG D PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 42 of 111

      ,Q IDFW  'HIHQGDQWV VXEPLWWHG WKH DV\OXP DSSOLFDWLRQ ZLWKRXW WHOOLQJ 0U  7RUUHV  RU 
UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  KLP     1HYHUWKHOHVV   'HIHQGDQW  7KRPDV  VLJQHG  WKH  SUHSDUHU 
DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ DW WKH 
UHTXHVW RI 0U  7RUUHV DQG WKDW KH UHDG WKH FRPSOHWHG DSSOLFDWLRQ WR KLP LQ D ODQJXDJH KH XQGHUVWRRG 
IRU  YHULILFDWLRQ     7KH  DSSOLFDWLRQ  FRQWDLQHG  WKH  VDPH  ERLOHUSODWH  EDVHV  IRU  DV\OXP  DV  WKH  RWKHU 
3ODLQWLIIV¶ DSSOLFDWLRQV  
      ,Q  RU  DURXQG         0U   7RUUHV¶  (QJOLVK  WHDFKHU  LQYLWHG  KLP  WR  D  SUHVHQWDWLRQ  DW 
051< DERXW WKH ³P\WK RI WKH WHQ \HDU ODZ ´  0U  7RUUHV ZHQW  DQG WKDW LV ZKHQ KH OHDUQHG WKDW 
'HIHQGDQWV KDG SURPLVHG KLP ODZIXO VWDWXV WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ WKDW 
GLG QRW H[LVW   
      $IWHU GLVFRYHULQJ WKDW KH ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH  0U  7RUUHV FDOOHG 
+HFKW /DZ )LUP DQG D PDQ DQVZHUHG   0U  7RUUHV DVNHG IRU D FRS\ RI KLV ILOH  DQG WKH PDQ VDLG 
³)


 <RX ´ DQG WKHQ KXQJ XS   0U  7RUUHV LPPHGLDWHO\ FDOOHG DJDLQ DQG D PDQ WRRN GRZQ KLV 
QDPH DQG QXPEHU DQG VDLG VRPHRQH ZRXOG FDOO KLP EDFN   1R RQH IURP +HFKW /DZ )LUP HYHU 
FDOOHG KLP EDFN  
,QMXU\ 6XIIHUHG  
      $V RI WRGD\  0U  7RUUHV KDV SDLG 'HIHQGDQWV D WRWDO RI        LQ PXOWLSOH SD\PHQWV 
E\ FDVK DQG PRQH\ RUGHU   0U  7RUUHV PDGH WKHVH SD\PHQWV HLWKHU GLUHFWO\ WR 'HIHQGDQW /HRQDUG 
RU WR D VHFUHWDU\ DW +HFKW /DZ )LUP    
      0U  7RUUHV DOVR UHFHLYHG D OHWWHU VD\LQJ WKDW KH RZHG 6\OYLD¶V 7UDQVODWLRQ 6HUYLFH 
    IRU WKH WUDQVODWLRQ RI KLV ELUWK FHUWLILFDWH  ZKLFK KH SDLG YLD PDLO E\ PRQH\ RUGHU    
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQWV  0U  7RUUHV ZRXOG QRW KDYH 
KLUHG RU SDLG 'HIHQGDQWV  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 43 of 111

      $V D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  0U  
7RUUHV VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW          
0U  3HUH] 2UWHJD DQG 0UV  3HUH] 
      3ODLQWLIIV  *UHJRULR  3HUH]  2UWHJD   ³0U   3HUH]  2UWHJD´   DQG  5RVD  3HUH]   ³0UV  
3HUH]´  DUH PDUULHG DQG OLYH ZLWK WKHLU WKUHH 8 6  FLWL]HQ FKLOGUHQ LQ 6WDWHQ ,VODQG  1HZ <RUN   0U  
3HUH] 2UWHJD¶V DQG 0UV  3HUH]¶V QDWLYH ODQJXDJH LV 6SDQLVK   7KH\ VSHDN  UHDG  DQG XQGHUVWDQG 
YHU\ OLPLWHG (QJOLVK   
      ,Q RU DURXQG ODWH      RU HDUO\       DW WKH UHFRPPHQGDWLRQ RI D IULHQG  0UV  3HUH] 
DQG 0U  3HUH] 2UWHJD PHW ZLWK 'HIHQGDQW 7KRPDV DW +HFKW /DZ )LUP   'XULQJ WKH ILUVW PHHWLQJ  
DQG LQ DOO VXEVHTXHQW PHHWLQJV  0UV  3HUH] DQG 0U  3HUH] 2UWHJD WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV 
DVNHG  E\  'HIHQGDQW  7KRPDV     'HIHQGDQW  7KRPDV  GLG  QRW  DVN  IRU  WKH  LQIRUPDWLRQ  QHFHVVDU\  WR 
GHWHUPLQH ZKHWKHU 0UV  3HUH] DQG 0U  3HUH] 2UWHJD ZHUH HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ 
ODZ RU IDFW WR DSSO\ IRU  DV\OXP   $OO VXEVHTXHQW PHHWLQJV WKDW 0UV  3HUH] DQG 0U  3HUH] 2UWHJD 
KDG DW +HFKW /DZ )LUP ZHUH FRQGXFWHG E\ 'HIHQGDQW /HRQDUG     
      'HIHQGDQW 7KRPDV IDOVHO\ UHSUHVHQWHG WR 0UV  3HUH] DQG 0U  3HUH] 2UWHJD WKDW WKH\ 
ZHUH HOLJLEOH WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\ XQGHU WKH ³WHQ \HDU ODZ ´ 
      'HIHQGDQWV¶ UHSUHVHQWDWLRQV FDXVHG 0UV  3HUH] DQG 0U  3HUH] 2UWHJD WR UHDVRQDEO\ 
EHOLHYH  WKDW  WKH\  ZHUH  HOLJLEOH  IRU  D  ZRUN  SHUPLW  DQG  ODZIXO  SHUPDQHQW  UHVLGHQF\  WKURXJK  DQ 
DIILUPDWLYH  DSSOLFDWLRQ  EDVHG  RQ  WKH  HOLJLELOLW\  FULWHULD  RI  OHQJWK  RI  UHVLGHQF\  DQG  8 6   FLWL]HQ 
FKLOGUHQ  
      'HIHQGDQW  /HRQDUG  LQVWUXFWHG  0UV   3HUH]  DQG  0U   3HUH]  2UWHJD  WR  VLJQ  VHYHUDO 
GRFXPHQWV  ZKLFK KH VDLG ZHUH QHFHVVDU\ WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\   'HIHQGDQW 
/HRQDUG GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 44 of 111

      :KHQ 0UV  3HUH] DQG 0U  3HUH] 2UWHJD DVNHG 'HIHQGDQW /HRQDUG TXHVWLRQV DERXW 
WKH OHJDO SURFHVV RU WKH GRFXPHQWV WKH\ ZHUH VLJQLQJ  'HIHQGDQW /HRQDUG UHIXVHG WR DQVZHU WKHLU 
TXHVWLRQV DQG WROG WKHP KH NQHZ ZKDW KH ZDV GRLQJ DQG WKH\ VKRXOG QRW ZRUU\  
      'HIHQGDQWV GLG QRW DGYLVH 0U  3HUH] 2UWHJD RU  0UV  3HUH] WKDW WKH\ LQWHQGHG  WR 
VXEPLW DQ DSSOLFDWLRQ IRU DV\OXP RQ WKHLU EHKDOI  DQG GLG QRW GLVFXVV WKH OHJDO UHTXLUHPHQWV IRU 
DV\OXP  RU WKH IDFW WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 0U  3HUH] 2UWHJD DQG 0UV  3HUH] WR EH SXW 
LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG    
      ,Q RU DURXQG 6HSWHPEHU       'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ IRU 0U  
3HUH] 2UWHJD  ZLWK 0UV  3HUH] DV D GHULYDWLYH RQ WKH DSSOLFDWLRQ  DQG XVHG D PDLO FDUULHU WR VHQG LW 
DFURVV VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  
      ,Q IDFW  'HIHQGDQWV VXEPLWWHG WKH DV\OXP DSSOLFDWLRQ ZLWKRXW WHOOLQJ 0UV  3HUH] DQG 
0U   3HUH]  2UWHJD   RU  UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  WKHP     1HYHUWKHOHVV   'HIHQGDQW  7KRPDV 
VLJQHG WKH SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP 
DSSOLFDWLRQ  DW  WKH  UHTXHVW  RI  0UV   3HUH]  DQG  0U   3HUH]  2UWHJD  DQG  WKDW  KH  UHDG  WKH  FRPSOHWHG 
DSSOLFDWLRQ WR WKHP LQ D ODQJXDJH WKH\ XQGHUVWRRG IRU YHULILFDWLRQ   7KH DSSOLFDWLRQ FRQWDLQHG WKH 
VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV  
      ,Q RU DURXQG 2FWREHU       0UV  3HUH] DQG 0U  3HUH] 2UWHJD UHFHLYHG D QRWLFH LQ 
WKH PDLO WKDW WKHLU DV\OXP DSSOLFDWLRQ KDG EHHQ UHFHLYHG E\ 86&,6 DQG DOVR UHFHLYHG D OHWWHU IURP 
'HIHQGDQWV  WKDW  WKHLU  ILQJHUSULQW  DSSRLQWPHQW  KDG  EHHQ  VFKHGXOHG     0UV   3HUH]  DQG  0U   3HUH] 
2UWHJD ZHUH FRQIXVHG E\ WKHVH PDLOLQJV EHFDXVH WKH\ GLG QRW LQWHQG WR DSSO\ IRU DV\OXP  
      0UV  3HUH] DQG 0U  3HUH] 2UWHJD FDOOHG +HFKW /DZ )LUP WR DVN DERXW WKH PDLOLQJV  
DQG  'HIHQGDQW  /HRQDUG  DFNQRZOHGJHG   IRU  WKH  ILUVW  WLPH   WKDW  'HIHQGDQWV  ILOHG  DQ  DV\OXP 
DSSOLFDWLRQ RQ WKHLU EHKDOI  EXW WROG WKHP QRW WR ZRUU\ DQG WKDW KH ZRXOG WDNH FDUH RI HYHU\WKLQJ   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 45 of 111

:KHQ WKH\ YLVLWHG WKH RIILFH LQ SHUVRQ WR DVN DERXW WKH PDLOLQJV  D UHFHSWLRQLVW WROG WKHP WKDW WKH 
QRWLFH VLPSO\ PHDQW WKDW WKHLU DSSOLFDWLRQ ZDV LQ SURFHVV  WKH UHFHSWLRQLVW DOVR H[SODLQHG WKDW WKHLU 
ZRUN SHUPLWV ZHUH GHOD\HG E\ WKH VORZ SURFHVVLQJ RI LPPLJUDWLRQ SDSHUZRUN    
      0UV  3HUH] DQG 0U  3HUH] 2UWHJD ODWHU OHDUQHG WKDW 86&,6 KDG QRW DSSURYHG WKHLU 
DV\OXP DSSOLFDWLRQ   :KHQ WKH\ DVNHG 'HIHQGDQWV DERXW WKLV GHYHORSPHQW  'HIHQGDQWV H[SODLQHG 
IRU WKH ILUVW WLPH WKDW WKH FDVH ZRXOG EH VHQW WR LPPLJUDWLRQ FRXUW    
      2Q  DW  OHDVW  WZR  RFFDVLRQV   0UV   3HUH]  DQG  0U   3HUH]  2UWHJD  DVNHG  'HIHQGDQW 
/HRQDUG IRU FRSLHV RI WKH GRFXPHQWV WKH\ KDG VLJQHG DQG IRU FRSLHV RI WKHLU HQWLUH ILOH   2Q ERWK 
RFFDVLRQV  'HIHQGDQW /HRQDUG UHIXVHG WR SURYLGH WKH FRSLHV     
      ,Q RU DURXQG $SULO       0UV  3HUH] DQG 0U  3HUH] 2UWHJD VDZ D FRPPHUFLDO RQ 79 
WDONLQJ DERXW WKH ³P\WK RI WKH WHQ \HDU ODZ ´  7KH\ VWDUWHG WR LQYHVWLJDWH WKLV LVVXH RQ WKH LQWHUQHW 
DQG PHW ZLWK DWWRUQH\V DW 051<   0UV  3HUH] DQG 0U  3HUH] 2UWHJD OHDUQHG WKDW 'HIHQGDQWV KDG 
SURPLVHG WKHP ODZIXO VWDWXV WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW    
      $IWHU GLVFRYHULQJ WKDW WKH\ ZHUH YLFWLPV RI WKH 7HQ <HDU 6FKHPH  0UV  3HUH] DQG 
0U  3HUH] 2UWHJD ILUHG +HFKW /DZ )LUP DQG UHWDLQHG SUR ERQR FRXQVHO   
,QMXU\ 6XIIHUHG 
      %DVHG  RQ  'HIHQGDQWV¶  IDOVH  UHSUHVHQWDWLRQV   0UV   3HUH]  DQG  0U   3HUH]  2UWHJD 
DJUHHG WR SD\ D WRWDO RI        WR 'HIHQGDQWV  
      $V  RI  WRGD\   0UV   3HUH]  DQG  0U   3HUH]  2UWHJD  KDYH  SDLG  'HIHQGDQWV  D  WRWDO  RI 
       LQ PXOWLSOH SD\PHQWV E\ FDVK  PRQH\ RUGHU  DQG FUHGLW FDUG   0UV  3HUH] DQG 0U  3HUH] 
2UWHJD PDGH WKHVH SD\PHQWV GLUHFWO\ WR 'HIHQGDQW 7KRPDV RU 'HIHQGDQW /HRQDUG  
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQWV  0UV  3HUH] DQG 0U  3HUH] 
2UWHJD ZRXOG QRW KDYH KLUHG RU SDLG 'HIHQGDQWV  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 46 of 111

      7KXV  DV D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  
0UV  3HUH] DQG 0U  3HUH] 2UWHJD VXIIHUHG ILQDQFLDO LQMXU\ RI DW OHDVW         
0V  $\DOD 
      3ODLQWLII 5RVDULR $\DOD  ³0V  $\DOD´  OLYHV ZLWK KHU KXVEDQG DQG WKHLU WKUHH 8 6  
FLWL]HQ FKLOGUHQ LQ 6WDWHQ ,VODQG  1HZ <RUN   0V  $\DOD¶V QDWLYH ODQJXDJH LV 6SDQLVK   6KH VSHDNV  
UHDGV  DQG XQGHUVWDQGV YHU\ OLPLWHG (QJOLVK    
      ,Q RU DURXQG      0V  $\DOD¶V KXVEDQG DQG KHU QHSKHZ  3ODLQWLII *UHJRULR 3HUH] 
2UWHJD   ³0U   3HUH]  2UWHJD´    PHW  ZLWK 'HIHQGDQWV EDVHG RQ WKH UHFRPPHQGDWLRQ RI 0U   3HUH] 
2UWHJD  ZKR ZDV DW WKH WLPH D FOLHQW RI 'HIHQGDQWV DQG KDG QRW \HW GLVFRYHUHG WKDW 'HIHQGDQWV KDG 
GHIUDXGHG KLP    
      ,Q  0DUFK         0V   $\DOD¶V  KXVEDQG  KDG  D  VHFRQG  PHHWLQJ  ZLWK  'HIHQGDQW 
/HRQDUG DW +HFKW /DZ )LUP  DQG WKLV WLPH  WRRN 0V  $\DOD ZLWK KLP   'XULQJ WKDW PHHWLQJ  DQG LQ 
DOO VXEVHTXHQW PHHWLQJV  0V  $\DOD DQG KHU KXVEDQG WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG E\ 
'HIHQGDQW /HRQDUG   'HIHQGDQW /HRQDUG GLG QRW DVN IRU WKH LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH 
ZKHWKHU 0V  $\DOD DQG KHU KXVEDQG ZHUH HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR 
DSSO\ IRU  DV\OXP    
      'XULQJ WKLV PHHWLQJ  'HIHQGDQW /HRQDUG IDOVHO\ UHSUHVHQWHG WR 0V  $\DOD DQG KHU 
KXVEDQG WKDW WKH\ ZHUH HOLJLEOH WR JHW ZRUN SHUPLWV WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ EHFDXVH RI 
WKH OHQJWK RI WLPH WKH\ KDG EHHQ OLYLQJ LQ WKH 8QLWHG 6WDWHV   'HIHQGDQW /HRQDUG VDLG WKH\ ZRXOG 
EH LQFOXGHG LQ WKH VDPH DSSOLFDWLRQ DQG ZRXOG ERWK UHFHLYH ZRUN DXWKRUL]DWLRQ   
      'HIHQGDQW  /HRQDUG¶V  UHSUHVHQWDWLRQV  FDXVHG  0V   $\DOD  DQG  KHU  KXVEDQG  WR 
UHDVRQDEO\ EHOLHYH WKDW VKH ZDV HOLJLEOH IRU D ZRUN SHUPLW WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ EDVHG 
RQ WKH HOLJLELOLW\ FULWHULRQ RI OHQJWK RI UHVLGHQF\    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 47 of 111

      $W  HDFK  PHHWLQJ  0V   $\DOD  KDG  ZLWK  'HIHQGDQWV   VKH  GHVFULEHG  KHU  FDVH  WR  WKH 
UHFHSWLRQLVW DQG WR 'HIHQGDQW /HRQDUG DV D ³FDVR SRU WLHPSR´  ³FDVH IRU WLPH´   
      'XULQJ  RQH  RI  WKHLU  PHHWLQJV   'HIHQGDQW  /HRQDUG  LQVWUXFWHG  0V   $\DOD  WR  VLJQ 
VHYHUDO  GRFXPHQWV   ZKLFK  KH  VDLG  ZHUH  QHFHVVDU\  WR  DSSO\  IRU  ZRUN  DXWKRUL]DWLRQ     'HIHQGDQW 
/HRQDUG GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV    
      :KHQ 0V  $\DOD RU KHU KXVEDQG DVNHG 'HIHQGDQW /HRQDUG TXHVWLRQV DERXW WKH OHJDO 
SURFHVV RU WKH GRFXPHQWV VKH ZDV VLJQLQJ  'HIHQGDQW /HRQDUG UHIXVHG WR DQVZHU WKH TXHVWLRQV  
WROG WKHP QRW WR ZRUU\  DQG VDLG WKDW KH ZRXOG FDOO WKHP ZLWK DQ\ XSGDWHV UHJDUGLQJ WKHLU FDVH  
      'HIHQGDQWV GLG QRW DGYLVH 0V  $\DOD WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ 
IRU DV\OXP RQ KHU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW 
WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 0V  $\DOD WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH 
DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG    
      2Q RU DURXQG 0D\           'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ RQ EHKDOI 
RI 0V  $\DOD DQG XVHG D PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 
9HUPRQW    
      ,Q IDFW  'HIHQGDQWV VXEPLWWHG WKH DV\OXP DSSOLFDWLRQ ZLWKRXW WHOOLQJ 0V  $\DOD  RU 
UHYLHZLQJ WKH DSSOLFDWLRQ ZLWK KHU   1HYHUWKHOHVV  XSRQ LQIRUPDWLRQ DQG EHOLHI  'HIHQGDQW 7KRPDV 
VLJQHG WKH SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP 
DSSOLFDWLRQ  DW  WKH  UHTXHVW  RI  0V   $\DOD  DQG  WKDW  KH  UHDG  WKH  FRPSOHWHG  DSSOLFDWLRQ  WR  KHU  LQ  D 
ODQJXDJH VKH XQGHUVWRRG IRU YHULILFDWLRQ   ,Q IDFW  'HIHQGDQW /HRQDUG KDG WROG 0V  $\DOD DQG KHU 
KXVEDQG  WKDW  WKH\  ZRXOG  ERWK  EH  LQFOXGHG  LQ  WKH  VDPH  DSSOLFDWLRQ   EXW   DV  LW  WXUQHG  RXW   WKH 
DSSOLFDWLRQ ZDV RQO\ LQ 0V  $\DOD¶V QDPH   8SRQ LQIRUPDWLRQ DQG EHOLHI  WKH DSSOLFDWLRQ FRQWDLQHG 
WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV      

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 48 of 111

      ,Q RU DURXQG 6HSWHPEHU       0V  $\DOD DWWHQGHG DQ 051< ZRUNVKRS DERXW WKH 
³P\WK RI WKH WHQ \HDU ODZ ´  $W WKLV ZRUNVKRS  0V  $\DOD OHDUQHG WKDW 'HIHQGDQWV KDG SURPLVHG 
KHU D ZRUN SHUPLW WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW    
      $IWHU GLVFRYHULQJ WKDW VKH ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH  0V  $\DOD  E\ 
OHWWHU GHOLYHUHG RQ RU DURXQG -DQXDU\           ILUHG +HFKW /DZ )LUP DQG GHPDQGHG D FRS\ RI KHU 
HQWLUH ILOH   'HIHQGDQWV GLG QRW UHSO\ WR 0V  $\DOD¶V OHWWHU  
      'HIHQGDQWV GLG HYHQWXDOO\ SURGXFH 0V  $\DOD¶V ILOH WR 3ODLQWLIIV¶ FRXQVHO RQ $XJXVW 
          EXW WKH ILOH GLG QRW LQFOXGH WKH )RUP ,     VXEPLWWHG E\ 'HIHQGDQWV RQ EHKDOI RI 0V  
$\DOD  
,QMXU\ 6XIIHUHG   
      %DVHG  RQ  'HIHQGDQWV¶  IDOVH  UHSUHVHQWDWLRQV   0V   $\DOD  DJUHHG  WR  SD\  D  WRWDO  RI 
       WR 'HIHQGDQWV    
      $V RI WRGD\  0V  $\DOD DQG KHU KXVEDQG KDYH SDLG 'HIHQGDQWV D WRWDO RI        LQ 
PXOWLSOH FDVK SD\PHQWV   (YHU\ WLPH WKDW 0V  $\DOD KDG DQ DSSRLQWPHQW ZLWK 'HIHQGDQW /HRQDUG  
KH UHTXHVWHG D SD\PHQW IURP KHU  WHOOLQJ KHU WKDW WKH SD\PHQW ZRXOG DOORZ KHU FDVH WR SURJUHVV  
      0V  $\DOD DOVR SDLG 'HIHQGDQW /HRQDUG     IRU WKH WUDQVODWLRQ RI 0V  $\DOD¶V ELUWK 
FHUWLILFDWH DQG KHU PDUULDJH FHUWLILFDWH LQWR (QJOLVK LQ RUGHU WR LQFOXGH WKRVH GRFXPHQWV ZLWK KHU 
DSSOLFDWLRQ   0V  $\DOD UHFHLYHG D ELOO IURP 6\OYLD¶V 7UDQVODWLRQ 6HUYLFH IRU WKH WUDQVODWLRQV    
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQWV  0V  $\DOD ZRXOG QRW KDYH 
KLUHG RU SDLG 'HIHQGDQWV  
      7KXV  DV D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  
0V  $\DOD VXIIHUHG ILQDQFLDO LQMXU\ RI DW OHDVW           

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 49 of 111

0U  )ORUHV 'RPLQJXH] DQG 0UV  2OPRV )ORUHV 
      3ODLQWLIIV 0DQXHO )ORUHV 'RPLQJXH]  ³0U  )ORUHV 'RPLQJXH]´  DQG 1HO\ 2OPRV 
)ORUHV  ³0UV  2OPRV )ORUHV´  DUH PDUULHG DQG OLYH ZLWK WKHLU WKUHH 8 6  FLWL]HQ FKLOGUHQ LQ $VWRULD  
1HZ <RUN   0UV  2OPRV )ORUHV¶ DQG 0U  )ORUHV 'RPLQJXH]¶V QDWLYH ODQJXDJH LV 6SDQLVK   7KH\ 
VSHDN  UHDG  DQG XQGHUVWDQG YHU\ OLPLWHG (QJOLVK  
      ,Q  RU  DURXQG         RQ  WKH  UHFRPPHQGDWLRQ  RI  DQ  DFTXDLQWDQFH   0U   )ORUHV 
'RPLQJXH] DQG 0UV  2OPRV )ORUHV PHW ZLWK 'HIHQGDQW 7KRPDV DW +HFKW /DZ )LUP   'XULQJ WKH 
ILUVW  PHHWLQJ   DQG  LQ  DOO  VXEVHTXHQW  PHHWLQJV   0U   )ORUHV  'RPLQJXH]  DQG  0UV   2OPRV  )ORUHV 
WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG E\ 'HIHQGDQW 7KRPDV   'HIHQGDQW /HRQDUG GLG QRW DVN IRU 
WKH LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH ZKHWKHU 0U  )ORUHV 'RPLQJXH] RU 0UV  2OPRV )ORUHV ZHUH 
HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP    
      'HIHQGDQW 7KRPDV IDOVHO\ UHSUHVHQWHG WR 0U  )ORUHV 'RPLQJXH] DQG 0UV  2OPRV 
)ORUHV WKDW RQFH WKH\ KDG WHQ \HDUV RI UHVLGHQFH LQ WKH 8 6   WKH\ ZRXOG TXDOLI\ IRU ³OD OH\ GH GLH] 
DxRV´  ³WKH WHQ \HDU ODZ´  EHFDXVH WKH\ KDG 8 6  FLWL]HQ FKLOGUHQ   'HIHQGDQW 7KRPDV WROG WKHP 
WKDW 'HIHQGDQW /HRQDUG ZRXOG KDQGOH WKHLU FDVH RQFH WKH\ DFFUXHG WKH WHQ \HDUV  
      ,Q RU DURXQG HDUO\       0U  )ORUHV 'RPLQJXH] DQG 0UV  2OPRV )ORUHV UHWXUQHG WR 
PHHW  ZLWK  'HIHQGDQW  /HRQDUG   ZKR  IDOVHO\  UHSUHVHQWHG  WR  WKHP  WKDW  WKH\  ZHUH  QRZ  HOLJLEOH  WR 
DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\ XQGHU WKH ³WHQ \HDU ODZ ´ 
      'HIHQGDQW  /HRQDUG¶V  UHSUHVHQWDWLRQV  FDXVHG  0U   )ORUHV  'RPLQJXH]  DQG  0UV  
2OPRV )ORUHV WR UHDVRQDEO\ EHOLHYH WKDW WKH\ ZHUH HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO SHUPDQHQW 
UHVLGHQF\ WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ 
DQG 8 6  FLWL]HQ FKLOGUHQ  
      $W WKHLU YLVLWV WR +HFKW /DZ )LUP  0U  )ORUHV 'RPLQJXH] DQG 0UV  2OPRV )ORUHV 
ZRXOG VLJQ LQ DQG QRWH WKH UHDVRQ IRU WKHLU DSSRLQWPHQW DV ³SRU WLHPSR´  ³IRU WLPH´   
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 50 of 111

      'XULQJ RQH RI WKHLU PHHWLQJV  'HIHQGDQW /HRQDUG LQVWUXFWHG 0U  )ORUHV 'RPLQJXH] 
DQG 0UV  2OPRV )ORUHV WR VLJQ VHYHUDO GRFXPHQWV  ZKLFK KH VDLG ZHUH QHFHVVDU\ WR DSSO\ IRU ODZIXO 
SHUPDQHQW  UHVLGHQF\     'HIHQGDQW  /HRQDUG  GLG  QRW  H[SODLQ  RU  WUDQVODWH  WKH  GRFXPHQWV     2Q  RQH 
RFFDVLRQ  WKH\ WULHG WR UHDG VRPH RI WKH GRFXPHQWV WKDW ZHUH ZULWWHQ LQ (QJOLVK  EXW 'HIHQGDQW 
/HRQDUG WROG WKHP WR MXVW VLJQ  
      :KHQ  0U   )ORUHV  'RPLQJXH]  DQG  0UV   2OPRV  )ORUHV  DVNHG  'HIHQGDQW  /HRQDUG 
TXHVWLRQV DERXW WKH OHJDO SURFHVV RU WKH GRFXPHQWV WKH\ ZHUH VLJQLQJ  'HIHQGDQW /HRQDUG UHIXVHG 
WR DQVZHU WKH TXHVWLRQV DQG WROG WKHP QRW WR ZRUU\    
      'HIHQGDQWV GLG QRW DGYLVH 0U  )ORUHV 'RPLQJXH] RU 0UV  2OPRV )ORUHV WKDW WKH\ 
LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ IRU DV\OXP RQ WKHLU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO 
UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 0U  )ORUHV 'RPLQJXH] DQG 
0UV  2OPRV )ORUHV WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH DV\OXP DSSOLFDWLRQ ZDV QRW 
DSSURYHG    
      2Q RU DURXQG 0D\           'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ RQ EHKDOI 
RI 0U  )ORUHV 'RPLQJXH]  ZLWK 0UV  2OPRV )ORUHV DV D GHULYDWLYH RQ WKH DSSOLFDWLRQ  DQG XVHG D 
PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW    
      ,Q  IDFW   'HIHQGDQWV  VXEPLWWHG  WKH  DV\OXP  DSSOLFDWLRQ  ZLWKRXW  WHOOLQJ  0U   )ORUHV 
'RPLQJXH]  RU  0UV   2OPRV  )ORUHV   RU  UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  WKHP     1HYHUWKHOHVV  
'HIHQGDQW 7KRPDV VLJQHG WKH SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH 
ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ DW WKH UHTXHVW RI 0U  )ORUHV 'RPLQJXH] DQG 0UV  2OPRV )ORUHV 
DQG WKDW KH UHDG WKH FRPSOHWHG DSSOLFDWLRQ WR WKHP LQ D ODQJXDJH WKH\ XQGHUVWRRG IRU YHULILFDWLRQ   
0RUHRYHU  WKHLU DSSOLFDWLRQ FRQWDLQHG WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ 
DSSOLFDWLRQV      

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 51 of 111

      ,Q RU DURXQG -XQH       0U  )ORUHV 'RPLQJXH] DQG 0UV  2OPRV )ORUHV UHFHLYHG D 
QRWLFH LQ WKH PDLO WKDW WKHLU DV\OXP DSSOLFDWLRQ KDG EHHQ UHFHLYHG E\ 86&,6   7KH QRWLFH ZDV LQ 
(QJOLVK  DQG WKH\ GLG QRW XQGHUVWDQG ZKDW LW VDLG  
      ,Q RU DURXQG 6HSWHPEHU       0U  )ORUHV 'RPLQJXH] DQG 0UV  2OPRV )ORUHV VDZ 
DQ DGYHUWLVHPHQW RQ WHOHYLVLRQ²RQ WKH 6SDQLVK ODQJXDJH FKDQQHO 8QLYLVLRQ²WKDW WKHUH ZRXOG EH 
D QHZV VWRU\ ODWHU WKDW QLJKW DERXW WKH ³WHQ \HDU ODZ ´ DQG WKH ZRUG ³IUDXGH´  ³IUDXG´  ZDV ZULWWHQ 
RQ WKH VFUHHQ LQ UHG OHWWHUV   7KH\ ZDLWHG XQWLO WKH VWRU\ DLUHG DW    S P  DQG ZDWFKHG DQ LQWHUYLHZ 
ZLWK D ZRPDQ ZKR KDG EHHQ D YLFWLP RI WKH VFDP   7KH QHZV VWRU\ PHQWLRQHG DQ RUJDQL]DWLRQ LQ 
+DUOHP WKDW ZDV DGYLVLQJ SHRSOH DERXW WKH VFDP  
      0U   )ORUHV  'RPLQJXH]  DQG  0UV   2OPRV  )ORUHV  FRQWDFWHG  WKDW  FRPPXQLW\ 
RUJDQL]DWLRQ DQG DWWHQGHG D ZRUNVKRS RQ WKH ³WHQ \HDU ODZ´ VFDP   $W WKLV ZRUNVKRS  0U  )ORUHV 
'RPLQJXH]  DQG  0UV   2OPRV  )ORUHV  OHDUQHG  WKDW  'HIHQGDQWV  KDG  SURPLVHG  WKHP  ODZIXO  VWDWXV 
WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW  
      $IWHU  GLVFRYHULQJ  WKDW  WKH\  ZHUH  YLFWLPV  RI  WKH  7HQ  <HDU  6FKHPH   0U   )ORUHV 
'RPLQJXH] DQG 0UV  2OPRV )ORUHV ILUHG +HFKW /DZ )LUP DQG KLUHG SUR ERQR FRXQVHO    
      0U  )ORUHV 'RPLQJXH] DQG 0UV  2OPRV )ORUHV KDYH UHSRUWHG 'HIHQGDQWV¶ DFWLRQV 
WR 86&,6 DQG VRXJKW WR ZLWKGUDZ WKH DV\OXP DSSOLFDWLRQ WKDW ZDV VXEPLWWHG RQ WKHLU EHKDOI  
,QMXU\ 6XIIHUHG 
      %DVHG  RQ  'HIHQGDQWV¶  IDOVH  UHSUHVHQWDWLRQV   0U   )ORUHV  'RPLQJXH]  DQG  0UV  
2OPRV )ORUHV DJUHHG WR SD\ D WRWDO RI        WR 'HIHQGDQWV    
      $V RI WRGD\  0U  )ORUHV 'RPLQJXH] DQG 0UV  2OPRV )ORUHV KDYH SDLG 'HIHQGDQWV 
D WRWDO RI        LQ VL[ VHSDUDWH SD\PHQWV E\ FDVK RU PRQH\ RUGHUV   0U  )ORUHV 'RPLQJXH] DQG 
0UV  2OPRV )ORUHV PDGH WKHVH SD\PHQWV WR D VHFUHWDU\ DW +HFKW /DZ )LUP    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 52 of 111

      0U  )ORUHV 'RPLQJXH] DQG 0UV  2OPRV )ORUHV DOVR SDLG +HFKW /DZ )LUP      IRU 
WKH WUDQVODWLRQ RI FHUWDLQ GRFXPHQWV IRU WKHLU FDVH   7KH LQYRLFH SURYLGHG WR 0U  )ORUHV 'RPLQJXH] 
DQG 0UV  2OPRV )ORUHV LV RQ 6\OYLD¶V 7UDQVODWLRQ 6HUYLFH OHWWHUKHDG    
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQWV  0U  )ORUHV 'RPLQJXH] DQG 
0UV  2OPRV )ORUHV ZRXOG QRW KDYH KLUHG RU SDLG 'HIHQGDQWV  
      $V D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  0U  
)ORUHV 'RPLQJXH] DQG 0UV  2OPRV )ORUHV VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW         
0V  5RGULJXH] 
      3ODLQWLII &DWDOLQD 5RGULJXH]  ³0V  5RGULJXH]´  OLYHV ZLWK KHU 8 6  FLWL]HQ KXVEDQG 
DQG 8 6  FLWL]HQ FKLOGUHQ LQ %URQ[  1HZ <RUN   0V  5RGULJXH]¶V QDWLYH ODQJXDJH LV 6SDQLVK   6KH 
VSHDNV  UHDGV  DQG XQGHUVWDQGV YHU\ OLPLWHG (QJOLVK  
      ,Q  RU  DURXQG         0V   5RGULJXH]  PDGH  DQ  DSSRLQWPHQW  DW  +HFKW  /DZ  )LUP  WR 
GHWHUPLQH ZKHWKHU VKH ZDV HOLJLEOH IRU DQ XSFRPLQJ ³SURYLVLRQDO ZDLYHU´ SURJUDP VKH OHDUQHG 
DERXW  RQ  D  WHOHYLVLRQ  QHZV  SURJUDP     0V   5RGULJXH]  EHOLHYHG  WKDW  VKH  PLJKW  TXDOLI\  IRU  D 
SURYLVLRQDO  ZDLYHU  EDVHG  RQ  WKH  IDFW  WKDW  VKH  ZDV  D  EHQHILFLDU\  RI  DQ  DSSURYHG  IDPLO\ EDVHG 
SHWLWLRQ    
      'XULQJ WKLV ILUVW PHHWLQJ DQG LQ DOO VXEVHTXHQW PHHWLQJV  0V  5RGULJXH] WUXWKIXOO\ 
DQVZHUHG DOO TXHVWLRQV DVNHG E\ 'HIHQGDQWV   'HIHQGDQWV GLG QRW DVN IRU WKH LQIRUPDWLRQ QHFHVVDU\ 
WR GHWHUPLQH ZKHWKHU 0V  5RGULJXH] ZDV HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR 
DSSO\ IRU  DV\OXP  
      $W WKH ILUVW PHHWLQJ  'HIHQGDQW 7KRPDV DVNHG ZKHWKHU 0V  5RGULJXH]  KDG  8 6  
FLWL]HQ  FKLOGUHQ     :KHQ  0V   5RGULJXH]  WROG  'HIHQGDQW  7KRPDV  WKDW  VKH  GLG  KDYH  8 6   FLWL]HQ 
FKLOGUHQ  KH IDOVHO\ UHSUHVHQWHG WR KHU WKDW VKH ZDV HOLJLEOH WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\ 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 53 of 111

XQGHU WKH ³WHQ \HDU ODZ ´  'HIHQGDQW 7KRPDV DOVR WROG 0V  5RGULJXH]  ZLWKRXW DQ\ H[SODQDWLRQ  
WKDW KH GLG QRW EHOLHYH D SURYLVLRQDO ZDLYHU DSSOLFDWLRQ ZRXOG EH VXFFHVVIXO LQ KHU FDVH  
      'HIHQGDQWV¶ UHSUHVHQWDWLRQV FDXVHG 0V  5RGULJXH] WR UHDVRQDEO\ EHOLHYH WKDW VKH 
ZDV HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO SHUPDQHQW UHVLGHQF\ WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ 
EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  FLWL]HQ FKLOGUHQ    
      :KHQ 0V  5RGULJXH] ZRXOG VLJQ LQ IRU KHU DSSRLQWPHQWV  VKH QRWHG RQ WKH VLJQ LQ 
VKHHW WKDW WKH SXUSRVH IRU KHU YLVLW ZDV ³SRU ORV GLH] DxRV´  ³IRU WKH WHQ \HDUV´    0V  5RGULJXH] 
REVHUYHG GXULQJ D W\SLFDO DSSRLQWPHQW WKDW D PDMRULW\ RI WKH SHRSOH ZKR KDG VLJQHG LQ EHIRUH KHU 
KDG DOVR ZULWWHQ ³SRU ORV GLH] DxRV´  ³IRU WKH WHQ \HDUV´    
      'XULQJ RQH RI WKHLU PHHWLQJV LQ       'HIHQGDQW /HRQDUG LQVWUXFWHG 0V  5RGULJXH] 
WR VLJQ VHYHUDO GRFXPHQWV  ZKLFK KH VDLG ZHUH QHFHVVDU\ WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\   
'HIHQGDQW /HRQDUG GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV   ,QVWHDG  'HIHQGDQW /HRQDUG VWDWHG 
WKDW +HFKW /DZ )LUP ZRXOG VXEPLW WKH DSSOLFDWLRQ DQG WKHQ VKH ZRXOG UHFHLYH KHU ZRUN SHUPLW   
'HIHQGDQW  /HRQDUG  WROG  0V   5RGULJXH]  WKDW  ODWHU  VKH  ZRXOG  DWWHQG  DQ  LQWHUYLHZ   WKHQ  ZDLW  WR 
UHFHLYH KHU JUHHQ FDUG  
      :KHQ  0V   5RGULJXH]  DVNHG  'HIHQGDQW  /HRQDUG  IRU  PRUH  GHWDLOV  DERXW  WKH  OHJDO 
SURFHVV  'HIHQGDQW /HRQDUG UHIXVHG WR JLYH KHU PRUH LQIRUPDWLRQ DERXW KHU FDVH   +H ZRXOG WHOO 
KHU WKDW HYHU\WKLQJ ZRXOG EH RND\  WKDW VKH ZRXOGQ¶W QHHG WR OHDYH WKH FRXQWU\  DQG QRW WR ZRUU\  
      'HIHQGDQWV  GLG  QRW  DGYLVH  0V   5RGULJXH]  WKDW  WKH\  LQWHQGHG  WR  VXEPLW  DQ 
DSSOLFDWLRQ IRU DV\OXP RQ KHU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  
RU WKH IDFW WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 0V  5RGULJXH] WR EH SXW LQ UHPRYDO SURFHHGLQJV LI 
DQG ZKHQ WKH DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 54 of 111

      :KHQ 0V  5RGULJXH] DVNHG DERXW WKH ULVNV RI WKH SURFHVV  'HIHQGDQWV UHDVVXUHG 
0V   5RGULJXH]  WKDW  EHFDXVH  KHU  FKLOGUHQ  ZHUH  ERUQ  LQ  WKH  8QLWHG  6WDWHV  DQG  ZHUH  PLQRUV   WKH 
SURFHVV ZDV QRW ULVN\   
      'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ RQ EHKDOI RI 0V  5RGULJXH] DQG XVHG 
D PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  
      ,Q IDFW  'HIHQGDQWV VXEPLWWHG WKH DV\OXP DSSOLFDWLRQ ZLWKRXW WHOOLQJ 0V  5RGULJXH] 
RU  UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  KHU     1HYHUWKHOHVV   XSRQ  LQIRUPDWLRQ  DQG  EHOLHI   'HIHQGDQW 
7KRPDV VLJQHG WKH SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ 
WKH DV\OXP DSSOLFDWLRQ DW WKH UHTXHVW RI 0V  5RGULJXH]  DQG WKDW KH UHDG WKH FRPSOHWHG DSSOLFDWLRQ 
WR KHU LQ D ODQJXDJH VKH XQGHUVWRRG IRU YHULILFDWLRQ   8SRQ LQIRUPDWLRQ DQG EHOLHI  WKH DSSOLFDWLRQ 
FRQWDLQHG WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV  
      2Q RU DURXQG 0D\           0V  5RGULJXH] UHFHLYHG D QRWLFH LQ WKH PDLO WKDW KHU 
DV\OXP DSSOLFDWLRQ KDG EHHQ UHFHLYHG E\ 86&,6   0V  5RGULJXH]¶V VRQ WUDQVODWHG WKLV QRWLFH LQWR 
6SDQLVK IRU 0V  5RGULJXH]   7KH QRWLFH DODUPHG KHU EHFDXVH VKH EHOLHYHG WKDW SHRSOH IURP KHU 
KRPH FRXQWU\ ZHUH QRW W\SLFDOO\ JUDQWHG DV\OXP  
      /HVV WKDQ D ZHHN ODWHU  RQ RU DURXQG 0D\           0V  5RGULJXH] UHFHLYHG D QRWLFH 
IURP 86&,6 WKDW DQ DV\OXP LQWHUYLHZ KDG EHHQ VFKHGXOHG IRU KHU  
      0V  5RGULJXH] YLVLWHG +HFKW /DZ )LUP WR H[SUHVV KHU FRQFHUQV DERXW WKH LQWHUYLHZ 
QRWLFH     0V   5RGULJXH]  DVNHG  'HIHQGDQW  /HRQDUG  LI  KH  ZRXOG  DWWHQG  WKH  LQWHUYLHZ  ZLWK  KHU   
'HIHQGDQW /HRQDUG WROG KHU WKDW KH ZRXOG QRW DWWHQG WKH LQWHUYLHZ DQG WKDW VKH VKRXOG EULQJ KHU 
RZQ LQWHUSUHWHU DQG WDON DERXW ³WKH YLROHQFH´ LQ KHU KRPH FRXQWU\   'HIHQGDQW /HRQDUG WROG KHU 
QRW WR ZRUU\ DERXW WKH LQWHUYLHZ DQG WKDW LW ZDV SDUW RI KHU ³WHQ \HDU´ FDVH    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 55 of 111

      2Q  RU  DURXQG  -XQH              0V   5RGULJXH]  DWWHQGHG  DQ  DV\OXP  LQWHUYLHZ  LQ 
/\QGKXUVW  1HZ -HUVH\   6KH DQVZHUHG DOO TXHVWLRQV WUXWKIXOO\   
      0V  5RGULJXH]¶V DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG    
      0V  5RGULJXH] ZDV SODFHG LQWR UHPRYDO SURFHHGLQJV LQ RU DURXQG -XO\        
      2Q  RU  DURXQG  $XJXVW             QHLWKHU  'HIHQGDQWV  7KRPDV  QRU  /HRQDUG 
DFFRPSDQLHG  0V   5RGULJXH]  WR  KHU  LQLWLDO  LPPLJUDWLRQ  FRXUW  GDWH   LQVWHDG   WKH\  VHQW  D 
UHSUHVHQWDWLYH WKDW 0V  5RGULJXH] KDG QHYHU PHW EHIRUH  
      ,Q  RU  DURXQG  )HEUXDU\         0V   5RGULJXH]¶V  UHPRYDO  SURFHHGLQJV  ZHUH 
DGPLQLVWUDWLYHO\ FORVHG   +HU UHPRYDO SURFHHGLQJV FRXOG EH UH FDOHQGDUHG DW DQ\ WLPH    
      'HIHQGDQWV  LQIRUPHG  0V   5RGULJXH]  WKDW  VKH  FRXOG  FRQWLQXH  WR  UHQHZ  KHU  ZRUN 
SHUPLW   0V  5RGULJXH] UHWXUQHG WR +HFKW /DZ )LUP HYHU\ \HDU WR UHQHZ KHU ZRUN SHUPLW   
      ,Q  RU  DURXQG  0D\         0V   5RGULJXH]  ZDWFKHG  D  QHZV  UHSRUW  LQ  6SDQLVK  RQ 
8QLYLVLRQ   &KDQQHO       DERXW  WKH  7HQ  <HDU  6FKHPH  DQG  +HFKW  /DZ  )LUP     $W  WKLV  WLPH   0V  
5RGULJXH]  OHDUQHG  WKDW  'HIHQGDQWV  KDG  SURPLVHG  KHU  ODZIXO  VWDWXV  WKURXJK  DQ  DIILUPDWLYH 
LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW  
      $IWHU GLVFRYHULQJ WKDW VKH ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH  0V  5RGULJXH] 
ILUHG +HFKW  /DZ  )LUP  DQG KDV FRQVXOWHG ZLWK SUR ERQR LPPLJUDWLRQ FRXQVHO LQ UHODWLRQ WR KHU 
LPPLJUDWLRQ FDVH   
,QMXU\ 6XIIHUHG 
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  0V  5RGULJXH] DJUHHG WR SD\ PRQH\ WR 
'HIHQGDQWV   0V  5RGULJXH] LV XQVXUH RI WKH WRWDO DPRXQW   
      $V RI WRGD\  0V  5RGULJXH] HVWLPDWHV WKDW VKH KDV SDLG 'HIHQGDQWV D WRWDO RI DW OHDVW 
         0V  5RGULJXH] PDGH WKHVH SD\PHQWV WR HPSOR\HHV DW +HFKW /DZ )LUP  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 56 of 111

      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQWV  0V  5RGULJXH] ZRXOG QRW 
KDYH KLUHG RU SDLG 'HIHQGDQWV   
      $V D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  0V  
5RGULJXH] VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW         
0U  0XxR] 
      3ODLQWLII 0DULR (QULTXH 0XxR]  ³0U  0XxR]´  KDV ILYH FKLOGUHQ  LQFOXGLQJ WKUHH 
8 6  FLWL]HQ FKLOGUHQ   0U  0XxR] OLYHV LQ 4XHHQV  1HZ <RUN   0U  0XxR]¶V QDWLYH ODQJXDJH LV 
6SDQLVK   +H VSHDNV DQG XQGHUVWDQGV (QJOLVK   
      ,Q RU DURXQG 2FWREHU       DQ DFTXDLQWDQFH RI KLV QRZ H[ ZLIH WROG 0U  0XxR] 
DERXW WKH ³WHQ \HDU ODZ ´  %DVHG RQ WKLV UHFRPPHQGDWLRQ  0U  0XxR] PHW ZLWK 'HIHQGDQW 7KRPDV 
DW +HFKW /DZ )LUP   'XULQJ WKH ILUVW PHHWLQJ  DQG LQ DOO VXEVHTXHQW PHHWLQJV  0U  0XxR] WUXWKIXOO\ 
DQVZHUHG  DOO  TXHVWLRQV  DVNHG  E\  'HIHQGDQW  7KRPDV     'HIHQGDQW  7KRPDV  GLG  QRW  DVN  IRU  WKH 
LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH ZKHWKHU 0U  0XxR] ZDV HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV 
LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP    
      'HIHQGDQW 7KRPDV IDOVHO\ UHSUHVHQWHG WR 0U  0XxR] WKDW KH ZDV HOLJLEOH WR DSSO\ 
IRU ODZIXO SHUPDQHQW UHVLGHQF\ XQGHU WKH ³WHQ \HDU ODZ ´ 
      'HIHQGDQW 7KRPDV¶ UHSUHVHQWDWLRQV FDXVHG 0U  0XxR] WR UHDVRQDEO\ EHOLHYH WKDW 
KH  ZDV  HOLJLEOH  IRU  D  ZRUN  SHUPLW  DQG  ODZIXO  SHUPDQHQW  UHVLGHQF\  WKURXJK  DQ  DIILUPDWLYH 
DSSOLFDWLRQ EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  FLWL]HQ FKLOGUHQ  
      'HIHQGDQW  7KRPDV  WROG 0U  0XxR] WKDW WKH  DSSOLFDWLRQ  ZRXOG  EH  YHU\  HDV\  DQG 
LQVWUXFWHG 0U  0XxR] WR VLJQ VHYHUDO GRFXPHQWV  VRPH RI ZKLFK ZHUH RQO\ SDUWLDOO\ FRPSOHWHG  
ZKLFK 'HIHQGDQW 7KRPDV VDLG ZRXOG EH ILOOHG RXW ODWHU   'HIHQGDQW 7KRPDV VDLG WKHVH IRUPV ZHUH 
QHFHVVDU\  WR  DSSO\  IRU  ODZIXO  SHUPDQHQW  UHVLGHQF\     'HIHQGDQW  7KRPDV  GLG  QRW  H[SODLQ  WKH 
GRFXPHQWV  
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 57 of 111

      :KHQ 0U  0XxR] DVNHG 'HIHQGDQW 7KRPDV TXHVWLRQV DERXW WKH OHJDO SURFHVV RU 
WKH GRFXPHQWV KH ZDV VLJQLQJ  'HIHQGDQW 7KRPDV UHIXVHG WR DQVZHU WKH TXHVWLRQV DQG WROG 0U  
0XxR] QRW WR ZRUU\  
      'HIHQGDQW  7KRPDV  WROG  0U   0XxR]  WKDW  KH  ZRXOG  UHFHLYH  KLV  ZRUN  SHUPLW  DQG 
VRFLDO VHFXULW\  QXPEHU  ZLWKLQ WKUHH WR VL[  PRQWKV  DQG KH ZRXOG  UHFHLYH KLV YLVD  JUDQWLQJ  KLP 
ODZIXO SHUPDQHQW UHVLGHQF\ LQ DERXW WKUHH \HDUV  
      'HIHQGDQWV GLG QRW DGYLVH 0U  0XxR] WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ 
IRU DV\OXP RQ KLV EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW 
WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 0U  0XxR] WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH 
DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG  
      2Q RU DURXQG 2FWREHU           'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ RQ 
EHKDOI RI 0U  0XxR] DQG KLV QRZ H[ ZLIH DQG XVHG D PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV WR 
WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  
      ,Q IDFW  'HIHQGDQWV VXEPLWWHG WKH DV\OXP DSSOLFDWLRQ ZLWKRXW WHOOLQJ 0U  0XxR]  RU 
UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  KLP     1HYHUWKHOHVV   'HIHQGDQW  7KRPDV  VLJQHG  WKH  SUHSDUHU 
DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ DW WKH 
UHTXHVW RI 0U  0XxR] DQG WKDW KH UHDG WKH FRPSOHWHG DSSOLFDWLRQ WR 0U  0XxR] LQ D ODQJXDJH KH 
XQGHUVWRRG IRU YHULILFDWLRQ   7KH DSSOLFDWLRQ FRQWDLQHG WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV 
WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV  
      ,Q RU DURXQG -DQXDU\       0U  0XxR] UHFHLYHG D QRWLFH LQ WKH PDLO WKDW KLV DV\OXP 
DSSOLFDWLRQ KDG EHHQ UHFHLYHG E\ 86&,6   0U  0XxR] ZDV FRQIXVHG E\ WKLV QRWLFH EHFDXVH KH GLG 
QRW LQWHQG WR DSSO\ IRU DV\OXP  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 58 of 111

      ,Q RU DURXQG 6HSWHPEHU       0U  0XxR] FRQWDFWHG DQRWKHU LPPLJUDWLRQ DWWRUQH\ 
IRU D VHFRQG RSLQLRQ DERXW WKH DV\OXP QRWLFH KH KDG UHFHLYHG   ,Q WKDW PHHWLQJ  0U  0XxR] OHDUQHG 
WKDW 'HIHQGDQWV KDG SURPLVHG KLP ODZIXO VWDWXV WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ 
WKDW GLG QRW H[LVW  
      $IWHU GLVFRYHULQJ WKDW KH ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH  0U  0XxR] ILUHG 
+HFKW /DZ )LUP DQG UHWDLQHG QHZ FRXQVHO   
,QMXU\ 6XIIHUHG 
      %DVHG  RQ  'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  0U   0XxR] DJUHHG WR SD\ D WRWDO  RI  
        WR 'HIHQGDQWV IRU KLP DQG KLV QRZ H[ ZLIH  
      $V RI WRGD\  0U  0XxR] KDV SDLG 'HIHQGDQWV      LQ FDVK SD\PHQWV   0U  0XxR] 
PDGH WKHVH SD\PHQWV WR DQ HPSOR\HH DW +HFKW /DZ )LUP   
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQW 7KRPDV  0U  0XxR] ZRXOG 
QRW KDYH KLUHG RU SDLG 'HIHQGDQWV   
      )XUWKHUPRUH  0U  0XxR] ZDV UHTXLUHG WR SD\ IRU OHJDO UHSUHVHQWDWLRQ  ZKLFK WKXV 
IDU KDV FRVW KLP DW OHDVW        IRU OHJDO VHUYLFHV IRU 0U  0XxR] DQG KLV QRZ H[ ZLIH     
      7KXV  DV D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  
0U  0XxR] VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW           
0U  5DPRV 
      3ODLQWLII $OLFLR 5DPRV  ³0U  5DPRV´  LV PDUULHG DQG OLYHV ZLWK KLV ZLIH DQG KLV 
WZR 8 6  FLWL]HQ FKLOGUHQ LQ 6WDWHQ ,VODQG  1HZ <RUN   0U  5DPRV¶ QDWLYH ODQJXDJH LV 6SDQLVK   +H 
VSHDNV  UHDGV  DQG XQGHUVWDQGV YHU\ OLPLWHG (QJOLVK  
      ,Q -XQH       0U  5DPRV PHW ZLWK 0U  /XLV *XHUUHUR IRU DVVLVWDQFH ZLWK SUHSDULQJ 
DQG ILOLQJ KLV WD[HV   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 59 of 111

      0U  /XLV *XHUUHUR WROG 0U  5DPRV WKDW KH PLJKW EH DEOH WR ³JHW KLV SDSHUV´ EDVHG 
RQ WKH QXPEHU RI \HDUV KH KDG EHHQ OLYLQJ LQ WKH 8QLWHG 6WDWHV   
      0U   /XLV  *XHUUHUR  UHIHUUHG  0U   5DPRV  WR  +HFKW  /DZ  )LUP  WR  DSSO\  IRU  ODZIXO 
SHUPDQHQW UHVLGHQW VWDWXV EDVHG RQ WKH QXPEHU RI \HDUV KH KDG EHHQ OLYLQJ LQ WKH 8QLWHG 6WDWHV   
      ,Q -XQH       0U  5DPRV PHW ZLWK 'HIHQGDQW /HRQDUG DW +HFKW /DZ )LUP  'XULQJ 
WKH  ILUVW  PHHWLQJ   DQG LQ DOO VXEVHTXHQW PHHWLQJV   0U  5DPRV WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV 
DVNHG E\ 'HIHQGDQW /HRQDUG   'HIHQGDQW /HRQDUG GLG QRW DVN KLP IRU WKH LQIRUPDWLRQ QHFHVVDU\ 
WR GHWHUPLQH ZKHWKHU KH ZDV HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\  IRU  
DV\OXP   
      'HIHQGDQW /HRQDUG IDOVHO\ UHSUHVHQWHG WR 0U  5DPRV WKDW KH ZDV HOLJLEOH IRU D YLVD 
XQGHU WKH ³WHQ \HDU ODZ ´ 
      'HIHQGDQW /HRQDUG¶V UHSUHVHQWDWLRQV FDXVHG 0U  5DPRV WR UHDVRQDEO\ EHOLHYH WKDW 
KH  ZDV  HOLJLEOH  IRU  D  ZRUN  SHUPLW  DQG  ODZIXO  SHUPDQHQW  UHVLGHQF\  WKURXJK  DQ  DIILUPDWLYH 
DSSOLFDWLRQ EDVHG RQ WKH HOLJLELOLW\ FULWHULRQ RI OHQJWK RI UHVLGHQF\  
      'HIHQGDQW /HRQDUG LQVWUXFWHG 0U  5DPRV WR VLJQ VHYHUDO GRFXPHQWV  ZKLFK KH VDLG 
ZHUH QHFHVVDU\ WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\   'HIHQGDQW /HRQDUG GLG QRW H[SODLQ RU 
WUDQVODWH WKH GRFXPHQWV   
      'HIHQGDQWV GLG QRW DGYLVH 0U  5DPRV WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ 
IRU DV\OXP RQ KLV EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW 
WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 0U  5DPRV WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH 
DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 60 of 111

      ,Q RU DURXQG 6HSWHPEHU       'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ IRU 0U  
5DPRV  DQG  KLV  ZLIH   DQG  XVHG  D  PDLO FDUULHU WR  VHQG LW DFURVV VWDWH OLQHV WR  WKH 86&,6 6HUYLFH 
&HQWHU LQ 9HUPRQW  
      ,Q IDFW  'HIHQGDQWV VXEPLWWHG WKH DV\OXP DSSOLFDWLRQ ZLWKRXW WHOOLQJ 0U  5DPRV  RU 
UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  KLP     1HYHUWKHOHVV   'HIHQGDQW  7KRPDV  VLJQHG  WKH  SUHSDUHU 
DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ DW WKH 
UHTXHVW  RI  0U   5DPRV  DQG  WKDW  KH  UHDG  WKH  FRPSOHWHG  DSSOLFDWLRQ  WR  KLP  LQ  D  ODQJXDJH  KH 
XQGHUVWRRG IRU YHULILFDWLRQ   7KH DV\OXP DSSOLFDWLRQ ZDV VLJQHG E\ 'HIHQGDQW 7KRPDV  DOWKRXJK 
0U  5DPRV RQO\ PHW ZLWK  'HIHQGDQW  /HRQDUG    7KH DSSOLFDWLRQ FRQWDLQHG WKH VDPH ERLOHUSODWH 
EDVHV IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV   
      $URXQG 1RYHPEHU       0U  5DPRV VDZ D QHZV SURJUDP RQ WHOHYLVLRQ UHSRUWLQJ 
WKDW WKH ³WHQ \HDU ODZ´ GLG QRW H[LVW DQG WKDW PDQ\ LPPLJUDQWV ZHUH EHLQJ GHIUDXGHG E\ DWWRUQH\V 
WKDW ZHUH WHOOLQJ WKHP WKDW WKH\ ZHUH HOLJLEOH IRU WKH ³WHQ \HDU YLVD ´  0U  5DPRV FDOOHG WKH ³   ´ 
KRWOLQH  DQG  OHDUQHG  WKDW  'HIHQGDQWV  KDG  SURPLVHG  KLP  ODZIXO  VWDWXV  WKURXJK  DQ  DIILUPDWLYH 
LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW  
      $IWHU GLVFRYHULQJ WKDW KH ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH  0U  5DPRV ILUHG 
+HFKW /DZ )LUP DQG UHWDLQHG QHZ FRXQVHO  
,QMXU\ 6XIIHUHG 
      %DVHG  RQ  'HIHQGDQWV¶  IDOVH  UHSUHVHQWDWLRQV   0U   5DPRV  DJUHHG  WR  SD\  D  WRWDO  RI 
       WR 'HIHQGDQWV IRU KLP DQG KLV ZLIH   
      $V RI WRGD\  0U  5DPRV KDV SDLG DW OHDVW         LQ PXOWLSOH FDVK SD\PHQWV   0U  
5DPRV PDGH WKHVH SD\PHQWV WR DQ HPSOR\HH DW +HFKW /DZ )LUP  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 61 of 111

      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQW /HRQDUG  0U  5DPRV ZRXOG 
QRW KDYH KLUHG RU SDLG 'HIHQGDQWV   
      $V D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  0U  
5DPRV VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW         
0U  6DELQR *XHUUHUR   0V  +HUQDQGH] 
      3ODLQWLIIV 6DELQR *XHUUHUR 9LFWRULR  ³0U  6DELQR *XHUUHUR´  DQG /LGLD +HUQDQGH] 
+HUQDQGH]  ³0V  +HUQDQGH]´  DUH PDUULHG DQG OLYH ZLWK WKHLU 8 6  FLWL]HQ FKLOG LQ 1HZ 5RFKHOOH  
1HZ <RUN   0U  6DELQR *XHUUHUR¶V DQG 0V  +HUQDQGH]¶V QDWLYH ODQJXDJH LV 6SDQLVK   7KH\ VSHDN  
UHDG  DQG XQGHUVWDQG OLPLWHG (QJOLVK  
      ,Q  RU  DURXQG  'HFHPEHU         DW  WKH  UHFRPPHQGDWLRQ  RI  D  IDPLO\  PHPEHU   0U  
6DELQR *XHUUHUR DQG 0V  +HUQDQGH] PHW ZLWK 'HIHQGDQW /HRQDUG DW +HFKW /DZ )LUP   'XULQJ WKH 
ILUVW PHHWLQJ  DQG LQ DOO VXEVHTXHQW PHHWLQJV  0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] WUXWKIXOO\ 
DQVZHUHG  DOO  TXHVWLRQV  DVNHG  E\  'HIHQGDQW  /HRQDUG     'HIHQGDQW  /HRQDUG  GLG  QRW  DVN  IRU  WKH 
LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH ZKHWKHU 0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] ZHUH HOLJLEOH 
IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP   
      'HIHQGDQW /HRQDUG IDOVHO\ UHSUHVHQWHG WR 0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] 
WKDW RQFH WKH\ ERWK KDG OLYHG LQ WKH 8QLWHG 6WDWHV IRU WHQ \HDUV WKH\ ZRXOG EH HOLJLEOH WR DSSO\ IRU 
ODZIXO SHUPDQHQW UHVLGHQF\ ³SRU ORV GLH] DxRV´  ³IRU WKH WHQ \HDUV´   DQG ³SRU HO WLHPSR´  ³IRU WKH 
WLPH´     
      ,Q RU DURXQG 0DUFK       RQFH WKH\ KDG OLYHG LQ WKH 8QLWHG 6WDWHV IRU WHQ \HDUV  
0U   6DELQR  *XHUUHUR  DQG  0V   +HUQDQGH] UHWXUQHG WR  +HFKW  /DZ  )LUP WR PHHW ZLWK  'HIHQGDQW 
/HRQDUG   ZKR  WROG  WKHP  WKDW  WKH\  ZRXOG  QRZ  VWDUW  WKH  SURFHVV  WR  DSSO\  IRU  ODZIXO  SHUPDQHQW 
UHVLGHQF\  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 62 of 111

      'HIHQGDQW  /HRQDUG¶V  UHSUHVHQWDWLRQV  FDXVHG  0U   6DELQR  *XHUUHUR  DQG  0V  
+HUQDQGH] WR UHDVRQDEO\ EHOLHYH WKDW WKH\ ZHUH HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO SHUPDQHQW 
UHVLGHQF\ WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ 
DQG D 8 6  FLWL]HQ FKLOG  
      $W 0U  6DELQR  *XHUUHUR¶V DQG 0V  +HUQDQGH]¶V  VXEVHTXHQW YLVLWV  WR +HFKW  /DZ 
)LUP  WKH\ ZRXOG VLJQ LQ RQ D VLJQ LQ VKHHW WKDW KDG D FROXPQ IRU W\SH RI FDVH  ZKHUH WKH\ ZRXOG 
ZULWH ³WLHPSR´  ³WLPH´   
      'XULQJ RQH RI WKHLU PHHWLQJV  'HIHQGDQW /HRQDUG LQVWUXFWHG 0U  6DELQR *XHUUHUR 
DQG 0V  +HUQDQGH] WR VLJQ VHYHUDO GRFXPHQWV  ZKLFK KH VDLG ZHUH QHFHVVDU\ WR DSSO\ IRU ODZIXO 
SHUPDQHQW UHVLGHQF\   'HIHQGDQW /HRQDUG GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV  
      :KHQ  0U   6DELQR  *XHUUHUR  DQG  0V   +HUQDQGH]  DVNHG  TXHVWLRQV  DERXW  WKH  OHJDO 
SURFHVV RU WKH GRFXPHQWV WKH\ ZHUH VLJQLQJ  'HIHQGDQW /HRQDUG UHIXVHG WR DQVZHU WKHLU TXHVWLRQV 
DQG WROG 0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] WKDW HYHU\WKLQJ ZDV ILQH  
      'HIHQGDQWV GLG QRW DGYLVH 0U  6DELQR *XHUUHUR RU 0V  +HUQDQGH] WKDW 'HIHQGDQWV 
LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ IRU DV\OXP RQ WKHLU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO 
UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 0U  6DELQR *XHUUHUR DQG 
0V  +HUQDQGH] WR EH SXW LQ UHPRYDO SURFHHGLQJV  LI DQG ZKHQ WKHLU DV\OXP DSSOLFDWLRQ ZDV QRW 
DSSURYHG   
      2Q  RU  DURXQG  $XJXVW              'HIHQGDQWV  VXEPLWWHG  DQ  DV\OXP  DSSOLFDWLRQ  RQ 
EHKDOI RI 0U  6DELQR *XHUUHUR  ZLWK 0V  +HUQDQGH] DV D GHULYDWLYH RQ WKH DSSOLFDWLRQ  DQG XVHG D 
PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  
      ,Q  IDFW   'HIHQGDQWV VXEPLWWHG  WKH  DV\OXP  DSSOLFDWLRQ ZLWKRXW  WHOOLQJ 0U  6DELQR 
*XHUUHUR  RU  0V   +HUQDQGH]   RU  UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  WKHP     1HYHUWKHOHVV   'HIHQGDQW 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 63 of 111

7KRPDV VLJQHG WKH SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ 
WKH DV\OXP DSSOLFDWLRQ DW WKH UHTXHVW RI 0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH]  DQG WKDW KH UHDG 
WKH FRPSOHWHG DSSOLFDWLRQ WR WKHP LQ D ODQJXDJH WKH\ XQGHUVWRRG IRU YHULILFDWLRQ   7KH DSSOLFDWLRQ 
FRQWDLQHG WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV   
      ,Q RU DURXQG $SULO       0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] UHFHLYHG D OHWWHU 
IURP +HFKW /DZ )LUP  VWDWLQJ WKDW WKH\ ZHUH ³VFKHGXOHG IRU DQ LQWHUYLHZ LQ FRQQHFWLRQ ZLWK >WKHLU@ 
DSSOLFDWLRQ ´    $Q  LQWHUYLHZ  QRWLFH  ZDV  DWWDFKHG  WR  WKH  OHWWHU     0U   6DELQR  *XHUUHUR  DQG  0V  
+HUQDQGH] PHW ZLWK 'HIHQGDQW 7KRPDV EHIRUH WKH LQWHUYLHZ   'HIHQGDQW 7KRPDV GLG QRW DGYLVH 
0U  6DELQR *XHUUHUR RU 0V  +HUQDQGH] WKDW WKH LQWHUYLHZ ZDV UHODWHG WR DQ DV\OXP DSSOLFDWLRQ 
ILOHG RQ WKHLU EHKDOI  
      2Q RU DURXQG 0D\          0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] DWWHQGHG WKHLU 
VFKHGXOHG  DV\OXP  LQWHUYLHZ     )ROORZLQJ  WKH  LQWHUYLHZ   0V   +HUQDQGH]  QRWLFHG  WKDW  WKH  ZRUG 
³DV\OXP´  ZDV  ZULWWHQ  RQ  WKH  LQWHUYLHZ  QRWLFH     0U   6DELQR  *XHUUHUR  DQG  0V   +HUQDQGH]  ZHUH 
FRQIXVHG EHFDXVH WKH\ KDG QRW LQWHQGHG WR DSSO\ IRU DV\OXP   
      0V  +HUQDQGH] DVNHG 'HIHQGDQW 7KRPDV ZK\ WKH QRWLFH VDLG ³DV\OXP ´  'HIHQGDQW 
7KRPDV WROG 0V  +HUQDQGH] WKDW HYHQ WKRXJK WKH QRWLFH VDLG ³DV\OXP ´ WKH FDVH ZDV QRW DFWXDOO\ 
IRU DV\OXP   +H UHSHDWHG WKDW WKH\ ZHUH DSSO\LQJ IRU ODZIXO SHUPDQHQW UHVLGHQW VWDWXV EDVHG RQ 
WLPH  WKHLU FKLOG  DQG WKH IDFW WKDW 0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] ZHUH JRRG SHRSOH  
      $IWHU  GLVFRYHULQJ  WKDW  DQ  DSSOLFDWLRQ  IRU  DV\OXP  KDG  EHHQ  ILOHG  RQ  KHU  DQG  KHU 
KXVEDQG¶V  EHKDOI   0V   +HUQDQGH]  UHTXHVWHG  D  FRS\  RI  WKHLU  ILOH  IURP  'HIHQGDQW  /HRQDUG   
'HIHQGDQW /HRQDUG UHIXVHG WR SURYLGH KHU ZLWK D FRS\ DQG DVNHG KHU ZK\ VKH QHHGHG D FRS\ RI 
WKH ILOH   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 64 of 111

      2Q  RU  DURXQG  0D\              0U   6DELQR  *XHUUHUR  DQG  0V   +HUQDQGH]  UHFHLYHG 
FKDUJLQJ GRFXPHQWV GLUHFWLQJ WKHP WR DSSHDU LQ LPPLJUDWLRQ FRXUW   2Q RU DURXQG -XQH          
0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] UHFHLYHG D KHDULQJ QRWLFH GLUHFWLQJ WKHP WR DSSHDU LQ 
LPPLJUDWLRQ FRXUW LQ -XO\       
      2Q RU DURXQG -XO\           0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] DWWHQGHG D 
PDVWHU  FDOHQGDU  KHDULQJ  DW  WKH  1HZ  <RUN  ,PPLJUDWLRQ  &RXUW     1HLWKHU  'HIHQGDQW  7KRPDV  QRU 
'HIHQGDQW /HRQDUG DFFRPSDQLHG 0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] WR LPPLJUDWLRQ FRXUW  
LQVWHDG  WKH\  VHQW  D  UHSUHVHQWDWLYH  WKDW 0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH]  KDG QHYHU PHW 
EHIRUH   7KLV UHSUHVHQWDWLYH ZDV XQDEOH RU XQZLOOLQJ WR FRPPXQLFDWH ZLWK 0U  6DELQR *XHUUHUR 
DQG 0V  +HUQDQGH] LQ 6SDQLVK  
      0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH]¶V FDVH ZDV DGPLQLVWUDWLYHO\ FORVHG EHIRUH 
WKH  ,PPLJUDWLRQ  &RXUW  LQ  RU  DURXQG  1RYHPEHU           7KHLU  UHPRYDO  SURFHHGLQJV  FRXOG  EH  UH 
FDOHQGDUHG DW DQ\ WLPH  
      ,Q RU DURXQG 0D\       0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] ZDWFKHG QHZV 
FRYHUDJH DERXW WKH ODZVXLW ILOHG DJDLQVW +HFKW /DZ )LUP LQ UHODWLRQ WR WKH 7HQ <HDU 6FKHPH   $W 
WKLV SRLQW  0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] OHDUQHG WKDW 'HIHQGDQWV KDG SURPLVHG WKHP 
ODZIXO  VWDWXV  WKURXJK  DQ  DIILUPDWLYH  LPPLJUDWLRQ  DSSOLFDWLRQ  WKDW  GLG  QRW  H[LVW     0U   6DELQR 
*XHUUHUR DQG 0V  +HUQDQGH] FRQWDFWHG 051< WR LQTXLUH DERXW SDUWLFLSDWLQJ LQ WKH OLWLJDWLRQ DIWHU 
VHHLQJ WKH SUHVV FRYHUDJH DQG PDNLQJ WKLV GLVFRYHU\   
      $IWHU  GLVFRYHULQJ  WKDW  WKH\  ZHUH  YLFWLPV  RI  WKH  7HQ  <HDU  6FKHPH   0U   6DELQR 
*XHUUHUR DQG 0V  +HUQDQGH] ILUHG +HFKW /DZ )LUP DQG XOWLPDWHO\ UHWDLQHG SUR ERQR FRXQVHO DIWHU 
SD\LQJ IRU LPPLJUDWLRQ FRQVXOWDWLRQV DQG D )2,$ UHTXHVW LQ WKHLU HIIRUWV WR XQGHUVWDQG ZKHUH WKHLU 
FDVH VWRRG DQG WKHLU RSWLRQV IRU QH[W VWHSV  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 65 of 111

,QMXU\ 6XIIHUHG 
      %DVHG  RQ  'HIHQGDQWV¶  IDOVH  UHSUHVHQWDWLRQV   0U   6DELQR  *XHUUHUR  DQG  0V  
+HUQDQGH] DJUHHG WR SD\ D WRWDO RI        WR 'HIHQGDQWV   
      $V  RI  WRGD\   0U   6DELQR  *XHUUHUR  DQG  0V   +HUQDQGH]  KDYH  SDLG  'HIHQGDQWV 
DSSUR[LPDWHO\        LQ PXOWLSOH SD\PHQWV   0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] PDGH HDFK 
RI WKHVH SD\PHQWV WR 'HIHQGDQW /HRQDUG  'HIHQGDQW 7KRPDV  RU VWDII DW +HFKW /DZ )LUP    
      0U   6DELQR  *XHUUHUR  EHOLHYHV  WKDW  KH  DOVR  SDLG  D  ELOO  IRU       IURP  6\OYLD¶V 
7UDQVODWLRQ 6HUYLFH IRU WUDQVODWLRQV  
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQWV /HRQDUG DQG 7KRPDV  0U  
6DELQR *XHUUHUR DQG 0V  +HUQDQGH] ZRXOG QRW KDYH KLUHG RU SDLG 'HIHQGDQWV  
      )XUWKHUPRUH  0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] SDLG      IRU LPPLJUDWLRQ 
FRQVXOWDWLRQV DQG D )2,$ UHTXHVW LQ WKHLU HIIRUWV WR XQGHUVWDQG ZKHUH WKHLU FDVH VWRRG DQG WKHLU 
RSWLRQV IRU QH[W VWHSV    
      7KXV  DV D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  
0U  6DELQR *XHUUHUR DQG 0V  +HUQDQGH] VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW          
0U  *HUDUGR 9DUJDV 'LD]   0V  *ORULD 9DOOH 9HURQLFD 
      3ODLQWLIIV *HUDUGR 9DUJDV 'LD]  ³0U  9DUJDV´  DQG *ORULD 9DOOH 9HURQLFD  ³0V  
9DOOH´  DUH PDUULHG DQG OLYH ZLWK WZR RI WKHLU 8 6  FLWL]HQ FKLOGUHQ LQ %URRNO\Q  1HZ <RUN   0U  
9DUJDV¶ DQG 0V  9DOOH¶V QDWLYH ODQJXDJH LV 6SDQLVK   7KH\ VSHDN  UHDG  DQG XQGHUVWDQG OLPLWHG 
(QJOLVK   
      ,Q RU DURXQG $XJXVW        DW  WKH  UHFRPPHQGDWLRQ  RI  D  IULHQG  RI 0V  9DOOH   0U  
9DUJDV DQG 0V  9DOOH PHW ZLWK 'HIHQGDQW /HRQDUG DW +HFKW /DZ )LUP   'XULQJ WKH ILUVW PHHWLQJ  
DQG LQ DOO VXEVHTXHQW PHHWLQJV  0U  9DUJDV DQG 0V  9DOOH WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG 
E\ 'HIHQGDQW /HRQDUG   'HIHQGDQW /HRQDUG GLG QRW DVN IRU WKH LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH 
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 66 of 111

ZKHWKHU 0U  9DUJDV DQG 0V  9DOOH ZHUH HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR 
DSSO\ IRU  DV\OXP   
      'HIHQGDQW /HRQDUG IDOVHO\ UHSUHVHQWHG WR 0U  9DUJDV DQG 0V  9DOOH WKDW WKH\ FRXOG 
IL[  WKHLU  VWDWXV  WKURXJK  0V   9DUJDV¶  WZHQW\ VHYHQ \HDU ROG  GDXJKWHU  DQG  WKDW  WKH\  ZHUH  DOVR 
HOLJLEOH WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\ XQGHU WKH ³WHQ \HDU ODZ ´ 
      'HIHQGDQWV¶ UHSUHVHQWDWLRQV FDXVHG 0U  9DUJDV DQG 0V  9DOOH WR UHDVRQDEO\ EHOLHYH 
WKDW  0U   9DUJDV  ZDV  HOLJLEOH  IRU  D  ZRUN  SHUPLW  DQG  ODZIXO  SHUPDQHQW  UHVLGHQF\  WKURXJK  DQ 
DIILUPDWLYH DSSOLFDWLRQ EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ LQ WKH 8QLWHG 6WDWHV 
DQG 8 6  FLWL]HQ FKLOGUHQ   7KH\ DOVR EHOLHYHG WKDW WKH\ ZHUH ERWK HOLJLEOH IRU WKHVH EHQHILWV WKURXJK 
0V  9DOOH¶V DGXOW 8 6  FLWL]HQ GDXJKWHU  
      'HIHQGDQW 7KRPDV LQVWUXFWHG 0U  9DUJDV DQG 0V  9DOOH WR VLJQ VHYHUDO GRFXPHQWV  
ZKLFK KH VDLG ZHUH WKH ³SHWLWLRQ´ WKDW ZDV SDUW RI WKH ³SURFHVV´ IRU WKH ODZIXO SHUPDQHQW UHVLGHQF\   
'HIHQGDQW 7KRPDV GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV  
      :KHQ 0U  9DUJDV RU 0V  9DOOH WULHG WR DVN TXHVWLRQV DERXW WKH OHJDO SURFHVV RU WKH 
GRFXPHQWV WKH\ ZHUH VLJQLQJ  'HIHQGDQWV UHIXVHG WR DQVZHU WKHLU TXHVWLRQV   'HIHQGDQW 7KRPDV 
LQIRUPHG 0V  9DOOH WKDW VKH VKRXOG MXVW ZDLW   
      'HIHQGDQWV GLG QRW DGYLVH 0U  9DUJDV DQG 0V  9DOOH WKDW 'HIHQGDQWV LQWHQGHG WR 
VXEPLW DQ DSSOLFDWLRQ IRU DV\OXP RQ WKHLU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV 
IRU DV\OXP  RU WKH IDFW WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 0U  9DUJDV DQG 0V  9DOOH WR EH SXW LQ 
UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG  
      2Q RU DURXQG 1RYHPEHU           'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ RQ 
EHKDOI RI 0U  9DUJDV  ZLWK 0V  9DOOH DV D GHULYDWLYH RQ WKH DSSOLFDWLRQ  DQG XVHG D PDLO FDUULHU WR 
VHQG LW DFURVV VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 67 of 111

      ,Q  IDFW   'HIHQGDQWV  VXEPLWWHG WKH DV\OXP DSSOLFDWLRQ ZLWKRXW WHOOLQJ 0U  9DUJDV 
DQG 0V  9DOOH  RU UHYLHZLQJ WKH DSSOLFDWLRQ ZLWK WKHP   1HYHUWKHOHVV  'HIHQGDQW 7KRPDV VLJQHG 
WKH  SUHSDUHU  DWWHVWDWLRQ  LQ  WKH  )RUP  ,       IDOVHO\  UHSUHVHQWLQJ  WKDW  KH  ZDV  ILOLQJ  WKH  DV\OXP 
DSSOLFDWLRQ DW WKH UHTXHVW RI 0U  9DUJDV DQG 0V  9DOOH  DQG WKDW KH UHDG WKH FRPSOHWHG DSSOLFDWLRQ 
WR  WKHP  LQ  D  ODQJXDJH  WKH\  XQGHUVWRRG  IRU  YHULILFDWLRQ     7KH  DSSOLFDWLRQ  FRQWDLQHG  WKH  VDPH 
ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV  
      ,Q  RU  DURXQG  'HFHPEHU         0U   9DUJDV  DQG  0V   9DOOH  UHFHLYHG  D  OHWWHU  IURP 
+HFKW /DZ )LUP VWDWLQJ WKDW 0U  9DUJDV ZRXOG EH XQDEOH WR IL[ KLV VWDWXV WKURXJK 0V  9DOOH¶V 
DGXOW GDXJKWHU   7KH OHWWHU VWDWHG WKDW ³>Z@KDWHYHU SD\PHQW \RX KDYH PDGH LQ WKLV PDWWHU ZLOO EH 
DSSOLHG WRZDUG WKH RWKHU FDVH ZH KDYH IRU \RX  UHJDUGLQJ WKH WLPH \RX KDYH UHVLGHG LQ WKH 8QLWHG 
6WDWHV ´  $W D VXEVHTXHQW PHHWLQJ  'HIHQGDQW 7KRPDV VWDWHG WKDW 0U  9DUJDV FRXOG VWLOO JDLQ KLV 
UHVLGHQF\  ³SRU  WLHPSR´   ³IRU  WLPH´   DQG  ³SRU  WX  KLMD´   ³E\  \RXU  GDXJKWHU´    UHIHUULQJ  WR  WKH 
FRXSOH¶V PLQRU GDXJKWHU   %HFDXVH WKLV OHWWHU ZDV VSHFLILF WR KHU KXVEDQG  0U  9DUJDV  0V  9DOOH 
EHOLHYHG WKDW KHU RZQ SHWLWLRQ WKURXJK KHU DGXOW GDXJKWHU ZDV VWLOO SHQGLQJ  DQG GLG QRW NQRZ XQWLO 
UHFHQWO\ WKDW WKH +HFKWV LQWHQGHG WR  DQG GLG  LQFOXGH KHU LQ KHU KXVEDQG¶V DSSOLFDWLRQ WKDW  DV LW 
WXUQHG RXW  UHTXHVWHG DV\OXP  
      ,Q RU DURXQG       D PHPEHU RI 0V  9DOOH¶V FKXUFK DVNHG 0V  9DOOH LI VKH NQHZ 
WKDW KHU DWWRUQH\ KDG DSSOLHG IRU DV\OXP RQ KHU EHKDOI DQG LQIRUPHG KHU WKDW VKH VKRXOG H[DPLQH 
WKH UHFHLSW QRWLFH   0V  9DOOH ZDV FRQIXVHG  EHFDXVH VKH DQG KHU KXVEDQG KDG QHYHU LQWHQGHG WR 
DSSO\ IRU DV\OXP  
      2Q  RU  DURXQG  -XQH              0V   9DOOH  ZHQW  WR  +HFKW  /DZ  )LUP  WR  VSHDN  ZLWK 
'HIHQGDQW /HRQDUG  DFFRPSDQLHG E\ KHU HPSOR\HU  ZKR VSHDNV DQG XQGHUVWDQGV IOXHQW (QJOLVK   
'HIHQGDQW /HRQDUG VWDWHG WKDW HYHU\WKLQJ ZDV ILQH DQG WKDW WKH DV\OXP DSSOLFDWLRQ ZDV SDUW RI WKH 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 68 of 111

SURFHVV   'HIHQGDQW /HRQDUG LQVWUXFWHG 0V  9DOOH QRW WR ZRUU\  EHFDXVH ³ORV GLH] DxRV HUD XQD 
OH\´  ³WKH WHQ \HDUV ZDV D ODZ´    'HIHQGDQW /HRQDUG LQIRUPHG 0V  9DOOH WKDW VKH ZRXOG UHFHLYH D 
QRWLFH WR DSSHDU LQ FRXUW   0V  9DOOH ZDV FRQIXVHG  EHFDXVH VKH KDG QRW NQRZQ VKH RU KHU KXVEDQG 
ZRXOG KDYH WR DSSHDU LQ FRXUW   
      ,Q       0V  9DOOH VDZ WHOHYLVLRQ FRYHUDJH RI WKH FXUUHQW DFWLRQ DJDLQVW 'HIHQGDQWV 
RQ 8QLYLVLRQ &KDQQHO     DQG OHDUQHG WKDW 'HIHQGDQWV KDG SURPLVHG 0V  9DOOH DQG KHU KXVEDQG 
ODZIXO VWDWXV WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW    
      2Q RU DURXQG 0D\           0V  9DOOH DQG KHU HPSOR\HU UHWXUQHG WR PHHW ZLWK 
'HIHQGDQW /HRQDUG   $W WKDW PHHWLQJ  'HIHQGDQW /HRQDUG H[SOLFLWO\ DGPLWWHG WKDW KH KDG ILOHG DQ 
DV\OXP  DSSOLFDWLRQ  RQ  0V   9DOOH¶V  EHKDOI   DQG  VWDWHG  WKDW KH GLG VR  EHFDXVH WKDW  ZDV  KRZ 0V  
9DOOH¶V FDVH ZRXOG EH VWDUWHG   +H UHLWHUDWHG WKDW D ³WHQ \HDU ODZ´ H[LVWHG DQG ZDV WKH EDVLV IRU 
0V   9DOOH¶V  FDVH     0V   9DOOH¶V  HPSOR\HU  UHTXHVWHG  D  FRS\  RI  0V   9DOOH¶V  ILOH   EXW  'HIHQGDQW 
/HRQDUG UHIXVHG WR SURYLGH LW   +H LQIRUPHG ERWK RI WKHP WKDW 0V  9DOOH FRXOG SD\      IRU D FRS\ 
RI KHU ILOH  EXW WKDW LI VKH WRRN D FRS\ RI KHU ILOH  0V  9DOOH FRXOG QHYHU UHWXUQ WR KLV RIILFH   7KH\ 
GLG QRW WDNH WKH ILOH    
      2Q RU DERXW -XQH          0V  9DOOH UHWXUQHG WR 'HIHQGDQW /HRQDUG¶V RIILFH WR RQFH 
DJDLQ UHTXHVW D FRS\ RI KHU ILOH   6KH ZDV DFFRPSDQLHG E\ KHU HPSOR\HU DQG ODWHU MRLQHG E\ 0U  
9DUJDV   'HIHQGDQW /HRQDUG \HOOHG DW 0V  9DOOH ZKHQ VKH UHTXHVWHG WKH ILOH DQG VWDWHG WKDW KH KDG 
QRWKLQJ WR JLYH WKHP  DQG WKDW KH KDG JLYHQ WKHP HYHU\WKLQJ WKH SUHYLRXV ZHHN   3UHVVHG E\ 0V  
9DOOH¶V HPSOR\HU  'HIHQGDQW /HRQDUG \HOOHG DQG WKUHDWHQHG WR KDYH KHU DUUHVWHG IRU WUHVSDVVLQJ   
$IWHU WKH HPSOR\HU OHIW WKH RIILFH  'HIHQGDQW /HRQDUG SURYLGHG 0V  9DOOH DQG 0U  9DUJDV ZLWK 
ZKDW LV  XSRQ LQIRUPDWLRQ DQG EHOLHI  RQO\ D SRUWLRQ RI WKHLU ILOH  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 69 of 111

      $IWHU GLVFRYHULQJ WKDW WKH\ ZHUH YLFWLPV RI WKH 7HQ <HDU 6FKHPH  0U  9DUJDV DQG 
0V  9DOOH ILUHG +HFKW /DZ )LUP DQG UHWDLQHG QHZ FRXQVHO   
,QMXU\ 6XIIHUHG 
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  0U  9DUJDV DQG 0V  9DOOH DJUHHG WR 
SD\ D WRWDO RI         WR 'HIHQGDQWV   
      $V RI WRGD\  0U  9DUJDV DQG 0V  9DOOH HVWLPDWH WKDW WKH\ KDYH SDLG 'HIHQGDQWV 
DSSUR[LPDWHO\        LQ PXOWLSOH SD\PHQWV   0U  9DUJDV DQG 0V  9DOOH PDGH WKHVH SD\PHQWV WR 
'HIHQGDQWV    
      0U  9DUJDV DQG 0V  9DOOH DOVR SDLG DQ HPSOR\HH DW +HFKW /DZ )LUP     IRU WKH 
WUDQVODWLRQ RI FHUWDLQ GRFXPHQWV IRU WKHLU FDVH   7KH LQYRLFH SURYLGHG WR 0U  9DUJDV DQG 0V  9DOOH 
LV RQ 6\OYLD¶V 7UDQVODWLRQ 6HUYLFH OHWWHUKHDG     
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQWV  0U  9DUJDV DQG 0V  9DOOH 
ZRXOG QRW KDYH KLUHG RU SDLG 'HIHQGDQWV   
      )XUWKHUPRUH   0U   9DUJDV  DQG  0V   9DOOH  ZHUH  UHTXLUHG  WR  SD\  IRU  OHJDO 
UHSUHVHQWDWLRQ   0U  9DUJDV DQG 0V  9DOOH KDYH WR GDWH SDLG      IRU OHJDO UHSUHVHQWDWLRQ   
      $V D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  0U  
9DUJDV DQG 0V  9DOOH VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW           
0U  0HMLD DQG 0V  7DFXED 
      3ODLQWLIIV (UQHVWR 0HMLD *RQ]DOH]  ³0U  0HMLD´  DQG 2QHLGD 7DFXED 0HMLD  ³0V  
7DFXED´  DUH PDUULHG DQG OLYH ZLWK WKHLU IRXU 8 6  FLWL]HQ FKLOGUHQ LQ %URRNO\Q  1HZ <RUN   0U  
0HMLD¶V  DQG  0V   7DFXED¶V  QDWLYH  ODQJXDJH  LV  6SDQLVK     7KH\  VSHDN   UHDG   DQG  XQGHUVWDQG  YHU\ 
OLPLWHG (QJOLVK   
      ,Q RU DURXQG 1RYHPEHU       DW WKH UHFRPPHQGDWLRQ RI 0U  0HMLD¶V FROOHDJXH  0U  
0HMLD DQG 0V  7DFXED PHW ZLWK 'HIHQGDQW 7KRPDV DW +HFKW /DZ )LUP   'XULQJ WKH ILUVW PHHWLQJ  
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 70 of 111

DQG LQ DOO VXEVHTXHQW PHHWLQJV  0V  7DFXED DQG 0U  0HMLD WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG 
E\ 'HIHQGDQW 7KRPDV   'HIHQGDQW 7KRPDV GLG QRW DVN IRU WKH LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH 
ZKHWKHU WKH\ ZHUH HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP  
      'HIHQGDQW 7KRPDV IDOVHO\ UHSUHVHQWHG WR 0U  0HMLD DQG 0V  7DFXED WKDW WKH\ ZHUH 
HOLJLEOH WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\ XQGHU WKH ³WHQ \HDU ODZ ´  
      'HIHQGDQW  7KRPDV¶  UHSUHVHQWDWLRQV  FDXVHG  0U   0HMLD  DQG  0V   7DFXED  WR 
UHDVRQDEO\  EHOLHYH  WKDW  WKH\  ZHUH  HOLJLEOH  IRU  D  ZRUN  SHUPLW  DQG  ODZIXO  SHUPDQHQW  UHVLGHQF\ 
WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  
FLWL]HQ FKLOGUHQ  
      $W WKHLU YLVLWV WR +HFKW /DZ )LUP  ZKHQ 0U  0HMLD DQG 0V  7DFXED ZRXOG VLJQ LQ  
WKH\ ZRXOG ZULWH ³GLH] DxRV´  ³WHQ \HDUV´  DV WKH UHDVRQ IRU WKHLU DSSRLQWPHQW   1R PHHWLQJ 0U  
0HMLD KDG ZLWK 'HIHQGDQWV ODVWHG ORQJHU WKDQ ILYH PLQXWHV  
      'XULQJ  RQH  RI  WKHLU  PHHWLQJV   'HIHQGDQW  7KRPDV  LQVWUXFWHG  0U   0HMLD  DQG  0V  
7DFXED WR VLJQ VHYHUDO GRFXPHQWV  ZKLFK KH VDLG ZHUH QHFHVVDU\ WR DSSO\ IRU ODZIXO SHUPDQHQW 
UHVLGHQF\   'HIHQGDQW 7KRPDV GLG QRW H[SODLQ RU WUDQVODWH WKH FRQWHQWV RI WKH GRFXPHQWV   
      'HIHQGDQW 7KRPDV WROG 0U  0HMLD DQG 0V  7DFXED WKDW KH ZRXOG ILOH DQ DV\OXP 
DSSOLFDWLRQ RQ WKHLU EHKDOI EHFDXVH DQ DV\OXP DSSOLFDWLRQ ZDV SDUW RI WKH SURFHVV  DQG WKDW ODWHU KH 
ZDV JRLQJ WR FKDQJH WKH DSSOLFDWLRQ WR RQH IRU WKH ³WHQ \HDU YLVD ´  'HIHQGDQWV GLG QRW DGYLVH 0U  
0HMLD RU 0V  7DFXED DERXW WKH OHJDO UHTXLUHPHQWV IRU DV\OXP RU WKH IDFW WKDW 'HIHQGDQWV LQWHQGHG 
WR  FDXVH  0U   0HMLD  DQG  0V   7DFXED  WR  EH  SXW  LQ  UHPRYDO  SURFHHGLQJV  LI  DQG  ZKHQ  WKH  DV\OXP 
DSSOLFDWLRQ ZDV QRW DSSURYHG   ,QVWHDG  0U  0HMLD DQG 0V  7DFXED XQGHUVWRRG WKDW 'HIHQGDQWV 
ZRXOG DSSO\ IRU DQ DIILUPDWLYH ³WHQ \HDU´ EHQHILW    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 71 of 111

      ,Q  RU  DURXQG  1RYHPEHU         'HIHQGDQWV  VXEPLWWHG  DQ  DV\OXP  DSSOLFDWLRQ  RQ 
EHKDOI RI 0U  0HMLD DQG 0V  7DFXED DQG XVHG D PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV WR WKH 
86&,6 6HUYLFH &HQWHU LQ 9HUPRQW    
      8SRQ LQIRUPDWLRQ DQG EHOLHI  'HIHQGDQW 7KRPDV VLJQHG WKH SUHSDUHU DWWHVWDWLRQ LQ 
WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH UHDG WKH FRPSOHWHG DSSOLFDWLRQ WR WKHP LQ D ODQJXDJH 
WKH\  XQGHUVWRRG  IRU  YHULILFDWLRQ   DQG  WKH  DSSOLFDWLRQ  FRQWDLQHG  WKH  VDPH  ERLOHUSODWH  EDVHV  IRU 
DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV  
      2Q RU DURXQG -DQXDU\           0U  0HMLD DQG 0V  7DFXED UHFHLYHG D OHWWHU IURP 
+HFKW /DZ )LUP QRWLI\LQJ WKHP WKDW DQ ³LQWHUYLHZ´ LQ FRQQHFWLRQ WR WKHLU DSSOLFDWLRQ KDG EHHQ 
VFKHGXOHG    
      &RQFHUQHG   0U   0HMLD  DQG  0V   7DFXED  PHW  ZLWK  DWWRUQH\V  DW  051<     $W  WKH 
PHHWLQJ   0U   0HMLD  DQG  0V   7DFXED  OHDUQHG  WKDW  'HIHQGDQWV  KDG  SURPLVHG  WKHP  ODZIXO  VWDWXV 
WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW   
      0U   0HMLD  DQG  0V   7DFXED  IHDUHG  WKH  UHSHUFXVVLRQV  RI  PLVVLQJ  WKHLU  VFKHGXOHG 
LQWHUYLHZ   7KXV  RQ RU DURXQG )HEUXDU\          0U  0HMLD DQG 0V  7DFXED PHW ZLWK 'HIHQGDQW 
7KRPDV UHJDUGLQJ WKH VFKHGXOHG LQWHUYLHZ   'HIHQGDQW 7KRPDV WROG 0U  0HMLD DQG 0V  7DFXED 
WKDW DW WKHLU DV\OXP LQWHUYLHZ  WKH\ MXVW KDG WR VD\ WKDW WKHLU FRXQWU\ ZDV YHU\ GDQJHURXV  
      0U  0HMLD DQG 0V  7DFXED VXEVHTXHQWO\ ILUHG +HFKW /DZ )LUP  DQG VHFXUHG QHZ 
FRXQVHO   
      0U  0HMLD ZDV SODFHG LQWR UHPRYDO SURFHHGLQJV LQ RU DERXW 0DUFK        6LQFH WKDW 
WLPH  0V  7DFXED KDV DOVR EHHQ SODFHG LQWR UHPRYDO SURFHHGLQJV  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 72 of 111

,QMXU\ 6XIIHUHG 
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  0U  0HMLD DQG 0V  7DFXED DJUHHG WR 
SD\ D WRWDO RI        WR 'HIHQGDQWV  
      $V RI WRGD\  0U  0HMLD DQG 0V  7DFXED KDYH SDLG DW OHDVW        LQ PXOWLSOH FDVK 
SD\PHQWV   0U  0HMLD DQG 0V  7DFXED PDGH WKH SD\PHQWV WR HPSOR\HHV DW +HFKW /DZ )LUP   
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQW 7KRPDV  0U  0HMLD DQG 0V  
7DFXED ZRXOG QRW KDYH KLUHG RU SDLG 'HIHQGDQWV   
      )XUWKHUPRUH   0U   0HMLD  DQG  0V   7DFXED  ZHUH  UHTXLUHG  WR  SD\  IRU  OHJDO 
UHSUHVHQWDWLRQ  
      $V RI WRGD\  0U  0HMLD DQG 0V  7DFXED KDYH SDLG PRUH WKDQ        IRU WKH OHJDO 
UHSUHVHQWDWLRQ    
      $V D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  0U  
0HMLD DQG 0V  7DFXED VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW          
6 ) &  DQG $ 0 2  
      3ODLQWLIIV  6 ) &   DQG  $ 0 2   DUH  PDUULHG  DQG  OLYH  ZLWK  WKHLU  WKUHH  8 6   FLWL]HQ 
FKLOGUHQ LQ %URRNO\Q  1HZ <RUN   6 ) & ¶V DQG $ 0 2 ¶V QDWLYH ODQJXDJH LV 6SDQLVK   7KH\ VSHDN  
UHDG  DQG XQGHUVWDQG YHU\ OLPLWHG (QJOLVK  
      ,Q RU DURXQG -XQH       DW WKH UHFRPPHQGDWLRQ RI $ 0 2 ¶V FRXVLQ  $ 0 2  PHW 
ZLWK 'HIHQGDQW /HRQDUG DW +HFKW /DZ )LUP   /DWHU WKDW VDPH \HDU  6 ) &  ZHQW ZLWK $ 0 2  WR 
PHHW  ZLWK  'HIHQGDQW  /HRQDUG  DW  +HFKW  /DZ  )LUP     'XULQJ  WKHLU  ILUVW  PHHWLQJV   DQG  LQ  DOO 
VXEVHTXHQW PHHWLQJV  $ 0 2  DQG 6 ) &  WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG E\ 'HIHQGDQW 
/HRQDUG     'HIHQGDQW  /HRQDUG  GLG  QRW  DVN  IRU  WKH  LQIRUPDWLRQ  QHFHVVDU\  WR  GHWHUPLQH  ZKHWKHU 
$ 0 2  RU 6 ) &  ZHUH HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 73 of 111

      'HIHQGDQW  /HRQDUG  IDOVHO\  UHSUHVHQWHG  WKDW  6 ) &   DQG  $ 0 2   ZHUH  HOLJLEOH  WR 
DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\ EDVHG RQ DQ DIILUPDWLYH DSSOLFDWLRQ LI WKH\ FRXOG VKRZ WKDW 
WKH\ KDG SDLG WD[HV LQ WKH 8QLWHG 6WDWHV IRU WHQ \HDUV DQG KDG 8 6  FLWL]HQ FKLOGUHQ  
      'HIHQGDQW  /HRQDUG¶V  UHSUHVHQWDWLRQV  FDXVHG  6 ) &   DQG  $ 0 2   WR  UHDVRQDEO\ 
EHOLHYH  WKDW  WKH\  ZHUH  HOLJLEOH  IRU  D  ZRUN  SHUPLW  DQG  ODZIXO  SHUPDQHQW  UHVLGHQF\  WKURXJK  DQ 
DIILUPDWLYH DSSOLFDWLRQ EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI SD\LQJ WD[HV LQ WKH 8QLWHG 6WDWHV IRU WHQ 
\HDUV DQG 8 6  FLWL]HQ FKLOGUHQ   
      'HIHQGDQW /HRQDUG LQVWUXFWHG 6 ) &  DQG $ 0 2  WR VLJQ VHYHUDO GRFXPHQWV  ZKLFK 
KH  VDLG  ZHUH  QHFHVVDU\  WR  DSSO\  IRU  ODZIXO  SHUPDQHQW  UHVLGHQF\     'HIHQGDQW  /HRQDUG  GLG  QRW 
H[SODLQ RU WUDQVODWH WKH GRFXPHQWV  
      'HIHQGDQWV  GLG  QRW  DGYLVH  6 ) &   RU  $ 0 2   WKDW  WKH\  LQWHQGHG  WR  VXEPLW  DQ 
DSSOLFDWLRQ IRU DV\OXP RQ WKHLU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  
RU WKH IDFW WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 6 ) &  DQG $ 0 2  WR EH SXW LQ UHPRYDO SURFHHGLQJV 
LI DQG ZKHQ WKH DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG    
      ,Q  RU  DURXQG  WKH  VXPPHU RU IDOO RI         'HIHQGDQWV VXEPLWWHG VHSDUDWH DV\OXP 
DSSOLFDWLRQV RQ EHKDOI RI 6 ) &  DQG $ 0 2  DQG XVHG D PDLO FDUULHU WR VHQG WKH DSSOLFDWLRQV DFURVV 
VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  
      ,Q IDFW  'HIHQGDQWV VXEPLWWHG WKH DV\OXP DSSOLFDWLRQV ZLWKRXW WHOOLQJ 6 ) &  DQG 
$ 0 2   RU UHYLHZLQJ WKH DSSOLFDWLRQV ZLWK WKHP   1HYHUWKHOHVV  'HIHQGDQW 7KRPDV VLJQHG WKH 
SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,     IRU 6 ) &   DQG  XSRQ LQIRUPDWLRQ DQG EHOLHI  DOVR VLJQHG WKH 
SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,     VXEPLWWHG IRU $ 0 2   IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ 
WKH  DV\OXP  DSSOLFDWLRQV  DW  WKH  UHTXHVW  RI  6 ) &   DQG  $ 0 2   DQG  WKDW  KH  UHDG  WKH  FRPSOHWHG 
DSSOLFDWLRQV WR WKHP LQ D ODQJXDJH WKH\ XQGHUVWRRG IRU YHULILFDWLRQ   6 ) & ¶V DSSOLFDWLRQ FRQWDLQHG 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 74 of 111

WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV  DQG  XSRQ LQIRUPDWLRQ 
DQG EHOLHI  $ 0 2 ¶V DSSOLFDWLRQ DOVR LQFOXGHG WKH VDPH UHVSRQVHV  
      $URXQG         $ 0 2   DQG  6 ) &   UHFHLYHG  QRWLFHV  LQ  WKH  PDLO  WKDW  WKHLU  DV\OXP 
DSSOLFDWLRQV KDG EHHQ UHFHLYHG E\ 86&,6     $ 0 2   DQG  6 ) &   ZHUH FRQIXVHG E\ WKHVH QRWLFHV 
EHFDXVH WKH\ GLG QRW LQWHQG WR DSSO\ IRU DV\OXP   :KHQ WKH\ FRQWDFWHG DQG RU YLVLWHG +HFKW /DZ 
)LUP   'HIHQGDQWV  WROG  WKHP  QRW  WR  ZRUU\  EHFDXVH  WKLV  ZDV  WKH  SURFHVV  WRZDUG  REWDLQLQJ  OHJDO 
SHUPDQHQW UHVLGHQFH    
      $URXQG  6SULQJ         6 ) &   DQG  $ 0 2   DWWHQGHG  DV\OXP  LQWHUYLHZV     7KH\ 
DQVZHUHG DOO TXHVWLRQV WUXWKIXOO\  
      6 ) &  DQG $ 0 2  ZHUH SODFHG LQWR UHPRYDO SURFHHGLQJV LQ RU DERXW 0DUFK      
DQG 6HSWHPEHU       UHVSHFWLYHO\  
      ,Q  RU  DURXQG         6 ) &   DQG  $ 0 2   EHFDPH  VXVSLFLRXV  ZKHQ  'HIHQGDQWV 
GHPDQGHG PRUH PRQH\ WR PRYH WKHLU DSSOLFDWLRQV IRUZDUG   6 ) &  DQG $ 0 2  FRQWDFWHG RWKHU 
DWWRUQH\V   DQG  OHDUQHG  WKDW  'HIHQGDQWV KDG  SURPLVHG  WKHP ODZIXO  VWDWXV  WKURXJK  DQ  DIILUPDWLYH 
LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW    
      $IWHU  GLVFRYHULQJ  WKDW  WKH\  ZHUH  YLFWLPV  RI  WKH  7HQ  <HDU  6FKHPH   6 ) &   DQG 
$ 0 2  ILUHG +HFKW /DZ )LUP   $ 0 2  UHWDLQHG DOWHUQDWLYH UHSUHVHQWDWLRQ IRU KHUVHOI DQG 6 ) &  
VXEVHTXHQWO\ REWDLQHG SUR ERQR FRXQVHO IRU KLPVHOI  
,QMXU\ 6XIIHUHG  
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  6 ) &  DQG $ 0 2  LQLWLDOO\ DJUHHG WR 
SD\ D WRWDO RI        WR 'HIHQGDQWV   
      'XULQJ WKH FRXUVH RI WKH UHSUHVHQWDWLRQ  'HIHQGDQWV GHPDQGHG DGGLWLRQDO SD\PHQWV 
WR PRYH WKH FDVH IRUZDUG   2YHU WKH FRXUVH RI ILYH \HDUV  6 ) &  DQG $ 0 2  SDLG 'HIHQGDQWV D 
WRWDO RI        LQ WHQ RU WZHOYH VHSDUDWH SD\PHQWV   
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 75 of 111

      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQW /HRQDUG  6 ) &  DQG $ 0 2  
ZRXOG QRW KDYH KLUHG RU SDLG 'HIHQGDQWV  
      $ 0 2  SDLG DW OHDVW        IRU OHJDO UHSUHVHQWDWLRQ WR KHU QHZ FRXQVHO  
      7KXV  DV D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  
6 ) &  DQG $ 0 2  VXIIHUHG D VLJQLILFDQW ILQDQFLDO LQMXU\ RI DW OHDVW           
' 3 &   
      3ODLQWLII  ' 3 &   OLYHV  ZLWK  KHU  KXVEDQG  DQG  IRXU  FKLOGUHQ   LQFOXGLQJ  WKUHH  8 6  
FLWL]HQ FKLOGUHQ  LQ %URRNO\Q  1HZ <RUN   ' 3 & ¶V QDWLYH ODQJXDJH LV 6SDQLVK   6KH VSHDNV  UHDGV  
DQG XQGHUVWDQGV YHU\ OLPLWHG (QJOLVK   
      ,Q  RU  DURXQG         DW  WKH  UHFRPPHQGDWLRQ  RI  KHU  EURWKHU   ZKRVH  DFTXDLQWDQFH 
UHFRPPHQGHG 'HIHQGDQWV DQG WKH ³WHQ \HDU ODZ ´ ' 3 &  PHW ZLWK 'HIHQGDQW 7KRPDV DW +HFKW 
/DZ )LUP   'XULQJ WKH ILUVW PHHWLQJ  DQG LQ DOO VXEVHTXHQW PHHWLQJV  ' 3 &  WUXWKIXOO\ DQVZHUHG 
DOO TXHVWLRQV DVNHG E\ 'HIHQGDQW 7KRPDV   'HIHQGDQW 7KRPDV GLG QRW DVN KHU IRU WKH LQIRUPDWLRQ 
QHFHVVDU\ WR GHWHUPLQH ZKHWKHU VKH ZDV HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR 
DSSO\ IRU  DV\OXP   
      'HIHQGDQW 7KRPDV IDOVHO\ UHSUHVHQWHG WR ' 3 &  WKDW VKH ZDV HOLJLEOH WR DSSO\ IRU 
ODZIXO SHUPDQHQW UHVLGHQF\ XQGHU WKH ³WHQ \HDU ODZ ´ 
      'HIHQGDQW 7KRPDV¶ UHSUHVHQWDWLRQV FDXVHG ' 3 &  WR UHDVRQDEO\ EHOLHYH WKDW VKH 
ZDV HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO SHUPDQHQW UHVLGHQF\ WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ 
EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  FLWL]HQ FKLOGUHQ  
      :KHQ ' 3 &  ZRXOG JR IRU DQ DSSRLQWPHQW DW +HFKW /DZ )LUP  VKH ZRXOG LQIRUP 
WKH UHFHSWLRQLVW WKDW WKH UHDVRQ IRU KHU DSSRLQWPHQW ZDV WKH ³WHQ \HDU ODZ ´   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 76 of 111

      'XULQJ RQH RI WKHLU PHHWLQJV  'HIHQGDQW 7KRPDV LQVWUXFWHG ' 3 &  WR VLJQ VHYHUDO 
GRFXPHQWV  ZKLFK  KH  VDLG  ZHUH  QHFHVVDU\  WR  DSSO\  IRU  ODZIXO  SHUPDQHQW  UHVLGHQF\     'HIHQGDQW 
7KRPDV GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV    
      :KHQ  ' 3 &   DVNHG  'HIHQGDQW  7KRPDV  TXHVWLRQV  DERXW  WKH  OHJDO  SURFHVV  RU  WKH 
GRFXPHQWV VKH ZDV VLJQLQJ  'HIHQGDQW 7KRPDV UHIXVHG WR DQVZHU WKH TXHVWLRQV DQG WROG ' 3 &  
QRW WR ZRUU\  EHFDXVH KH ZDV WKH H[SHUW  
      'HIHQGDQWV GLG QRW DGYLVH ' 3 &  WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ IRU 
DV\OXP RQ KHU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW WKDW 
'HIHQGDQWV LQWHQGHG WR FDXVH ' 3 &  WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH DV\OXP 
DSSOLFDWLRQ ZDV QRW DSSURYHG    
      2Q RU DURXQG 0DUFK          'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ RQ EHKDOI 
RI ' 3 &  DQG KHU KXVEDQG DQG XVHG D PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV WR WKH 86&,6 6HUYLFH 
&HQWHU LQ 9HUPRQW   
      ,Q  IDFW   'HIHQGDQWV  VXEPLWWHG  WKH  DV\OXP  DSSOLFDWLRQ  ZLWKRXW  WHOOLQJ  ' 3 &    RU 
UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  KHU     1HYHUWKHOHVV   'HIHQGDQW  7KRPDV  VLJQHG  WKH  SUHSDUHU 
DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ DW WKH 
UHTXHVW RI ' 3 &   DQG WKDW KH UHDG WKH FRPSOHWHG DSSOLFDWLRQ WR KHU LQ D ODQJXDJH VKH XQGHUVWRRG 
IRU  YHULILFDWLRQ     7KH  DSSOLFDWLRQ  FRQWDLQHG  WKH  VDPH  ERLOHUSODWH  EDVHV  IRU  DV\OXP  DV  WKH  RWKHU 
3ODLQWLIIV¶ DSSOLFDWLRQV  
      %HWZHHQ 0DUFK DQG 2FWREHU       ' 3 &  UHFHLYHG D QRWLFH LQ WKH PDLO WKDW KHU 
DV\OXP DSSOLFDWLRQ KDG EHHQ UHFHLYHG E\ 86&,6   ' 3 &  ZDV FRQIXVHG E\ WKLV QRWLFH EHFDXVH VKH 
GLG QRW LQWHQG WR DSSO\ IRU DV\OXP   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 77 of 111

      ' 3 &  FDOOHG +HFKW /DZ )LUP WR DVN DERXW WKH QRWLFH  DQG WKH SHUVRQ ZKR DQVZHUHG 
WKH SKRQH WROG ' 3 &  QRW WR ZRUU\  EHFDXVH WKDW DSSOLFDWLRQ ZDV MXVW D ³QDPH´ RI WKH ³IRUP´ IRU 
WKH ³WHQ \HDU ODZ´ DSSOLFDWLRQ  
      $W WKH HQG RI       ' 3 &  PHW ZLWK DWWRUQH\V DW 051<   $W WKH PHHWLQJ  ' 3 &  
OHDUQHG  WKDW  'HIHQGDQWV  KDG  SURPLVHG  KHU  ODZIXO  VWDWXV  WKURXJK  DQ  DIILUPDWLYH  LPPLJUDWLRQ 
DSSOLFDWLRQ WKDW GLG QRW H[LVW  
      $IWHU GLVFRYHULQJ WKDW VKH ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH  ' 3 &  ILUHG +HFKW 
/DZ )LUP DQG UHWDLQHG QHZ FRXQVHO   
,QMXU\ 6XIIHUHG 
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  ' 3 &  DJUHHG WR SD\ D WRWDO RI        
WR 'HIHQGDQWV IRU ' 3 &  DQG KHU KXVEDQG  
      $V RI WRGD\  ' 3 &  KDV SDLG 'HIHQGDQWV        LQ FDVK SD\PHQWV   ' 3 &  PDGH 
WKHVH SD\PHQWV WR HPSOR\HHV DW +HFKW /DZ )LUP   
      ' 3 &  DOVR SDLG 'HIHQGDQW 7KRPDV     IRU WKH WUDQVODWLRQ RI WKH ELUWK FHUWLILFDWHV 
RI  ' 3 &   DQG  KHU  KXVEDQG     7KH  UHFHLSW  SURYLGHG  WR  ' 3 &  LV  RQ  6\OYLD¶V  7UDQVODWLRQ  6HUYLFH 
OHWWHUKHDG   
      %XW  IRU  WKH  IDOVH  UHSUHVHQWDWLRQV  PDGH  E\  'HIHQGDQW  7KRPDV   ' 3 &   ZRXOG  QRW 
KDYH KLUHG RU SDLG 'HIHQGDQWV  
      7KXV  DV D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  
' 3 &  VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW            
% 5 (  
      3ODLQWLII  % 5 (   OLYHV  ZLWK  KHU  WKUHH  8 6   FLWL]HQ  FKLOGUHQ  LQ  6WDWHQ  ,VODQG   1HZ 
<RUN     % 5 ( ¶V  QDWLYH  ODQJXDJH  LV  6SDQLVK     6KH  VSHDNV   UHDGV   DQG  XQGHUVWDQGV  YHU\  OLPLWHG 
(QJOLVK  
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 78 of 111

      ,Q RU DURXQG       DW WKH UHFRPPHQGDWLRQ RI KHU IDWKHU  % 5 (  PHW ZLWK 'HIHQGDQW 
7KRPDV  DW  +HFKW  /DZ  )LUP     'XULQJ  WKH  ILUVW  PHHWLQJ   DQG  LQ  DOO  VXEVHTXHQW  PHHWLQJV   % 5 (  
WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG E\ 'HIHQGDQW 7KRPDV   'HIHQGDQW 7KRPDV GLG QRW DVN IRU 
WKH LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH ZKHWKHU % 5 (  ZDV HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV 
LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP  
      'HIHQGDQW 7KRPDV IDOVHO\ UHSUHVHQWHG WR % 5 (  WKDW VKH ZDV HOLJLEOH WR DSSO\ IRU 
ODZIXO SHUPDQHQW UHVLGHQF\ WKURXJK WKH ³OH\ GH GLH] DxRV´  ³ODZ RI WHQ \HDUV´   
      'HIHQGDQW 7KRPDV¶ UHSUHVHQWDWLRQV FDXVHG % 5 (  WR UHDVRQDEO\ EHOLHYH WKDW VKH 
ZDV HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO SHUPDQHQW UHVLGHQF\ WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ 
EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  FLWL]HQ FKLOGUHQ   
       $W % 5 ( ¶V VXEVHTXHQW YLVLWV WR +HFKW /DZ )LUP  VKH ZRXOG VLJQ LQ RQ D VLJQ LQ 
VKHHW WKDW KDG D FROXPQ IRU ³WLSR GH FDVR´  ³W\SH RI FDVH´   ZKHUH VKH ZRXOG ZULWH ³SRU HO WLHPSR´ 
 ³IRU WKH WLPH´   
      'XULQJ RQH RI WKHLU PHHWLQJV  'HIHQGDQW 7KRPDV LQVWUXFWHG % 5 (  WR VLJQ VHYHUDO 
GRFXPHQWV  ZKLFK KH VDLG ZHUH QHFHVVDU\ WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\   'HIHQGDQW 
7KRPDV GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV  
      :KHQ  % 5 (   DVNHG  'HIHQGDQW  7KRPDV  TXHVWLRQV  DERXW  WKH  OHJDO  SURFHVV  RU  WKH 
GRFXPHQWV VKH ZDV VLJQLQJ  'HIHQGDQW 7KRPDV UHIXVHG WR DQVZHU WKH TXHVWLRQV DQG WROG KHU QRW 
WR ZRUU\ EHFDXVH KH ZDV WKH DWWRUQH\   
      'HIHQGDQWV GLG QRW DGYLVH % 5 (  WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ IRU 
DV\OXP RQ KHU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW WKDW 
'HIHQGDQWV LQWHQGHG WR FDXVH % 5 (  WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH DV\OXP 
DSSOLFDWLRQ ZDV QRW DSSURYHG    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 79 of 111

      2Q RU DURXQG 2FWREHU           'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ IRU 
% 5 (  DQG XVHG D PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  
      ,Q  IDFW   'HIHQGDQWV  VXEPLWWHG  WKH  DV\OXP  DSSOLFDWLRQ  ZLWKRXW  WHOOLQJ  % 5 (    RU 
UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  KHU     1HYHUWKHOHVV   'HIHQGDQW  7KRPDV  VLJQHG  WKH  SUHSDUHU 
DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ DW WKH 
UHTXHVW RI % 5 (   DQG WKDW KH UHDG WKH FRPSOHWHG DSSOLFDWLRQ WR KHU LQ D ODQJXDJH VKH XQGHUVWRRG 
IRU YHULILFDWLRQ   % 5 ( ¶V DSSOLFDWLRQ FRQWDLQHG WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 
3ODLQWLIIV¶ DSSOLFDWLRQV    
      ,Q RU DURXQG 1RYHPEHU       % 5 (  UHFHLYHG D SKRQH FDOO IURP 'HIHQGDQW 7KRPDV 
LQIRUPLQJ KHU WKDW VKH ZDV VFKHGXOHG IRU DQ DV\OXP LQWHUYLHZ   % 5 (  ZDV FRQIXVHG E\ WKLV SKRQH 
FDOO EHFDXVH VKH GLG QRW LQWHQG WR DSSO\ IRU DV\OXP    
      'HIHQGDQW 7KRPDV WROG % 5 (  QRW WR ZRUU\  EHFDXVH WKH LQWHUYLHZ ZDV WKH ILUVW 
VWHS WRZDUGV VWDWXV WKURXJK WKH ³OH\ GH GLH] DxRV´  ³ODZ RI WHQ \HDUV´   
      2Q  RU  DURXQG  'HFHPEHU             % 5 (   DWWHQGHG  WKH  DV\OXP  LQWHUYLHZ  DQG 
DQVZHUHG DOO RI WKH TXHVWLRQV WUXWKIXOO\  
      2Q RU DURXQG 'HFHPEHU           % 5 (  UHFHLYHG D FKDUJLQJ GRFXPHQW GLUHFWLQJ 
KHU WR DSSHDU LQ LPPLJUDWLRQ FRXUW LQ -DQXDU\        'HIHQGDQWV GLG QRW H[SODLQ WKDW WKLV PHDQW 
WKDW VKH KDG EHHQ SODFHG LQ UHPRYDO SURFHHGLQJV   
      2Q RU DURXQG -DQXDU\           QHLWKHU 'HIHQGDQW 7KRPDV QRU 'HIHQGDQW /HRQDUG 
DFFRPSDQLHG % 5 (  WR LPPLJUDWLRQ FRXUW  LQVWHDG  WKH\ VHQW D UHSUHVHQWDWLYH WKDW % 5 (  KDG QHYHU 
PHW EHIRUH    
      $URXQG  $XJXVW         EDVHG  RQ  D  IULHQG¶V  UHFRPPHQGDWLRQ   % 5 (   YLVLWHG  WKH 
)DPLO\ -XVWLFH &HQWHU  ZKHUH VKH VSRNH ZLWK DQ LPPLJUDWLRQ ODZ\HU   % 5 (  WROG WKH LPPLJUDWLRQ 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 80 of 111

DWWRUQH\ WKDW VKH KDG OHJDO VWDWXV XQGHU WKH ³WHQ \HDU ODZ ´ DQG WKH DWWRUQH\ LQIRUPHG % 5 (  WKDW 
WKLV ODZ GLG QRW H[LVW   $IWHU WKLV PHHWLQJ  % 5 (  UHDOL]HG WKDW 'HIHQGDQWV KDG SURPLVHG KHU ODZIXO 
VWDWXV WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW  
      % 5 (  ZDV VXEVHTXHQWO\ UHIHUUHG WR 051<  DQG LQ RU DURXQG 2FWREHU       % 5 (  
DWWHQGHG DQ 051< ZRUNVKRS  ZKHUH VKH OHDUQHG PRUH DERXW WKH ³P\WK RI WKH WHQ \HDU ODZ ´     
      $IWHU GLVFRYHULQJ WKDW VKH ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH  % 5 (  ILUHG +HFKW 
/DZ )LUP DQG UHWDLQHG DOWHUQDWLYH UHSUHVHQWDWLRQ  
,QMXU\ 6XIIHUHG 
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  % 5 (  DJUHHG WR SD\ D WRWDO RI        
WR 'HIHQGDQWV   
      % 5 (  SDLG 'HIHQGDQWV WKH IXOO DPRXQW LQ ILYH RU VL[ VHSDUDWH SD\PHQWV E\ FDVK RU 
FKHFN   % 5 (   PDGH WKHVH SD\PHQWV WR LQGLYLGXDOV HPSOR\HG E\ +HFKW /DZ )LUP    
      'HIHQGDQWV  7KRPDV  DQG RU  /HRQDUG  DOVR  UHIHUUHG  % 5 (   WR  6\OYLD¶V  7UDQVODWLRQ 
6HUYLFH IRU WUDQVODWLRQV WKH\ VDLG ZHUH QHFHVVDU\ IRU KHU FDVH   % 5 (  SDLG 6\OYLD¶V 7UDQVODWLRQ 
6HUYLFH     IRU WKH WUDQVODWLRQ RI KHU ELUWK FHUWLILFDWH   
      %XW  IRU  WKH  IDOVH  UHSUHVHQWDWLRQV  PDGH  E\  'HIHQGDQW  7KRPDV   % 5 (   ZRXOG  QRW 
KDYH KLUHG RU SDLG 'HIHQGDQWV   
      7KXV  DV D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  
% 5 (  VXIIHUHG ILQDQFLDO LQMXU\ RI DW OHDVW         
$ 0 0  
      3ODLQWLII $ 0 0  OLYHV ZLWK KHU WZR 8 6  FLWL]HQ GDXJKWHUV LQ %URRNO\Q  1HZ <RUN   
$ 0 0 ¶V QDWLYH ODQJXDJH LV 6SDQLVK   6KH VSHDNV  UHDGV  DQG XQGHUVWDQGV OLPLWHG (QJOLVK  
      ,Q RU DURXQG 0D\       DW WKH UHFRPPHQGDWLRQ  RI D IDPLO\  IULHQG   $ 0 0  PHW 
ZLWK  'HIHQGDQW  7KRPDV  DW  +HFKW  /DZ  )LUP     'XULQJ  WKH  ILUVW  PHHWLQJ   DQG  LQ  DOO  VXEVHTXHQW 
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 81 of 111

PHHWLQJV  $ 0 0  WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG E\ 'HIHQGDQWV 7KRPDV DQG /HRQDUG   
'HIHQGDQWV  GLG  QRW  DVN  $ 0 0   IRU  WKH  LQIRUPDWLRQ  QHFHVVDU\  WR  GHWHUPLQH  ZKHWKHU  VKH  ZDV 
HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP  
      'HIHQGDQW 7KRPDV IDOVHO\ UHSUHVHQWHG WR $ 0 0  WKDW VKH ZDV HOLJLEOH WR DSSO\ IRU 
ODZIXO SHUPDQHQW UHVLGHQF\ EHFDXVH VKH KDG OLYHG LQ WKH 8QLWHG 6WDWHV IRU PRUH WKDQ WHQ \HDUV DQG 
KDG 8 6  FLWL]HQ FKLOGUHQ  
      ,Q  RU  DURXQG  -XO\         $ 0 0   UHWXUQHG  WR  +HFKW  /DZ  )LUP  DQG  PHW  ZLWK 
'HIHQGDQW  /HRQDUG   ZKR  WROG  KHU  WKDW  'HIHQGDQW  7KRPDV  ZDV  KLV  IDWKHU  DQG  WKDW  WKH\  ZRUNHG 
WRJHWKHU   'HIHQGDQW /HRQDUG FRQILUPHG WKDW $ 0 0  TXDOLILHG IRU ODZIXO SHUPDQHQW UHVLGHQF\   
+H  DOVR  VDLG  WKDW  DIWHU  VL[  PRQWKV   VKH  ZRXOG  JHW  SHUPLVVLRQ  WR  ZRUN     $ 0 0   PDGH  KHU  ILUVW 
SD\PHQW LQ WKH DPRXQW RI      WR 'HIHQGDQW /HRQDUG WKDW GD\    
      'HIHQGDQWV¶  UHSUHVHQWDWLRQV  FDXVHG  $ 0 0   WR  UHDVRQDEO\  EHOLHYH  WKDW  VKH  ZDV 
HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO SHUPDQHQW UHVLGHQF\ WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ EDVHG 
RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  FLWL]HQ FKLOGUHQ  
      ,Q  RU  DURXQG  $XJXVW  RU  6HSWHPEHU         $ 0 0   PHW  DJDLQ  ZLWK  'HIHQGDQW 
/HRQDUG  ZKR LQVWUXFWHG KHU WR VLJQ VHYHUDO GRFXPHQWV  ZKLFK KH VDLG ZHUH QHFHVVDU\ WR DSSO\ IRU 
ODZIXO SHUPDQHQW UHVLGHQF\   'HIHQGDQW /HRQDUG GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV   
      :KHQ $ 0 0  DVNHG 'HIHQGDQW /HRQDUG TXHVWLRQV DERXW WKH OHJDO SURFHVV RU WKH 
GRFXPHQWV VKH ZDV VLJQLQJ  'HIHQGDQW /HRQDUG UHIXVHG WR DQVZHU DQG WROG KHU QRW WR ZRUU\  
      'HIHQGDQWV GLG QRW DGYLVH $ 0 0  WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ IRU 
DV\OXP RQ KHU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW WKDW 
'HIHQGDQWV LQWHQGHG WR FDXVH $ 0 0  WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH DV\OXP 
DSSOLFDWLRQ ZDV QRW DSSURYHG    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 82 of 111

      ,Q  RU  DURXQG  2FWREHU         'HIHQGDQWV  VXEPLWWHG  DQ  DV\OXP  DSSOLFDWLRQ  IRU 
$ 0 0    DQG  XVHG  D  PDLO  FDUULHU  WR  VHQG  LW  DFURVV  VWDWH  OLQHV  WR  WKH  86&,6  6HUYLFH  &HQWHU  LQ 
9HUPRQW  
      ,Q IDFW  'HIHQGDQWV VXEPLWWHG WKH DV\OXP DSSOLFDWLRQ ZLWKRXW WHOOLQJ $ 0 0   RU 
UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  KHU     1HYHUWKHOHVV   'HIHQGDQW  7KRPDV  VLJQHG  WKH  SUHSDUHU 
DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ DW WKH 
UHTXHVW RI $ 0 0   DQG WKDW KH UHDG WKH FRPSOHWHG DSSOLFDWLRQ WR KHU LQ D ODQJXDJH VKH XQGHUVWRRG 
IRU  YHULILFDWLRQ     7KH  DSSOLFDWLRQ  FRQWDLQHG  WKH  VDPH  ERLOHUSODWH  EDVHV  IRU  DV\OXP  DV  WKH  RWKHU 
3ODLQWLIIV¶ DSSOLFDWLRQV    
      /DWHU WKDW PRQWK  'HIHQGDQW 7KRPDV VHQW $ 0 0  D OHWWHU GLUHFWLQJ WR KHU JR WR D 
86&,6 RIILFH WR JHW KHU ILQJHUSULQWV WDNHQ   &RQIXVHG E\ WKH OHWWHU  VKH ZHQW WR +HFKW /DZ )LUP   
'HIHQGDQW /HRQDUG WROG KHU QRW WR ZRUU\ DQG DGYLVHG KHU WR DWWHQG WKH ILQJHUSULQW DSSRLQWPHQW    
      ,Q  RU  DURXQG  )DOO         $ 0 0 ¶V  HOGHVW  GDXJKWHU  EHJDQ  DQ  LQWHUQVKLS  ZLWK  D 
FRPPXQLW\ RUJDQL]DWLRQ UXQ E\ DQG IRU LPPLJUDQWV IDFLQJ GHSRUWDWLRQ   $V VKH OHDUQHG PRUH DERXW 
LPPLJUDWLRQ ODZ  VKH EHFDPH VXVSLFLRXV RI 'HIHQGDQWV   
      ,Q RU DURXQG -DQXDU\       $ 0 0   DFFRPSDQLHG E\ KHU HOGHVW GDXJKWHU  UHWXUQHG 
WR +HFKW /DZ )LUP DQG PHW ZLWK 'HIHQGDQW /HRQDUG   :KHQ $ 0 0 ¶V GDXJKWHU DVNHG 'HIHQGDQW 
/HRQDUG TXHVWLRQV DERXW ZK\ WKH SDSHUZRUN IURP 86&,6 VDLG ³DV\OXP´ ZKHQ KH KDG WROG WKHP 
KH ZDV ILOLQJ DQ DSSOLFDWLRQ EDVHG RQ KHU OHQJWK RI UHVLGHQF\ DQG FKLOGUHQ  'HIHQGDQW /HRQDUG VDLG 
KH ZDV WKH ODZ\HU DQG  LQ KLV ZRUGV  NQHZ ZKDW KH ZDV GRLQJ    
      $ 0 0  DVNHG 'HIHQGDQW /HRQDUG WR ZLWKGUDZ KHU DV\OXP DSSOLFDWLRQ   %XW LQ RU 
DURXQG -XO\       $ 0 0  UHFHLYHG DQRWKHU OHWWHU VLJQHG E\ 'HIHQGDQW 7KRPDV LQVWUXFWLQJ KHU WR 
DSSHDU DW WKH 86&,6 RIILFH LQ %URRNO\Q IRU DQ DGGLWLRQDO VHW RI ILQJHUSULQWV   $ 0 0 DQG KHU HOGHVW 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 83 of 111

GDXJKWHU UHWXUQHG WR +HFKW /DZ )LUP LQ RU DURXQG -XO\      DQG PHW ZLWK 'HIHQGDQW /HRQDUG   
7KH\ DVNHG ZK\ KH KDG QRW ZLWKGUDZQ WKH DSSOLFDWLRQ  DQG UHTXHVWHG D FRS\ RI $ 0 0 ¶V ILOH   
'HIHQGDQW /HRQDUG VDLG WKDW $ 0 0  QHHGHG WR SD\ HYHU\WKLQJ VKH RZHG EHIRUH KH ZRXOG JLYH KHU 
D FRS\  EHFDPH YHU\ DJJUHVVLYH  DQG GHPDQGHG WKDW $ 0 0 ¶V GDXJKWHU OHDYH WKH URRP   
      /DWHU LQ -XO\  $ 0 0  UHFHLYHG D QRWLFH WKDW KHU DV\OXP LQWHUYLHZ ZDV VFKHGXOHG 
IRU $XJXVW            $ 0 0  DQG KHU HOGHVW GDXJKWHU DJDLQ PHW ZLWK 'HIHQGDQW /HRQDUG WR DVN 
ZK\ KH KDG QRW ZLWKGUDZQ WKH DSSOLFDWLRQ    
      'HIHQGDQW  /HRQDUG  GLVPLVVHG  WKHLU  TXHVWLRQV  DQG  VDLG  WKDW  KH  ZRXOG  QRWH  LQ 
$ 0 0 ¶V ILOH WKDW VKH ZDV ³GLIILFXOW WR ZRUN ZLWK´ EHFDXVH KHU GDXJKWHU DVNHG VR PDQ\ TXHVWLRQV   
'HIHQGDQW /HRQDUG DOVR VDLG WKDW KH ZRXOG QRW DFFRPSDQ\ KHU WR WKH DV\OXP LQWHUYLHZ  
      2Q RU DURXQG $XJXVW          QRZ DFFRPSDQLHG E\ KHU \RXQJHVW GDXJKWHU  $ 0 0  
UHWXUQHG  WR  +HFKW  /DZ  )LUP     'HIHQGDQW  /HRQDUG  HQFRXUDJHG  $ 0 0   WR  DWWHQG  WKH  DV\OXP 
LQWHUYLHZ    
      'HIHQGDQW /HRQDUG DOVR UHSHDWHGO\ VWDWHG WKDW WKHUH ZDV QR ULVN RI GHSRUWDWLRQ DQG 
WKDW D MXGJH ZRXOG QRW GHSRUW D VLQJOH ZRPDQ ZLWKRXW D FULPLQDO KLVWRU\   7KLV LV QRW DFFXUDWH 
XQGHU LPPLJUDWLRQ ODZ    
      :KHQ  $ 0 0   DVNHG  'HIHQGDQW  /HRQDUG  WR  DFFRPSDQ\  KHU  WR  KHU  DV\OXP 
LQWHUYLHZ  KH WROG KHU QRW WR ZRUU\  EXW VWDWHG WKDW KH ZRXOG QRW DFFRPSDQ\ KHU    
      $IWHU  GLVFRYHULQJ  WKDW  VKH  ZDV  D  YLFWLP  RI  WKH  7HQ  <HDU  6FKHPH   $ 0 0   ILUHG 
+HFKW /DZ )LUP DQG ZURWH WR WKH $V\OXP 2IILFH WR ZLWKGUDZ KHU DSSOLFDWLRQ   
      $ 0 0  ZDV SODFHG LQWR UHPRYDO SURFHHGLQJV RQ RU DURXQG 0DUFK            
,QMXU\ 6XIIHUHG  
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  $ 0 0  DJUHHG WR SD\ D WRWDO RI        
WR 'HIHQGDQWV  
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 84 of 111

      $V RI WRGD\  $ 0 0  KDV SDLG 'HIHQGDQWV D WRWDO RI DSSUR[LPDWHO\         LQ DW 
OHDVW HLJKW VHSDUDWH SD\PHQWV E\ FDVK DQG PRQH\ RUGHUV   $ 0 0  PDGH WKHVH SD\PHQWV GLUHFWO\ 
WR DQ HPSOR\HH DW +HFKW /DZ )LUP    
      $ 0 0   DOVR  SDLG       IRU  WKH  WUDQVODWLRQ  RI  KHU  ELUWK  FHUWLILFDWH     6KH  VHQW  WKH 
SD\PHQW WR +HFKW /DZ )LUP YLD PDLO   
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQWV  $ 0 0  ZRXOG QRW KDYH KLUHG 
RU SDLG 'HIHQGDQWV   
      $V  D  GLUHFW  DQG  SUR[LPDWH  UHVXOW  RI  'HIHQGDQWV¶  IUDXGXOHQW  DQG  SUHGDWRU\  DFWV  
$ 0 0  VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW          
- 0  DQG 0 0  
      3ODLQWLIIV - 0  DQG 0 0  DUH PDUULHG DQG OLYH ZLWK WKHLU WZR 8 6  FLWL]HQ FKLOGUHQ 
LQ 6WDWHQ ,VODQG  1HZ <RUN   0 0 ¶V DQG - 0 ¶V QDWLYH ODQJXDJH LV 6SDQLVK   7KH\ VSHDN  UHDG  DQG 
XQGHUVWDQG YHU\ OLPLWHG (QJOLVK  
      ,Q RU DURXQG $SULO       - 0  DQG 0 0  PHW ZLWK 0U  /XLV *XHUUHUR IRU DVVLVWDQFH 
ZLWK SUHSDULQJ DQG ILOLQJ WKHLU WD[HV   0U  /XLV *XHUUHUR DVNHG WKHP KRZ ORQJ WKH\ KDG EHHQ OLYLQJ 
LQ WKH 8QLWHG 6WDWHV   :KHQ WKH\ VDLG WKDW WKH\ KDG OLYHG LQ WKH 8QLWHG 6WDWHV IRU DOPRVW WHQ \HDUV  
0U  /XLV *XHUUHUR WROG - 0  DQG 0 0  WKDW KH XQGHUVWRRG WKDW +HFKW /DZ )LUP FRXOG ³IL[ WKHLU 
SDSHUV´  EHFDXVH  WKH\  KDG  OLYHG  LQ  WKH  8QLWHG  6WDWHV  IRU  DW  OHDVW  WHQ  \HDUV     0U   /XLV  *XHUUHUR 
HQFRXUDJHG WKHP WR VFKHGXOH DQ DSSRLQWPHQW ZLWK +HFKW /DZ )LUP  DVVXULQJ WKHP WKDW 'HIHQGDQWV 
ZHUH  JRRG  ODZ\HUV  DQG  WKDW  WKH  SURFHVV  ZRXOG  PRYH  TXLFNO\  EHFDXVH  WKH\  KDYH  8 6   FLWL]HQ 
FKLOGUHQ   
      $W WKH UHFRPPHQGDWLRQ RI 0U  /XLV *XHUUHUR  - 0  DQG 0 0  PDGH DQ DSSRLQWPHQW 
DW +HFKW /DZ )LUP IRU D FRQVXOWDWLRQ   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 85 of 111

      $W WKH WLPH RI WKHLU ILUVW PHHWLQJ ZLWK 'HIHQGDQW 7KRPDV  - 0  DQG 0 0  KDG OLYHG 
LQ WKH 8QLWHG 6WDWHV IRU MXVW XQGHU WHQ \HDUV   'HIHQGDQW 7KRPDV LQIRUPHG - 0  DQG 0 0  WKDW WKH\ 
ZRXOG QHHG WR ZDLW D IHZ PRQWKV WR UHDFK WKH WHQ \HDU PDUN EHIRUH KH FRXOG IL[ WKHLU SDSHUV XVLQJ 
WKH ³WHQ  \HDU ODZ ´  'XULQJ WKHLU ILUVW PHHWLQJ  DQG LQ DOO VXEVHTXHQW PHHWLQJV  - 0  DQG 0 0  
WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG E\ 'HIHQGDQWV 7KRPDV DQG /HRQDUG   'HIHQGDQWV GLG QRW 
DVN IRU WKH LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH ZKHWKHU - 0  RU 0 0  ZDV HOLJLEOH IRU  RU KDG D 
UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP  
      'HIHQGDQWV 7KRPDV DQG /HRQDUG IDOVHO\ UHSUHVHQWHG WR - 0  DQG 0 0  WKDW WKH\ 
ZHUH HOLJLEOH WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\ XQGHU WKH ³WHQ \HDU ODZ ´   
      'XULQJ WKHLU ILUVW PHHWLQJ  - 0  WROG 'HIHQGDQWV WKDW LI WKLV IRUP RI LPPLJUDWLRQ 
EHQHILW GLG QRW H[LVW  RU LI UHFHLYLQJ ODZIXO SHUPDQHQW UHVLGHQF\ ZDV QRW D FHUWDLQW\  KH GLG QRW 
ZDQW WR DSSO\   'HIHQGDQWV DVVXUHG - 0  DQG 0 0  WKDW LW ZDV SRVVLEOH WR REWDLQ ODZIXO SHUPDQHQW 
UHVLGHQF\ EHFDXVH WKH\ KDG 8 6  FLWL]HQ FKLOGUHQ DQG KDG OLYHG LQ WKH 8QLWHG 6WDWHV IRU WHQ \HDUV   
'HIHQGDQWV SURPLVHG - 0  DQG 0 0  WKDW WKH\ ZRXOG UHFHLYH WKHLU ³SDSHUV´ LQ D \HDU DQG D KDOI   
      'HIHQGDQWV¶ UHSUHVHQWDWLRQV FDXVHG - 0  DQG 0 0  WR UHDVRQDEO\ EHOLHYH WKDW WKH\ 
ZHUH HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO SHUPDQHQW UHVLGHQF\ WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ 
EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  FLWL]HQ FKLOGUHQ   
      :KHQ - 0  DQG 0 0  ZRXOG JR WR +HFKW /DZ )LUP IRU DSSRLQWPHQWV  WKH\ ZRXOG 
QRWH WKH UHDVRQ IRU WKHLU YLVLW RQ D VLJQ LQ VKHHW DV ³GLH] DxRV´  ³WHQ \HDUV´   
      'XULQJ RQH RI WKHLU PHHWLQJV  'HIHQGDQW 7KRPDV LQVWUXFWHG - 0  DQG 0 0  WR VLJQ 
VHYHUDO  GRFXPHQWV   ZKLFK  KH  VDLG  ZHUH  QHFHVVDU\  WR  DSSO\  IRU  ODZIXO  SHUPDQHQW  UHVLGHQF\   
'HIHQGDQW 7KRPDV GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 86 of 111

      :KHQ - 0  DQG 0 0  DVNHG TXHVWLRQV DERXW WKH OHJDO SURFHVV RU WKH GRFXPHQWV WKH\ 
ZHUH VLJQLQJ  'HIHQGDQWV 7KRPDV DQG /HRQDUG WROG WKHP QRW WR ZRUU\ EHFDXVH WKH ³WHQ \HDU ODZ´ 
ZDV UHDO DQG WKH\ KDG D JRRG FDVH    
      'HIHQGDQWV  GLG  QRW  DGYLVH  - 0   RU  0 0   WKDW  'HIHQGDQWV  LQWHQGHG  WR  VXEPLW  DQ 
DSSOLFDWLRQ IRU DV\OXP RQ WKHLU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  
RU WKH IDFW WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH - 0  DQG 0 0  WR EH SXW LQ UHPRYDO SURFHHGLQJV LI 
DQG ZKHQ WKH DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG  
      ,Q RU DURXQG -XO\       'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ IRU - 0   ZLWK 
0 0  DV D GHULYDWLYH RQ WKH DSSOLFDWLRQ  DQG XVHG D PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV WR WKH 
86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  
      ,Q  IDFW   'HIHQGDQWV  VXEPLWWHG  WKH  DV\OXP  DSSOLFDWLRQ  ZLWKRXW  WHOOLQJ  - 0   DQG 
0 0    RU  UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  WKHP     1HYHUWKHOHVV   XSRQ  LQIRUPDWLRQ  DQG  EHOLHI  
'HIHQGDQW 7KRPDV VLJQHG WKH SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH 
ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ DW WKH UHTXHVW RI - 0  DQG 0 0   DQG WKDW KH UHDG WKH FRPSOHWHG 
DSSOLFDWLRQ WR WKHP LQ D ODQJXDJH WKH\ XQGHUVWRRG IRU YHULILFDWLRQ   8SRQ LQIRUPDWLRQ DQG EHOLHI  
WKHLU  DSSOLFDWLRQ  FRQWDLQHG  WKH  VDPH  ERLOHUSODWH  EDVHV  IRU  DV\OXP  DV  WKH  RWKHU  3ODLQWLIIV¶ 
DSSOLFDWLRQV    
      'HIHQGDQW /HRQDUG UHSHDWHGO\ WROG - 0  DQG 0 0  WKDW WKHLU FDVH ZRXOG PRYH IDVWHU 
LI WKH\ PDGH DGGLWLRQDO SD\PHQWV   
      ,Q  RU  DURXQG  WKH  VXPPHU  RI         - 0   PHW  DQ  LPPLJUDWLRQ  DWWRUQH\  DW  WKH 
FRPPXQLW\ FHQWHU ³/D &ROPHQD´ LQ 6WDWHQ ,VODQG  1HZ <RUN  ZKR WROG KLP WKDW WKH ³WHQ \HDU ODZ´ 
GLG QRW H[LVW   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 87 of 111

      7KDW  DWWRUQH\  UHIHUUHG  - 0   WR  DQ  LPPLJUDWLRQ  DWWRUQH\  DW  6WDWHQ  ,VODQG  /HJDO 
6HUYLFHV  ZKR DJUHHG WR UHSUHVHQW - 0  DQG 0 0   7KLV DWWRUQH\ LQVWUXFWHG - 0  DQG 0 0  WR UHWXUQ 
WR +HFKW /DZ )LUP WR UHTXHVW WKHLU FDVH ILOH    
      2Q WZR VHSDUDWH RFFDVLRQV  - 0  DQG 0 0  ZHQW WR +HFKW /DZ )LUP WR UHTXHVW WKHLU 
FDVH ILOH   2Q ERWK RFFDVLRQV  WKH\ ZHUH PDGH WR ZDLW IRU KRXUV  DQG HDFK WLPH 'HIHQGDQW /HRQDUG 
WROG - 0  DQG 0 0  WKDW WKH\ GLG QRW QHHG WKHLU FDVH ILOH EHFDXVH WKH\ GR QRW VSHDN (QJOLVK  
      'HIHQGDQWV HYHQWXDOO\ SURGXFHG - 0 ¶V DQG 0 0 ¶V ILOHV WR WKHLU QHZ DWWRUQH\  EXW 
WKH ILOH GLG QRW LQFOXGH WKH )RUP ,     VXEPLWWHG E\ 'HIHQGDQWV RQ EHKDOI RI - 0  DQG 0 0   
      - 0  DQG 0 0  ZHUH SODFHG LQWR UHPRYDO SURFHHGLQJV DQG KDG WKHLU ILUVW DSSHDUDQFH 
LQ IURQW RI DQ ,PPLJUDWLRQ -XGJH RQ $SULO            
,QMXU\ 6XIIHUHG 
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  - 0  DQG 0 0  DJUHHG WR SD\ D WRWDO RI 
       WR 'HIHQGDQWV  
      $V RI WRGD\  - 0  DQG 0 0  KDYH SDLG 'HIHQGDQWV D WRWDO RI        LQ WKUHH VHSDUDWH 
FDVK SD\PHQWV    
      - 0  DQG 0 0  DOVR SDLG 'HIHQGDQW /HRQDUG     IRU WKH WUDQVODWLRQ RI WKHLU ELUWK 
FHUWLILFDWHV   7KH UHFHLSW SURYLGHG WR - 0  DQG 0 0  LV RQ 6\OYLD¶V 7UDQVODWLRQ 6HUYLFH OHWWHUKHDG   
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQWV  - 0  DQG 0 0  ZRXOG QRW 
KDYH KLUHG RU SDLG 'HIHQGDQWV   
      7KXV  DV D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  
- 0  DQG 0 0  VXIIHUHG ILQDQFLDO LQMXU\ RI DW OHDVW          

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 88 of 111

( * 5  
      3ODLQWLII ( * 5  LV PDUULHG DQG OLYHV ZLWK KHU WZR 8 6  FLWL]HQ FKLOGUHQ LQ 6WDWHQ 
,VODQG   1HZ  <RUN     ( * 5 ¶V  QDWLYH  ODQJXDJH  LV  6SDQLVK     6KH  VSHDNV   UHDGV   DQG  XQGHUVWDQGV 
OLPLWHG (QJOLVK   
      ,Q RU DURXQG 0DUFK       ( * 5  PHW ZLWK 0U  /XLV *XHUUHUR IRU DVVLVWDQFH ZLWK 
SUHSDULQJ DQG ILOLQJ KHU WD[HV   
      0U   /XLV  *XHUUHUR  WROG  ( * 5   WKDW  VKH  TXDOLILHG  IRU  ODZIXO  SHUPDQHQW  UHVLGHQW 
VWDWXV EDVHG RQ WKH QXPEHU RI \HDUV VKH KDG EHHQ OLYLQJ LQ WKH 8QLWHG 6WDWHV DQG KHU 8 6  FLWL]HQ 
FKLOGUHQ   
      0U  /XLV *XHUUHUR UHIHUUHG ( * 5  WR +HFKW /DZ )LUP WR JHW KHOS ZLWK WKH OHJDO 
SURFHVV LQ DSSO\LQJ IRU ODZIXO SHUPDQHQW UHVLGHQW VWDWXV EDVHG RQ WKH QXPEHU RI \HDUV VKH KDG 
EHHQ OLYLQJ LQ WKH 8 6  
      ,Q RU DURXQG 0DUFK       ( * 5  PHW ZLWK 'HIHQGDQW 7KRPDV DW +HFKW /DZ )LUP   
'XULQJ WKH ILUVW PHHWLQJ  DQG LQ DOO VXEVHTXHQW PHHWLQJV  ( * 5  WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV 
DVNHG  E\  'HIHQGDQW  7KRPDV     'HIHQGDQW  7KRPDV  GLG  QRW  DVN  IRU  WKH  LQIRUPDWLRQ  QHFHVVDU\  WR 
GHWHUPLQH ZKHWKHU ( * 5  ZDV HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  
DV\OXP   
      'HIHQGDQW 7KRPDV IDOVHO\ UHSUHVHQWHG WR ( * 5  WKDW VKH ZDV HOLJLEOH WR DSSO\ IRU 
ODZIXO SHUPDQHQW UHVLGHQF\ XQGHU WKH ³WHQ \HDU ODZ ´ 
      'HIHQGDQW 7KRPDV¶ UHSUHVHQWDWLRQV FDXVHG ( * 5  WR UHDVRQDEO\ EHOLHYH WKDW VKH 
ZDV HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO SHUPDQHQW UHVLGHQF\ WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ 
EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  FLWL]HQ FKLOGUHQ  
      :KHQ ( * 5  ZRXOG VLJQ LQ IRU KHU DSSRLQWPHQWV  VKH QRWHG RQ WKH VLJQ LQ VKHHW 
WKDW WKH SXUSRVH IRU KHU YLVLW ZDV ³WHQ \HDU ODZ ´   
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 89 of 111

      'XULQJ RQH RI WKHLU PHHWLQJV  'HIHQGDQW 7KRPDV LQVWUXFWHG ( * 5  WR VLJQ VHYHUDO 
GRFXPHQWV  ZKLFK KH VDLG ZHUH QHFHVVDU\ WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\   'HIHQGDQW 
7KRPDV GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV   
      :KHQ  ( * 5   DVNHG  'HIHQGDQW  7KRPDV  TXHVWLRQV  DERXW  WKH  OHJDO  SURFHVV  RU  WKH 
GRFXPHQWV VKH ZDV VLJQLQJ  'HIHQGDQW 7KRPDV UHIXVHG WR DQVZHU WKH TXHVWLRQV DQG WROG KHU QRW 
WR ZRUU\  
      'HIHQGDQWV GLG QRW DGYLVH ( * 5  WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ IRU 
DV\OXP RQ KHU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW WKDW 
'HIHQGDQWV LQWHQGHG WR FDXVH ( * 5  WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH DV\OXP 
DSSOLFDWLRQ ZDV QRW DSSURYHG    
      ,Q RU DURXQG $SULO       'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ IRU ( * 5 ¶V 
KXVEDQG ZLWK ( * 5  DV D GHULYDWLYH RQ WKH DSSOLFDWLRQ  DQG XVHG D PDLO FDUULHU WR VHQG LW DFURVV 
VWDWH OLQHV WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW   
      ,Q  IDFW   'HIHQGDQWV  VXEPLWWHG  WKH  DV\OXP  DSSOLFDWLRQ  ZLWKRXW  WHOOLQJ  ( * 5    RU 
UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  KHU     1HYHUWKHOHVV   'HIHQGDQW  7KRPDV  VLJQHG  WKH  SUHSDUHU 
DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ DW WKH 
UHTXHVW  RI  ( * 5   DQG  KHU  KXVEDQG   DQG  WKDW  KH  UHDG  WKH  FRPSOHWHG  DSSOLFDWLRQ  WR  WKHP  LQ  D 
ODQJXDJH WKH\ XQGHUVWRRG IRU YHULILFDWLRQ   7KH DSSOLFDWLRQ FRQWDLQHG WKH VDPH ERLOHUSODWH EDVHV 
IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV  
      ,Q -XO\       ( * 5  UHFHLYHG D OHWWHU IURP 'HIHQGDQW 7KRPDV VWDWLQJ WKDW VKH KDG 
DQ  LQWHUYLHZ  ZLWK  86&,6  RQ  $XJXVW             LQ  UHODWLRQ  WR  DQ  DV\OXP  DSSOLFDWLRQ     6KH  ZDV 
FRQIXVHG EHFDXVH VKH KDG QRW LQWHQGHG WR DSSO\ IRU DV\OXP      

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 90 of 111

      ( * 5   FDOOHG  'HIHQGDQW  7KRPDV  WR  DVN  DERXW  WKH  OHWWHU  DQG  WKH  VFKHGXOHG 
LQWHUYLHZ   'HIHQGDQW 7KRPDV WROG KHU WR QRW ZRUU\ DQG WKDW WKLV ZDV D UHTXLUHG VWHS LQ WKH SURFHVV 
XQGHU WKH ³WHQ \HDU ODZ ´  
      'HIHQGDQW  7KRPDV  WROG  ( * 5   WKDW  KH  ZRXOG  QRW  EH  SUHVHQW  IRU  WKH  LQWHUYLHZ   
'HIHQGDQW 7KRPDV DGYLVHG KHU WR VD\ LQ WKH LQWHUYLHZ WKDW VKH IHDUHG UHWXUQLQJ WR KHU KRPH FRXQWU\ 
EHFDXVH RI WKH KLJK FULPH UDWH DQG IUHTXHQW NLGQDSSLQJV   'HIHQGDQW 7KRPDV DOVR DGYLVHG KHU WR 
VD\ VKH ZDQWHG WR VWD\ LQ WKH 8QLWHG 6WDWHV WR SURYLGH KHU FKLOGUHQ ZLWK D EHWWHU OLIH  
      ,Q RU DURXQG 6HSWHPEHU       ( * 5  DWWHQGHG D 051< ZRUNVKRS DERXW WKH ³P\WK 
RI WKH WHQ \HDU ODZ ´  $W WKLV ZRUNVKRS  ( * 5  OHDUQHG WKDW 'HIHQGDQWV KDG SURPLVHG KHU ODZIXO 
VWDWXV WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW   
      $IWHU GLVFRYHULQJ WKDW VKH ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH  ( * 5  ILUHG +HFKW 
/DZ )LUP DQG UHWDLQHG QHZ FRXQVHO   
      ( * 5  ZDV SODFHG LQWR UHPRYDO SURFHHGLQJV LQ RU DURXQG 1RYHPEHU       
,QMXU\ 6XIIHUHG  
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  ( * 5  DJUHHG WR SD\ D WRWDO RI        
WR 'HIHQGDQWV   
      $V RI WRGD\  ( * 5  KDV SDLG 'HIHQGDQWV D WRWDO RI        LQ VL[ VHSDUDWH SD\PHQWV 
E\ FDVK DQG PRQH\ RUGHUV   ( * 5  PDGH WKHVH SD\PHQWV HLWKHU GLUHFWO\ WR 'HIHQGDQW 7KRPDV RU 
WR KLV DVVLVWDQW DW +HFKW /DZ )LUP   
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQWV  ( * 5  ZRXOG QRW KDYH KLUHG 
RU SDLG 'HIHQGDQWV  
      )XUWKHUPRUH   ( * 5   ZDV  UHTXLUHG  WR  SD\  IRU  OHJDO  UHSUHVHQWDWLRQ     $V  RI  WRGD\  
( * 5  KDV SDLG        IRU WKH OHJDO UHSUHVHQWDWLRQ    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 91 of 111

      7KXV  DV D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  
( * 5  VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW          
) 7 5  DQG - & 5  
      3ODLQWLIIV  ) 7 5   DQG  - & 5   DUH  PDUULHG  DQG  OLYH  ZLWK  WKHLU  WKUHH  8 6   FLWL]HQ 
FKLOGUHQ  LQ  6WDWHQ  ,VODQG   1HZ  <RUN     ) 7 5 ¶V  DQG  - & 5 ¶V  QDWLYH  ODQJXDJH  LV  6SDQLVK     7KH\ 
VSHDN  UHDG  DQG XQGHUVWDQG YHU\ OLPLWHG (QJOLVK   
      ,Q RU DURXQG -XQH       DW WKH UHFRPPHQGDWLRQ RI - & 5 ¶V DXQW  - & 5  PHW ZLWK 
'HIHQGDQW 7KRPDV DW +HFKW /DZ )LUP   'XULQJ WKH ILUVW PHHWLQJ  DQG LQ DOO VXEVHTXHQW PHHWLQJV  
- & 5  WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG E\ 'HIHQGDQW 7KRPDV   'HIHQGDQW 7KRPDV GLG QRW 
DVN IRU WKH LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH ZKHWKHU - & 5  ZDV HOLJLEOH IRU  RU KDG D UHDVRQDEOH 
EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP  
      'HIHQGDQW 7KRPDV IDOVHO\ UHSUHVHQWHG WR - & 5  WKDW KH DQG KLV ZLIH ZHUH HOLJLEOH 
WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\ XQGHU WKH ³WHQ \HDU YLVD ´   
      ) 7 5 ¶V ILUVW PHHWLQJ ZLWK 'HIHQGDQW 7KRPDV ZDV LQ RU DURXQG 2FWREHU       DQG 
- & 5  DOVR DWWHQGHG WKLV PHHWLQJ   'XULQJ WKLV PHHWLQJ   DQG LQ DOO VXEVHTXHQW PHHWLQJV  ) 7 5  
WUXWKIXOO\  DQVZHUHG  DOO  TXHVWLRQV  DVNHG  E\  'HIHQGDQW  7KRPDV     $JDLQ   KH  GLG  QRW  DVN  IRU  WKH 
LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH ZKHWKHU ) 7 5  ZDV HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ 
ODZ RU IDFW WR DSSO\ IRU  DV\OXP  
      'HIHQGDQW  7KRPDV  DOVR  WROG  ) 7 5   WKDW  VKH  ZDV  HOLJLEOH  WR  DSSO\  IRU  ODZIXO 
SHUPDQHQW  UHVLGHQF\  XQGHU  WKH  ³WHQ  \HDU  YLVD ´  DQG  UHSHDWHGO\  WROG  KHU  WKDW  'HIHQGDQWV  ZRXOG 
DSSO\ IRU D JUHHQ FDUG RQ KHU EHKDOI    
      'HIHQGDQW 7KRPDV¶ UHSUHVHQWDWLRQV FDXVHG - & 5  DQG ) 7 5  WR UHDVRQDEO\ EHOLHYH 
WKDW WKH\ ZHUH HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO SHUPDQHQW UHVLGHQF\ WKURXJK DQ DIILUPDWLYH 
DSSOLFDWLRQ EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  FLWL]HQ FKLOGUHQ  
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 92 of 111

      :KHQ ) 7 5  ZHQW WR +HFKW /DZ )LUP IRU DSSRLQWPHQWV  VKH ZRXOG VLJQ LQ RQ D 
VLJQ LQ VKHHW  QRWLQJ WKH UHDVRQ IRU KHU YLVLW DV ³SRU WLHPSR´  ³IRU WLPH´     
      'XULQJ RQH RI WKHLU PHHWLQJV  'HIHQGDQW 7KRPDV LQVWUXFWHG - & 5  DQG ) 7 5  WR 
VLJQ VHYHUDO GRFXPHQWV  ZKLFK KH VDLG ZHUH QHFHVVDU\ WR DSSO\ IRU WKH WHQ \HDU YLVD   'HIHQGDQW 
7KRPDV GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV  
      :KHQ - & 5  RU ) 7 5  DVNHG 'HIHQGDQW 7KRPDV TXHVWLRQV DERXW WKH OHJDO SURFHVV 
RU WKH GRFXPHQWV WKH\ ZHUH VLJQLQJ  'HIHQGDQW 7KRPDV ZRXOG FXW WKHP RII DQG WHOO WKHP QRW WR 
ZRUU\   
      'HIHQGDQWV  GLG  QRW  DGYLVH  - & 5   RU  ) 7 5   WKDW  WKH\  LQWHQGHG  WR  VXEPLW  DQ 
DSSOLFDWLRQ IRU DV\OXP RQ WKHLU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  
RU WKH IDFW WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH - & 5  DQG ) 7 5  WR EH SXW LQ UHPRYDO SURFHHGLQJV LI 
DQG ZKHQ WKH DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG    
      ,Q RU DURXQG 0DUFK       'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ IRU - & 5   
ZLWK ) 7 5  DV D GHULYDWLYH RQ WKH DSSOLFDWLRQ  DQG XVHG D PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV 
WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  
      ,Q  IDFW   'HIHQGDQWV  VXEPLWWHG  WKH  DV\OXP  DSSOLFDWLRQ  ZLWKRXW  WHOOLQJ  - & 5   RU 
) 7 5    RU  UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  WKHP     1HYHUWKHOHVV   'HIHQGDQW  7KRPDV  VLJQHG  WKH 
SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ 
DW WKH UHTXHVW RI - & 5  DQG ) 7 5   DQG WKDW KH UHDG WKH FRPSOHWHG DSSOLFDWLRQ WR WKHP LQ D ODQJXDJH 
WKH\ XQGHUVWRRG IRU YHULILFDWLRQ   7KH DSSOLFDWLRQ FRQWDLQHG WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP 
DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 93 of 111

      ,Q RU DURXQG 0DUFK       - & 5  DQG ) 7 5  UHFHLYHG D QRWLFH LQ WKH PDLO WKDW WKHLU 
DV\OXP DSSOLFDWLRQ KDG EHHQ UHFHLYHG E\ 86&,6   - & 5  DQG ) 7 5  ZHUH FRQIXVHG E\ WKLV QRWLFH 
EHFDXVH WKH\ GLG QRW LQWHQG WR DSSO\ IRU DV\OXP  
      - & 5  FDOOHG +HFKW  /DZ )LUP¶V RIILFH WR DVN DERXW WKH QRWLFH   7KH SHUVRQ ZKR 
DQVZHUHG WKH SKRQH DW +HFKW /DZ )LUP WROG - & 5  WKDW WKLV ZDV WKH ILUVW VWHS XQGHU WKH ³WHQ \HDU 
YLVD ´   
      ,Q  RU  DURXQG  HDUO\  )DOO  RI         - & 5   DQG  ) 7 5   DWWHQGHG  D  051<  ZRUNVKRS 
DERXW WKH ³P\WK RI WKH WHQ \HDU ODZ ´  $W WKLV ZRUNVKRS  - & 5  DQG ) 7 5  OHDUQHG WKDW 'HIHQGDQWV 
KDG SURPLVHG WKHP ODZIXO VWDWXV WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW    
      $IWHU GLVFRYHULQJ WKDW WKH\ ZHUH YLFWLPV RI WKH 7HQ <HDU 6FKHPH  - & 5  DQG ) 7 5  
ILUHG  +HFKW  /DZ  )LUP   VHFXUHG  RWKHU  FRXQVHO   ZLWKGUHZ  WKHLU  DV\OXP  DSSOLFDWLRQ   DQG  UHSRUWHG 
'HIHQGDQWV¶ DFWLRQV WR 86&,6  
,QMXU\ 6XIIHUHG 
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  - & 5  DQG ) 7 5  DJUHHG WR SD\ D WRWDO 
RI        WR 'HIHQGDQWV  
      $V RI WRGD\  - & 5  DQG ) 7 5  KDYH SDLG 'HIHQGDQWV      LQ WKUHH VHSDUDWH FDVK 
SD\PHQWV     - & 5   DQG  ) 7 5   PDGH  WKHVH  SD\PHQWV  HLWKHU  GLUHFWO\  WR  'HIHQGDQWV  7KRPDV  DQG 
/HRQDUG RU WR D VHFUHWDU\ DW +HFKW /DZ )LUP  
      ) 7 5  DQG - & 5  DOVR SDLG HLWKHU 'HIHQGDQW 7KRPDV RU D VHFUHWDU\ DW +HFKW /DZ 
)LUP     IRU WKH WUDQVODWLRQ RI WKHLU ELUWK FHUWLILFDWHV   7KH UHFHLSW SURYLGHG WR ) 7 5  DQG - & 5  LV 
RQ 6\OYLD¶V 7UDQVODWLRQ 6HUYLFH OHWWHUKHDG   
      %XW  IRU  WKH  IDOVH  UHSUHVHQWDWLRQV  PDGH  E\  'HIHQGDQW  7KRPDV   - & 5   DQG  ) 7 5  
ZRXOG QRW KDYH KLUHG RU SDLG 'HIHQGDQWV  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 94 of 111

      7KXV  DV D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  
- & 5  DQG ) 7 5  VXIIHUHG ILQDQFLDO LQMXU\ RI DW OHDVW       
5 0 5  
      3ODLQWLII  5 0 5   OLYHV  ZLWK  KHU  KXVEDQG  DQG  WKHLU  WZR  8 6   FLWL]HQ  FKLOGUHQ  LQ 
%URRNO\Q  1HZ <RUN   5 0 5 ¶V QDWLYH ODQJXDJH LV 6SDQLVK   6KH VSHDNV  UHDGV  DQG XQGHUVWDQGV 
YHU\ OLPLWHG (QJOLVK  
      5 0 5   KHDUG  RI  +HFKW  /DZ  )LUP¶V  VHUYLFHV  WKURXJK  KHU  PRWKHU LQ ODZ     6KH 
FRQVXOWHG +HFKW /DZ )LUP PXOWLSOH WLPHV WR DGYLVH KHU DERXW KHU RSWLRQV IRU LPPLJUDWLRQ EHQHILWV   
,Q DOO PHHWLQJV  5 0 5  WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG E\ 'HIHQGDQW /HRQDUG   'HIHQGDQW 
/HRQDUG GLG QRW DVN IRU WKH LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH ZKHWKHU 5 0 5  ZDV HOLJLEOH IRU  
RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP  
      'XULQJ D PHHWLQJ DURXQG       'HIHQGDQW /HRQDUG IDOVHO\ UHSUHVHQWHG WR 5 0 5  
WKDW VKH ZDV HOLJLEOH WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\ WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ   
'HIHQGDQW /HRQDUG UHSHDWHGO\ DVVXUHG 5 0 5  WKDW WKH DSSOLFDWLRQ SURFHVV ZDV VDIH DQG WKDW WKH 
JRYHUQPHQW ZRXOG QRW GHSRUW KHU  EHFDXVH  DV 'HIHQGDQW /HRQDUG SXW LW  WKH JRYHUQPHQW ZDV QRW 
ORRNLQJ WR VSOLW XS WD[ SD\LQJ IDPLOLHV  
      'HIHQGDQW /HRQDUG¶V UHSUHVHQWDWLRQV FDXVHG 5 0 5  WR UHDVRQDEO\ EHOLHYH WKDW VKH 
ZDV HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO SHUPDQHQW UHVLGHQF\ WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ  
      'HIHQGDQW  /HRQDUG  LQVWUXFWHG  5 0 5   WR  VLJQ  VHYHUDO  GRFXPHQWV   ZKLFK  KH  VDLG 
ZHUH QHFHVVDU\ WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\   'HIHQGDQW /HRQDUG GLG QRW H[SODLQ RU 
WUDQVODWH WKH GRFXPHQWV  
      'HIHQGDQWV GLG QRW DGYLVH 5 0 5  WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ IRU 
DV\OXP RQ KHU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW WKDW 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 95 of 111

'HIHQGDQWV LQWHQGHG WR FDXVH 5 0 5  WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH DV\OXP 
DSSOLFDWLRQ ZDV QRW DSSURYHG    
      ,Q RU DURXQG 0DUFK       'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ RQ EHKDOI 
RI  5 0 5   DQG  XVHG  D  PDLO  FDUULHU  WR  VHQG  LW  DFURVV  VWDWH  OLQHV  WR  WKH  86&,6  6HUYLFH  &HQWHU  LQ 
9HUPRQW  
      ,Q  IDFW   'HIHQGDQWV  VXEPLWWHG  WKH  DV\OXP  DSSOLFDWLRQ  ZLWKRXW  WHOOLQJ  5 0 5    RU 
UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  KHU     1HYHUWKHOHVV   'HIHQGDQW  7KRPDV  VLJQHG  WKH  SUHSDUHU 
DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP DSSOLFDWLRQ DW WKH 
UHTXHVW RI 5 0 5   DQG WKDW KH UHDG WKH FRPSOHWHG DSSOLFDWLRQ WR KHU LQ D ODQJXDJH VKH XQGHUVWRRG 
IRU YHULILFDWLRQ   5 0 5 ¶V DSSOLFDWLRQ FRQWDLQHG WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 
3ODLQWLIIV¶ DSSOLFDWLRQV    
      $W  VRPH  SRLQW   D  IDPLO\  PHPEHU  RI  5 0 5   DGYLVHG  5 0 5   WR  VHHN  D  VHFRQG 
RSLQLRQ RQ KHU LPPLJUDWLRQ FDVH  DV WKH IDPLO\ PHPEHU KDG KHDUG FRPSODLQWV DERXW 'HIHQGDQWV¶ 
VHUYLFHV   
      5 0 5  FRQVXOWHG ZLWK 051< LQ RU DURXQG )HEUXDU\        $W WKLV FRQVXOWDWLRQ  
5 0 5  OHDUQHG WKDW 'HIHQGDQWV KDG SURPLVHG KHU ODZIXO VWDWXV WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ 
DSSOLFDWLRQ WKDW GLG QRW H[LVW  
      $IWHU GLVFRYHULQJ WKDW VKH ZDV D YLFWLP RI 'HIHQGDQWV¶ IUDXG  5 0 5  ILUHG +HFKW 
/DZ )LUP  DQG UHWDLQHG SUR ERQR FRXQVHO WR UHSUHVHQW KHU  
,QMXU\ 6XIIHUHG 
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  5 0 5  DJUHHG WR SD\ D WRWDO RI        
WR 'HIHQGDQWV  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 96 of 111

      $V  RI  WRGD\   5 0 5   KDV  SDLG  'HIHQGDQWV          LQ  PXOWLSOH  FDVK  SD\PHQWV   
5 0 5  PDGH WKHVH SD\PHQWV HLWKHU GLUHFWO\ WR 'HIHQGDQWV 7KRPDV DQG /HRQDUG RU WR D VHFUHWDU\ 
DW +HFKW /DZ )LUP  
      5 0 5  DOVR SDLG HLWKHU 'HIHQGDQW /HRQDUG RU D VHFUHWDU\ DW +HFKW /DZ )LUP     
IRU WKH WUDQVODWLRQ RI KHU ELUWK FHUWLILFDWH   7KH UHFHLSW SURYLGHG WR 5 0 5  LV RQ 6\OYLD¶V 7UDQVODWLRQ 
6HUYLFH OHWWHUKHDG  
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQW /HRQDUG  5 0 5  ZRXOG QRW 
KDYH KLUHG RU SDLG 'HIHQGDQWV  
      7KXV  DV D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  
5 0 5  VXIIHUHG ILQDQFLDO LQMXU\ RI DW OHDVW         
) 7 9  
      3ODLQWLII ) 7 9  LV PDUULHG DQG OLYHV ZLWK KLV ZLIH DQG \RXQJHVW 8 6  FLWL]HQ FKLOG 
LQ %URQ[  1HZ <RUN   ) 7 9 ¶V QDWLYH ODQJXDJH LV 6SDQLVK   +H VSHDNV  UHDGV  DQG XQGHUVWDQGV YHU\ 
OLPLWHG (QJOLVK  
      ,Q RU DURXQG HDUO\       RQ WKH UHFRPPHQGDWLRQ RI DQ DFTXDLQWDQFH  ) 7 9  DQG KLV 
ZLIH  PHW  ZLWK  'HIHQGDQW  /HRQDUG  DW  +HFKW  /DZ  )LUP     'XULQJ  WKH  ILUVW  PHHWLQJ   DQG  LQ  DOO 
VXEVHTXHQW  PHHWLQJV   ) 7 9   WUXWKIXOO\  DQVZHUHG  DOO  TXHVWLRQV  DVNHG  E\  'HIHQGDQW  /HRQDUG   
'HIHQGDQW /HRQDUG GLG QRW DVN ) 7 9  IRU WKH LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH ZKHWKHU KH ZDV 
HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  DV\OXP  
      'HIHQGDQW /HRQDUG IDOVHO\ UHSUHVHQWHG WR ) 7 9  WKDW KH ZDV HOLJLEOH WR DSSO\ IRU 
ODZIXO SHUPDQHQW UHVLGHQF\ XQGHU WKH ³WHQ \HDU ODZ ´ 
      'HIHQGDQW /HRQDUG¶V UHSUHVHQWDWLRQV FDXVHG ) 7 9  WR UHDVRQDEO\ EHOLHYH WKDW KH 
ZDV HOLJLEOH IRU D ZRUN SHUPLW DQG ODZIXO SHUPDQHQW UHVLGHQF\ WKURXJK DQ DIILUPDWLYH DSSOLFDWLRQ 
EDVHG RQ WKH HOLJLELOLW\ FULWHULD RI OHQJWK RI UHVLGHQF\ DQG 8 6  FLWL]HQ FKLOGUHQ  
   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 97 of 111

      'HIHQGDQW  /HRQDUG  LQVWUXFWHG  ) 7 9   WR  VLJQ  VHYHUDO  GRFXPHQWV     'HIHQGDQW 
/HRQDUG GLG QRW H[SODLQ RU WUDQVODWH WKH GRFXPHQWV  
      'HIHQGDQWV GLG QRW DGYLVH ) 7 9  WKDW WKH\ LQWHQGHG WR VXEPLW DQ DSSOLFDWLRQ IRU 
DV\OXP RQ KLV EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  RU WKH IDFW WKDW 
'HIHQGDQWV LQWHQGHG WR  FDXVH  ) 7 9  WR EH SXW LQ UHPRYDO SURFHHGLQJV LI DQG ZKHQ WKH DV\OXP 
DSSOLFDWLRQ ZDV QRW DSSURYHG    
      2Q RU DERXW 0D\          'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ RQ EHKDOI 
RI ) 7 9   DQG XVHG D PDLO FDUULHU WR VHQG LW WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  
      ,Q  IDFW   'HIHQGDQWV  VXEPLWWHG  WKH  DV\OXP  DSSOLFDWLRQ  ZLWKRXW  WHOOLQJ  ) 7 9    RU 
UHYLHZLQJ WKH DSSOLFDWLRQ ZLWK KLP   1HYHUWKHOHVV  XSRQ LQIRUPDWLRQ DQG EHOLHI  'HIHQGDQW 7KRPDV 
VLJQHG WKH SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH ZDV ILOLQJ WKH DV\OXP 
DSSOLFDWLRQ DW WKH UHTXHVW RI ) 7 9   DQG WKDW KH UHDG WKH FRPSOHWHG DSSOLFDWLRQ WR KLP LQ D ODQJXDJH 
KH XQGHUVWRRG IRU YHULILFDWLRQ   8SRQ LQIRUPDWLRQ DQG EHOLHI  WKH DSSOLFDWLRQ FRQWDLQHG WKH VDPH 
ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ DSSOLFDWLRQV  
      +DG KH NQRZQ WKDW 'HIHQGDQWV  LQWHQGHG  WR  VXEPLW  DQ  DV\OXP  DSSOLFDWLRQ RQ  KLV 
EHKDOI  ) 7 9  ZRXOG QRW KDYH SHUPLWWHG 'HIHQGDQWV WR GR VR EHFDXVH KH EHOLHYHG WKDW LQGLYLGXDOV 
IURP KLV KRPH FRXQWU\ GLG QRW TXDOLI\ IRU DV\OXP    
      ) 7 9   EHFDPH  VXVSLFLRXV  RI  'HIHQGDQW  /HRQDUG¶V  UHSUHVHQWDWLRQ  EHFDXVH  RI  WKH 
EULHI  DQG  VLPSOLVWLF  DQVZHUV  KH  JDYH  WR  TXHVWLRQV     ) 7 9 ¶V  GDXJKWHU   ZKR  VSHDNV  (QJOLVK  
DFFRPSDQLHG  KLP  WR  +HFKW  /DZ  )LUP  WR  DVN  DERXW  WKH  FDVH   EXW  'HIHQGDQW  /HRQDUG  HYDGHG 
DQVZHULQJ TXHVWLRQV  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 98 of 111

      $W WKH UHFRPPHQGDWLRQ RI KLV GDXJKWHU  ) 7 9  VRXJKW DQ LPPLJUDWLRQ FRQVXOWDWLRQ 
ZLWK DQ DWWRUQH\ DW 051< LQ $SULO        $W WKLV PHHWLQJ  ) 7 9  OHDUQHG WKDW 'HIHQGDQWV KDG 
SURPLVHG KLP D EHQHILW WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW  
      $IWHU GLVFRYHULQJ WKDW KH ZDV D YLFWLP RI WKH 7HQ <HDU 6FKHPH  ) 7 9  ILUHG +HFKW 
/DZ )LUP DQG UHWDLQHG QHZ FRXQVHO  
,QMXU\ 6XIIHUHG 
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  ) 7 9  DJUHHG WR SD\ D WRWDO RI        
IRU 'HIHQGDQWV¶ OHJDO DVVLVWDQFH  
      $V RI WRGD\  ) 7 9  KDV SDLG 'HIHQGDQWV D WRWDO RI        LQ WKUHH VHSDUDWH FDVK 
SD\PHQWV   ) 7 9  PDGH WKHVH SD\PHQWV WR 'HIHQGDQW /HRQDUG  
      ) 7 9  DOVR SDLG +HFKW /DZ )LUP      YLD PRQH\ RUGHU IRU WKH WUDQVODWLRQ RI FHUWDLQ 
GRFXPHQWV  IRU  KLV  FDVH     7KH  LQYRLFH  SURYLGHG  WR  ) 7 9   LV  RQ  6\OYLD¶V  7UDQVODWLRQ  6HUYLFH 
OHWWHUKHDG  
      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQWV  ) 7 9  ZRXOG QRW KDYH KLUHG 
RU SDLG 'HIHQGDQWV  
      $V  D  GLUHFW  DQG  SUR[LPDWH  UHVXOW  RI  'HIHQGDQWV¶  IUDXGXOHQW  DQG  SUHGDWRU\  DFWV  
) 7 9  VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW         
2 & )  DQG 5 0 )  
      3ODLQWLIIV  2 & )   DQG  5 0 )   DUH  PDUULHG  DQG  OLYH  ZLWK  WKHLU  WZR  8 6   FLWL]HQ 
FKLOGUHQ LQ 6WDWHQ ,VODQG  1HZ <RUN   2 & ) ¶V DQG 5 0 ) ¶V QDWLYH ODQJXDJH LV 6SDQLVK   7KH\ 
VSHDN  UHDG  DQG XQGHUVWDQG YHU\ OLPLWHG (QJOLVK   
      5 0 )  KHDUG IURP D IULHQG WKDW +HFKW /DZ )LUP FRXOG KHOS KHU REWDLQ VWDWXV    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 99 of 111

      2Q RU DURXQG 6HSWHPEHU          5 0 )  ZHQW WR +HFKW /DZ )LUP WR DVN DERXW DQ 
DSSRLQWPHQW     7KH  VHFUHWDU\  LQVWUXFWHG  5 0 )   WR  ILOO  RXW  DQ  LQWDNH  IRUP  DQG  UHYLHZHG  WKH 
GRFXPHQWV 5 0 )  EURXJKW ZLWK KHU    
      7KH VHFUHWDU\ WROG 5 0 )  WKDW VKH KDG D ³VWURQJ FDVH´ XQGHU WKH ³WHQ \HDU ODZ ´  
6KH  PDGH  FRSLHV  RI  DOO  RI  5 0 ) ¶V  GRFXPHQWV   FKDUJHG  5 0 )          DQG  VFKHGXOHG  DQ 
DSSRLQWPHQW IRU 5 0 )  DQG 2 & )  WR PHHW ZLWK 'HIHQGDQW /HRQDUG  
      2Q RU DURXQG 6HSWHPEHU           5 0 )  DQG 2 & )  PHW ZLWK 'HIHQGDQW /HRQDUG 
DW +HFKW /DZ )LUP   'XULQJ WKHLU ILUVW DQG RQO\ PHHWLQJ  'HIHQGDQW /HRQDUG VSHQW QR PRUH WKDQ 
WHQ PLQXWHV ZLWK 5 0 )  DQG 2 & )   5 0 )  DQG 2 & )  WUXWKIXOO\ DQVZHUHG DOO TXHVWLRQV DVNHG 
E\ 'HIHQGDQW /HRQDUG   'HIHQGDQW /HRQDUG GLG QRW DVN IRU WKH LQIRUPDWLRQ QHFHVVDU\ WR GHWHUPLQH 
ZKHWKHU 5 0 )  DQG 2 & )  ZHUH HOLJLEOH IRU  RU KDG D UHDVRQDEOH EDVLV LQ ODZ RU IDFW WR DSSO\ IRU  
DV\OXP  
      'HIHQGDQW /HRQDUG IDOVHO\ UHSUHVHQWHG WR 5 0 )  DQG 2 & )  WKDW WKH\ ZHUH HOLJLEOH 
WR DSSO\ IRU ODZIXO SHUPDQHQW UHVLGHQF\ XQGHU WKH ³WHQ \HDU ODZ ´ 
      'HIHQGDQW  /HRQDUG¶V  UHSUHVHQWDWLRQV  FDXVHG  5 0 )   DQG  2 & )   WR  UHDVRQDEO\ 
EHOLHYH  WKDW  WKH\  ZHUH  HOLJLEOH  IRU  D  ZRUN  SHUPLW  DQG  ODZIXO  SHUPDQHQW  UHVLGHQF\  WKURXJK  DQ 
DIILUPDWLYH  DSSOLFDWLRQ  EDVHG  RQ  WKH  HOLJLELOLW\  FULWHULD  RI  OHQJWK  RI  UHVLGHQF\  DQG  8 6   FLWL]HQ 
FKLOGUHQ  
      'HIHQGDQW /HRQDUG LQVWUXFWHG 5 0 )  DQG 2 & )  WR VLJQ VHYHUDO GRFXPHQWV  ZKLFK 
KH  VDLG  ZHUH  QHFHVVDU\  WR  DSSO\  IRU  ODZIXO  SHUPDQHQW  UHVLGHQF\     'HIHQGDQW  /HRQDUG  GLG  QRW 
H[SODLQ RU WUDQVODWH WKH GRFXPHQWV    

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 100 of 111

      :KHQ  5 0 )   RU  2 & )   WULHG  WR  DVN  TXHVWLRQV  DERXW  WKH  OHJDO  SURFHVV  RU  WKH 
GRFXPHQWV  WKH\  ZHUH  VLJQLQJ   'HIHQGDQW  /HRQDUG  FXW  WKHP  RII   WROG  WKHP  QRW  WR  ZRUU\   DQG 
GLVPLVVHG WKHLU FRQFHUQV  
      'HIHQGDQWV  GLG  QRW  DGYLVH  5 0 )   RU  2 & )   WKDW  WKH\  LQWHQGHG  WR  VXEPLW  DQ 
DSSOLFDWLRQ IRU DV\OXP RQ WKHLU EHKDOI  DQG DW QR SRLQW GLVFXVVHG WKH OHJDO UHTXLUHPHQWV IRU DV\OXP  
RU WKH IDFW WKDW 'HIHQGDQWV LQWHQGHG WR FDXVH 5 0 )  DQG 2 & )  WR EH SXW LQ UHPRYDO SURFHHGLQJV 
LI DQG ZKHQ WKH DV\OXP DSSOLFDWLRQ ZDV QRW DSSURYHG    
      2Q  RU  DURXQG  6HSWHPEHU              2 & )   GHOLYHUHG  FHUWDLQ  GRFXPHQWV  WR  WKH 
VHFUHWDU\ DW +HFKW /DZ )LUP  ZKR  XSRQ LQIRUPDWLRQ DQG EHOLHI  WKHQ UHPLWWHG WKHP WR 6\OYLD¶V 
7UDQVODWLRQ  6HUYLFH  WR  EH  WUDQVODWHG     6\OYLD¶V  7UDQVODWLRQ  6HUYLFH  FKDUJHG  2 & )         ZKLFK 
2 & )  SDLG WR WKH VHFUHWDU\   
      ,Q RU DURXQG 2FWREHU       'HIHQGDQWV VXEPLWWHG DQ DV\OXP DSSOLFDWLRQ IRU 2 & )   
ZLWK 5 0 )  DV D GHULYDWLYH RQ WKH DSSOLFDWLRQ  DQG XVHG D PDLO FDUULHU WR VHQG LW DFURVV VWDWH OLQHV 
WR WKH 86&,6 6HUYLFH &HQWHU LQ 9HUPRQW  
      ,Q  IDFW   'HIHQGDQWV  VXEPLWWHG WKH DV\OXP DSSOLFDWLRQ ZLWKRXW WHOOLQJ 5 0 )   DQG 
2 & )    RU  UHYLHZLQJ  WKH  DSSOLFDWLRQ  ZLWK  WKHP     1HYHUWKHOHVV   XSRQ  LQIRUPDWLRQ  DQG  EHOLHI  
'HIHQGDQW 7KRPDV VLJQHG WKH SUHSDUHU DWWHVWDWLRQ LQ WKH )RUP ,      IDOVHO\ UHSUHVHQWLQJ WKDW KH 
ZDV  ILOLQJ  WKH  DV\OXP  DSSOLFDWLRQ  DW  WKH  UHTXHVW  RI  2 & )   DQG  5 0 )    DQG  WKDW  KH  UHDG  WKH 
FRPSOHWHG DSSOLFDWLRQ WR WKHP LQ D ODQJXDJH WKH\ XQGHUVWRRG IRU YHULILFDWLRQ   8SRQ LQIRUPDWLRQ 
DQG EHOLHI  WKH DSSOLFDWLRQ FRQWDLQHG WKH VDPH ERLOHUSODWH EDVHV IRU DV\OXP DV WKH RWKHU 3ODLQWLIIV¶ 
DSSOLFDWLRQV  
      ,Q RU DURXQG 2FWREHU       5 0 )  DQG 2 & )  UHFHLYHG D QRWLFH LQ WKH PDLO WKDW 
WKHLU DV\OXP DSSOLFDWLRQ KDG EHHQ UHFHLYHG E\ 86&,6   5 0 )  DQG 2 & )  ZHUH FRQIXVHG E\ WKLV 

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 101 of 111

QRWLFH EHFDXVH WKH\ GLG QRW LQWHQG WR DSSO\ IRU DV\OXP  DQG WKH\ KDG QRW ZDQWHG WR DSSO\ IRU DV\OXP 
EHFDXVH WKH\ EHOLHYHG WKDW LQGLYLGXDOV IURP WKHLU KRPH FRXQWU\ FRXOG QRW EH JUDQWHG DV\OXP   
      5 0 )   KDV  EHHQ  D  PHPEHU  RI  051<  VLQFH  'HFHPEHU                :RUULHG  WKDW 
VRPHWKLQJ ZDV ZURQJ  5 0 )  FRQWDFWHG D VWDII PHPEHU DW 051< WR DVN DERXW WKH QRWLFH  DQG 
WKDW VWDII PHPEHU LQIRUPHG KHU DERXW WKH ³WHQ \HDU VFDP ´  5 0 )  OHDUQHG WKDW 'HIHQGDQWV KDG 
SURPLVHG KHU ODZIXO VWDWXV WKURXJK DQ DIILUPDWLYH LPPLJUDWLRQ DSSOLFDWLRQ WKDW GLG QRW H[LVW    
      $IWHU  GLVFRYHULQJ  WKDW  WKH\  ZHUH  YLFWLPV  RI  WKH  7HQ  <HDU  6FKHPH   5 0 )   DQG 
2 & )  ILUHG +HFKW /DZ )LUP  DQG KDYH PHW ZLWK RWKHU LPPLJUDWLRQ DWWRUQH\V LQ UHODWLRQ WR WKHLU 
LPPLJUDWLRQ FDVH  
      2Q RU DURXQG 0DUFK           5 0 )  DQG 2 & )  UHFHLYHG QRWLFH IURP 86&,6 WKDW 
WKHLU DV\OXP LQWHUYLHZ KDG EHHQ VFKHGXOHG   2Q RU DURXQG 0DUFK           5 0 )  DQG 2 & )  
UHFHLYHG  D  OHWWHU  IURP  +HFKW  /DZ  )LUP  QRWLI\LQJ  WKHP  WKDW  DQ  LQWHUYLHZ  LQ  FRQQHFWLRQ  WR  WKHLU 
DSSOLFDWLRQ KDG EHHQ VFKHGXOHG   7KDW OHWWHU GLG QRW PHQWLRQ DV\OXP  
      5 0 )  DQG 2 & )  KDYH ERWK EHHQ SODFHG LQWR UHPRYDO SURFHHGLQJV  
,QMXU\ 6XIIHUHG  
      %DVHG RQ 'HIHQGDQWV¶ IDOVH UHSUHVHQWDWLRQV  5 0 )  DQG 2 & )  DJUHHG WR SD\ D WRWDO 
RI        WR 'HIHQGDQWV  
      $V RI WRGD\  5 0 )  DQG 2 & )  KDYH SDLG 'HIHQGDQWV DW OHDVW      LQ YDULRXV FDVK 
SD\PHQWV   5 0 )  DQG  2 & )  PDGH WKHVH  SD\PHQWV  WR  'HIHQGDQW  /HRQDUG LQ SHUVRQ  RU WR WKH 
VHFUHWDU\ DW +HFKW /DZ )LUP  
      5 0 )  DQG 2 & )  DOVR SDLG     IRU WKH WUDQVODWLRQ RI FHUWDLQ GRFXPHQWV IRU WKHLU 
FDVH WR D VHFUHWDU\ DW +HFKW /DZ )LUP   7KH LQYRLFH SURYLGHG WR 5 0 )  DQG 2 & )  LV RQ 6\OYLD¶V 
7UDQVODWLRQ 6HUYLFH OHWWHUKHDG  

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 102 of 111

      %XW IRU WKH IDOVH UHSUHVHQWDWLRQV PDGH E\ 'HIHQGDQWV  5 0 )  DQG 2 & )  ZRXOG QRW 
KDYH KLUHG RU SDLG 'HIHQGDQWV  
      )XUWKHUPRUH   5 0 )   DQG  2 & )   ZHUH  UHTXLUHG  WR  SD\  IRU  OHJDO  UHSUHVHQWDWLRQ  
ZKLFK  WKXV IDU  KDV FRVW WKHP         
      7KXV  DV D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ IUDXGXOHQW DQG SUHGDWRU\ DFWV  
5 0 )  DQG 2 & )  VXIIHUHG D ILQDQFLDO LQMXU\ RI DW OHDVW           
0DNH WKH 5RDG 1HZ <RUN 
      3ODLQWLII  051<  EULQJV  WKLV  DFWLRQ  RQ  EHKDOI  RI  LWVHOI   D  QRQSURILW  
PHPEHUVKLS EDVHG †     F     RUJDQL]DWLRQ GHGLFDWHG WR EXLOGLQJ WKH SRZHU RI LPPLJUDQW  /DWLQ[  
DQG  ZRUNLQJ FODVV  FRPPXQLWLHV  LQ  1HZ  <RUN     051<  VHHNV  RQO\  LQMXQFWLYH  UHOLHI  RQ  LWV  RZQ 
EHKDOI  
      051<  KDV  RIILFHV  LQ  %URRNO\Q   4XHHQV   6WDWHQ  ,VODQG   6XIIRON  &RXQW\   DQG 
:HVWFKHVWHU &RXQW\    051< LQWHJUDWHV DGXOW DQG \RXWK HGXFDWLRQ  OHJDO DQG VXUYLYDO VHUYLFHV  
DQG FRPPXQLW\ DQG FLYLF HQJDJHPHQW LQ RUGHU WR VXSSRUW ORZ LQFRPH 1HZ <RUNHUV LQ LPSURYLQJ 
WKHLU RZQ OLYHV DQG QHLJKERUKRRGV   
      051< KDV PRUH WKDQ        GXHV SD\LQJ PHPEHUV UHVLGLQJ LQ 1HZ <RUN &LW\  
/RQJ ,VODQG  DQG :HVWFKHVWHU  SULPDULO\ LQ WKH ERURXJKV RI %URRNO\Q DQG 4XHHQV   ,WV PHPEHUV 
LQFOXGH PDQ\ RI 3ODLQWLIIV  DORQJ ZLWK PDQ\ RWKHUV ZKR KDYH VXIIHUHG IURP 'HIHQGDQWV¶ VFKHPH 
EXW DUH QRW SDUWLFLSDWLQJ LQ WKLV ODZVXLW  
      051<  KDV  D  OHJDO  GHSDUWPHQW  VWDIIHG  E\  WZHQW\ VHYHQ  DWWRUQH\V  DQG  IRXUWHHQ 
DGYRFDWHV ZKR SURYLGH D EURDG UDQJH RI FLYLO OHJDO VHUYLFHV WR LPPLJUDQW 1HZ <RUNHUV   051<¶V 
LPPLJUDWLRQ  WHDP  UHSUHVHQWV  LPPLJUDQWV  IDFLQJ  GHSRUWDWLRQ  DV  ZHOO  DV  LPPLJUDQWV  ILOLQJ 
DIILUPDWLYH DSSOLFDWLRQV IRU LPPLJUDWLRQ EHQHILWV   

   
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 103 of 111

      051< KDV KDG WR GHGLFDWH VLJQLILFDQW UHVRXUFHV WR PLWLJDWLQJ WKH KDUP FDXVHG E\ 
'HIHQGDQWV  
      051< ILUVW QRWLFHG D WUHQG UHJDUGLQJ IRUPHU FOLHQWV RI +HFKW /DZ )LUP LQ 6WDWHQ 
,VODQG  LQ  RU  DURXQG           6LQFH  WKHQ   051<  KDV  HQFRXQWHUHG  VXUYLYRUV  ZLWK  VLPLODU  VWRULHV 
WKURXJKRXW 1HZ <RUN  LQFOXGLQJ LQ %URRNO\Q  4XHHQV  WKH %URQ[ DQG LQ :HVWFKHVWHU DQG 6XIIRON 
&RXQWLHV   %HFDXVH RI WKH KLJK YROXPH RI FOLHQWV DQG PHPEHUV ZKR FRPH WKURXJK 051<¶V GRRUV 
DQG KDYH EHHQ GLUHFWO\ LPSDFWHG E\ 'HIHQGDQWV¶ DFWLRQV  051< VSHQGV VLJQLILFDQW RUJDQL]DWLRQDO 
UHVRXUFHV RQ FRPPXQLW\ HGXFDWLRQ  OHJDO FRXQVHOLQJ  DQG UHSUHVHQWDWLRQ UHODWHG WR WKH 7HQ <HDU 
6FKHPH  
      051< PXVW QRZ GHYRWH UHVRXUFHV WR D FRQWLQXRXV DQG LQFUHDVLQJ IORZ RI SHRSOH 
IURP  1HZ  <RUN  DQG  HYHQ  1HZ  -HUVH\  ZKR  FRQWDFW  051<  EHFDXVH  WKH\  KDYH  VXIIHUHG  IURP 
'HIHQGDQWV¶ DFWLRQV   2IWHQ WKHVH LQGLYLGXDOV KDYH EHHQ VFKHGXOHG IRU DQ LQWHUYLHZ DQG DUH VHHNLQJ 
D  VHFRQG  RSLQLRQ  EHFDXVH  WKH\  DUH  FRQIXVHG  DV  WR  ZK\  WKHLU  OHJDO  UHSUHVHQWDWLYHV  UHIXVH  WR 
DFFRPSDQ\ WKHP WR WKH LQWHUYLHZ   6RPHWLPHV WKH\ FRPH UHTXHVWLQJ KHOS WR UHQHZ DQ HPSOR\PHQW 
DXWKRUL]DWLRQ GRFXPHQW RQO\ WR OHDUQ IRU WKH ILUVW WLPH WKDW WKH\ DUH RQ D FRQYH\HU EHOW WR  RU DUH LQ 
IDFW DOUHDG\ LQ  UHPRYDO SURFHHGLQJV   0RUH UHFHQWO\  051< KDV FRXQVHOHG VKRFNHG LQGLYLGXDOV 
ZKR UHFHLYHG UHPRYDO RUGHUV DQG DUH LQ VHDUFK RI UHSUHVHQWDWLRQ IRU D PRWLRQ WR UHRSHQ RU DSSHDO   
,Q RWKHU LQVWDQFHV  WKHVH LQGLYLGXDOV KDYH KHDUG DERXW WKH LQVWDQW OLWLJDWLRQ DQG DUH FRQFHUQHG WKDW 
WKH\ WRR PD\ IDFH WKH ULVN RI GHSRUWDWLRQ DQG ZHUH QHYHU DGYLVHG RI WKLV SRVVLEOH FRQVHTXHQFH   
      051<¶V OLPLWHG OHJDO VWDII KDV KDG WR GLYHUW VLJQLILFDQW VWDII WLPH IURP WKHLU QRUPDO 
FDVH ZRUN WR SURYLGH LQIRUPDWLRQ DQG VRPHWLPHV IXOO LPPLJUDWLRQ FRQVXOWDWLRQV IRU LQGLYLGXDOV 
ZKR VHHN WR WHUPLQDWH WKHLU UHSUHVHQWDWLRQ ZLWK 'HIHQGDQWV   &RQVXOWDWLRQV RI WKLV W\SH UHTXLUH D 
GLVSURSRUWLRQDWH  GLYHUVLRQ  RI  UHVRXUFHV     7KH\  DUH  UHVRXUFH LQWHQVLYH  DQG  HDFK  W\SLFDOO\  ODVWV 

    
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 104 of 111

VHYHUDO KRXUV MXVW LQ RUGHU WR DSSURSULDWHO\ XQGHUVWDQG WKH FDVH SRVWXUH DQG DGYLVH WKH DIIHFWHG 
LQGLYLGXDOV  UHJDUGLQJ  WKHLU  RSWLRQV  PRYLQJ  IRUZDUG     7KLV  LV  EHFDXVH  WKH  WKUHDW  RI  UHPRYDO 
SURFHHGLQJV  UHTXLUHV  DVVHVVLQJ  DOO  SRWHQWLDO  IRUPV  RI  LPPLJUDWLRQ  UHOLHI  DQG  EHFDXVH  WKH 
LQGLYLGXDOV¶ XQGHUVWDQGLQJ RI WKHLU RZQ  FDVH  SRVWXUH  LV  IDU  IURP WKH UHDOLW\   $V RSSRVHG  WR  LWV 
QRUPDO  UHSUHVHQWDWLRQ  RI  FOLHQWV   051<  DWWRUQH\V  DUH  QRW  VWDUWLQJ  IURP  VFUDWFK  ZLWK  WKHVH 
LQGLYLGXDOV  UDWKHU  WKH\ KDYH WR ILUVW FRUUHFW D FRPSOLFDWHG ZHE RI PLVLQIRUPDWLRQ  
      051<¶V OHJDO GHSDUWPHQW KDV DW SUHVHQW EHHQ UHWDLQHG E\ DW OHDVW WKLUWHHQ IRUPHU 
FOLHQWV  RI  'HIHQGDQWV IRU IXOO UHSUHVHQWDWLRQ EHIRUH WKH DV\OXP  RIILFH  RU  LPPLJUDWLRQ  FRXUW DQG 
UHJDUGLQJ RWKHU DWWHQGDQW PDWWHUV   7KHVH FDVHV KDYH UHTXLUHG 051< WR JR EH\RQG WKH RUGLQDU\ 
OLPLWV  RI  LWV  UHSUHVHQWDWLRQ   IRU  H[DPSOH   E\  LPPHGLDWHO\  GLYHUWLQJ  ZRUN  WR  UHVSRQG  WR  D  IDVW 
DSSURDFKLQJ GHDGOLQH IRU D PRWLRQ WR UHRSHQ RU VHHNLQJ  UHFRYHU\ RI  D  FOLHQW¶V ILQDQFLDO ORVV LQ 
DGGLWLRQ WR WKH LPPLJUDWLRQ UHSUHVHQWDWLRQ  
      051< KDV DOVR LQYHVWHG VLJQLILFDQW UHVRXUFHV LQ VHFXULQJ QHZ UHSUHVHQWDWLRQ IRU 
SHRSOH  ZKR  DUH  FDXJKW  XS  LQ  WKLV  VFKHPH  DQG  DUH  QRZ  ZLWKRXW  FRXQVHO  DIWHU  WHUPLQDWLQJ  WKHLU 
UHODWLRQVKLS  ZLWK  'HIHQGDQWV   EHFDXVH   RQFH  VWDUWHG   WKH  SURFHVV  FRQWLQXHV  WR  PRYH  IRUZDUG 
DXWRPDWLFDOO\ HYHQ DIWHU 'HIHQGDQWV DUH ILUHG   6HHNLQJ UHSUHVHQWDWLRQ IRU VRPHRQH LQ WKLV VLWXDWLRQ 
LV UHVRXUFH LQWHQVLYH EHFDXVH PRVW RUJDQL]DWLRQV WKDW SURYLGH IUHH LPPLJUDWLRQ OHJDO DVVLVWDQFH LQ 
1HZ <RUN DUH DW RU QHDU FDSDFLW\ DQG RIWHQ FDQQRW DFFHSW QHZ FDVHV   051< VWDII PXVW QRZ VSHQG 
VLJQLILFDQW WLPH FDOOLQJ SURYLGHUV  VHQGLQJ FDVH EOXUEV DQG H PDLOV LQTXLULQJ DERXW FDSDFLW\  DQG 
FRXQVHOLQJ  FOLHQWV  ZKR  DUH  EHLQJ  UHIHUUHG  LQVWHDG  RI  XVLQJ  WKDW  WLPH  IRU  WKHLU  QRUPDO  ZRUN  RI 
UHSUHVHQWLQJ LQGLYLGXDOV LQ DIILUPDWLYH LPPLJUDWLRQ FDVHV DQG GHSRUWDWLRQ GHIHQVH  
      %HWZHHQ HDUO\      DQG WRGD\  051< RUJDQL]HUV DQG OHJDO VWDII KDYH JLYHQ DW OHDVW 
WZHQW\  SUHVHQWDWLRQV  WR  JURXSV  RI  FRPPXQLW\  PHPEHUV  DERXW  'HIHQGDQWV¶  FRQGXFW  DQG  VLPLODU 

    
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 105 of 111

FRQGXFW  E\  RWKHU  LPPLJUDWLRQ  DWWRUQH\V  VR  WKDW  FRPPXQLW\  PHPEHUV  XQGHUVWDQG   DPRQJ  RWKHU 
WKLQJV  KRZ WR WHOO ZKHQ DQ HPSOR\PHQW DXWKRUL]DWLRQ GRFXPHQW LV EDVHG RQ D SHQGLQJ DV\OXP 
DSSOLFDWLRQ    
      051<  ODZ\HUV  KDYH  SUHSDUHG  DQG  JLYHQ  SUHVHQWDWLRQV  WR  DW  OHDVW  VL[  H[WHUQDO 
JURXSV  RI  ODZ\HUV  DQG  DGYRFDWHV  RQ  WKH  7HQ  <HDU  6FKHPH  DQG  FDVH  VWUDWHJLHV  IRU  UHSUHVHQWLQJ 
SHRSOH ZKR KDYH EHHQ VFDPPHG  LQFOXGLQJ IRUPHU FOLHQWV RI 'HIHQGDQWV   $V D UHVXOW  051<¶V 
ODZ\HUV  UHFHLYH  IUHTXHQW  UHTXHVWV  IRU  WHFKQLFDO  DVVLVWDQFH  IURP  SHRSOH  DW  RWKHU  OHJDO  VHUYLFHV 
RUJDQL]DWLRQV ZKR DUH UHSUHVHQWLQJ IRUPHU FOLHQWV RI 'HIHQGDQWV   
      $V D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ UDFNHWHHULQJ DFWLYLW\ DQG YLRODWLRQV 
RI      8 6 &   †       F    3ODLQWLII  051<  VXIIHUHG  LQMXU\  WR  LWV  EXVLQHVV  DQG  SURSHUW\  WKURXJK 
GLYHUVLRQ RI RUJDQL]DWLRQDO UHVRXUFHV  
      ,Q UHVSRQGLQJ WR WKH PDVVLYH QHHG FUHDWHG LQ WKH FRPPXQLW\ EHFDXVH RI 'HIHQGDQWV¶ 
IUDXG  051< VWDII  LQFOXGLQJ DWWRUQH\V  RUJDQL]HUV  DQG SDUDOHJDOV  KDYH VSHQW KXQGUHGV RI KRXUV 
ZRUNLQJ RQ EHKDOI RI PHPEHUV DQG FOLHQWV GHIUDXGHG E\ 'HIHQGDQWV  
      3XUVXDQW WR    8 6 &  †      F   051< LV HQWLWOHG WR LQMXQFWLYH UHOLHI WR SUHYHQW 
'HIHQGDQWV IURP FRQWLQXLQJ WR H[SORLW LPPLJUDQWV WKURXJK WKH 7HQ <HDU 6FKHPH  
121 5,&2 &$86(6 2) $&7,21 
)UDXG DQG 'HFHLW 
      3ODLQWLIIV UHSHDW DQG UHDOOHJH WKH SUHFHGLQJ SDUDJUDSKV DV LI IXOO\ VHW IRUWK KHUHLQ  
      $V VHW IRUWK DERYH  'HIHQGDQWV PDGH QXPHURXV LQWHQWLRQDO PLVUHSUHVHQWDWLRQV DQG 
RPLVVLRQV WR GHIUDXG 3ODLQWLIIV WKURXJK WKH 7HQ <HDU 6FKHPH  
      6SHFLILFDOO\  'HIHQGDQWV /HRQDUG DQG 7KRPDV  E\ DQG WKURXJK +HFKW /DZ )LUP  
LQWHQWLRQDOO\ PLVUHSUHVHQWHG  L  WKH VHUYLFHV 'HIHQGDQWV LQWHQGHG WR SURYLGH WR 3ODLQWLIIV   LL  WKH 
H[LVWHQFH RI DQ DIILUPDWLYH LPPLJUDWLRQ EHQHILW EDVHG RQ DQ LQGLYLGXDO¶V WHQ \HDU UHVLGHQFH LQ WKH 
    
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 106 of 111

8QLWHG 6WDWHV DQG RU 8 6  FLWL]HQ FKLOGUHQ   LLL  3ODLQWLIIV¶ HOLJLELOLW\ IRU ZRUN DXWKRUL]DWLRQ DQG 
ODZIXO SHUPDQHQW UHVLGHQF\ DQG WKH UHTXLUHPHQWV IRU TXDOLI\LQJ IRU WKHVH EHQHILWV   LY  WKH FRQWH[W 
LQ  ZKLFK  3ODLQWLIIV¶  WHQ  \HDU  UHVLGHQFH  LQ  WKH  8QLWHG  6WDWHV  DQG RU  8 6   FLWL]HQ  FKLOGUHQ  FRXOG 
SRWHQWLDOO\ EH FRQVLGHUHG LQ FRQQHFWLRQ WR WKHLU LPPLJUDWLRQ PDWWHUV   Y  WKH W\SH RI DSSOLFDWLRQ 
'HIHQGDQWV LQWHQGHG WR  DQG GLG  ILOH RQ EHKDOI RI 3ODLQWLIIV  DQG RU  YL  WKH ULVNV DQG SXUSRVH RI 
WKH DSSOLFDWLRQV 'HIHQGDQWV DFWXDOO\ LQWHQGHG WR  DQG GLG  ILOH RQ 3ODLQWLIIV¶ EHKDOI  
      %DVHG  RQ  'HIHQGDQWV¶  EODWDQW  LQWHQWLRQDO  PLVUHSUHVHQWDWLRQV  DQG  IXQGDPHQWDO 
RPLVVLRQV   3ODLQWLIIV  UHDVRQDEO\  EHOLHYHG  WKDW  WKH\  ZHUH  HOLJLEOH  IRU  ZRUN  DXWKRUL]DWLRQ  DQG RU 
ODZIXO VWDWXV LQ WKH 8QLWHG 6WDWHV EDVHG RQ WKH OHQJWK RI WKHLU UHVLGHQF\ LQ WKH 8QLWHG 6WDWHV DQG 
WKHLU 8 6  FLWL]HQ FKLOGUHQ  
      %HFDXVH  RI  'HIHQGDQWV¶  PLVUHSUHVHQWDWLRQV  DQG  RPLVVLRQV   3ODLQWLIIV  GLG  QRW 
XQGHUVWDQG WKH QDWXUH RI WKH DSSOLFDWLRQV 'HIHQGDQWV DFWXDOO\ VXEPLWWHG RQ WKHLU EHKDOI    
      %DVHG  RQ  'HIHQGDQWV¶  PLVUHSUHVHQWDWLRQV  DQG  RPLVVLRQV   3ODLQWLIIV  UHDVRQDEO\ 
EHOLHYHG WKDW WKH\ ZHUH SD\LQJ IRU OHJDO UHSUHVHQWDWLRQ WR ODZIXOO\ REWDLQ DIILUPDWLYH LPPLJUDWLRQ 
EHQHILWV IRU ZKLFK WKH\ ZHUH TXDOLILHG    
      'HIHQGDQWV  PDGH  WKHVH  VWDWHPHQWV  ZLWK  NQRZOHGJH  RI  WKHLU  IDOVLW\  RU  ZLWK 
UHFNOHVVQHVV DV WR ZKHWKHU RU QRW WKH\ ZHUH WUXH  
      'HIHQGDQWV PDGH WKH DIRUHPHQWLRQHG UHSUHVHQWDWLRQV ZLWK WKH LQWHQW RI PLVOHDGLQJ 
3ODLQWLIIV DQG FRQYLQFLQJ WKHP WR SD\ 'HIHQGDQWV  
      3ODLQWLIIV¶  UHOLDQFH  RQ  WKHVH  PLVUHSUHVHQWDWLRQV  ZDV  MXVWLILHG  EHFDXVH  3ODLQWLIIV 
WUXVWHG 'HIHQGDQWV GXH WR WKH WUXVW LQKHUHQW LQ WKH DWWRUQH\ FOLHQW UHODWLRQVKLS  
      'HIHQGDQWV  DFWLYHO\  FRQFHDOHG  WKH  7HQ  <HDU  6FKHPH  WKURXJK  WKHLU  PDWHULDO 
PLVVWDWHPHQWV DQG RPLVVLRQV  

    
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 107 of 111

      )RU WKH UHDVRQV GHVFULEHG DERYH  3ODLQWLIIV FRXOG QRW KDYH GLVFRYHUHG WKDW  L  WKH 
LPPLJUDWLRQ  EHQHILWV  'HIHQGDQWV  DGYHUWLVHG  WR  WKHP  GLG  QRW  H[LVW  RU   LL   'HIHQGDQWV  KDG 
PLVUHSUHVHQWHG WKH QDWXUH RI WKH DSSOLFDWLRQV WKH\ ZHUH ILOLQJ RQ 3ODLQWLIIV¶ EHKDOI  
      3ODLQWLIIV  ZRXOG  QRW  KDYH  PDGH  SD\PHQWV  WR  'HIHQGDQWV  KDG  WKH\  NQRZQ   L   WKH 
DIILUPDWLYH LPPLJUDWLRQ EHQHILWV 'HIHQGDQWV PLVUHSUHVHQWHG WR WKHP WKDW WKH\ ZHUH HOLJLEOH IRU GR 
QRW H[LVW   LL  'HIHQGDQWV DFWXDOO\ LQWHQGHG WR  DQG XOWLPDWHO\ GLG  ILOH JHQHULF DV\OXP DSSOLFDWLRQV  
RU  LLL  WKDW 'HIHQGDQWV LQWHQGHG IRU WKHP WR EH SODFHG LQ UHPRYDO SURFHHGLQJV DQG IDFH GHSRUWDWLRQ 
DV D UHVXOW RI WKRVH DV\OXP DSSOLFDWLRQV  
      $V  VHW  RXW  DERYH   DV  D  GLUHFW  DQG  SUR[LPDWH  UHVXOW  RI  'HIHQGDQWV¶  IDOVH 
UHSUHVHQWDWLRQV DQG RPLVVLRQV  3ODLQWLIIV VXIIHUHG D FROOHFWLYH ILQDQFLDO LQMXU\ RI DW OHDVW          
WKH DPRXQW WKH\ SDLG WR 'HIHQGDQWV LQ MXVWLILHG UHOLDQFH RQ 'HIHQGDQWV¶ PLVUHSUHVHQWDWLRQV DQG 
RPLVVLRQV DQG WKH DPRXQW WKH\ KDYH KDG WR SD\ IRU QHZ FRXQVHO DV D UHVXOW RI 'HIHQGDQWV¶ DFWLRQV  
LQFOXGLQJ DGGLWLRQDO OHJDO FRVWV  
      'HIHQGDQWV¶  IUDXG  DIIHFWHG  3ODLQWLIIV  VSHFLILFDOO\  EXW  ZDV  DLPHG  DW  WKH  SXEOLF 
JHQHUDOO\  
      'HIHQGDQWV¶ IUDXG ZDV PDOLFLRXV  UHSUHVHQWV D KLJK GHJUHH RI PRUDO FXOSDELOLW\  DQG 
ULVHV WR VXFK D OHYHO RI ZDQWRQ GLVKRQHVW\ DV WR LPSO\ D FULPLQDO LQGLIIHUHQFH WR FLYLO REOLJDWLRQV   
'HIHQGDQWV DUH WKHUHIRUH DOVR OLDEOH IRU SXQLWLYH GDPDJHV  
'HFHSWLYH %XVLQHVV 3UDFWLFHV  1< *HQHUDO %XVLQHVV /DZ †      
      3ODLQWLIIV UHSHDW DQG UHDOOHJH WKH SUHFHGLQJ SDUDJUDSKV DV LI IXOO\ VHW IRUWK KHUHLQ  
      'HIHQGDQWV KDYH HQJDJHG LQ QXPHURXV SUDFWLFHV WKDW DUH GHFHSWLYH DQG PLVOHDGLQJ 
LQ D PDWHULDO ZD\ WKURXJK WKH 7HQ <HDU 6FKHPH  

    
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 108 of 111

      7KH 7HQ <HDU 6FKHPH ZDV DLPHG DW WKH FRQVXPHU SXEOLF DW ODUJH JLYHQ 'HIHQGDQWV¶ 
URXWLQH  SUDFWLFH  RI  SHUSHWXDWLQJ  WKH  P\WK  RI  WKH  ³WHQ  \HDU  ODZ´  DQG  ILOLQJ  VXEVWDQWLDOO\  VLPLODU 
DV\OXP DSSOLFDWLRQV IRU XQGRFXPHQWHG LPPLJUDQWV  
      $V D GLUHFW DQG SUR[LPDWH UHVXOW RI 'HIHQGDQWV¶ GHFHSWLYH DQG PLVOHDGLQJ SUDFWLFHV  
3ODLQWLIIV DUH HDFK HQWLWOHG WR UHVWLWXWLRQ RI WKH PRQH\ WKDW WKH\ SDLG WR 'HIHQGDQWV  
      %HFDXVH  'HIHQGDQWV  DFWHG  NQRZLQJO\  ZKHQ  WKH\  YLRODWHG  1<  *HQHUDO  %XVLQHVV 
/DZ †      3ODLQWLIIV DUH HDFK HQWLWOHG WR WUHEOH GDPDJHV RI XS WR         
      $V VHW RXW DERYH  'HIHQGDQWV¶ FRQGXFW HYLGHQFHV D KLJK GHJUHH RI PRUDO FXOSDELOLW\   
'HIHQGDQWV DUH WKHUHIRUH DOVR OLDEOH IRU SXQLWLYH GDPDJHV  
8QMXVW (QULFKPHQW  
      3ODLQWLIIV UHSHDW DQG UHDOOHJH WKH SUHFHGLQJ SDUDJUDSKV DV LI IXOO\ VHW IRUWK KHUHLQ  
      3ODLQWLIIV FRQIHUUHG D EHQHILW WR 'HIHQGDQWV LQ WKH IRUP RI SD\PHQWV IRU DSSO\LQJ 
IRU DGYHUWLVHG LPPLJUDWLRQ EHQHILWV  
      'HIHQGDQWV DFFHSWHG DQG UHFHLYHG WKH SD\PHQWV  
      ,W ZRXOG EH DJDLQVW HTXLW\ DQG JRRG FRQVFLHQFH WR DOORZ 'HIHQGDQWV WR UHWDLQ WKHVH 
PRQLHV  ZKLFK ZHUH SURFXUHG E\ IDOVH DQG PLVOHDGLQJ UHSUHVHQWDWLRQV  
      6SHFLILFDOO\  'HIHQGDQWV IDOVHO\ UHSUHVHQWHG WR 3ODLQWLIIV WKDW WKH\ ZHUH HOLJLEOH WR 
DSSO\  IRU  DIILUPDWLYH  LPPLJUDWLRQ  EHQHILWV  LQ  WKH  IRUP  RI  ZRUN  DXWKRUL]DWLRQ  DQG RU  ODZIXO 
SHUPDQHQW UHVLGHQF\ EDVHG RQ 3ODLQWLIIV¶ WHQ \HDU UHVLGHQFH LQ WKH 8QLWHG 6WDWHV DQG RU 8 6  FLWL]HQ 
FKLOGUHQ LQ RUGHU WR LQGXFH 3ODLQWLIIV WR SD\ 'HIHQGDQWV WR DSSO\ IRU WKRVH EHQHILWV  
      'HIHQGDQWV  UHFHLYHG  SD\PHQWV  WKH\  VKRXOG  QRW  KDYH  UHFHLYHG   DV  3ODLQWLIIV¶ 
SD\PHQWV  ZHUH  PDGH  XQGHU  'HIHQGDQWV¶  IDOVH  SUHWHQVHV  DQG  GXH  WR  'HIHQGDQWV¶ 
PLVUHSUHVHQWDWLRQV  

    
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 109 of 111

      'HIHQGDQWV¶  EUHDFKHV  RI  ILGXFLDU\  GXW\  HQWLWOH  3ODLQWLIIV  WR  GLVJRUJHPHQW  RI  WKH 
PRQH\  DOUHDG\  SDLG  WR  'HIHQGDQWV     3ODLQWLIIV  DUH  WKHUHIRUH  HQWLWOHG  WR  UHOLHI  IRU  WKLV  XQMXVW 
HQULFKPHQW  HTXDO  WR  WKH  EHQHILWV  XQMXVWO\  UHWDLQHG  E\  'HIHQGDQWV   DV  ZHOO  DV  LQWHUHVW  RQ  WKHVH 
DPRXQWV    
      $V VHW RXW DERYH  'HIHQGDQWV¶ FRQGXFW HYLGHQFHV D KLJK GHJUHH RI PRUDO FXOSDELOLW\   
$FFRUGLQJO\  'HIHQGDQWV DUH DOVR OLDEOH IRU SXQLWLYH GDPDJHV  
%UHDFK RI )LGXFLDU\ 'XW\  
      3ODLQWLIIV UHSHDW DQG UHDOOHJH WKH SUHFHGLQJ SDUDJUDSKV DV LI IXOO\ VHW IRUWK KHUHLQ   
      $W DOO WLPHV UHOHYDQW  'HIHQGDQWV 7KRPDV DQG /HRQDUG ZHUH DWWRUQH\V DFWLQJ ZLWKLQ 
WKH VFRSH RI WKHLU DFWXDO DQG DSSDUHQW DJHQF\  DQG ZHUH HPSOR\HG E\ +HFKW /DZ )LUP   'HIHQGDQWV 
SURYLGHG OHJDO VHUYLFHV WR 3ODLQWLIIV   
      'HIHQGDQWV KDG DQ DWWRUQH\ FOLHQW UHODWLRQVKLS ZLWK HDFK 3ODLQWLII   
      3XUVXDQW WR WKH DWWRUQH\ FOLHQW UHODWLRQVKLS  'HIHQGDQWV KDG D ILGXFLDU\ GXW\ WR DFW 
LQ WKH EHVW LQWHUHVWV RI 3ODLQWLIIV   
      'HIHQGDQWV LQWHQWLRQDOO\ IDLOHG WR DFW LQ WKH EHVW LQWHUHVWV RI 3ODLQWLIIV LQ WKH PDWWHUV 
IRU ZKLFK WKH\ ZHUH UHWDLQHG E\ LQWHQWLRQDOO\ PLVUHSUHVHQWLQJ WKH VHUYLFHV WKH\ LQWHQGHG WR DQG 
FRXOG SURYLGH 3ODLQWLIIV    
      $OWHUQDWLYHO\  'HIHQGDQWV QHJOLJHQWO\ IDLOHG WR DFW LQ WKH EHVW LQWHUHVWV RI 3ODLQWLIIV 
LQ WKH PDWWHUV IRU ZKLFK WKH\ ZHUH UHWDLQHG   
      3ODLQWLIIV VXIIHUHG LQMXU\ LQ WKH IRUP RI SD\PHQWV PDGH WR 'HIHQGDQWV DV D GLUHFW 
UHVXOW RI 'HIHQGDQWV¶ IDLOXUH WR DFW LQ WKHLU EHVW LQWHUHVWV   3ODLQWLIIV ZRXOG QRW KDYH PDGH SD\PHQWV 
WR  'HIHQGDQWV  KDG  3ODLQWLIIV  NQRZQ   L   WKH  DIILUPDWLYH  LPPLJUDWLRQ  EHQHILWV  'HIHQGDQWV 
PLVUHSUHVHQWHG WKDW WKH\ ZHUH HOLJLEOH IRU GR QRW H[LVW   LL  'HIHQGDQWV DFWXDOO\ LQWHQGHG WR  DQG 

    
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 110 of 111

XOWLPDWHO\ GLG  ILOH JHQHULF DV\OXP DSSOLFDWLRQV  RU  LLL  WKDW 'HIHQGDQWV LQWHQGHG IRU WKHP WR EH 
SODFHG LQ UHPRYDO SURFHHGLQJV DQG IDFH GHSRUWDWLRQ DV D UHVXOW RI WKRVH DV\OXP DSSOLFDWLRQV  
      'HIHQGDQWV¶  EUHDFKHV  RI  ILGXFLDU\  GXW\  HQWLWOH  3ODLQWLIIV  WR  GLVJRUJHPHQW  RI  WKH 
PRQH\ DOUHDG\ SDLG WR 'HIHQGDQWV  
35$<(5 )25 5(/,() 
:+(5()25(  3ODLQWLIIV UHVSHFWIXOO\ UHTXHVW WKDW WKLV &RXUW    
$   (QMRLQ 'HIHQGDQWV IURP FRQWLQXLQJ WR SHUSHWUDWH WKH 7HQ <HDU 6FKHPH  
%   $ZDUG FRPSHQVDWRU\ DQG SXQLWLYH GDPDJHV WR 3ODLQWLIIV  
&   'HFODUH  SXUVXDQW WR    8 6 &  †       WKDW GRFXPHQWDU\ VXEPLVVLRQV  LQFOXGLQJ 
DV\OXP DSSOLFDWLRQV  ILOHG E\ 'HIHQGDQWV RQ 3ODLQWLIIV¶ EHKDOI DUH LQKHUHQWO\ 
XQUHOLDEOH  
'   $ZDUG 3ODLQWLIIV FRVWV DQG UHDVRQDEOH DWWRUQH\V¶ IHHV LQFXUUHG LQ WKLV DFWLRQ  DQG 
(   *UDQW RWKHU VXFK UHOLHI DV WKH &RXUW GHHPV MXVW DQG SURSHU   
 
 
 
 
 
 

 

    
 

 Case 1:18-cv-03947-DLC Document 28 Filed 08/31/18 Page 111 of 111

'DWHG  $XJXVW          
 
1HZ <RUN  1HZ <RUN 
 
5HVSHFWIXOO\ VXEPLWWHG  
 
 
 
0$.( 7+( 52$' 1(: <25. 
 
$P\ 6  7D\ORU 
DP\ WD\ORU#PDNHWKHURDGQ\ RUJ 
6FRWW )ROHWWD 
VFRWW IROHWWD#PDNHWKHURDGQ\ RUJ 
.HQGDO 1\VWHGW  
NHQGDO Q\VWHGW#PDNHWKHURDGQ\ RUJ 
-HVVLFD <RXQJ  DSSOLFDWLRQ IRU DGPLVVLRQ 
SHQGLQJ  
MHVVLFD \RXQJ#PDNHWKHURDGQ\ RUJ 
 
    *URYH 6WUHHW 
%URRNO\Q  1<       
7HO                  
 
 
&/($5< *277/,(% 67((1   
+$0,/721 //3 
 
B V B$EHQD 0DLQRRBBBBBBBBBBBBB 
 
$EHQD 0DLQRR 
DPDLQRR#FJVK FRP 
6KDQQRQ 'DXJKHUW\ 
VGDXJKHUW\#FJVK FRP 
 
2QH /LEHUW\ 3OD]D 
1HZ <RUN  1<       
7HO                  
 
$WWRUQH\V IRU 3ODLQWLIIV

 
.$7+5<1 2  *5((1%(5* 
,00,*5$7,21 -867,&( &/,1,& 
%(1-$0,1 1  &$5'2=2 6&+22/ 
2) /$: 
 
/LQGVD\ 1DVK 
OLQGVD\ QDVK#\X HGX 
-XDQ %DVDGUH
 
EDVDGUH#ODZ FDUGR]R \X HGX 
$OH[LV 0DNULGHV
 
PDNULGHV#ODZ FDUGR]R \X HGX 
1ROEHUWR =XELD
 
]XELD#ODZ FDUGR]R \X HGX 
-D\QDK 5RVV 0HQGR]D
 
MMURVV#ODZ FDUGR]R \X HGX 
 
   )LIWK $YHQXH 
1HZ <RUN  1<       
7HO                  
 

0RWLRQ WR $SSHDU DV /DZ 6WXGHQWV 
IRUWKFRPLQJ