**ATTORNEY-CLIENT PRIVILEGED & CONFIDENTIAL / COMMON INTEREST COMMUNICATION**
This communication is protected by the attorney-client privilege and the work product doctrine. It is being shared pursuant to the Joint Defense / Common Interest Agreement dated April 25, 2022, among Dunmore Energy Holdings Ltd., Greystone Capital Partners Fund IV, L.P., and Thornbury Infrastructure Fund II, L.P. This communication may not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.
Dear Arthur,
I wanted to provide you with a quarterly status update on the internal investigation we are conducting on behalf of Dunmore Energy Holdings Ltd. in connection with the inquiry by the DOJ National Security Division and Grand Jury Subpoena GJ No. 22-418, issued April 19, 2022, by the U.S. District Court for the District of Columbia (Grand Jury 22-2). This update is being shared consistent with the Common Interest Agreement and the information-sharing protocol we established in April. Given Greystone's position as the 62.5% majority equity holder in Dunmore, I expect Richard Fairbanks will want to be briefed on these developments; please let me know if it would be helpful to schedule a call at his convenience.
**Personnel Actions.** Since our last update, there have been several key personnel developments. Natasha Sorokin, Senior Trader at Dunmore Trading International, was placed on administrative leave on May 16, 2022, and was formally separated from the company effective September 15, 2022. She is represented personally by Philip Keane of Wexford Keane LLP. Derek Hargrave, President of DTI in Dubai, was placed on administrative leave on July 1, 2022, and remains on leave while the company evaluates next steps regarding his status. His personal counsel is James Overstreet of Overstreet & McClain PLLC. Gerald Fisk, the former Chief Compliance Officer, departed Dunmore on June 10, 2022, and is represented by Catherine Blackthorn of Blackthorn & Associates LLP. We have established appropriate information-sharing limitations with respect to Mr. Fisk given the potential for adverse interests. On the remediation side, Priya Nayar was appointed as the new Chief Compliance Officer effective August 1, 2022. Dunmore continues to advance defense costs for Fisk, Sorokin, and Hargrave pursuant to its indemnification obligations under Cayman Islands law, the articles of association, and their respective employment agreements.
**Witness Interviews.** We have completed two rounds of witness interviews. The first round, conducted between May 18 and June 30, 2022, encompassed 22 interviews across the Houston, Dubai, and London offices. The second round, which concluded today, involved 15 additional interviews conducted between August 5 and September 30. In total, we have completed 37 interviews to date, with current and former employees across multiple jurisdictions. We anticipate a third round of re-interviews and follow-up interviews. I should note that we have identified a cooperating witness within DTI's Middle East operations who has been forthcoming and whose account has been corroborated in meaningful respects by the documentary record.
**Document Review and E-discovery.** We engaged Nexagen Analytics Inc. (Project No. NX-DEH-2204) for e-discovery processing, hosting, and technology-assisted review. Document collections have spanned six jurisdictions — the Cayman Islands, UAE, United States, Germany, Nigeria, and the United Kingdom. To date, we have collected approximately 2.3 million documents from custodians across all Dunmore entities. The TAR review is well advanced and we expect it to be substantially completed by approximately October 15. We anticipate identifying a significant volume of responsive documents. Our first production to the DOJ is being prepared and is expected to be made on or about November 1, with Bates-stamped documents using the DEH-DOJ prefix.
**Forensic Accounting.** Ridgeline Advisory Group LLC (Engagement No. RAG-2022-0319), led by Dr. Margaret Liu, was retained on May 2, 2022, to conduct forensic tracing of suspect transaction flows. I can share the following preliminary findings under the common interest protection. The investigation has identified 14 crude oil swap transactions executed between June 2020 and February 2022, totaling approximately $218.7 million in notional value, involving counterparties Petronova Trading FZE and Zenith Petroleum DMCC. Forensic analysis indicates that at least 9 of the 14 transactions — approximately $156.3 million in notional value — involved crude oil ultimately sourced from or destined for entities connected to Volkhov Industrial Group JSC, which was subject to OFAC Directive 2 sectoral sanctions under E.O. 13662 since November 15, 2019, and was subsequently added to the OFAC SDN List on April 6, 2022, under E.O. 14024. Separately, the investigation has identified approximately $12.4 million in oilfield equipment exports classified under EAR ECCN 2B350 and 2B999 shipped to end users in Russia via Caspian Logistik GmbH in Hamburg, potentially involving false end-user certifications. Ridgeline has also identified approximately $34.2 million in payments across 127 individual transactions routed through intermediary accounts at Crescent Commercial Bank PJSC in Dubai between March 2020 and March 2022, structured in a manner that appears designed to obscure the beneficial ownership of Volkhov-connected entities. Ridgeline's final forensic report is expected in early 2023.
**DOJ Engagement.** We made an initial proffer of cooperation to AUSA Meredith Calloway at the DOJ National Security Division on July 15, 2022, in Washington. The DOJ team also includes Trial Attorneys Samuel Kovacs and Diana Pressman from the Counterintelligence and Export Control Section, and the FBI case agent is Special Agent Paul Reinhardt. The DOJ has been receptive to Dunmore's cooperative posture and agreed to a rolling production protocol, memorialized in a letter dated July 10, 2022. As you will recall, the original subpoena return date of May 19 was extended to July 19 by agreement, and further rolling productions have been agreed. We are currently preparing a supplemental proffer summarizing our forensic findings for submission to the DOJ in November. While we are cautiously encouraged by the cooperative dynamic, I want to be clear that the inquiry remains active and we are not in a position to predict the outcome at this stage.
**Remediation.** Beyond the CCO appointment, the team is beginning to evaluate additional remediation steps, including the potential engagement of an independent compliance consultant to design an enhanced sanctions and export controls compliance program. As you know, the DOJ Corporate Enforcement Policy places significant weight on timely and effective remediation, and we anticipate formalizing such an engagement in the near term.
**D&O Insurance.** Howard Quinn has submitted a claim to Garrison Mutual Insurance Co. under D&O policy GM-DO-2021-08734, which provides $50 million in aggregate coverage with a $10 million per-claim limit and a $2.5 million retention. The carrier's claims adjuster, Patricia Holbrook, is reviewing the claim. We expect coverage to apply to defense costs, though not to any potential disgorgement or penalties. We will update you as the claim progresses.
**Cost Exposure.** I want to flag that legal costs are accruing significantly given the investigation's scope across six jurisdictions, the volume of documents under review, and the number of witness interviews conducted to date. I am not in a position to provide specific figures at this time, but the total cost exposure — inclusive of forensic accounting, e-discovery, advancement of individual counsel fees, and potential voluntary disgorgement — could be substantial. If Greystone's fund counsel would find a more detailed cost summary useful, we are happy to prepare one.
Arthur, I want to reiterate that all information in this update is shared under the Common Interest Agreement and should be treated as privileged and confidential. I would ask that distribution be limited to those individuals at Greystone Capital Management LLC with a need to know. Please let me know if you would like to schedule a call — I am happy to make myself available to speak with you and Richard at your convenience. I will also ensure that Helen Cresswell at Thornbury Asset Management Ltd. receives an appropriate update consistent with the Common Interest Agreement, given Thornbury Infrastructure Fund II's equity position.
If you would prefer a more detailed written status memorandum in lieu of or in addition to this email summary, we can certainly prepare one. As always, please do not hesitate to reach out with any questions.
Best regards,
Victoria Chambers Partner, White Collar Defense & Investigations Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Tel: (202) 555-4180 vchambers@calderwoodharkness.com Matter No. 1016-00009