ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT DRAFT FOR INTERNAL REVIEW — NOT FOR FILING
DRAFT — VOLUNTARY SELF-DISCLOSURE NARRATIVE
For Submission to the Office of Foreign Assets Control U.S. Department of the Treasury
May 15, 2023
Prepared by: Conrad Reeves, Senior Counsel, Export Controls & Sanctions Jasmine Thornton, Lead Associate, White Collar & Investigations Calderwood & Harkness LLP
On Behalf of: Dunmore Energy Holdings Ltd.
Matter No.: 1016-00009
Distribution Limited To: Victoria Chambers, Responsible Partner, Calderwood & Harkness LLP Marcus Wellbourne, Esq., General Counsel, Dunmore Energy Holdings Ltd. Priya Nayar, Chief Compliance Officer, Dunmore Energy Holdings Ltd.
I. COVER PAGE AND TRANSMITTAL INFORMATION
VOLUNTARY SELF-DISCLOSURE Pursuant to 31 C.F.R. Part 501, Appendix A
Addressee:
Office of Foreign Assets Control Compliance and Enforcement Division U.S. Department of the Treasury 1500 Pennsylvania Avenue NW Washington, D.C. 20220
Filing Entity:
Dunmore Energy Holdings Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands, Cayman Company Registration No. MC-334821.
Registered Office: Harbour Place, 4th Floor 103 South Church Street George Town, Grand Cayman KY1-1002 Cayman Islands
Operational Headquarters: 1200 McKinney Street, Suite 3400 Houston, TX 77010 United States of America
Filing Made Through Counsel:
Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 United States of America
Contact Partner: Victoria Chambers, Responsible Partner, White Collar & Investigations Telephone: (202) 555-8100
Email: v.chambers@calderwoodharkness.com
Contact Counsel: Conrad Reeves, Senior Counsel, Export Controls & Sanctions Telephone: (202) 555-8247
Email: c.reeves@calderwoodharkness.com
Nature of Filing:
This submission constitutes a voluntary self-disclosure ("VSD") filed on behalf of Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH") pursuant to 31 C.F.R. Part 501, Appendix A, and the Office of Foreign Assets Control's Economic Sanctions Enforcement Guidelines, 31 C.F.R. Part 501, Appendix A (the "Enforcement Guidelines"). Dunmore voluntarily discloses apparent violations of U.S. sanctions laws administered by OFAC, as described in detail in this narrative and the accompanying appendices.
Coordination with the U.S. Department of Justice:
Dunmore respectfully advises OFAC that this VSD is being filed in coordination with Dunmore's ongoing cooperation with the U.S. Department of Justice, National Security Division, Counterintelligence and Export Control Section ("DOJ NSD/CES"), in connection with grand jury subpoena GJ No. 22-418, issued on April 19, 2022 by the U.S. District Court for the District of Columbia (Grand Jury 22-2). Dunmore has cooperated fully with DOJ NSD/CES since the issuance of that subpoena and has made substantial document productions and facilitated witness interviews, as described in detail in Section VII below. Dunmore's counsel has communicated with the assigned Assistant United States Attorney, Meredith Calloway, regarding the filing of this VSD with OFAC and will continue to coordinate between the two agencies as appropriate to ensure the efficient resolution of this matter.
II. EXECUTIVE SUMMARY
Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH") hereby voluntarily discloses to the Office of Foreign Assets Control ("OFAC") apparent violations of U.S. sanctions laws arising from activities conducted at its Dubai-based subsidiary, Dunmore Trading International Ltd. ("DTI"), DIFC License No. CL-4827, with its principal office located at Level 14, Gate Building 3, Dubai International Financial Centre, P.O. Box 506774, Dubai, United Arab Emirates. The apparent violations described in this narrative occurred during the approximate period of March 2020 through April 2022.
As set forth in detail below, the apparent violations fall into three categories:
Category 1 — Crude Oil Swap Transactions: DTI executed fourteen crude oil swap transactions with an aggregate notional value of approximately $218.7 million with counterparties connected to Volkhov Industrial Group JSC ("Volkhov" or "VIG"), a Russian industrial conglomerate that was designated under Directive 2 of Executive Order 13662 on November 15, 2019 and subsequently placed on OFAC's Specially Designated Nationals and blocked Persons List ("SDN List") on April 6, 2022 pursuant to Executive Order 14024. Of these fourteen transactions, nine—with an aggregate notional value of approximately $156.3 million—involved crude oil that was ultimately sourced from, or destined for, entities controlled by Volkhov. The remaining five transactions, with an aggregate notional value of approximately $62.4 million, could not be conclusively linked to Volkhov, although they presented significant red flags and are disclosed here for completeness.
Category 2 — Oilfield Equipment Exports: DTI facilitated the export of oilfield drilling equipment and components valued at approximately $12.4 million to end users in Russia, routed through a German logistics company, Caspian Logistik GmbH, in potential violation of OFAC-administered sanctions programs and the Export Administration Regulations ("EAR"). End-user certificates associated with these shipments are suspected to contain false statements regarding the ultimate destination and end user of the equipment.
Category 3 — Payment Structuring: Approximately $34.2 million in payments, comprising 127 individual wire transactions, were routed through intermediary accounts at Crescent Commercial Bank PJSC in Dubai. These payments were structured in a manner designed to obscure the beneficial ownership of Volkhov-connected counterparties, thereby evading sanctions screening protocols.
Dunmore discovered its potential exposure to sanctions liability on April 11, 2022, when then-Chief Compliance Officer Gerald Fisk conducted a routine OFAC screening refresh following Volkhov's addition to the SDN List on April 6, 2022. Fisk identified potential historical exposure to Volkhov through Petronova Trading FZE, the primary intermediary in the crude oil swap transactions, and notified General Counsel Marcus Wellbourne that same day. Dunmore retained Calderwood & Harkness LLP on April 14, 2022, and the firm promptly commenced a comprehensive internal investigation.
On April 19, 2022, DOJ NSD/CES issued grand jury subpoena GJ No. 22-418 to Dunmore. Dunmore has cooperated fully and transparently with DOJ since that date, producing 438,916 responsive documents across two productions, facilitating 47 witness interviews across three rounds, and making available a cooperating witness for a DOJ follow-up interview.
Since the discovery of the apparent violations, Dunmore has undertaken extensive remediation measures, including: the separation of the employees principally responsible for the violative conduct (Derek Hargrave, President of DTI, and Natasha Sorokin, Senior Trader at DTI); the departure of then-Chief Compliance Officer Gerald Fisk; the appointment of Priya Nayar as the new Chief Compliance Officer effective August 1, 2022; the voluntary disgorgement of approximately $8.75 million in estimated net profits from the tainted transactions, paid to the U.S. Treasury on November 30, 2023; and the design, adoption, and implementation of an Enhanced Sanctions & Export Controls Compliance Program, formally adopted by Dunmore's Board of Directors on October 1, 2023.
Dunmore files this VSD to obtain the mitigating credit afforded to entities that make voluntary self-disclosures under OFAC's Enforcement Guidelines and respectfully requests that OFAC take into account the totality of the mitigating factors described herein in determining the appropriate disposition of this matter.
III. DESCRIPTION OF THE DISCLOSING ENTITY
A. Dunmore Energy Holdings Ltd. — Corporate Overview
Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH") is an exempted company incorporated with limited liability under the laws of the Cayman Islands, Cayman Company Registration No. MC-334821. Dunmore's registered office is located at Harbour Place, 4th Floor, 103 South Church Street, George Town, Grand Cayman KY1-1002, Cayman Islands.
Dunmore operates in the oil and gas exploration, production, and trading sector, with a growing portfolio in renewable energy development. The company maintains its operational headquarters at 1200 McKinney Street, Suite 3400, Houston, TX 77010, United States of America, from which it manages its global operations and corporate functions, including its legal, compliance, finance, and human resources departments.
For the fiscal year ending December 31, 2021, Dunmore reported annual revenue of approximately $4.87 billion, as reflected in audited financial statements prepared by Ashford & Whitmore LLP, with Kenneth Ashford serving as the engagement partner. As of April 2022, the approximate date on which the apparent violations described in this narrative came to light, Dunmore employed approximately 3,200 individuals on a global basis, distributed across its operational headquarters in Houston, Texas and its various subsidiary offices and field operations in the United Arab Emirates, Germany, Nigeria, the United Kingdom, and other jurisdictions.
Dunmore's operations encompass upstream exploration and production activities, principally conducted through its U.S.-based subsidiary, Dunmore upstream Americas LLC, and its West African subsidiary, Dunmore Exploration West Africa Ltd., as well as midstream and downstream trading activities conducted primarily through its Dubai-based subsidiary, Dunmore Trading International Ltd., the entity at the center of the apparent violations disclosed herein. Dunmore has also expanded into renewable energy development through its German subsidiary, Dunmore Renewables GmbH, which focuses on offshore wind and solar energy projects in Northern Europe.
B. Ownership Structure
Dunmore's equity ownership is held by the following three groups:
Greystone Capital Partners Fund IV, L.P. — Greystone holds 62.5% of Dunmore's equity. Greystone Capital Partners Fund IV, L.P. is a Delaware limited partnership whose general partner is Greystone Capital Management LLC. The managing partner of Greystone Capital Management LLC is Richard Fairbanks. Greystone Capital Partners Fund IV, L.P. is a 2016-vintage private equity fund with a total fund size of approximately $8.3 billion. Greystone acquired its majority interest in Dunmore in 2017 and has been the controlling shareholder since that date.
Dunmore Management — Members of Dunmore's senior management team collectively hold 22.5% of Dunmore's equity. This management equity pool includes, among others, Chief Executive Officer Callum Renshaw, Chief Financial Officer Sandra Whitfield, and other senior executives who participate in the company's management equity incentive program.
Thornbury Infrastructure Fund II, L.P. — Thornbury holds 15.0% of Dunmore's equity. Thornbury Infrastructure Fund II, L.P. is a Cayman Islands limited partnership whose general partner is Thornbury Asset Management Ltd., a company organized under the laws of England and Wales with its principal office in London, United Kingdom. The managing director of Thornbury Asset Management Ltd. is Helen Cresswell. Thornbury acquired its minority interest in Dunmore in 2018 as part of a co-investment alongside Greystone.
The foregoing three equity holders collectively hold 100% of Dunmore's issued and outstanding equity.
C. Key Subsidiaries
Dunmore operates through the following principal subsidiaries, each of which is either directly implicated in or relevant to the apparent violations disclosed in this narrative:
Dunmore Trading International Ltd. ("DTI") — DTI is the subsidiary at the center of this disclosure. DTI holds DIFC License No. CL-4827 and maintains its principal office at Level 14, Gate Building 3, Dubai International Financial Centre, P.O. Box 506774, Dubai, United Arab Emirates. DTI serves as Dunmore's primary trading desk for crude oil and petroleum product trading in the Middle East, Africa, and the former Soviet Union. During the relevant period, DTI was led by Derek Hargrave, who served as President, and employed the trading, logistics, and financial personnel whose activities gave rise to the apparent violations described herein.
Dunmore upstream Americas LLC ("DUA") — DUA is a limited liability company organized under the laws of the State of Delaware, United States of America, Employer Identification Number 84-2937561. DUA's registered agent is located at 1209 Orange Street, Wilmington, Delaware 19801, and its principal office is located at 1200 McKinney Street, Suite 3400, Houston, TX 77010. DUA conducts Dunmore's upstream exploration and production activities in the Americas, including onshore operations in the Permian Basin and offshore operations in the Gulf of Mexico. DUA is a U.S.-incorporated, U.S.-based subsidiary and employs U.S. persons who were involved in certain aspects of transaction approval and support for DTI's trading activities, thereby establishing a significant U.S. person nexus for the transactions at issue.
Dunmore Renewables GmbH — Dunmore Renewables GmbH is a Gesellschaft mit beschränkter Haftung organized under the laws of the Federal Republic of Germany, with its registered address at Überseeallee 12, 20457 Hamburg, Germany. The Managing Director of Dunmore Renewables GmbH is Tobias Engel. Dunmore Renewables GmbH was tangentially involved in one suspect transaction with Caspian Logistik GmbH, as discussed in Section VI.B.3 below.
Dunmore Exploration West Africa Ltd. ("DEWA") — DEWA maintains its principal office at 14B Kofo Abayomi Street, Victoria Island, Lagos, Nigeria. DEWA conducts Dunmore's upstream exploration and production activities in West Africa, with current operations focused on offshore assets in the Gulf of Guinea. DEWA is not directly implicated in the apparent violations described herein, but was included in the scope of the internal investigation and the litigation hold for purposes of completeness.
D. Banking Relationships
Dunmore maintains the following principal banking relationships that are relevant to the transactions and conduct described in this narrative:
Meridian National Bank, N.A. (New York) — Meridian serves as Dunmore's primary lender under a $750 million senior secured revolving credit facility. The lead banker for the Dunmore relationship is Gregory Stanhope, Senior Vice President, Energy Lending Group, Meridian National Bank, N.A. The revolving credit facility is used to finance Dunmore's working capital needs, including trade finance for DTI's crude oil trading activities. Certain U.S. dollar-denominated payments related to the transactions at issue were cleared through the U.S. correspondent banking system, including through accounts maintained at Meridian.
Crescent Commercial Bank PJSC (Dubai) — Crescent Commercial Bank PJSC serves as DTI's primary trade finance bank in Dubai. Crescent's offices are located at Al Maktoum Tower, Dubai International Financial Centre, P.O. Box 335102, Dubai, United Arab Emirates. The relationship manager for the DTI account is Khalid Mansour. As described in Section VI.C below, Crescent Commercial Bank accounts were used in the payment structuring activities that form the basis of the Category 3 apparent violations.
E. Key Personnel (As of Date of Filing)
As of the date of this filing, the following individuals hold senior positions at Dunmore Energy Holdings Ltd.:
• Chief Executive Officer: Callum Renshaw (Houston, TX)
• General Counsel: Marcus Wellbourne, Esq. (Houston, TX)
• Chief Financial Officer: Sandra Whitfield (Houston, TX)
• Chief Compliance Officer: Priya Nayar (Houston, TX; appointed August 1, 2022, replacing Gerald Fisk, who departed Dunmore on June 10, 2022)
The roles of the individuals who were directly involved in the apparent violations, and who have since been separated from Dunmore, are described in detail in Section VIII below.
IV. APPLICABLE OFAC PROGRAMS AND LEGAL FRAMEWORK
A. Executive Order 13662 and Directive 2 — Sectoral Sanctions, Energy Sector of the Russian Federation
Executive Order 13662, signed by the President on March 20, 2014, authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to impose sanctions on persons determined to be operating in specified sectors of the Russian Federation economy, including the financial services, energy, metals and mining, engineering, and defense and related materiel sectors. The implementing regulations for E.O. 13662 are codified at 31 C.F.R. Part 589.
Pursuant to E.O. 13662, OFAC issued Directive 2 (as amended), which applies to persons determined to be operating in the energy sector of the Russian Federation economy and identified on the Sectoral Sanctions Identifications ("SSI") List. Directive 2 prohibits certain transactions by U.S. persons or within the United States related to new debt of longer than 60 days maturity and new equity of persons identified on the SSI List under Directive 2. The prohibition extends to dealings with entities in which persons identified under Directive 2 hold a 50% or greater ownership interest, consistent with OFAC's 50% Rule guidance.
Volkhov Industrial Group JSC was designated by OFAC under Directive 2 of E.O. 13662, effective November 15, 2019, as a person operating in the energy sector of the Russian Federation. From and after that date, U.S. persons were prohibited from engaging in specified transactions involving new debt or new equity of Volkhov or entities owned 50% or more, directly or indirectly, by Volkhov.
The scope of prohibitions under Directive 2 applicable to Dunmore's transactions during the period November 15, 2019 through April 5, 2022 is a central analytical question in this disclosure. The crude oil swap transactions executed by DTI during this period must be analyzed to determine whether they constituted prohibited dealings in new debt or new equity of Volkhov or its owned or controlled entities. Calderwood & Harkness's analysis of this question, including the application of the Directive 2 prohibitions to the specific transactional structures at issue, is set forth in internal memoranda prepared by Conrad Reeves dated May 10, 2022 and June 1, 2022. While the crude oil swaps were not, on their face, debt or equity instruments, certain structural features—including deferred settlement terms and contingent payment obligations—raise questions about whether they may have constituted prohibited "new debt" within the meaning of Directive 2.
B. Executive Order 14024 — Full blocking Sanctions
Executive Order 14024, signed by the President on April 15, 2021, authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to impose full blocking sanctions on persons determined to operate or have operated in specified sectors of the Russian Federation economy, including the technology, defense and related materiel, financial services, extractives, and other sectors, as well as persons determined to be responsible for or complicit in actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of the United States, its allies, or its partners.
On April 6, 2022, OFAC added Volkhov Industrial Group JSC to the SDN List pursuant to E.O. 14024. As a consequence of this full blocking designation, all property and interests in property of Volkhov that are in the United States or in the possession or control of U.S. persons are blocked, and U.S. persons are generally prohibited from engaging in any transactions or dealings with Volkhov or in its property or interests in property. The blocking extends, by operation of OFAC's 50% Rule, to entities owned 50% or more, directly or indirectly, by Volkhov.
The practical effect of the April 6, 2022 SDN designation was to convert the limited Directive 2 prohibitions that had been in place since November 15, 2019 into comprehensive blocking sanctions. Any transactions with Volkhov or entities owned or controlled by Volkhov that remained open or unsettled as of April 6, 2022 would constitute clear violations of the full blocking requirements imposed by E.O. 14024.
C. OFAC 50% Rule
OFAC's guidance on entities owned 50% or more by one or more blocked persons (commonly referred to as the "50% Rule") provides that the property and interests in property of entities directly or indirectly owned 50% or more in the aggregate by one or more persons whose property and interests in property are blocked are themselves blocked, regardless of whether the entity has been separately identified on the SDN List or SSI List. This rule applies in the context of both E.O. 13662 (Directive 2) and E.O. 14024.
The 50% Rule is directly relevant to the analysis of Petronova Trading FZE, the primary counterparty to the crude oil swap transactions disclosed herein. As described in detail in Section V.A below, Calderwood & Harkness's investigation determined that Petronova was a front or conduit entity for Volkhov Industrial Group JSC, and that Petronova was at least 50% owned, directly or indirectly, by Volkhov during the relevant period. Accordingly, Petronova's property and interests in property would have been subject to the Directive 2 restrictions from November 15, 2019 and blocked by operation of the 50% Rule following the April 6, 2022 SDN designation.
D. International Emergency Economic Powers Act (IEEPA)
The International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701–1706, provides the statutory authority underlying the executive orders and OFAC regulations at issue in this disclosure. IEEPA authorizes the imposition of both civil and criminal penalties for violations of sanctions imposed under the statute.
Civil violations of IEEPA are subject to strict liability, meaning that a person may be held civilly liable for a sanctions violation regardless of whether the person had knowledge that the conduct was prohibited. The maximum civil monetary penalty for a violation of IEEPA is the greater of $356,579 per violation (as adjusted for inflation) or twice the amount of the transaction that is the basis of the violation. Criminal violations of IEEPA require a showing of willfulness—that is, that the person engaged in the prohibited conduct with knowledge that the conduct was unlawful. Criminal penalties under IEEPA include fines of up to $1,000,000 per violation and imprisonment of up to 20 years.
E. U.S. Person Nexus
The applicability of OFAC-administered sanctions programs to Dunmore's activities depends on the existence of a sufficient nexus to the United States or to U.S. persons. The term "U.S. person" is defined in the applicable executive orders and implementing regulations at 31 C.F.R. Part 589 to include, among others, any United States citizen, permanent resident alien, entity organized under the laws of the United States (including foreign branches), and any person in the United States.
Dunmore's connections to the United States and U.S. persons are substantial and establish a clear U.S. person nexus for the transactions at issue:
Operational Headquarters. Dunmore maintains its operational headquarters in Houston, Texas, from which it manages its global operations, including the oversight of DTI's trading activities in Dubai.
U.S.-Incorporated Subsidiary. Dunmore upstream Americas LLC ("DUA") is a limited liability company organized under the laws of the State of Delaware, EIN 84-2937561, with its principal office in Houston, Texas. DUA is a U.S. person by definition. DUA personnel provided operational support and, in certain instances, participated in the approval of transactions executed by DTI.
U.S.-Person Employees. Dunmore employs numerous U.S. citizens and permanent residents, including at its Houston headquarters, who were involved in various aspects of corporate oversight, financial reporting, and transactional approval related to DTI's activities.
U.S. Dollar-Denominated Transactions. The crude oil swap transactions and payment transfers at issue were denominated in U.S. dollars and cleared through the U.S. correspondent banking system, creating an independent U.S. person nexus.
A comprehensive analysis of the U.S. person nexus for each category of apparent violation is set forth in a Calderwood & Harkness internal memorandum dated May 10, 2022, prepared by Jasmine Thornton.
V. COUNTERPARTIES TO THE APPARENT VIOLATIONS
A. Petronova Trading FZE
Entity Information. Petronova Trading FZE ("Petronova") is a Free Zone Establishment registered in the Jebel Ali Free Zone Authority ("JAFZA"), Dubai, United Arab Emirates. Petronova's registered address is Office 1407, Al Shafar Tower, Dubai Internet City, Dubai, United Arab Emirates. Petronova's Managing Director is Sergei Volkov, a Russian national who is a resident of the United Arab Emirates.
Role in Apparent Violations. Petronova served as the primary intermediary counterparty in twelve of the fourteen crude oil swap transactions flagged in the internal investigation. Petronova was DTI's principal trading partner for Russian-origin and Central Asian-origin crude oil transactions during the period June 2020 through February 2022.
Beneficial Ownership Analysis. Calderwood & Harkness's internal investigation, supported by forensic analysis conducted by Ridgeline Advisory Group LLC (Engagement No. RAG-2022-0319), determined that Petronova was a front or conduit entity for Volkhov Industrial Group JSC. The investigation revealed the following key findings:
(a) Sergei Volkov, Petronova's Managing Director, has direct familial ties to Arkady Volkhov, the Chairman of Volkhov Industrial Group JSC. Specifically, Sergei Volkov is the nephew of Arkady Volkhov. Additionally, Sergei Volkov maintained significant business relationships with Arkady Volkhov and VIG prior to and during the relevant period, including through his prior employment at a VIG subsidiary in Moscow from 2012 to 2017.
(b) Corporate registry and financial records obtained during the investigation indicate that Petronova received substantial capital infusions from entities associated with VIG and that Petronova's principal business activity was the marketing and sale of crude oil produced by VIG-controlled upstream assets.
(c) Forensic analysis of trading records, shipping documents, and financial flows confirmed that Petronova did not operate as an independent commercial entity; rather, it functioned as a marketing arm for VIG's crude oil production, with pricing, volumes, and delivery terms effectively dictated by VIG personnel in Moscow.
OFAC 50% Rule Implications. Based on the totality of the evidence gathered during the investigation, including corporate registry filings, financial records, and witness testimony, Calderwood & Harkness's analysis concluded that Petronova was at least 50% owned, directly or indirectly, by Volkhov Industrial Group JSC during the relevant period. Accordingly, Petronova's property and interests in property were subject to the Directive 2 prohibitions from November 15, 2019 and were blocked by operation of OFAC's 50% Rule following VIG's addition to the SDN List on April 6, 2022.
The detailed beneficial ownership analysis is set forth in a Calderwood & Harkness memorandum dated June 15, 2022, prepared by Liam Donahue, and is further supported by the forensic analysis performed by Ridgeline Advisory Group LLC under Engagement No. RAG-2022-0319.
B. Volkhov Industrial Group JSC
Entity Information. Volkhov Industrial Group JSC ("Volkhov" or "VIG") is a joint stock company organized under the laws of the Russian Federation, with its headquarters located at 12 Kutuzovsky Prospekt, Moscow 121248, Russia. The Chairman of VIG is Arkady Volkhov. VIG is a diversified Russian industrial conglomerate with operations spanning the energy, petrochemical, mining, and infrastructure sectors. VIG's energy-sector operations include upstream crude oil exploration and production, primarily in Western Siberia and the Caspian region, as well as downstream refining and petrochemical production.
OFAC Designation History. VIG has been the subject of the following OFAC designations:
(a) November 15, 2019: VIG was designated under Directive 2 of Executive Order 13662 as a person operating in the energy sector of the Russian Federation, and was added to OFAC's Sectoral Sanctions Identifications List. This designation imposed restrictions on transactions by U.S. persons involving new debt of longer than 60 days maturity and new equity of VIG.
(b) April 6, 2022: VIG was added to OFAC's Specially Designated Nationals and blocked Persons List ("SDN List") pursuant to Executive Order 14024, subjecting VIG to full blocking sanctions. All property and interests in property of VIG in the United States or in the possession or control of U.S. persons were blocked, and U.S. persons were prohibited from engaging in any transactions or dealings with VIG or its property or interests in property.
Relationship to Dunmore. VIG was not a direct counterparty to any transaction with Dunmore or DTI. Rather, VIG was the ultimate beneficial principal behind Petronova Trading FZE, the intermediary entity through which the crude oil swap transactions were executed. VIG was also the ultimate end user or source for certain crude oil flows that formed the basis of the swap transactions, as determined through Calderwood & Harkness's investigation and Ridgeline Advisory Group's forensic analysis.
C. Zenith Petroleum DMCC
Entity Information. Zenith Petroleum DMCC ("Zenith") is a company registered with the Dubai Multi Commodities Centre ("DMCC"), Dubai, United Arab Emirates. Zenith's registered address is Unit 2201, Jumeirah Bay Tower X2, Cluster X, Jumeirah Lakes Towers, Dubai, United Arab Emirates. Zenith's Managing Director is Farhan Qureshi, a Pakistani national who is a resident of the United Arab Emirates.
Role in Apparent Violations. Zenith was involved as a counterparty in two of the fourteen crude oil swap transactions flagged in the internal investigation. Zenith served as a secondary intermediary in transactions where crude oil was ultimately sourced from production assets controlled by Volkhov Industrial Group JSC.
Connection to Volkhov. Calderwood & Harkness's investigation found that Zenith served as a secondary layer of intermediation in certain transactions designed to distance the crude oil flows from their ultimate source at VIG-controlled assets. The analysis of Zenith's connection to VIG is set forth in a Calderwood & Harkness memorandum dated July 5, 2022, prepared by Amara Osei. While Zenith's ownership structure did not present as clear a link to VIG as Petronova's, the investigation identified commercial relationships and payment flows between Zenith and Petronova that indicated coordination between the two entities in the marketing and sale of VIG-origin crude oil.
D. Caspian Logistik GmbH
Entity Information. Caspian Logistik GmbH ("Caspian Logistik") is a Gesellschaft mit beschränkter Haftung organized under the laws of the Federal Republic of Germany, with its registered address at Mönckebergstraße 22, 20095 Hamburg, Germany. The Managing Director of Caspian Logistik is Klaus Weidemann, a German national.
Role in Apparent Violations. Caspian Logistik facilitated the shipment of oilfield drilling equipment and components from DTI to end users in Russia. Caspian Logistik served as the logistics and forwarding agent for the equipment shipments, coordinating transportation, customs clearance, and documentation for the delivery of items to Russian end users.
Export Control Concerns. Caspian Logistik is under investigation by Calderwood & Harkness in connection with potential export control violations related to the shipment of items classified under the Export Administration Regulations ("EAR") at Export Control Classification Numbers ("ECCNs") 2B350 and 2B999. The end-user certifications associated with the equipment shipments facilitated by Caspian Logistik are suspected to contain false statements regarding the identity and location of the ultimate end users, as discussed in detail in Section VI.B.2 below.
Caspian Logistik was involved in the $12.4 million in oilfield equipment export transactions that constitute the Category 2 apparent violations. The detailed analysis of Caspian Logistik's role is set forth in a Calderwood & Harkness memorandum dated July 20, 2022, prepared by Liam Donahue.
VI. DETAILED DESCRIPTION OF APPARENT VIOLATIONS
A. Category 1: Crude Oil Swap Transactions ($218.7 Million Total Notional / $156.3 Million Tainted)
1. Overview. Between approximately June 2020 and February 2022, DTI's Dubai-based trading desk executed fourteen crude oil swap transactions with a total aggregate notional value of approximately $218.7 million. The counterparties to these transactions were Petronova Trading FZE (twelve transactions) and Zenith Petroleum DMCC (two transactions). The transactions were structured as commodity swap agreements, with DTI typically taking a position in the swap that allowed it to profit from the differential between the contracted swap price and the prevailing market price for the relevant crude oil grade at the time of settlement.
These transactions were executed under the supervision of Derek Hargrave, who served as President of DTI throughout the relevant period, and with the direct involvement of Natasha Sorokin, Senior Trader at DTI, who was the primary point of contact with Petronova and Zenith and who personally negotiated and executed the trades on behalf of DTI. The transactions were booked through DTI's trading systems in Dubai and settled through accounts maintained at Crescent Commercial Bank PJSC.
The trading relationship between DTI and Petronova was initiated in early 2020, shortly after Natasha Sorokin joined DTI's Dubai trading desk. Sorokin had prior professional connections to Sergei Volkov, Petronova's Managing Director, from her previous employment at a commodities trading house in Geneva, Switzerland. The investigation found evidence suggesting that Sorokin's recruitment to DTI may have been motivated, at least in part, by the opportunity to channel VIG-connected crude oil volumes through DTI's trading platform, although the precise circumstances of Sorokin's hiring remain under review.
2. Identification of Tainted Transactions
Calderwood & Harkness retained Ridgeline Advisory Group LLC ("Ridgeline"), a forensic accounting and financial advisory firm, to conduct a comprehensive forensic analysis of the fourteen crude oil swap transactions. The engagement was initiated on May 2, 2022, under Engagement No. RAG-2022-0319. The engagement was led by Dr. Margaret Liu, CPA, CFE, a recognized expert in forensic tracing of commodity flows and financial transactions in the energy sector.
Ridgeline's analysis examined the commercial documentation underlying each transaction, including trade confirmations, shipping documents, bills of lading, certificates of origin, survey reports, and settlement instructions, as well as internal DTI communications (email, instant messaging, and encrypted messaging records), financial records, and banking documentation obtained from Crescent Commercial Bank PJSC pursuant to a consent order. Ridgeline also traced the physical crude oil flows associated with each swap transaction, identifying the ultimate source (i.e., the producing field or loading terminal) and, where applicable, the ultimate destination of the crude oil.
Ridgeline delivered its final forensic report on April 1, 2023. The report concluded that at least nine of the fourteen transactions, with an aggregate notional value of approximately $156.3 million, involved crude oil that was ultimately sourced from, or destined for, entities controlled by Volkhov Industrial Group JSC. The $156.3 million figure represents the sum of the individual notional values of the nine tainted transactions, as identified in Ridgeline's transaction-by-transaction analysis.
The remaining five transactions, with an aggregate notional value of approximately $62.4 million, could not be conclusively linked to Volkhov based on the evidence available to Ridgeline. However, these transactions presented significant red flags, including the involvement of Petronova as counterparty, the similarity of the transactional structures to the tainted transactions, and certain anomalies in the documentation. Dunmore has elected to disclose all fourteen transactions to OFAC for completeness, while identifying the nine tainted transactions as presenting the strongest basis for a finding of apparent violation.
3. Transaction-by-Transaction Summary
A detailed summary of all fourteen crude oil swap transactions is set forth in the Transaction Summary Schedule attached hereto as Appendix A. The Transaction Summary Schedule is presented in spreadsheet format and includes, for each transaction, the following information:
(a) Transaction reference number (DTI internal booking reference);
(b) Trade date (the date on which the swap was executed);
(c) Settlement date (the date on which the swap was settled and payment was made);
(d) Counterparty (Petronova Trading FZE or Zenith Petroleum DMCC);
(e) Crude oil grade and country of origin (e.g., Urals Blend, ESPO Blend, CPC Blend);
(f) Notional value (U.S. dollar amount);
(g) Delivery point (e.g., Novorossiysk, Primorsk, Kozmino);
(h) Tainted/non-tainted classification, with a brief description of the basis for the classification.
The fourteen transactions span the period from June 2020 through February 2022. The earliest tainted transaction was executed on June 15, 2020, and the last tainted transaction was executed on February 8, 2022. All fourteen transactions were fully settled prior to Volkhov's addition to the SDN List on April 6, 2022, although certain transactions settled in the weeks immediately preceding that date.
4. Sanctions Analysis for Category 1
The sanctions analysis for the Category 1 transactions requires consideration of two distinct regulatory regimes, depending on the date of the transaction:
Directive 2 Period (November 15, 2019 through April 5, 2022). During this period, Volkhov was designated under Directive 2 of E.O. 13662, which imposed restrictions on transactions by U.S. persons involving new debt of longer than 60 days maturity and new equity of persons identified on the SSI List. All fourteen of the crude oil swap transactions were executed during this period.
The central analytical question during the Directive 2 period is whether the crude oil swap transactions constituted prohibited dealings in the "new debt" or "new equity" of Volkhov or entities in which Volkhov held a 50% or greater ownership interest. The crude oil swaps were structured as commodity derivative contracts, not as traditional debt or equity instruments. However, OFAC has taken an expansive view of the term "debt" in the context of Directive 2, and certain features of the swap transactions—including deferred settlement terms, margin provisions, and contingent payment obligations—raise questions about whether they may fall within the scope of the prohibition.
Additionally, to the extent that Petronova Trading FZE was at least 50% owned, directly or indirectly, by Volkhov during the relevant period (as Calderwood & Harkness's investigation has concluded), the crude oil swap transactions may have constituted prohibited dealings with Volkhov's property or interests in property through its ownership of Petronova, regardless of whether the transactions themselves qualified as "new debt" or "new equity." OFAC's 50% Rule guidance provides that the property and interests in property of entities owned 50% or more by a blocked person are blocked, and the same principle extends to the Directive 2 context with respect to the restrictions applicable to SSI-listed persons.
Post-SDN Designation Period (April 6, 2022 onward). From April 6, 2022 onward, Volkhov was subject to full SDN blocking under E.O. 14024. Any ongoing transactions with Volkhov or entities owned 50% or more by Volkhov would constitute clear violations of the blocking prohibitions. As noted above, the most recent tainted transaction was executed on February 8, 2022, and all fourteen transactions were fully settled prior to the April 6, 2022 SDN designation. However, to the extent that any residual rights, obligations, or open positions existed as of April 6, 2022, they would be subject to the blocking requirements.
U.S. Person Nexus. The U.S. person nexus for the Category 1 transactions is established through multiple independent bases: (i) the transactions were denominated in U.S. dollars and cleared through the U.S. correspondent banking system; (ii) Dunmore's operational headquarters is in Houston, Texas, and U.S.-person employees at the Houston headquarters participated in certain aspects of transaction oversight and approval; (iii) Dunmore upstream Americas LLC, a U.S.-incorporated subsidiary, provided operational support to DTI's trading desk, including market intelligence and risk management analysis; and (iv) Dunmore itself, while incorporated in the Cayman Islands, maintains a substantial and continuous U.S. presence through its Houston headquarters and U.S.-based management team.
B. Category 2: Oilfield Equipment Exports ($12.4 Million)
1. Overview. Between approximately August 2020 and January 2022, DTI facilitated the export of oilfield drilling equipment and components with an aggregate value of approximately $12.4 million to end users in Russia. The equipment was shipped from various points of origin in Europe and the Middle East, routed through Caspian Logistik GmbH in Hamburg, Germany, which served as the logistics and freight-forwarding agent for the shipments.
The equipment at issue included drilling mud systems, downhole tools, wellhead components, and related items classified under the Export Administration Regulations at Export Control Classification Numbers 2B350 (chemical manufacturing equipment and components, not elsewhere specified) and 2B999 (specific processing equipment, not elsewhere specified). The classification of certain items under these ECCNs indicates that the items may be subject to dual-use export controls under the EAR, although the OFAC component of the analysis—which is the focus of this VSD—relates to the potential sanctions violations arising from the ultimate diversion of the equipment to Volkhov-controlled entities or other sanctioned end users in Russia.
The logistics and shipping arrangements for the equipment exports were coordinated by Yves Leclerc, DTI's Director of Logistics & Shipping, a French national based in Dubai. Leclerc maintained the commercial relationship with Caspian Logistik GmbH and its Managing Director, Klaus Weidemann, and was responsible for preparing and reviewing shipping documentation, including end-user certificates.
2. End-User Certificate Issues
Calderwood & Harkness's investigation included a detailed review of the end-user certifications associated with each of the equipment shipments facilitated by Caspian Logistik GmbH. The review, performed by Liam Donahue and set forth in a Calderwood & Harkness memorandum dated July 20, 2022, identified significant irregularities in the end-user certificates submitted in connection with the equipment exports.
Specifically, the end-user certificates identified non-Russian end users—typically entities in Kazakhstan, Turkey, or Georgia—as the intended recipients of the equipment. However, documentary evidence obtained during the investigation, including internal DTI communications, shipping manifests, customs documentation, and third-party logistics records, revealed that the actual ultimate destination for the equipment was Russia. In several instances, the investigation identified evidence that the equipment was delivered to drilling sites and production facilities controlled by subsidiaries of Volkhov Industrial Group JSC in Western Siberia.
The discrepancies between the stated end users on the certificates and the actual ultimate destinations of the equipment strongly suggest that the end-user certifications contained false statements and were prepared or procured for the purpose of concealing the true Russian end users from regulatory scrutiny. The investigation has not yet conclusively determined whether the false certifications were prepared by Caspian Logistik GmbH, by DTI personnel, or by the purported end users, although evidence suggests a coordinated effort involving Caspian Logistik and certain DTI personnel.
3. Tangential Involvement of Dunmore Renewables GmbH
One of the suspect equipment export transactions involved Dunmore Renewables GmbH, the company's German subsidiary based in Hamburg. In this transaction, which occurred in approximately November 2021, Dunmore Renewables GmbH facilitated the procurement of certain specialized drilling components from a European manufacturer and transferred the components to Caspian Logistik GmbH for onward shipment. Tobias Engel, the Managing Director of Dunmore Renewables GmbH, was tangentially involved in this transaction, primarily in an administrative capacity related to the procurement and transfer of the components.
Calderwood & Harkness's analysis of this transaction, set forth in a memorandum dated October 10, 2022 prepared by Liam Donahue, concluded that Engel's involvement was limited and that there was no evidence that Engel was aware of the ultimate Russian end user for the equipment. Nevertheless, the involvement of a Dunmore subsidiary in Germany in a transaction with potential sanctions and export control implications is disclosed for completeness.
4. OFAC Implications
The oilfield equipment exports to Russia present potential violations of OFAC-administered sanctions programs to the extent that the equipment was exported to, or for the benefit of, Volkhov-controlled entities or other persons subject to OFAC sanctions, including persons identified on the SDN List or SSI List. The diversion of equipment to sanctioned end users through the use of false end-user certifications would constitute prohibited dealing with the property or interests in property of blocked persons or SSI-listed persons and, to the extent the conduct was knowing and willful, could also give rise to potential criminal liability under IEEPA.
The Category 2 transactions also raise potential issues under the jurisdiction of the Bureau of Industry and Security ("BIS") within the U.S. Department of Commerce, given the EAR classification of the equipment items. This VSD is limited to the OFAC component of the analysis. Calderwood & Harkness has prepared a separate memorandum dated May 1, 2023, authored by Conrad Reeves, analyzing the advisability and scope of a separate voluntary self-disclosure to BIS. That analysis is ongoing, and any BIS filing will be coordinated with this OFAC VSD and with Dunmore's cooperation with DOJ NSD/CES.
C. Category 3: Payment Structuring ($34.2 Million, 127 Transactions)
1. Overview. Ridgeline Advisory Group LLC's forensic analysis identified approximately $34.2 million in payments that were routed through a series of intermediary accounts maintained at Crescent Commercial Bank PJSC in Dubai during the period March 2020 through March 2022. The $34.2 million was distributed across 127 individual wire transactions. The forensic analysis concluded that the payments were structured in a manner designed to obscure the ultimate beneficial ownership of the Volkhov-connected entities that were the sources or recipients of the funds.
The payment structuring was facilitated through DTI's banking relationship with Crescent Commercial Bank PJSC, with relationship manager Khalid Mansour serving as DTI's primary banking contact. The payment instructions were processed on behalf of DTI by Rajesh Malhotra, DTI's Controller, who was responsible for initiating and approving wire transfers from DTI's accounts at Crescent Commercial Bank.
2. Structuring Methods
The investigation identified the following principal methods by which payments were structured to evade sanctions screening:
(a) Use of Multiple Intermediary Accounts. Rather than directing payments from DTI directly to Petronova Trading FZE or other Volkhov-connected counterparties, payments were routed through a series of intermediary accounts held at Crescent Commercial Bank in the names of entities that were not identified on OFAC's SDN List, SSI List, or other restricted party lists. These intermediary entities appeared to be shell companies with no substantive business operations, established for the sole purpose of serving as conduits for payment flows between DTI and the Volkhov-connected counterparties.
(b) Payment Disaggregation. Payments were broken into smaller amounts across multiple wire transfers, with individual transfers designed to fall below thresholds that might trigger enhanced due diligence or suspicious activity reporting by the bank. This disaggregation obscured the aggregate value of the payment flows and made it more difficult for automated screening systems to identify the ultimate beneficial parties to the transactions.
(c) Concealment of Beneficial Ownership. The wire transfer instructions and supporting documentation associated with the 127 transactions contained originator and beneficiary information that did not identify Petronova Trading FZE, Volkhov Industrial Group JSC, or any other known Volkhov-connected entity. Instead, the instructions identified the intermediary shell entities as the originators or beneficiaries of the payments. The forensic tracing methodology employed by Ridgeline Advisory Group—which included analysis of bank statements, SWIFT message traffic, account opening documentation, and corporate registry records for the intermediary entities—ultimately traced the funds to accounts controlled by Petronova and, through Petronova, to Volkhov-connected entities.
A comprehensive summary of Ridgeline's forensic findings on the payment structuring activity is set forth in a Calderwood & Harkness memorandum dated October 1, 2022, prepared by Jasmine Thornton, which incorporates and analyzes Ridgeline's interim forensic report on this topic.
3. OFAC Implications
Payment structuring designed to evade sanctions screening constitutes an apparent violation of the prohibitions on evasion, avoidance, or circumvention of U.S. sanctions under the applicable OFAC programs. Section 1705(a) of IEEPA (50 U.S.C. § 1705(a)) prohibits any person from causing a violation, conspiring to violate, or attempting to violate the sanctions imposed under executive orders administered by OFAC. OFAC has consistently taken the position that the deliberate structuring of transactions to evade or avoid sanctions requirements constitutes an independent violation, regardless of whether the underlying transaction would itself have been a sanctions violation.
The payment structuring activity also establishes additional U.S. person nexus. Ridgeline's forensic analysis determined that a significant portion of the $34.2 million in structured payments was denominated in U.S. dollars and cleared through the U.S. correspondent banking system. Even payments that were initiated and received in Dubai would have transited through U.S. correspondent bank accounts to the extent they were U.S. dollar-denominated, thereby bringing them within the jurisdiction of U.S. sanctions law.
The role of Rajesh Malhotra, DTI's Controller, in processing the payment instructions is analyzed in a Calderwood & Harkness memorandum dated October 20, 2022, prepared by Nicholas Ferreira. The memorandum examines the evidence regarding Malhotra's knowledge of and involvement in the structuring of payments through intermediary accounts, including his communications with banking contacts at Crescent Commercial Bank, his review and approval of wire transfer instructions, and his interactions with other DTI personnel regarding the payment flows. The memorandum concludes that while the evidence indicates Malhotra was aware that payments were being routed through intermediary accounts, it is less clear whether Malhotra had knowledge that the ultimate beneficial parties to the payments were Volkhov-connected entities subject to U.S. sanctions.
VII. DISCOVERY AND REPORTING TIMELINE
A. Discovery of Potential Violations
Dunmore's discovery of its potential exposure to OFAC sanctions liability occurred in the immediate aftermath of OFAC's addition of Volkhov Industrial Group JSC to the SDN List on April 6, 2022, pursuant to Executive Order 14024.
On April 11, 2022, then-Chief Compliance Officer Gerald Fisk conducted a routine screening refresh of Dunmore's counterparty database against the updated SDN List, a process that was standard practice within Dunmore's compliance function whenever OFAC published updates to its restricted party lists. During this screening refresh, Fisk identified a potential hit on Petronova Trading FZE and recognized that Petronova had been a significant counterparty of DTI's Dubai trading desk. Fisk immediately conducted a preliminary review of DTI's transaction history with Petronova and identified the potential for historical exposure to Volkhov Industrial Group JSC through Petronova's intermediary role.
That same day, April 11, 2022, Fisk notified General Counsel Marcus Wellbourne of the potential exposure. Wellbourne directed Fisk to preserve all relevant records and to cease any further transactions with Petronova, Zenith Petroleum, or any other counterparty that might be associated with Volkhov. Wellbourne also initiated the process of retaining outside counsel to conduct an internal investigation.
On April 14, 2022, Dunmore retained Calderwood & Harkness LLP to serve as its outside counsel in connection with the potential sanctions violations. Victoria Chambers, a partner in Calderwood & Harkness's White Collar & Investigations practice group, was assigned as the responsible partner for the engagement.
B. DOJ Inquiry
On April 19, 2022—five days after Dunmore retained Calderwood & Harkness—the U.S. Department of Justice, National Security Division, Counterintelligence and Export Control Section, issued grand jury subpoena GJ No. 22-418 to Dunmore Energy Holdings Ltd. The subpoena was issued by the U.S. District Court for the District of Columbia (Grand Jury 22-2) and was served on Dunmore through its registered agent in Houston, Texas.
The subpoena demanded the production of all documents from January 1, 2019 to the date of the subpoena relating to the following subjects, among others:
(a) Petronova Trading FZE, including all communications, contracts, trading confirmations, shipping documents, and payment records;
(b) Volkhov Industrial Group JSC, including all communications, due diligence materials, and records of any direct or indirect dealings;
(c) Zenith Petroleum DMCC, including all communications, contracts, and transaction records;
(d) Caspian Logistik GmbH, including all communications, shipping documents, end-user certificates, and logistics records;
(e) All crude oil transactions involving Russian-origin crude oil, including Urals Blend, ESPO Blend, and CPC Blend;
(f) All oilfield equipment exports to Russia or for end use in Russia.
Dunmore has cooperated fully and transparently with DOJ NSD/CES since receiving the grand jury subpoena. Dunmore, through Calderwood & Harkness, made an initial proffer to Assistant United States Attorney Meredith Calloway on July 15, 2022, disclosing the preliminary findings of the internal investigation and the scope of the potential violations identified to that date. A supplemental proffer was made on November 20, 2022, incorporating updated findings from the ongoing investigation, including the results of additional witness interviews and the interim forensic analysis by Ridgeline Advisory Group.
C. Internal Investigation
Calderwood & Harkness commenced its internal investigation immediately upon retention on April 14, 2022. The investigation has been comprehensive in scope and has involved the following key components:
Litigation Hold. On April 20, 2022, litigation hold notices were issued globally across all Dunmore entities in six jurisdictions: the Cayman Islands, the United Arab Emirates, the United States of America, Germany, Nigeria, and the United Kingdom. The litigation hold notices directed all employees and agents of Dunmore and its subsidiaries to preserve all documents, communications, and other records potentially relevant to the investigation, including electronic records, paper files, and any records maintained on personal devices.
Forensic Accounting. On May 2, 2022, Dunmore retained Ridgeline Advisory Group LLC to conduct a comprehensive forensic accounting analysis of the transactions and payment flows at issue. The engagement was led by Dr. Margaret Liu, CPA, CFE, and was assigned Engagement No. RAG-2022-0319. Ridgeline's scope of work encompassed the forensic tracing of crude oil flows and financial transactions across all fourteen crude oil swap transactions, the analysis of the $34.2 million in structured payments through Crescent Commercial Bank, and the examination of the oilfield equipment export shipments. Ridgeline's final forensic report was delivered on April 1, 2023.
E-discovery. Calderwood & Harkness retained Nexagen Analytics Inc. to provide electronic discovery and document review services. The engagement was managed by Brian Cavanaugh of Nexagen and assigned Project No. NX-DEH-2204. Nexagen conducted forensic collections of electronic data from custodians across six jurisdictions, yielding a total of 2,347,812 documents. Following processing, de-duplication, and technology-assisted review ("TAR") using predictive coding models validated by Calderwood & Harkness's document review team, 438,916 documents were deemed responsive to the investigation's scope, and an additional 12,847 documents were withheld on the basis of attorney-client privilege or attorney work product protection. Privilege logs for the withheld documents have been prepared and are available upon request.
Witness Interviews. Calderwood & Harkness conducted 47 witness interviews across three rounds, as follows:
First Round (May 18 – June 30, 2022): 22 interviews conducted. Interviewees included current and former DTI trading desk personnel, DTI management, Houston-based compliance and legal staff, and administrative personnel. This round focused on establishing the factual predicate for the crude oil swap transactions and identifying the key individuals and decision-making processes involved.
Second Round (August 5 – September 30, 2022): 15 interviews conducted. Interviewees included additional DTI personnel, Crescent Commercial Bank relationship contacts (with the bank's consent), and personnel at Dunmore Renewables GmbH. This round focused on the payment structuring activities, the oilfield equipment exports, and the compliance program deficiencies.
Third Round (February 15 – March 15, 2023): 10 interviews conducted. Interviewees included follow-up interviews with key witnesses and interviews with remediation consultants and newly appointed compliance personnel. This round focused on confirming factual findings, resolving inconsistencies identified in prior rounds, and documenting the remediation measures undertaken.
All interviews were conducted by Calderwood & Harkness attorneys, with detailed notes maintained for each interview. Where interviewees had retained separate counsel, interviews were conducted with separate counsel present.
Internal Investigation Report. Calderwood & Harkness completed a 176-page comprehensive internal investigation report on May 15, 2023. The report was authored by Victoria Chambers, Jasmine Thornton, Conrad