The Trump Network Lawsuit – Going Down Fast?

The Trump Network Lawsuit

The Trump Network (TTN),  the founders of The Trump Network are Todd and Scott Stanwood and Lou DeCaprio.

In March of 1997, Ideal Health started and is renamed  in 2009 as The Trump Network when Donald Trump came in. Estimated revenue in 2010 $20 million, active 21,000 distributors.

2/3 of the company has left to find other opportunities after the marketer compensation stopped.

Over 20 diamond directors left the company in January.  There are several lawsuits, a bankruptcy filed and one of the founders has left the company and the two others have stepped down.

A review about the Trump Network including 60 leading distributors can be found here

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IN THE FOURTH JUDICIAL DISTRICT COURT IN AND FOR UTAH COUNTY, STATE OF UTAH THOMAS E. MOWER Plaintiff, vs. IDEAL HEALTH, INC., a Nevada corporation; TTN, LCC dba THE TRUMP NETWORK, a Massachusetts limited liability company;

TODD STANWOOD; SCOTT STANWOOD; and LOUIS DeCAPRIO, Defendants.


Plaintiff THOMAS E. MOWER alleges and complains of Defendants IDEAL HEALTH, INC., TTN, LLC dba THE TRUMP NETWORK, TODD STANWOOD, SCOTT STANWOOD and LOUIS DeCAPRIO (collectively “Defendants”) as follows:

PARTIES AND JURISDICTION

1. Plaintiff THOMAS E. MOWER (“Plaintiff”) is, and at all times relevant hereto was, an individual residing in Utah County, Utah.

2. Defendant IDEAL HEALTH, INC. (“Ideal Health”) is, and at all times relevant hereto was, a Nevada corporation, doing business throughout the United States and has held itself out as an owner of THE TRUMP NETWORK.

3. Defendant TTN, LLC (“TTN”) is, and at all times relevant hereto was, a Massachusetts limited liability company, doing business as THE TRUMP NETWORK throughout the United States. Plaintiff is informed and believes, and on that basis alleges, that at all times alleged herein TTN and Ideal Health were the alter ego of the other.

4. Defendant TODD STANWOOD (“T. Stanwood”) is, and at all times relevant hereto was, an individual residing in the State of Massachusetts.

5. Defendant SCOTT STANWOOD (“S. Stanwood”) is, and at all times relevant hereto was, an individual residing in the State of Massachusetts.

6. Defendant LOUIS DeCAPRIO (“DeCaprio”) is, and at all times relevant hereto was, an individual residing in the State of Massachusetts.

7. Plaintiff is informed and believes, and on that basis alleges, that at all times herein mentioned each of the Defendants was the agent, representative and/or employee of each of the other defendants, and, in doing the acts hereinafter alleged, was acting within the course and scope of such relationship and with the permission and consent of their co-defendants and, further, that the Defendants, and each of them, have authorized, ratified, and approved the acts of each of the other Defendants with full knowledge of those acts.

8. This Court has jurisdiction over the present matter pursuant to UTAH CODE ANN. § 78A-5-102(1) because this is a civil matter arising out of the parties’ transaction of business within the State of Utah. Defendants and each of them through the transaction hereinafter alleged have established sufficient minimum contacts with the State of Utah justifying this Court’s assertion of jurisdiction over them.

9. This Court is the proper venue for the present matter under UTAH CODE ANN. § 78B-3-304(2) and/or § 78B-3-307.

BACKGROUND ALLEGATIONS

10. In the fall of 2011, Plaintiff became interested in the possibility of acquiring Ideal Health and/or TTN dba THE TRUMP NETWORK.

11. In exploring the possibility of acquiring Ideal Health and/or TTN dba THE TRUMP NETWORK, Plaintiff learned that Ideal Health/TTN was in need of financing to pay current commissions due to its distributors.

12. To assist Ideal Health/TTN and to further explore the possibility of acquiring Ideal Health and/or TTN dba THE TRUMP NETWORK, Plaintiff and Defendants entered into an Agreement on October 31, 2011, whereby Plaintiff agreed to lend Ideal Health/TTN $270,000 as “bridge financing” upon the following terms:

a. Ideal Health/TTN would only use the loaned funds to pay current commissions due to distributors based on Ideal Health/TTN’s commission plan;

b. Ideal Health/TTN would repay the $270,000 including 8% interest compounded annually from funds flowing through Ideal Health/TTN’s Discover and American Express accounts. These payments were to be immediately transferred to Plaintiff’s account upon receipt of funds in the Discover and American Express accounts (at least three times a week).

c. Ideal Health/TTN would establish a joint bank account with Plaintiff into which all of the funds from the Discover and American Express accounts would be deposited.

d. Ideal Health/TTN’s CFO would then disburse 25% of the funds deposited into the joint account over to Plaintiff’s account (three times a week) and also provide Plaintiff with a complete accounting and reconciliation of the account with each disbursement.

e. Ideal Health/TTN also agreed to provide Plaintiff a daily reconciliation through its CFO to account for the funds flowing into the business and the portion forwarded to Plaintiff pursuant to the terms of the agreement.

f. For 90 days following the execution of the Agreement and or whatever additional period beyond the 90 days was required for Ideal Health/TTN to repay the bridge financing, Ideal Health/TTN agreed not to promote or pursue sale of its business or any stock in the business to any other party, which included Ideal Health/TTN’s agreement not to engage in any conversation of a potential sale with any other parties.

g. Ideal Health/TTN agreed to pay Plaintiff any outstanding amounts due under the agreement by November 30, 2011. (A true and correct copy of the parties’ October 31, 2011 Agreement is attached as Exhibit “A.”)

13. As part of the Agreement, T. Stanwood, S. Stanwood and Louis DeCaprio personally guaranteed the repayment of the bridge financing out of their personal assets.

14. On or about November 1, 2011, pursuant to the Agreement, Plaintiff transferred $270,000 to Ideal Health/TTN. (A true and correct copy of the Plaintiff’s November 1, 2011 Wire Transfer Form is attached as Exhibit “B.”)

15. Despite Plaintiff’s full performance under the terms of the Agreement, Defendants and each of them have failed to pay the amounts due and owing to Plaintiff.

16. As of the date of this Complaint, Defendants owe Plaintiff the principal amount of $260,478.75, plus interest at the rate of 8% per annum.

FIRST CAUSE OF ACTION (Breach of Contract – Ideal Health/TTN)

17. Plaintiff incorporates herein all other allegations contained in this Complaint.

18. Plaintiff and Ideal Health/TTN are parties to a binding and enforceable Agreement, whereby Plaintiff agreed to lend Ideal Health/TTN $270,000 in exchange for repayment and other promises as outlined in Paragraph 12, above. (See Exhibit “A.”)

19. Plaintiff has fully performed under the terms of the Agreement by transferring the $270,000 it agreed to lend to Ideal Health/TTN. (See Exhibit “B.”)

20. Ideal Health/TTN have nevertheless breached the Agreement by failing to pay Plaintiff the amounts due under the Agreement.

21. Upon information and belief, Ideal Health/TTN have further breached the Agreement by, without limitation, using the bridge financing for purposes other than to pay the current commissions due to distributors based on Ideal Health/TTN’s commission plan, by failing to establish a joint bank account with Plaintiff into which all of the funds from the Discover and American Express accounts would be deposited, by failing to provide Plaintiff a daily reconciliation through its CFO to account for the funds flowing into the business and the portion forwarded to Plaintiff pursuant to the terms of the Agreement, by failing to enter into good faith negotiations with Plaintiff for the potential purchase of Ideal Health/TTN by Plaintiff, and by promoting or discussing the sale of its business or stock in the business to other parties.

22. As a result, Plaintiff has been damaged in an amount to be determined at trial but not less than $260,476.75, plus interest accruing at the rate of 8% from November 1, 2011 until the entry of Judgment.

SECOND CAUSE OF ACTION (Unjust Enrichment – Ideal Health/TTN)

23. Plaintiff incorporates herein all other allegations contained in this Complaint.

24. Ideal Health/TTN received $270,000 loan from Plaintiff without paying for the loan.

25. Ideal Health/TTN fully appreciated and had actual knowledge of the benefit it received by way of the $270,000 loan.

26. It would be inequitable to allow Ideal Health/TTN to accept and retain the $270,000 loan without paying Plaintiff for its value.

27. Accordingly, Ideal Health/TTN has been enriched—and Plaintiff damaged—in an amount to be determined at trial, but not less than $260,476.75, plus interest.

THIRD CAUSE OF ACTION (Breach of Contract – T. Stanwood, S. Stanwood and DeCaprio)

28. Plaintiff incorporates herein all other allegations contained in this Complaint.

29. T. Stanwood, S. Stanwood and DeCaprio (collectively the “Guarantors”) executed a written guarantee, each personally guaranteeing the repayment of the bridge financing to Ideal Health/TTN.

30. Plaintiff has properly performed under the terms of the Agreement, providing the consideration and value evidenced by the November 1, 2011 Outgoing Wire Transfer to Ideal Health/TTN. (See Exhibit “B.”)

31. As alleged above, Ideal Health/TTN have failed to pay the amounts due and owing under the terms of the Agreement.

32. The Guarantors have also defaulted on their guarantee obligations, whereby they also agreed to repay the bridge financing paid to Ideal Health/TTN.

33. As a result, the Guarantors have damaged Plaintiff in an amount to be determined at trial, but not less than $260,476.75, plus interest accruing at the rate of 8% from November 1, 2011 until the entry of Judgment.

FOURTH CAUSE OF ACTION (Fraud – Defendants)

34. Plaintiff incorporates herein all other allegations contained in this Complaint.

35. Defendants and each of them, represented to Plaintiff that Ideal Health/TTN would, among other things, repay the amounts owed to Plaintiff from funds flowing through Ideal Health’s Discover and American Express accounts according to the payment terms of the  Agreement, enter into negotiations with Plaintiff for the potential purchase of Ideal Health/TTN, and not promote or pursue the sale of the business or of any stock in the business to any other party for a period of 90 days from the execution of the Agreement or whatever additional period beyond the 90 days was required for Ideal Health/TTN to repay the bridge loan.

36. However, Defendants’ representations were false.

37. Upon information and belief, Defendants had no intent to fully repay Plaintiff from the funds flowing through Ideal Health/TTN’s Discover and American Express accounts.

38. Nor did the Defendants intend to refrain from promoting or pursuing the sale of the business or of any stock in the business to any other party for a period of 90 days from the execution of the Agreement or whatever additional period beyond the 90 days was required for Ideal Health/TTN to repay the bridge loan.

39. Instead, Defendants had the secret intention to keep all of the funds flowing through Ideal Health/TTN’s Discover and American Express accounts for Ideal Health/TTN’s own purposes while continuing to to promote or pursue the sale of the business and/or their stock in the business to parties other than Plaintiff.

40. Defendants did not disclose their true intentions to Plaintiff in order to induce Plaintiff to enter into the Agreement and provide Ideal Health/TTN with a $270,000 loan.

41. Defendants understood that each of the false promises alleged herein were material to Plaintiff.

42. In reliance on Defendant’s promises as alleged herein, Plaintiff entered into the Agreement and lent Ideal Health/TTN $270,000.

43. As a result of the foregoing, Plaintiff has been injured in an amount to be determined at trial, but not less than $260,476.75, which represents, without limitation, the amounts Defendants wrongly induced Plaintiff to lend to Ideal Health/TTN and Plaintiff’s lost business opportunities arising from Defendants’ promotion of the sale of the business and/or their stock in the business to parties other than Plaintiff.

FIFTH CAUSE OF ACTION (Negligent Misrepresentation – Defendants)

44. Plaintiff incorporates herein all other allegations contained in this Complaint.

45. Defendants and each of them, represented to Plaintiff that Ideal Health/TTN would, among other things, repay the amounts owed to Plaintiff from funds flowing through Ideal Health/TTN’s Discover and American Express accounts according to the payment terms of the Agreement, enter into negotiations with Plaintiff for the potential purchase of Ideal Health/TTN, and not promote or pursue the sale of the business or of any stock in the business to any other party for a period of 90 days from the execution of the Agreement or whatever additional period beyond the 90 days was required for Ideal Health/TTN to repay the bridge loan.

46. However, Defendants’ representations were false.

47. Upon information and belief, Defendants had no reasonable grounds for believing that Ideal Health/TTN would fully repay Plaintiff from the funds flowing through Ideal Health/TTN’s Discover and American Express accounts.

48. Nor did the Defendants have any reasonable grounds for believing that they would refrain from promoting or pursuing the sale of the business or of any stock in the business to any other party for a period of 90 days from the execution of the Agreement or whatever additional period beyond the 90 days was required for Ideal Health/TTN to repay the bridge loan.

49. Instead, Ideal Health/TTN kept all of the funds flowing through Ideal Health’s Discover and American Express accounts for Ideal Health/TTN’s own purposes and promoted or pursued the sale of the business and/or their stock in the business to parties other than Plaintiff.

50. Defendants fully appreciated the importance of the foregoing promises to Plaintiff.

51. In reliance on Defendant’s promises as alleged herein, Plaintiff entered into the Agreement and lent Ideal Health/TTN $270,000. As a result of the foregoing, Plaintiff has been injured in an amount to be determined at trial, but not less than $260,476.75, which represents, without limitation, the amounts Defendants wrongly induced Plaintiff to lend to Ideal Health/TTN and Plaintiff’s lost business opportunities arising from Defendants’ promotion of the sale of the business and/or their stock in the business to parties other than Plaintiff.

PRAYER FOR RELIEF  WHEREFORE, Plaintiff requests relief as follows:

A. Under the First Claim for Relief: a judgment in favor of Plaintiff, and against Ideal Health/TTN, in an amount to be determined at trial, but not less than $260,476.75, plus interest, costs and attorney’s fees;

B. Under the Second Claim for Relief: a judgment in favor of Plaintiff, and against Ideal Health/TTN, in an amount to be determined at trial, but not less than $260,476.75, plus interest, costs and attorney’s fees;

C. Under the Third Claim for Relief: a judgment in favor of Plaintiff, and against the Guarantors, in an amount to be determined at trial, but not less than $260,476.75, plus interest, costs and attorney’s fees;

D. Under the Fourth Claim for Relief: a judgment in favor of Plaintiff, and against each of the Defendants, in an amount to be determined at trial, but not less than $781,430.25 (which represents treble and punitive damages to which Plaintiff is entitled due to Defendants’ fraud), plus interest, costs and attorney’s fees;

E. Under the Fifth Claim for Relief: a judgment in favor of Plaintiff, and against each of the Defendants, in an amount to be determined at trial, but not less than $781,430.25 (which represents treble and punitive damages to which Plaintiff is entitled due to Defendants’ misrepresentation), plus interest, costs and attorney’s fees;

F. Any other relief the Court deems equitable and just.

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Comments (26)

  1. This is very sad for all Distributors involved! It is very important to do your due diligence when choosing a company to work with.  Strength of leadership, product, training, timing, compensation plan, and lack of competition are very important indicators of which company will succeed.  I am thankful that I did my research of over 200 companies and chose a company that was strong and reliable in all these areas.  After 3 and half years, they have exceeded all my and my distributors expectations.  If you are in the Trump Network and looking for a new home, Global Wealth Trade is where you need to be and I will be more than happy to support you in achieving the dreams you have.

  2. So sad.  Love Donald Trump.  But he bought into a company that has failed 3 times.  That is why I love working with Tim Sales Team.  We are doing it right.  Company can't terminate you…will never go retail.  Management team already got the company into China.  
    Building a different type of team with the #1 MLM Trainer Tim Sales.

  3. Hi Ted,
    Sad to hear another company shutting it's doors, even sadder that there are at least two others likely to follow shortyly.
    Let's hope for some good news soon to balance the story.
    Regards,
    John

  4. Another sad day for the industry. None of us can ever be happy when this happens in our great industry. I am truly saddened for this and for the TRUMP Network distributors. I am always so grateful and thankful that among the many good companies in the industry I found the one which has paid out on time every week for 8 years and was able to do some key things never done before in the industry:
      60% commissions plus bonuses
     FREE FLOWING PLAN
     A variable Business plan with all three major Direct sales platforms:
     1- Catalogue division
     2- Home branding party division
     3- MLM
     Glamour and exclusive products worn by 100 celebrities
     A product that is pre approved in every country in the world
     60% to 100% Retail profits
     8 times the industry averages for ongoing residual income
     Forensic networker
     A safe and reliable product line that has been an asset for 5000 years.

  5. Hello! These are sad news to a great number of distributors. For the people searching for good alternative, I can offer:
    Nature's Sunshine is a world leader in manufacturing Herbal, Vitamin, Mineral and Nutritional Supplements, created to enhance your health and well being. Delighted customer's return to Nature's Sunshine because they can be assurred of outstanding quality and efficacy from our comprehensive product range. 
    Support your own good health with Daily Nutrition from our top selling products such as Zambroza antioxidant drink. Our top quality soya protein mix, SynerProTein, Super Supplemental Multi Vitamins & Minerals, or Omega 3 EPA – We have a great range to choose from.
    If you would like to know more about Nature's Sunshine please contact us, we look forward to hearing from you.

  6. El echo que una empresa de la industria multinivel  cierre no puede poner feliz a nadie que este dentro de esto, por supuesto apareceran los detractores, y mal informados que diran viste yo te advertí que es una estafa, que no son ciertos los negocios que alli se realizan bla bla bla, por que nunca tiene en cuenta el crecimiento de otras empresas a nivel mundial, Señores  networkmarketers de  red Trump a no decaer existen un muchas  oportunidades dentro de esta industria a no decaer muchos ofreceran su oportunidad por este medio, no me parece lo mas sensato,  por algo debemos poner nuestra web y nuestro correo 
    desde Argentina Saludos para todos 

  7. It was a terrible choice we had to make, but after not being paid for 3 months, something had to happen.

    After MUCH research, (we weren't going to be fooled twice) this is where most of us went.

    An incredible company with their own state-or-the-art manufacturing facility, international presence and phenomenal compensation plan.

    If you're looking for a home-based business of which you can be proud, go where the movers and shakers from the Trump Network went.

  8. Well, it seem like the story goes again. Its unfortunate. Working with Tim SALES, MLM #1 Trainer and an All-Star Management group that has been working togheter for 10+ years and have a proven track record in running the best publicly traded MLM company accounts for long term security. 
    No Termination, No sudden comp plan changes, NEVER will go retail. Open in China 8 days after prelaunch.
    An estimated 70 millions in first full year of operation. Over 30 000 reps in the first 6 months.
     

  9. this is sad when it comes to this industry! There are so many me 2 products  when it comes to network marketing.Since people are leaving trump network.I hope people learned their lesson though and such a sad news in this industry.  If anybody is interested in a new opportunity let me know! I want to mastermind with other leaders! = ) Have a wonderful day! 

  10. This is the final destination of most of the companies in product based MLM where reps are forced to sell over priced products every month. One visit to my website will give you all answers you are looking for.

  11. Global Wealth Trade is on the edge of massive growth in the USA, with a program that is entirely unique and very lucrative. CEO Ramin Mesgarlou, a.k.a. The Forensic Networker, has used his family's history as the backbone to start the company in 2005, which is now serving almost 60 countries with only ~10,000 Luxury Consultants (Distributors). The US has only recently begun growth due to a few very diligent "forensic networkers" such as Lior Skaler (see his comments above).
    Search for Global Wealth Trade on this website and then earn $200 off any $300 Fashion Designer item on my site. * Only 1 gift per customer. Shipping and taxes are extra.

  12. Somehow the link did not work in my previous post.

    Some of the leadership in the Trump Network did not take what they were being told at face value and did their own due diligence.  After discovering what was happening and seeing the writing on the wall, they negotiated our collective move. 

    This is where MOST of the Trump Network went:  Sisel International

    Check it out if you want the real deal.

  13. Sorry to hear this is happening to all the distributors out there but you know what they say, out of every tragedy comes opportunity. Check out this 15 year old International company with a proven track record for 15 years, listed in the stock exchange and a scientific discovery, contact me if you want o know more. http://www.romyjacques.com

  14. How do you know (i.e. what proof do you have) that "2/3 of the company has left"? 
    That is a really specific and large claim to make without having a complete genealogy list which would not be available seeing how this is not only a private company but that it has been less than one month since independent marketers choose to join another company (many in addition to The Trump Network).

  15. I have looked at many different MLM's to get involved in as I believe in this business model. I looked closely at Trump and have a close friend who is heavily involved. I am sorry to see things seem to be going wrong with it at this juncture. I previously got involved with a start up MLM that failed and remember how hard I worked and how teed off I was when all that work went out the door.  After doing serious research I joined Ambit Energy, not your typical MLM company. We don't sell monthly products, but offer a service ( electricity or Natural gas) that our customers use every month. We don't have to sell to our customers monthly, don't carry inventory, don't do billing, etc. Very straight forward. It is why Ambit was the #1 fastest growing privately held company in the US in 2010 according to Inc. Magazine. We have an "A" business rating with the Better Business Bureau and simply put a professional system that allows everyone to succeed and treats consultants great. With our product in only about 6 states now, but opening quickly in other regions this is the perfect time to get started, still well ahead of the growth curve. If you would like more information please drop me a note.
    I do not "hard sell " anyone. I believe if this is the right opportunity you will see it, understand it, and want it.  If not, I wish you nothing but success in your future endeavors.
     
    Thanks,
    Dave B.

  16. If you are going to spend the time and effort to build a business you have to avoid these problems for the long term!!!   Our home business has been around in the US for 15 years, has the best of the best attorneys on retainer, pays everyday and ensures compliance.  

  17. I'm very sorry to hear what just happened also with the "Trump Network" company (similar thing just happened to the "Tiens" company).
    This is always very sad news for the Industry and for the Distributors.
    If you're a Trump Distributor looking for new home, I invite you to join a unique&solid&growing company and a team that really is there for you and supports you along the way: 4Life is the company you're looking for and INT (International Networkers Team) is the Team you deserve and have been looking for!
    According to research, since 1956 thousands of different MLM, Multi Level, or Network Marketing companies have opened their doors; and to date only +/- 50 MLM companies have found a way to celebrate their 10th anniversary and still remain in business today…
    …and that's why I'm with 4Life Research (a unique and solid 13 year old company with continuous growth) and the best team in the Industry (INT, with 12 years of experience and results).
    Just send me a PM for you to get started!

  18. Guys, are you really that desperate that need to prospect here?
    C'mon!
    This is a forum where we should only discuss MLM issues, not prospecting.
    But then again, this is just my personal opinion.
    Cheers
    Alfredo Rodrigues

  19. A lawsuit was filed. So what! That is only one side of the story.
    A convicted felon bought an option to starve The Trump Network and never followed up with additional funding. He started a fire and hoped to collect survivors. He never intended to pay the marketers, he only would provide products and opportunity. He puts people at the top of his comp plan and kicks back all of the breakage to the company. So much for a great comp plan. He is even promising to pay off people to convince Trump Network founders to give up their company and make the lawsuit go away. Sounds like extortion to me.
    Its true that about 40 marketers left the company, but 80% of the company revenues are to customers/marketers that simply order product each month at a discount and don't bother with the commissions or the marketing hype. They just want the much higher quality products available from the company.
    A combination of these companies could have made sense with the Trump brand and the international presence of Sisel, however the complete lack of integrity or competence of the felon is what killed this deal. He had a chance, but chose to not pay for anything, except lawyer fees. I guess old habits are hard to break.

  20. So What?

    You are repeating the company line, meaning that you are likely one of the few dinosaurs left at Trump. 40 people left? HaHa – nearly 40 left from MY downline alone! LOL

    I realize that you are trying desperately to patch a sinking ship, but the “founders” did it to you guys! Tom Mowers loaned Todd, Scott and Lou enough money to pay you guys for two months! They paid you for one month and the rest of it was used elsewhere. My wife used to work for a man who went to “Club Fed” for doing exactly that! If any backroom “deals” were made, it was so that the pretty boys didn’t wind up in jumpsuits!

    As far as the felony goes…that’s out of context and water WAY under the bridge! If your guys were as bright as you think they are, they knew about him going in – with hat in hand.

    C’mon…wise up and think for yourself.

  21. No doubt that the Trump Network was a disaster. Innovation and creativity just isn’t the same as world class management. But, we now have that. New company…Bioceutica. Extraordinary management expertise !! We still control the most unique health and wellness product on the planet. Customized nutritionals determined by one’s own bio-identity through metabolic testing… try buying that at the drug store. International expansion plans already underway…And…the new owner paid significant bonuses to the field who never gave up, acknowledging the importance that he places on the field.. We off and running !! Best of luck to everybody else.. Nobody benefits from trying to tear each other down…only the MLM skeptics…

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