CALDERWOOD & HARKNESS LLP WHITE COLLAR DEFENSE & INVESTIGATIONS GROUP
ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT PRIVILEGED AND CONFIDENTIAL — PREPARED AT THE DIRECTION OF COUNSEL IN ANTICIPATION OF LITIGATION
MEMORANDUM
This memorandum was prepared at the direction of counsel in anticipation of litigation and for the purpose of providing legal advice to the client. It is protected by the attorney-client privilege and the work product doctrine. This document and its contents should not be disclosed to any person outside of Calderwood & Harkness LLP and authorized representatives of Dunmore Energy Holdings Ltd. without the prior written consent of the Responsible Partner.
I. EXECUTIVE SUMMARY
This memorandum analyzes the role of Yves Leclerc, Director of Logistics & Shipping at Dunmore Trading International Ltd. ("DTI"), a wholly owned subsidiary of Dunmore Energy Holdings Ltd. ("Dunmore" or the "Company"), in facilitating oilfield equipment shipments valued at approximately $12.4 million to end users in Russia via Caspian Logistik GmbH ("Caspian Logistik"), a German-registered logistics company based in Hamburg. The purpose of this memorandum is to assess Leclerc's knowledge, intent, and potential legal exposure in connection with these transactions, which are the subject of the ongoing inquiry by the U.S. Department of Justice, National Security Division ("DOJ-NSD"), and the U.S. Department of the Treasury, Office of Foreign Assets Control ("OFAC").
The period under review spans from August 2020 through January 2022, during which time at least eight discrete shipment events were facilitated through Caspian Logistik. Leclerc is a French national based in Dubai, UAE, at DTI's principal office located at Level 14, Gate Building 3, Dubai International Financial Centre, P.O. Box 506774, Dubai, UAE. Throughout the relevant period, Leclerc served as the principal DTI employee responsible for coordinating all shipping logistics, freight forwarding, and documentation for the oilfield equipment exports at issue. In this capacity, he interacted directly and regularly with Klaus Weidemann, Managing Director of Caspian Logistik GmbH, the entity through which the shipments were routed from Hamburg onward to their ultimate destinations.
This memorandum assesses Leclerc's knowledge and intent regarding the ultimate Russian end users of the exported equipment and the potential violations of the Export Administration Regulations ("EAR") § 746.5, including items classified under Export Control Classification Numbers ("ECCNs") 2B350 and 2B999, as well as OFAC sanctions administered under Executive Order 13662 (Directive 2) and Executive Order 14024. The actual end users of the equipment appear to have been entities connected to Volkhov Industrial Group JSC, which was subject to OFAC sectoral sanctions effective November 15, 2019, and was subsequently added to the OFAC Specially Designated Nationals and blocked Persons List (the "SDN List") on April 6, 2022.
Based on the evidence reviewed to date — including Leclerc's custodial email files, shipping documentation, internal DTI communications, forensic analyses prepared by Ridgeline Advisory Group and Nexagen Analytics Inc., and two witness interviews conducted by Calderwood & Harkness — our key findings regarding Leclerc are as follows:
• Leclerc was the primary DTI point of contact with Caspian Logistik and personally coordinated shipping schedules, freight forwarding, and documentation for the relevant shipments.
• Leclerc received communications from Weidemann that contained references to Russian destinations (e.g., "final delivery Moscow," "transit to RF"), which constituted potential red flags for sanctions and export control concerns.
• Leclerc escalated questions about end-user certificate accuracy to his direct supervisor, Derek Hargrave, President of DTI, on at least three documented occasions and was instructed by Hargrave to proceed each time.
• Leclerc made limited contact with the DTI compliance function regarding these shipments, and the one documented inquiry he made was dismissed by then-Chief Compliance Officer Gerald Fisk.
• The evidence does not establish that Leclerc acted with the specific intent to evade U.S. sanctions or export controls. His conduct is more consistent with negligence or reckless disregard of red flags than with willful participation in a sanctions evasion scheme.
• Leclerc's culpability is assessed as significantly lower than that of Hargrave, Natasha Sorokin (Senior Trader), and Gerald Fisk (former CCO), each of whom had broader knowledge of, or responsibility for, the counterparty relationships and compliance failures at issue.
There is no indication that Leclerc has retained personal counsel. He cooperated fully with Calderwood & Harkness's internal investigation and sat for two interviews — the first on June 22, 2022, and the second on August 18, 2022 — both conducted at Calderwood & Harkness's London office. At each session, Leclerc was administered the firm's standard Upjohn corporate Miranda warning. He did not request individual legal representation at either session.
II. BACKGROUND ON YVES LECLERC
A. Professional History and Role at DTI
Yves Leclerc is a French national who has been employed by DTI since approximately 2016. He holds the title of Director of Logistics & Shipping and is based at DTI's principal office in Dubai, UAE (Level 14, Gate Building 3, Dubai International Financial Centre, P.O. Box 506774, Dubai, UAE). Prior to joining DTI, Leclerc accumulated experience in international oil and gas logistics, including freight forwarding and supply chain management for energy sector clients. During his first interview on June 22, 2022, Leclerc described his prior experience as consisting of approximately fifteen years in the logistics sector, with roles at two European logistics firms and a stint at a Middle East–based oilfield services company. Leclerc indicated that his career had been focused on the operational and logistical dimensions of the energy supply chain rather than on trading, compliance, or legal functions.
At DTI, Leclerc's responsibilities encompassed the full range of physical logistics, transportation, freight forwarding, warehousing, shipping documentation, bills of lading, customs declarations, and end-user certificate coordination for DTI's trading operations. He oversaw the preparation and processing of shipping paperwork for equipment and commodities traded by DTI, and he served as DTI's primary liaison with external freight forwarders, shipping lines, port agents, and customs brokers. Leclerc's role was operational in nature: he received transaction instructions from DTI's trading desk and executive leadership, and he executed the logistical arrangements necessary to move physical goods from origin to destination.
From the time of his hire through July 1, 2022, Leclerc reported directly to Derek Hargrave, President of DTI. Hargrave supervised DTI's overall trading and operations and served as the ultimate decision-maker for transactional matters, including the approval of counterparties and trade terms. On July 1, 2022, Hargrave was placed on administrative leave by Dunmore in connection with this investigation, and Leclerc thereafter reported to interim management appointed by Dunmore Energy Holdings Ltd.
A review of Leclerc's personnel file and compliance records, as well as searches of publicly available databases, reveals no prior sanctions violations, export control violations, regulatory enforcement actions, or criminal history.
B. Relationship to Other Key Individuals
Understanding Leclerc's role requires situating him within the network of individuals who were involved in the transactions under review. The following individuals are relevant to the analysis:
Derek Hargrave — President of DTI and Leclerc's direct supervisor throughout the relevant period. Hargrave approved all material trading transactions at DTI and, as detailed in the memorandum dated September 1, 2022, by Jasmine Thornton, possessed the broadest knowledge of the counterparty relationships involved in the transactions at issue. Hargrave was placed on administrative leave on July 1, 2022, and separated from Dunmore effective October 1, 2022. He has retained personal counsel, James Overstreet of Overstreet & McClain PLLC, Dallas, Texas, and has not cooperated with the internal investigation since his separation.
Natasha Sorokin — Senior Trader at DTI. Sorokin was the primary trading contact for Sergei Volkov of Petronova Trading FZE, the entity through which certain of the relevant transactions were commercially structured. Sorokin worked closely with Leclerc on transactional logistics, providing him with equipment specifications, delivery instructions, and shipment timelines. Sorokin separated from Dunmore on September 15, 2022, and has retained personal counsel, Philip Keane of Wexford Keane LLP, Washington, D.C. A separate memorandum regarding Sorokin's trading activity and personal communications was prepared by Liam Donahue and is dated September 10, 2022.
Omar Al-Rashidi — Head of Middle East Operations at DTI. Al-Rashidi coordinated with Leclerc on regional shipping routes, customs clearance procedures, and logistics for shipments originating from or transiting through the UAE, including the Jebel Ali port. Al-Rashidi has been identified as a cooperating witness in the investigation and has provided information regarding the operational aspects of the equipment shipments.
Rajesh Malhotra — Controller, DTI. Malhotra was responsible for financial accounting and payment processing at DTI and interacted with Leclerc regarding payment documentation tied to shipping invoices, freight costs, and related expenses. Malhotra's knowledge of the financial flows associated with the equipment shipments is relevant to the broader investigation but is not the focus of this memorandum.
Gerald Fisk — Former Chief Compliance Officer, DTI. Fisk was responsible for administering DTI's sanctions screening, counterparty due diligence, and compliance oversight programs during the relevant period. As discussed in Section IV.B below, Leclerc made at least one documented inquiry to Fisk regarding the vetting of Caspian Logistik. Fisk departed Dunmore on June 10, 2022. A separate memorandum regarding Fisk's compliance failures and supervisory deficiencies was prepared by Nicholas Ferreira and is dated August 15, 2022.
Klaus Weidemann — Managing Director, Caspian Logistik GmbH (Mönckebergstraße 22, 20095 Hamburg, Germany). Weidemann was Leclerc's principal external counterpart and the individual with whom Leclerc coordinated all aspects of the Hamburg-based logistics for the equipment shipments. Weidemann and Caspian Logistik are under separate investigation for potential export control violations involving dual-use items. Leclerc communicated with Weidemann primarily by email, with supplemental communications via telephone and Meridian Services Inc. messaging.
III. THE OILFIELD EQUIPMENT EXPORT TRANSACTIONS
A. Overview of Shipments
Between August 2020 and January 2022, DTI facilitated the export of oilfield drilling equipment and components with an aggregate value of approximately $12.4 million. The equipment at issue includes drilling components, downhole tools, measurement instrumentation, and related spare parts used in upstream oil and gas exploration and production operations. These items are classified under the EAR, with relevant classifications including ECCN 2B350 (which covers chemical/biological equipment, including certain industrial process equipment with potential dual-use applications) and ECCN 2B999 (which covers items not elsewhere specified on the Commerce Control List, including certain oilfield-related items that are subject to controls for specified end uses and end users). A detailed analysis of the applicable ECCN classifications was prepared by Conrad Reeves in his memorandum dated May 5, 2022, and is incorporated herein by reference.
The shipments were routed from various origin points — primarily the UAE, with equipment typically dispatched from the Jebel Ali port in Dubai — through Caspian Logistik GmbH's facilities in Hamburg, Germany, for onward forwarding. In at least one instance, equipment was sourced from or routed through Dunmore Renewables GmbH's facility in Hamburg (Überseeallee 12, 20457 Hamburg, Germany), a related Dunmore subsidiary managed by Tobias Engel. From Hamburg, Caspian Logistik arranged onward transport to end users that, based on the evidence reviewed, were ultimately located in Russia.
The transactions were structured commercially through DTI's trading operations, with Natasha Sorokin serving as the primary trader and Derek Hargrave providing supervisory approval. Leclerc's involvement was in the logistical execution of these transactions — that is, in the physical movement of equipment, the preparation and processing of shipping documentation, and the coordination with freight forwarders and customs authorities.
B. Role of Caspian Logistik GmbH
Caspian Logistik GmbH is a German-registered Gesellschaft mit beschränkter Haftung (limited liability company), managed by Klaus Weidemann. Its registered address is Mönckebergstraße 22, 20095 Hamburg, Germany. Caspian Logistik functioned as a freight forwarder and logistics intermediary for the transactions at issue. Specifically, it received equipment shipments at Hamburg port and warehouse facilities, consolidated shipments as necessary, prepared onward shipping documentation, and arranged transport to the downstream destinations specified by Weidemann and, presumably, by the ultimate purchasers of the equipment.
Caspian Logistik is itself the subject of a separate investigation for potential export control violations involving dual-use items under EAR Category 2. A separate memorandum regarding Caspian Logistik's role in the export shipment chain and the analysis of end-user certificates was prepared by Liam Donahue and is dated July 20, 2022. That memorandum provides a detailed analysis of Caspian Logistik's corporate structure, ownership, and operational history, as well as its relationships with downstream counterparties in the Caucasus, Central Asia, and Russia.
Leclerc served as DTI's primary point of contact with Caspian Logistik throughout the relevant period. He communicated directly with Weidemann via email, telephone, and, to a lesser extent, Meridian Services Inc. messaging. The nature and content of these communications are discussed in detail in Section IV below.
C. Specific Shipment Details
The evidence supporting this memorandum includes key shipment records identified through the technology-assisted review ("TAR") conducted by Nexagen Analytics Inc. (Project No. NX-DEH-2204, project manager Brian Cavanaugh) and confirmed through forensic tracing performed by Ridgeline Advisory Group (Engagement No. RAG-2022-0319, led by Dr. Margaret Liu, CPA, CFE). The document review identified at least eight discrete shipment events over the August 2020 through January 2022 period, with a total aggregate value of approximately $12.4 million across all equipment shipments.
The shipping documentation reviewed in connection with this memorandum includes bills of lading, commercial invoices, packing lists, freight forwarding agreements, and end-user certificates associated with each of the identified shipment events. These documents were produced to the DOJ and OFAC and are Bates-stamped within the DEH-DOJ production range. By way of illustration, the following are representative examples of specific shipment records that bear on Leclerc's role:
• DEH-DOJ-0024817 through DEH-DOJ-0024835: Bill of lading and associated commercial invoice for a shipment of downhole tools and drilling components valued at approximately $1.7 million, shipped from Jebel Ali (UAE) to Hamburg via container vessel in October 2020. The bill of lading identifies Caspian Logistik GmbH as the consignee, with an accompanying end-user certificate identifying the purported end user as Kazakh Energy Solutions LLP, Almaty, Kazakhstan.
• DEH-DOJ-0031204 through DEH-DOJ-0031219: Freight forwarding agreement between DTI and Caspian Logistik GmbH, dated January 2021, covering the onward transport of measurement instrumentation and spare parts valued at approximately $2.1 million. Weidemann signed on behalf of Caspian Logistik. The agreement references delivery to "destination per client instruction" without specifying the final delivery location.
• DEH-DOJ-0047612 through DEH-DOJ-0047628: Packing list and commercial invoice for a shipment of drilling components valued at approximately $1.4 million, routed through the Dunmore Renewables GmbH facility in Hamburg in June 2021. The documents identify the shipment as destined for "Ankara Industrial Supplies Ltd., Istanbul, Turkey," an entity that Ridgeline Advisory Group was unable to independently verify as a legitimate operating entity.
• DEH-DOJ-0058933 through DEH-DOJ-0058951: Bill of lading, commercial invoice, and end-user certificate for the final identified shipment in January 2022, covering spare parts and measurement instrumentation valued at approximately $980,000. The end-user certificate identifies "Caspian Oilfield Services LLC, Baku, Azerbaijan" as the end user. Ridgeline's forensic analysis determined that the address listed for this entity corresponds to a mail-forwarding service in Baku.
These illustrative documents, together with the balance of the shipping records identified in the review, form the evidentiary basis for the analysis set forth in this memorandum.
D. End-User Certifications
End-user certificates ("EUCs") accompanied several of the shipments, purporting to identify the ultimate end users of the exported equipment. The EUCs consistently identified end users in non-sanctioned jurisdictions, including Kazakhstan, Turkey, and Azerbaijan. In each case, the named end user appeared to be a commercial entity engaged in the oil and gas sector in the relevant jurisdiction.
However, forensic review conducted by Ridgeline Advisory Group and independent document analysis performed by Calderwood & Harkness identified significant discrepancies in the EUCs that suggest potential false end-user statements. Specifically:
• Several of the listed end users could not be independently verified as legitimate operating entities through corporate registry searches, commercial database queries, or publicly available information. Ridgeline's investigators found no evidence of active operations, physical premises, or employees at the addresses provided.
• In at least two instances, the addresses listed on the EUCs appeared to correspond to shell entities or mail-forwarding services, rather than bona fide oilfield services or industrial companies.
• The pattern of entities across multiple EUCs — each in a different non-sanctioned jurisdiction — is consistent with the use of front companies or intermediaries to obscure the true end destination of the goods, a technique commonly associated with sanctions evasion schemes involving re-exportation through third countries.
Based on the totality of the evidence, including the forensic payment flow analysis conducted by Ridgeline, the actual end users of the exported oilfield equipment appear to have been entities in Russia connected to Volkhov Industrial Group JSC. Volkhov Industrial Group is a Russian industrial conglomerate headquartered at 12 Kutuzovsky Prospekt, Moscow 121248, Russia, and chaired by Arkady Volkhov. Volkhov Industrial Group was subject to OFAC Directive 2 sectoral sanctions under Executive Order 13662, which became effective with respect to Volkhov on November 15, 2019. Volkhov was subsequently added to the OFAC SDN List on April 6, 2022, pursuant to Executive Order 14024, which imposed full blocking sanctions.
These shipments of oilfield equipment to Volkhov-connected end users, facilitated through Caspian Logistik as an intermediary, potentially violated EAR § 746.5, which imposes license requirements for the export, reexport, and transfer (in-country) of specified items to Russia and Belarus, as well as OFAC prohibitions on dealings with sanctioned persons and entities. The applicable sanctions framework is analyzed in detail in the memorandum dated April 27, 2022, by Conrad Reeves.
IV. LECLERC'S ROLE — DOCUMENT REVIEW FINDINGS
A. Email and Communication Evidence
As part of the internal investigation, Calderwood & Harkness oversaw the collection and processing of Leclerc's email custodial files from DTI's systems in Dubai. Leclerc was among the custodians identified in the preservation notice and data collection protocol. His email data was collected, processed, and hosted by Nexagen Analytics Inc. (Project No. NX-DEH-2204, project manager Brian Cavanaugh) as part of the broader 2,347,812-document collection spanning six jurisdictions. Leclerc's custodial file was reviewed using the TAR methodology, supplemented by targeted keyword and date-range searches and manual review of documents identified as potentially responsive to the investigation's key issues.
The review of Leclerc's email file reveals that Leclerc exchanged approximately 1,240 emails with Klaus Weidemann of Caspian Logistik between August 2020 and January 2022. These communications encompass the full range of logistical coordination associated with the equipment shipments, including the scheduling of vessel bookings and container allocations, the preparation and exchange of shipping documentation (bills of lading, packing lists, commercial invoices), the coordination of customs clearance at Hamburg port, and the arrangement of warehousing and onward transport from Caspian Logistik's Hamburg facilities.
The key communications identified through the document review that bear directly on the assessment of Leclerc's knowledge and intent are summarized as follows:
Emails in which Leclerc forwarded equipment specifications and packing lists to Weidemann. Leclerc routinely received equipment specifications, packing lists, and delivery instructions from Natasha Sorokin or, in some cases, directly from Derek Hargrave, and forwarded this information to Weidemann to facilitate the preparation of freight forwarding and customs documentation in Hamburg. These emails are largely operational in nature and do not, on their face, contain references to sanctioned end users or jurisdictions. They do, however, establish Leclerc's direct and central role in the physical logistics chain.
Emails in which Weidemann provided onward routing instructions referencing Russian destinations. In several communications — identified through keyword searches for terms including "Moscow," "RF," "Russian Federation," "Rossiya," and related variants — Weidemann provided Leclerc with onward routing instructions or logistical updates that referenced destinations in Russia or the Russian Federation. Specifically:
• In an email dated March 14, 2021 (DEH-DOJ-0034507), Weidemann wrote to Leclerc: "Container release confirmed Hamburg. Will arrange ground transport for final delivery Moscow per client instruction. Please confirm ETA for next consignment."
• In an email dated July 22, 2021 (DEH-DOJ-0044219), Weidemann stated: "Transit to RF arranged via Tbilisi hub. Documentation adjusted for Georgian customs. Delivery timeline 14–18 working days from Hamburg departure."
• In an email dated November 3, 2021 (DEH-DOJ-0052861), Weidemann wrote: "Onward routing confirmed. Final consignee coordination ongoing — will revert with RF delivery confirmation once ground transport operator provides schedule."
These emails, which explicitly reference Moscow and "RF" (Russian Federation) as delivery destinations, are inconsistent with the end-user certificates that accompanied the corresponding shipments, which identified end users in Kazakhstan, Turkey, and Azerbaijan. The existence of these references in communications directed to Leclerc is central to the assessment of his constructive knowledge of the actual end destinations.
Internal DTI emails between Leclerc and Natasha Sorokin. The review identified a series of emails between Leclerc and Sorokin in which Sorokin provided Leclerc with equipment sourcing details, shipping timelines, and delivery instructions tied to Sorokin's trading activity with Petronova Trading FZE. These communications establish the commercial context within which Leclerc operated: Sorokin initiated or structured the transactions on the trading desk, and Leclerc executed the logistics. In some of these emails, Sorokin provided Leclerc with delivery addresses or contact details for downstream recipients. However, the review has not identified any email in which Sorokin explicitly informed Leclerc that the ultimate end users were Volkhov-connected entities or that the shipments were destined for sanctioned persons.
Emails in which Leclerc raised questions about end-user certificate accuracy. The document review identified at least three emails in which Leclerc raised questions or concerns about the accuracy or completeness of end-user certificates to his supervisor, Derek Hargrave. These communications are significant because they demonstrate that Leclerc was aware of potential irregularities in the documentation and sought supervisory guidance, while also demonstrating that Hargrave directed Leclerc to proceed notwithstanding those concerns:
• In an email dated December 8, 2020 (DEH-DOJ-0028144), Leclerc wrote to Hargrave: "Derek — Just flagging that the EUC for the Almaty shipment lists an entity I haven't been able to find any web presence for. Kazakh Energy Solutions LLP does not appear in any registry I can access. Should I hold the shipment or proceed?" Hargrave responded the same day: "Proceed. Compliance has cleared the counterparty. Not our job to audit the end user."
• In an email dated May 18, 2021 (DEH-DOJ-0040376), Leclerc wrote to Hargrave: "The EUC for the Istanbul consignment came in late and the address doesn't match the entity name. Ankara Industrial Supplies — but the address is in Istanbul. Minor issue or should I follow up?" Hargrave responded: "Push it through. Sorokin's dealt with this client before."
• In an email dated September 2, 2021 (DEH-DOJ-0049188), Leclerc wrote to Hargrave: "Klaus [Weidemann] keeps referencing Moscow and Russian delivery in his routing emails, but the EUC says Azerbaijan. Something doesn't line up. Want me to hold until we get clarification?" Hargrave responded: "These are transit logistics references. The EUC is the controlling document. Process it."
These three documented exchanges are central to the assessment of Leclerc's knowledge and intent. They demonstrate that Leclerc identified and escalated what he perceived as irregularities or discrepancies in the shipping documentation. They also demonstrate that Hargrave, as Leclerc's direct supervisor and the President of DTI, repeatedly and explicitly directed Leclerc to proceed with the shipments, dismissing the concerns Leclerc raised and characterizing them as immaterial.
B. Leclerc's Interaction with Compliance
The evidence reflects limited interaction between Leclerc and DTI's compliance function regarding the shipments at issue. During the relevant period, the compliance function was headed by Gerald Fisk, who held the title of Chief Compliance Officer. Fisk departed Dunmore on June 10, 2022, shortly after the internal investigation commenced. His compliance failures and supervisory deficiencies are analyzed in detail in the memorandum dated August 15, 2022, by Nicholas Ferreira.
The document review identified one email from Leclerc to Fisk, dated November 17, 2020 (DEH-DOJ-0026891), in which Leclerc asked whether Caspian Logistik GmbH required additional vetting or enhanced due diligence in light of the volume of shipments being routed through the company. Leclerc wrote:
"Gerald — We're routing a significant amount of equipment through Caspian Logistik in Hamburg. I wanted to check whether we need any additional KYC or screening for them given the volume. They were onboarded a while back but I don't know if the original screening covered the scope of what we're now doing with them."
Fisk responded to Leclerc on November 18, 2020 (DEH-DOJ-0026893):
"Yves — Caspian Logistik was screened during onboarding and is on the approved counterparty list. The existing screening is sufficient and I don't see a need for further diligence at this point. If anything changes in their profile we'll pick it up in the periodic review cycle."
Beyond this single exchange, the review has identified no evidence that Leclerc independently conducted or requested OFAC or restricted party screening for the ultimate end users identified on the end-user certificates, nor for any downstream entities beyond Caspian Logistik itself. Leclerc's role was operational and logistical in nature. He was not trained in, nor tasked with, sanctions compliance or export control analysis, and he relied on the compliance function under Fisk and on Hargrave's supervisory direction to address compliance-related questions.
It is noteworthy that DTI's compliance program, as assessed in the memorandum dated November 15, 2022, by Conrad Reeves and Jasmine Thornton, did not require logistics personnel to conduct independent end-user screening or to verify the accuracy of end-user certificates beyond the counterparty-level checks performed by the compliance department. The absence of such requirements in DTI's compliance policies and procedures is relevant to the assessment of Leclerc's individual culpability.
C. Connection to the Dunmore Renewables GmbH Transaction
At least one of the equipment shipments identified in the review involved equipment that was sourced from, or routed through, Dunmore Renewables GmbH's facility in Hamburg (Überseeallee 12, 20457 Hamburg, Germany). Dunmore Renewables GmbH is a separate Dunmore subsidiary focused on renewable energy projects, managed by Tobias Engel as Managing Director. Engel was tangentially involved in this particular shipment insofar as the equipment transited through the Dunmore Renewables facility before being transferred to Caspian Logistik's Hamburg warehouse.
The document review identified emails between Leclerc and Engel coordinating the logistics of transferring certain dual-use components from the Dunmore Renewables GmbH warehouse to Caspian Logistik. Leclerc's communications with Engel were limited in scope — focused narrowly on the physical handoff of equipment, scheduling of warehouse access, and coordination of ground transport within the Hamburg port area. There is no evidence that Leclerc and Engel discussed the ultimate destination of the equipment, the identity of the end users, or sanctions compliance considerations in the context of this transfer.
The role of Tobias Engel and Dunmore Renewables GmbH in the broader transaction chain is the subject of a separate memorandum prepared by Liam Donahue, dated October 10, 2022, to which this memorandum cross-refers for a more complete analysis of the Hamburg-based logistics.
V. LECLERC'S WITNESS INTERVIEWS
A. First Interview — June 22, 2022
The first interview of Yves Leclerc was conducted on June 22, 2022, by Amara Osei at Calderwood & Harkness's London office, located at 30 St Mary Axe, 12th Floor, London EC3A 8BF. Prior to the commencement of substantive questioning, Leclerc was administered the firm's standard Upjohn corporate Miranda warning, in accordance with the Witness Interview Protocol & Upjohn Warning Script dated April 18, 2022, which had been approved by Victoria Chambers. Leclerc was advised that Calderwood & Harkness represents Dunmore Energy Holdings Ltd. and not Leclerc individually; that the purpose of the interview was to gather facts in connection with the internal investigation; that the privilege belongs to the company and not to Leclerc; that the company may choose to waive the privilege and disclose the contents of the interview to government authorities or other third parties; and that Leclerc had the right to retain personal counsel at his own expense. Leclerc acknowledged his understanding of the Upjohn warning and stated that he did not wish to retain personal counsel at that time.
No personal counsel was present on Leclerc's behalf during the interview. The interview lasted approximately three hours and fifteen minutes.
The key statements made by Leclerc during the first interview are summarized as follows:
Role and responsibilities. Leclerc acknowledged his role as the person responsible for coordinating all shipping logistics for DTI's trading operations, including the equipment shipments routed through Caspian Logistik GmbH. He confirmed that he had been DTI's primary point of contact with Caspian Logistik and that he had communicated directly and regularly with Klaus Weidemann throughout the relevant period.
Understanding of Caspian Logistik. Leclerc stated that he understood Caspian Logistik to be a legitimate German logistics and freight forwarding company. He stated that Caspian Logistik had been introduced to DTI through existing business contacts — he believed the introduction came through Hargrave, though he was not certain of the precise origin — and that it had been onboarded as an approved counterparty through DTI's standard compliance procedures. Leclerc stated that he relied on DTI's compliance department, under Gerald Fisk, to clear counterparties before he began working with them.
Awareness of Russian destinations. When asked whether he had been aware of references to Russian destinations in Weidemann's communications, Leclerc acknowledged that he had seen such references. However, he stated that he understood these references to be transit logistics references — that is, references to intermediate logistics hubs or transit points in the shipping chain — and not indications that the final end users were located in Russia. Leclerc pointed to the end-user certificates, which consistently identified non-Russian end users, as the basis for his understanding that the equipment was destined for entities in Kazakhstan, Turkey, and Azerbaijan. He stated that he viewed the end-user certificate as the "controlling document" for determining the final destination, an understanding he attributed to instructions from Hargrave.
Escalation to Hargrave. Leclerc acknowledged that he had forwarded questions about end-user certificate accuracy to Derek Hargrave on at least two or three occasions. He described these as instances in which something "didn't quite add up" in the documentation — such as a discrepancy between the EUC entity name and address, or Weidemann's references to Russian delivery — and he sought guidance from his supervisor. Leclerc stated that Hargrave instructed him to proceed with the shipments each time, and that he followed those instructions.
Denial of knowledge of Volkhov Industrial Group. Leclerc denied any knowledge of Volkhov Industrial Group JSC, Arkady Volkhov, or any connection between Petronova Trading FZE, Caspian Logistik, and Volkhov-controlled entities. He stated that the names "Volkhov" and "Petronova" were not familiar to him until they were raised during the investigation. Leclerc further stated that he was not aware of the OFAC Directive 2 designation of Volkhov Industrial Group (effective November 15, 2019) or the subsequent SDN listing (effective April 6, 2022) until he was informed of these designations during the investigation.
Description of the export documentation process. Leclerc described the standard workflow for equipment shipments as follows: Sorokin or Hargrave would initiate the transaction by communicating equipment specifications, quantities, and delivery requirements to Leclerc. Leclerc would then coordinate with Caspian Logistik (or other freight forwarders, depending on the route) to arrange shipping, prepare documentation, and manage customs clearance. End-user certificates were typically provided to Leclerc by Sorokin or Hargrave; Leclerc did not prepare the EUCs himself but incorporated them into the shipping documentation package. Leclerc stated that he did not negotiate trade terms, select counterparties, or structure payments.
B. Second Interview — August 18, 2022
The second interview of Yves Leclerc was conducted on August 18, 2022, at Calderwood & Harkness's London office by Amara Osei and Jasmine Thornton. The Upjohn warning was re-administered at the outset of the interview, and Leclerc again acknowledged his understanding and confirmed that he had not retained personal counsel. No personal counsel was present. The interview lasted approximately four hours and was conducted as a follow-up to the first interview, with a particular focus on specific documents identified during the Nexagen Analytics TAR review that had not been available at the time of the first interview.
The key statements made by Leclerc during the second interview are summarized as follows:
Response to specific documentary evidence. Leclerc was shown copies of the emails from Weidemann referencing "final delivery Moscow" (DEH-DOJ-0034507), "transit to RF" (DEH-DOJ-0044219), and "RF delivery confirmation" (DEH-DOJ-0052861). When confronted with these documents, Leclerc acknowledged that, with the benefit of hindsight, he now understood that these references constituted red flags that should have prompted further inquiry. However, he maintained that at the time he received these communications, he believed the references to Moscow and the Russian Federation related to intermediate logistics hubs or transit routing, not to the identity of the sanctioned end users. He stated that he had not appreciated the significance of these references in the context of U.S. sanctions and export control requirements.
Reliance on Hargrave's approval. Leclerc reiterated that he had raised concerns about end-user certificate discrepancies with Hargrave and had been directed to proceed each time. He stated that he did not independently verify end-user certificate information beyond what he described as "common-sense checks" — such as looking for a web presence or address consistency — and that he relied on Hargrave's approval as sufficient authorization to process the shipments. Leclerc stated that Hargrave was his direct supervisor, that Hargrave had been with Dunmore for many years and had vastly more experience in the trading business, and that Leclerc did not feel it was his place to override Hargrave's instructions.
Compensation structure. Leclerc stated that he had no financial incentive tied to the volume or value of equipment shipments. His compensation consisted of a fixed salary plus a discretionary annual bonus based on DTI's overall performance, not on transaction-specific metrics. He stated that he did not receive commissions, deal fees, or any other variable compensation linked to the shipments at issue.
Shipping routes. Leclerc provided additional context on the physical shipping routes used for the equipment. He explained that equipment was typically shipped by sea from Jebel Ali (UAE) on container vessels to Hamburg, where it was received by Caspian Logistik at Hamburg port or at Caspian Logistik's warehouse facility. From Hamburg, Caspian Logistik arranged onward transport, which Leclerc understood could involve ground transport through the Caucasus or Central Asia. Leclerc stated that the multi-leg routing was not unusual for oilfield equipment shipments to the Caspian region and that he did not, at the time, view the routing as indicative of sanctions evasion.
Meridian Services Inc. messages. Leclerc cooperated fully with the investigation's request to review communications on his personal mobile device. With Leclerc's written consent, Calderwood & Harkness's e-discovery team reviewed Meridian Services Inc. messages between Leclerc and Weidemann. The Meridian Services Inc. messages contained logistical coordination consistent with the email communications — scheduling confirmations, delivery updates, and container tracking references — but no overt discussion of sanctions evasion, the identity of ultimate end users, or the involvement of Volkhov Industrial Group or Volkhov-connected entities. The communications do not materially alter the assessment of Leclerc's knowledge or intent.
Throughout both interviews, Leclerc was cooperative, responsive, and appeared forthcoming. He did not decline to answer any questions and did not invoke any personal privilege. His demeanor was consistent across both sessions, and his account of events was largely consistent between the two interviews, with the exception of his somewhat more candid acknowledgment during the second interview that the Weidemann references to Russian destinations were, in retrospect, red flags.
VI. ASSESSMENT OF LECLERC'S KNOWLEDGE AND CULPABILITY
A. Knowledge of Sanctions and Export Controls
The assessment of Leclerc's knowledge of applicable sanctions and export control requirements is central to determining his potential legal exposure. Several factors are relevant to this analysis.
First, Leclerc is a French national with no formal training in U.S. sanctions law, U.S. export control law, or the specific regulatory frameworks administered by OFAC and the Bureau of Industry and Security ("BIS"). The pre-existing Dunmore compliance program, as assessed in the memorandum dated November 15, 2022, by Conrad Reeves and Jasmine Thornton, did not provide specialized OFAC or EAR training to logistics personnel at DTI. The compliance training that DTI offered was general in nature, focused on anti-corruption and anti-bribery compliance, and did not address the specific requirements of the EAR, OFAC sanctions programs, or the identification of red flags in shipping documentation that might indicate sanctions evasion. Leclerc confirmed during his interviews that he had not received any specialized training in U.S. sanctions or export controls during his tenure at DTI.
Second, Leclerc had no direct access to OFAC screening tools, restricted party list databases, or the compliance systems used by Gerald Fisk's compliance department. He relied on the compliance department to conduct counterparty screening and to advise on whether specific transactions or counterparties raised compliance concerns. His one documented inquiry to Fisk — the November 2020 email regarding Caspian Logistik — was met with a response that no further diligence was required, effectively closing the matter from Leclerc's perspective.
Third, the evidence suggests that Leclerc had constructive awareness, through Weidemann's communications, that shipments were being routed to or through Russia. The emails referencing "final delivery Moscow," "transit to RF," and "RF delivery confirmation" were addressed to Leclerc and were received by him in the ordinary course of his logistical coordination work. These references, taken together, should have prompted a reasonably diligent logistics professional to inquire further into the actual end destinations of the equipment, particularly in light of the discrepancies with the end-user certificates.
However, the evidence does not establish that Leclerc had direct knowledge that the ultimate end users were entities controlled by or connected to Volkhov Industrial Group, or that those entities were subject to OFAC sanctions. Leclerc's statements that he was unaware of Volkhov and the OFAC designations are not contradicted by any documentary evidence identified in the review. The Weidemann emails reference Russian destinations in general terms but do not identify Volkhov Industrial Group, Arkady Volkhov, or any specific sanctioned entity.
In sum, Leclerc's knowledge is best characterized as constructive awareness that the shipments had a Russian nexus, combined with an absence of direct knowledge regarding the identity of the sanctioned end users. His failure to investigate further, given the red flags present in the Weidemann communications and the EUC discrepancies, reflects a failure of diligence rather than deliberate ignorance.
B. Intent and Willfulness Analysis
Under the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701–1706, and the Export Control Reform Act of 2018 ("ECRA"), 50 U.S.C. §§ 4801–4852, criminal liability for sanctions and export control violations requires that the violation be willful. The willfulness standard has been interpreted by courts to require that the defendant acted with knowledge that his conduct was unlawful, or with a purpose to disobey or disregard the law. Mere negligence, even gross negligence, is generally insufficient to establish willfulness for purposes of criminal liability under these statutes, though it may support civil enforcement action.
Based on the evidence reviewed to date, the evidence does not establish that Leclerc acted with the specific intent to evade U.S. sanctions or export controls. The key factors supporting this conclusion are:
• Leclerc escalated concerns about end-user certificate discrepancies to his supervisor on at least three documented occasions. This conduct is inconsistent with a willful intent to evade sanctions; a person acting with the intent to evade would be unlikely to create a documentary record of his concerns by emailing his supervisor.
• Leclerc's inquiries were overridden by Hargrave, who directed Leclerc to proceed. Leclerc followed his supervisor's instructions, which, while not exculpatory as a matter of law, is relevant to the assessment of his subjective intent.
• Leclerc's role was limited to operational logistics. He did not select the end users, negotiate transaction terms, structure payments, or prepare the end-user certificates. These functions were performed by others — principally Sorokin and Hargrave — who had greater knowledge of and involvement in the commercial and counterparty dimensions of the transactions.
• Leclerc had no financial incentive tied to the specific transactions at issue. His compensation was not structured to reward the volume or value of equipment shipments.
• Leclerc cooperated voluntarily with the investigation, sat for two interviews without personal counsel, and provided access to his personal mobile device for review. This cooperative posture is consistent with a person who does not believe he engaged in intentional wrongdoing.
Leclerc's conduct is more accurately characterized as negligence or reckless disregard than as willful participation in a sanctions evasion scheme. He failed to recognize or adequately respond to red flags that should have prompted further inquiry, and he deferred to his supervisor's instructions rather than independently investigating the discrepancies he identified. This conduct may give rise to civil liability under strict liability or knowledge-based standards applicable to certain OFAC and EAR enforcement actions, but it falls short of the willfulness threshold required for criminal prosecution.
The distinction between Leclerc's role and the roles of the other principal actors is critical. Hargrave approved transactions and overrode compliance concerns with express instructions to proceed. Sorokin directly transacted with Sergei Volkov of Petronova Trading FZE and had the closest relationship with the commercial counterparties. Fisk, as CCO, failed to implement adequate screening procedures and dismissed Leclerc's one documented compliance inquiry. Each of these individuals bore a greater degree of responsibility — whether by virtue of decision-making authority, counterparty knowledge, or compliance oversight obligations — than Leclerc.
C. Comparison to Other Key Individuals
To place Leclerc's role and culpability in the proper context, a brief comparison to the other key individuals involved in the transactions is warranted:
Derek Hargrave (President, DTI). Hargrave directed Leclerc and others to proceed with the equipment shipments despite red flags, including Leclerc's documented escalation of end-user certificate discrepancies. Hargrave supervised the entire DTI trading desk, approved all material transactions, and had broader knowledge of the counterparty relationships at issue. The memorandum dated September 1, 2022, by Jasmine Thornton, assesses Hargrave's knowledge and role in detail and concludes that Hargrave's culpability is high. Hargrave has retained personal counsel (James Overstreet of Overstreet & McClain PLLC) and has not cooperated with the internal investigation since his separation.
Natasha Sorokin (Senior Trader, DTI). Sorokin was the primary trading contact with Sergei Volkov of Petronova Trading FZE and executed fourteen crude oil swap transactions with a total notional value of approximately $218.7 million in addition to the equipment transactions. Sorokin had direct knowledge of the counterparty chain and the commercial relationships underlying the transactions. The memorandum dated September 10, 2022, by Liam Donahue, assesses Sorokin's trading activity and personal communications and concludes that Sorokin's culpability is high. Sorokin has retained personal counsel (Philip Keane of Wexford Keane LLP).
Gerald Fisk (Former CCO, DTI). Fisk was responsible for administering DTI's sanctions screening and compliance oversight programs and failed to implement adequate screening for the ultimate end users of the equipment shipments. When Leclerc directly asked Fisk whether Caspian Logistik required additional vetting, Fisk dismissed the inquiry and advised that the existing screening was "sufficient." The memorandum dated August 15, 2022, by Nicholas Ferreira, assesses Fisk's compliance failures and concludes that his conduct represents a significant supervisory deficiency.
Leclerc's culpability is assessed as significantly lower than that of Hargrave, Sorokin, or Fisk. While Leclerc was the person who physically executed the shipping logistics, he did so under the direction and supervision of individuals who bore primary responsibility for the selection of counterparties, the structuring of transactions, and the maintenance of compliance controls. Leclerc's failures were failures of diligence, not of intent.
VII. POTENTIAL LEGAL EXPOSURE
A. Export Control Violations (EAR)
The shipments of oilfield equipment classified under ECCN 2B350 and ECCN 2B999 to end users in Russia potentially violated EAR § 746.5, which, during the relevant period, imposed license requirements for the export, reexport, and transfer of specified items to Russia and Belarus, including items classified under the relevant ECCNs. A detailed analysis of the applicable EAR provisions and ECCN classifications is set forth in the memorandum dated May 5, 2022, by Conrad Reeves.
Leclerc, as the person who arranged, documented, and facilitated the physical shipments of the controlled equipment, could be considered a "party to the transaction" within the meaning of EAR Part 744, Supplement No. 3. Under the EAR, parties to a transaction include not only the principal parties in interest (exporter, purchaser, and end user) but also freight forwarders, shipping agents, and other intermediaries who participate in the transaction. BIS has exercised enforcement authority against freight forwarders and logistics personnel in prior cases, particularly where such persons had knowledge of, or reason to know of, the unlawful end use or end user.
However, several mitigating factors weigh against a finding of significant individual EAR exposure for Leclerc:
• Leclerc did not select the end users, prepare the end-user certificates, or make any export licensing determinations. These functions were performed by others within DTI.
• Leclerc escalated concerns about end-user certificate discrepancies to his supervisor and was directed to proceed. While this does not negate his status as a party to the transaction, it is relevant to the assessment of his knowledge and intent.
• Leclerc did not possess specialized knowledge of EAR classifications, licensing requirements, or the red flag indicators set forth in BIS guidance.
Risk Assessment: Leclerc faces low to moderate individual exposure under the EAR civil enforcement regime. BIS may consider administrative penalties against individuals who facilitated controlled exports in circumstances where red flags were present, even absent evidence of willfulness. However, the equities favor focusing enforcement attention on the more culpable actors. Leclerc's criminal exposure under the EAR is assessed as low, absent additional evidence of willfulness not currently in the record.
B. OFAC Violations
The oilfield equipment exports to Volkhov-connected end users also potentially constitute violations of OFAC-administered sanctions programs. During the earlier portion of the relevant period (August 2020 through approximately April 2022), Volkhov Industrial Group was subject to Directive 2 sectoral sanctions under Executive Order 13662, which prohibited the provision of certain services and the export of certain goods in connection with specified activities in the Russian energy sector. Following Volkhov's addition to the SDN List on April 6, 2022, under Executive Order 14024, any dealings with Volkhov or Volkhov-controlled entities were subject to full blocking sanctions.
Leclerc's role in facilitating the shipments could implicate him as a "cause" of OFAC violations within the meaning of OFAC's enforcement guidelines. OFAC's Economic Sanctions Enforcement Guidelines (31 C.F.R. Part 501, Appendix A) set forth the factors that OFAC considers in determining the appropriate enforcement response, including the nature and extent of the individual's involvement, the individual's awareness of the conduct at issue, the individual's cooperation with the investigation, and the existence and adequacy of the entity's compliance program.
With respect to Leclerc specifically, OFAC enforcement typically focuses on the entities and principals responsible for sanctions violations rather than on operational personnel who facilitated transactions in the absence of evidence of deliberate evasion. While OFAC has the authority to impose civil penalties on individuals, the exercise of such authority against a logistics employee who lacked direct knowledge of the sanctioned end users and who escalated concerns to his supervisor would represent an aggressive enforcement posture that is not supported by the precedents reviewed.
It is also significant that Dunmore filed a voluntary self-disclosure ("VSD") with OFAC on June 1, 2023, encompassing the transactions at issue. Under OFAC's enforcement guidelines, the filing of a VSD is a significant mitigating factor and typically results in a reduction in the base penalty amount. The VSD covers Leclerc's conduct as part of the broader corporate disclosure.
C. DOJ Prosecution Risk
Based on the evidence reviewed to date, Leclerc presents a low prosecution risk in connection with the DOJ-NSD investigation. The following factors support this assessment:
• The evidence does not establish that Leclerc acted willfully within the meaning of IEEPA and ECRA. Criminal prosecution under these statutes requires proof of willfulness, and the evidence is more consistent with negligence or reckless disregard than with intentional evasion.
• The DOJ-NSD team handling this matter — Assistant U.S. Attorney Meredith Calloway, and Trial Attorneys Samuel Kovacs and Diana Pressman — has not separately targeted Leclerc or indicated any individual interest in him to date. To our knowledge, Leclerc has not been identified as a subject or target of the investigation.
• FBI Special Agent Paul Reinhardt's investigative focus, as reflected in the document requests and subpoena specifications received by Dunmore, appears directed at Hargrave and Sorokin as the principal actors in the alleged sanctions evasion scheme.
• Leclerc's continued cooperation with the internal investigation, his willingness to sit for interviews without personal counsel, and the absence of evidence that he destroyed or concealed documents or communications all weigh strongly against individual prosecution.
• Leclerc's role was that of an operational logistics coordinator who executed instructions received from more senior individuals within DTI. DOJ prosecution guidance, including the Justice Manual's provisions regarding individual accountability in corporate investigations, generally directs prosecutorial attention toward the individuals who directed, authorized, or concealed the unlawful conduct rather than those who performed ministerial or logistical functions under direction.
We will continue to monitor DOJ's posture toward Leclerc and will update this assessment if circumstances change, including if DOJ issues any individual subpoena or request for testimony directed at Leclerc, or if additional evidence bearing on Leclerc's knowledge or intent is identified in ongoing document review.
VIII. RECOMMENDATIONS
A. Continued Cooperation
Based on the assessment set forth in this memorandum, we recommend that Leclerc remain available for further interviews if requested by DOJ or OFAC. Any such request should be coordinated through Calderwood & Harkness. If OFAC Compliance Analyst Erin Matsuda or any other government representative contacts Leclerc directly, Leclerc should be instructed to refer the inquiry to Calderwood & Harkness and not to provide any substantive response without counsel's involvement.
At this time, there is no recommendation to advise Leclerc to retain personal counsel. His interests remain aligned with those of the Company, and his classification as a cooperating witness (discussed in Section VIII.B below) does not warrant the introduction of personal representation at this stage. However, this assessment should be revisited promptly if any of the following circumstances arise: (a) DOJ or OFAC signals any individual interest in Leclerc, including through the issuance of an individual subpoena, a target letter, or a request for personal testimony; (b) additional evidence is identified that materially increases the assessment of Leclerc's knowledge or intent; or (c) Leclerc's interests diverge from those of the Company for any other reason. Victoria Chambers should be notified immediately if any such circumstance arises.
Leclerc should continue to be subject to the litigation hold and document preservation obligations that were imposed at the outset of the investigation and reaffirmed in the reminder memorandum dated July 15, 2022. Leclerc should be reminded that he must preserve all documents, communications, and data in his possession or control that are potentially relevant to the investigation, including personal email accounts, mobile device communications, and any physical documents. Any request by Leclerc to dispose of or modify potentially relevant materials should be denied and reported to the investigation team.
B. Witness Classification
We recommend that Leclerc be classified as a cooperating witness with no current adverse interest to the Company. This classification reflects the following:
• Leclerc has cooperated fully with the internal investigation, including by sitting for two interviews, providing access to his personal mobile device, and answering questions without invoking personal privilege.
• The evidence does not indicate that Leclerc acted with willful intent to evade sanctions or export controls, and his culpability is assessed as significantly lower than that of the principal actors.
• Leclerc's interests are not currently adverse to those of the Company. He was a mid-level operational employee who executed instructions received from more senior individuals, and his continued employment and cooperation support the Company's broader cooperation and remediation narrative.
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