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Discovered that our customers with Ampersand (&) characters in their email address (i.e. firstname.lastname@example.org) can login to webmail just fine but an Administrator cannot impersonate these users. Attempting to Impersonate User for one of these addresses will result in "User Not Found" errors.
A temporary workaround to this issue is to Percent-Encode the address in the Impersonate User field (i.e. email@example.com).
SmarterMail Enterprise version 12.3.5318.