1016-00009 · Dunmore Energy Holdings · Personnel & Indemnification

letter-to-overstreet-hargrave-representation.docx DOCUMENT Litigation

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PRIVILEGED & CONFIDENTIAL

CALDERWOOD & HARKNESS LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-8400 Facsimile: (202) 555-8401 www.calderwoodharkness.com

July 5, 2022

Via Email and First-Class Mail

James Overstreet, Esq. Overstreet & McClain PLLC 2200 Ross Avenue, Suite 3600 Dallas, TX 75201

Re: Representation of Derek Hargrave — Dunmore Energy Holdings Ltd. DOJ Inquiry (Matter No. 1016-00009)

Dear Mr. Overstreet:

I. Acknowledgment of Representation

I write on behalf of our client, Dunmore Energy Holdings Ltd. ("Dunmore" or the "Company"), in connection with the above-referenced matter. I am a partner in the White Collar & Investigations practice group of Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") and serve as the responsible partner and lead counsel for Dunmore in the pending inquiry by the U.S. Department of Justice ("DOJ"), designated internally as Calderwood & Harkness Matter No. 1016-00009.

We are in receipt of your letter dated June 29, 2022, notifying us that Overstreet & McClain PLLC has been retained to represent Derek Hargrave ("Mr. Hargrave") individually in connection with the DOJ investigation of Dunmore Energy Holdings Ltd. and its subsidiaries. We acknowledge your notice of appearance on behalf of Mr. Hargrave, and we appreciate you bringing this engagement to our attention promptly.

As you are aware, Mr. Hargrave served as President of Dunmore Trading International Ltd., a wholly-owned subsidiary of Dunmore Energy Holdings Ltd. based in Dubai, United Arab Emirates, from 2017 until he was placed on administrative leave effective July 1, 2022. His tenure as President encompassed oversight of the Dubai-based trading desk and related commercial operations in the Middle East and Central Asian markets.

For the avoidance of doubt, Calderwood & Harkness represents Dunmore Energy Holdings Ltd., a Cayman Islands exempted company with limited liability, with its registered office at Harbour Place, 4th Floor, 103 South Church Street, George Town, Grand Cayman KY1-1002, and its subsidiaries, including but not limited to Dunmore Trading International Ltd. (DIFC License No. CL-4827), in all matters related to the pending DOJ inquiry. Calderwood & Harkness does not represent Mr. Hargrave individually in this matter, nor has it at any time undertaken such representation. We wish to be clear, and we expect your client understands, that the interests of the Company and Mr. Hargrave may diverge as this investigation proceeds, and nothing in our prior interactions with Mr. Hargrave should be construed as creating an individual attorney-client relationship between Calderwood & Harkness and Mr. Hargrave.

II. Background of the Matter

For purposes of establishing a mutual understanding of the matter's context, we provide the following summary, which we believe is consistent with information already known to you and your client.

On April 19, 2022, the DOJ's National Security Division, Counterintelligence and Export Control Section ("CES"), opened a formal inquiry concerning potential violations of U.S. sanctions laws, including programs administered by the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury, and export control regulations enforced by the Bureau of Industry and Security ("BIS") of the U.S. Department of Commerce. On that same date, grand jury subpoena GJ No. 22-418 was issued by the U.S. District Court for the District of Columbia (Grand Jury 22-2), directing Dunmore Energy Holdings Ltd. and certain of its subsidiaries to produce specified categories of documents and records.

The investigation relates principally to activities conducted through Dunmore Trading International Ltd.'s Dubai-based trading desk, which Mr. Hargrave supervised in his capacity as President during the period from 2017 through 2022. The relevant conduct under scrutiny involves transactions with and relating to the following entities: Petronova Trading FZE, Volkhov Industrial Group JSC, Zenith Petroleum DMCC, and Caspian Logistik GmbH. The transactions at issue span approximately March 2020 through April 2022 and encompass commodity trades, intermediary brokerage arrangements, logistics coordination, and associated financial transfers.

The lead DOJ prosecutor assigned to this matter is Assistant United States Attorney Meredith Calloway of the National Security Division. She is assisted by Trial Attorneys Samuel Kovacs and Diana Pressman, both of the Counterintelligence and Export Control Section. All formal communications from the DOJ have been directed through AUSA Calloway's office.

The applicable legal frameworks implicated by the DOJ's inquiry include, but are not limited to:

(a) the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701–1706;

(b) the Export Control Reform Act ("ECRA"), 50 U.S.C. §§ 4801–4852;

(c) OFAC-administered sanctions programs, including Executive Order 14024, "Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation" (April 15, 2021), and Directive 2 under Executive Order 13662, as amended;

(d) the Export Administration Regulations ("EAR"), 15 C.F.R. Parts 730–774, with particular relevance to Section 746.5 (Russian and Belarusian industry sector sanctions); and

(e) related anti-money laundering statutes and regulations to the extent they intersect with the foregoing.

This summary is provided for informational purposes and is not intended to be exhaustive. The scope of the DOJ's inquiry may broaden or narrow as the investigation progresses.

III. Status of Mr. Hargrave's Employment and Administrative Leave

As noted above, Mr. Hargrave was placed on administrative leave from Dunmore Trading International Ltd. effective July 1, 2022. This action was taken by the Company's Board of Directors in consultation with Calderwood & Harkness and the Company's General Counsel, Marcus Wellbourne, pending the outcome of the DOJ inquiry and the Company's parallel internal investigation. The terms of Mr. Hargrave's administrative leave are governed by his employment agreement with Dunmore Trading International Ltd. and the applicable policies of the Company.

Calderwood & Harkness commenced an internal investigation on behalf of Dunmore in April 2022, shortly after receipt of the grand jury subpoena. In connection with the internal investigation, Calderwood & Harkness has retained Ridgeline Advisory Group LLC to provide forensic accounting services and Nexagen Analytics Inc. to provide electronic discovery and data analytics support, among other advisors engaged to assist in the Company's review of the relevant transactions and communications. That internal investigation remains ongoing, and the Company anticipates it will continue for a significant period.

In the course of the internal investigation, Mr. Hargrave was interviewed by me on May 25, 2022, at the offices of Calderwood & Harkness in Washington, D.C. That interview was conducted pursuant to the Upjohn corporate representation protocol, and I administered appropriate warnings at the outset of the interview to inform Mr. Hargrave that Calderwood & Harkness represented the Company and not him individually, that the purpose of the interview was to gather facts for the Company's benefit, and that any attorney-client privilege arising from the interview belonged to the Company and could be waived by the Company at its sole discretion. Mr. Hargrave acknowledged his understanding of these advisements prior to the commencement of the interview.

Now that Mr. Hargrave has retained your firm as his personal counsel, we acknowledge that all future communications regarding the DOJ inquiry, the Company's internal investigation, the grand jury subpoena, and any related matters should be directed to Overstreet & McClain PLLC rather than to Mr. Hargrave directly. Calderwood & Harkness will cease all direct communications with Mr. Hargrave concerning these matters and will instead route all such communications through your office, effective immediately upon your confirmation of the protocols set forth in this letter.

IV. Communication Protocols

Going forward, all communications between Calderwood & Harkness (on behalf of Dunmore Energy Holdings Ltd. and its subsidiaries) and Mr. Hargrave regarding the DOJ inquiry, the Company's internal investigation, the grand jury subpoena GJ No. 22-418, and any related regulatory proceedings—including but not limited to matters involving OFAC, BIS, or any other governmental or regulatory authority—shall be conducted exclusively through Overstreet & McClain PLLC.

The primary points of contact at Calderwood & Harkness for this matter are as follows:

Victoria Chambers, Partner White Collar & Investigations Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Direct: (202) 555-8412

Email: vchambers@calderwoodharkness.com

Jasmine Thornton, Associate White Collar & Investigations Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Direct: (202) 555-8437

Email: jthornton@calderwoodharkness.com

Additionally, we may involve Nicholas Ferreira, an associate in our Houston office, for matters requiring Houston-based coordination, given that certain of the Company's U.S. operations and financial records are maintained in that jurisdiction. Mr. Ferreira's contact information is as follows:

Nicholas Ferreira, Associate White Collar & Investigations Calderwood & Harkness LLP 1200 McKinney Street, Suite 2100 Houston, TX 77010 Direct: (713) 555-2290

Email: nferreira@calderwoodharkness.com

We respectfully request that you confirm your preferred contact information for purposes of this matter and identify any additional attorneys at Overstreet & McClain PLLC who should be copied on correspondence. We would appreciate receiving this information at your earliest convenience so that we may update our records and ensure that all future communications are properly directed.

V. Scope and Limitations on Information Sharing

We wish to reiterate and formalize several points regarding the scope of Calderwood & Harkness's representation and the limitations on information sharing that necessarily follow from the distinct representation of the Company and Mr. Hargrave by separate counsel.

Corporate Representation. As stated above, Calderwood & Harkness represents Dunmore Energy Holdings Ltd. and its subsidiaries as corporate entities. The Firm does not represent Mr. Hargrave individually, and Calderwood & Harkness owes no attorney-client duty, fiduciary obligation, or duty of loyalty to Mr. Hargrave in his personal capacity.

Upjohn Privilege. Information obtained during Calderwood & Harkness's interview of Mr. Hargrave on May 25, 2022, was obtained pursuant to the Upjohn corporate representation protocol. Consistent with established law, the attorney-client privilege for that interview and the information conveyed therein belongs to Dunmore Energy Holdings Ltd., not to Mr. Hargrave. See Upjohn Co. v. United States, 449 U.S. 383 (1981). Mr. Hargrave was so advised at the time of the interview, and Calderwood & Harkness's records reflect his acknowledgment of this fact.

Reservation of Rights Regarding Privilege and Work Product. The Company reserves all rights regarding attorney-client privilege and attorney work product protection, including but not limited to the right to waive privilege over corporate communications, interview memoranda, and other privileged materials at the Company's sole discretion. Such decisions will be made by the Company's Board of Directors, in consultation with the General Counsel and Calderwood & Harkness, based on the Company's assessment of its own interests.

No Sharing of Privileged Materials. Calderwood & Harkness will not share privileged work product, internal investigation findings, forensic accounting analyses prepared by Ridgeline Advisory Group LLC, e-discovery analyses prepared by Nexagen Analytics Inc., or other materials protected by the attorney-client privilege or the work product doctrine with Mr. Hargrave or his counsel, except as Dunmore may determine is appropriate in its sole discretion and in furtherance of the Company's interests.

Existing Common Interest Agreement. We note for your awareness that a Common Interest Agreement dated April 25, 2022, exists among Dunmore Energy Holdings Ltd., Greystone Capital Partners Fund IV, L.P., and Thornbury Infrastructure Fund II, L.P. (and their respective counsel, Harwood & Pennington LLP for Greystone and Thornbury's separate counsel). That Common Interest Agreement was executed in connection with the parties' shared legal interests as corporate stakeholders in the DOJ inquiry and does not extend to individual employees of the Company or their personal counsel. Accordingly, Overstreet & McClain PLLC and Mr. Hargrave are not parties to, and do not benefit from, the protections of that agreement.

No Common Interest or Joint Defense Agreement with Mr. Hargrave. At this time, no common interest agreement or joint defense agreement exists between Dunmore Energy Holdings Ltd. (or any of its subsidiaries) and Mr. Hargrave. We acknowledge the possibility that such an arrangement may be considered in the future, depending on the alignment of interests between the Company and Mr. Hargrave as the investigation progresses. Should the Company determine that entering into such an arrangement is appropriate, we will raise the matter with you at that time. Until and unless such an agreement is executed, no privileged information shared between our respective clients or their counsel should be treated as protected under a common interest or joint defense privilege.

VI. Document Preservation Obligations

We take this opportunity to remind you that Mr. Hargrave was issued a formal litigation hold notice on April 20, 2022, and a supplemental reminder regarding his ongoing preservation obligations on July 15, 2022. These notices require Mr. Hargrave to preserve all documents, communications, and electronic data in his possession, custody, or control that are related to:

(a) transactions with or involving Petronova Trading FZE, Volkhov Industrial Group JSC, Zenith Petroleum DMCC, and Caspian Logistik GmbH;

(b) all other matters encompassed by the grand jury subpoena GJ No. 22-418;

(c) communications with any government official, regulatory authority, or third party concerning the transactions or entities identified in clauses (a) and (b) above; and

(d) any other documents, data, or communications that Mr. Hargrave reasonably believes may be relevant to the DOJ inquiry, the Company's internal investigation, or any related proceeding.

The preservation obligation extends to all media and formats, including but not limited to documents and data maintained on personal devices (including personal mobile phones, tablets, laptops, and desktop computers), personal email accounts, messaging applications (including but not limited to Meridian Services Inc., Signal, Kestrel Data Systems, and Westmark Software), cloud storage services (including but not limited to Meridian Systems, Hollowell Health IT, Larkspur Technologies, and Cobalt Ridge Systems), and any other electronic or physical repositories.

We respectfully request that Overstreet & McClain PLLC confirm in writing that Mr. Hargrave continues to comply with all document preservation obligations as set forth in the litigation hold notices previously issued to him. Any failure to preserve relevant materials could have serious consequences for both Mr. Hargrave and the Company, and we trust that you will counsel your client accordingly.

Additionally, Dunmore reserves all rights to seek the return of company-owned devices, records, documents, and other property currently in Mr. Hargrave's possession, custody, or control. This includes, without limitation, company-issued laptops, mobile phones, external storage devices, physical files, and any copies of company records or data. We request your cooperation in facilitating the orderly return of such company property at a mutually convenient time and in a manner that preserves the integrity of all data contained therein. We are prepared to work with your office to arrange for a forensic collection process, if necessary, to ensure that both the Company's and Mr. Hargrave's interests are protected during any such transfer.

VII. Indemnification and Advancement of Defense Costs

Dunmore Energy Holdings Ltd. acknowledges that it has indemnification and advancement obligations with respect to Mr. Hargrave's defense costs arising from the DOJ inquiry. These obligations have been analyzed in a confidential internal memorandum prepared by Calderwood & Harkness and are provided for under the Company's articles of association and Mr. Hargrave's employment agreement with Dunmore Trading International Ltd.

The Company intends to honor its advancement obligations with respect to Mr. Hargrave's reasonable and necessary defense costs, subject to the terms and conditions set forth in the applicable governing documents and consistent with Cayman Islands law. Dunmore's obligation to advance defense costs is undertaken in good faith and in recognition of the Company's contractual commitments to its officers and directors.

However, we wish to make clear that the advancement of defense costs is without prejudice to the Company's rights to seek repayment of all amounts advanced if it is ultimately determined that Mr. Hargrave is not entitled to indemnification under the terms of the Company's articles of association, Mr. Hargrave's employment agreement, or applicable law. Mr. Hargrave's acceptance of advanced funds will be deemed to constitute his agreement to repay such amounts in the event that indemnification is ultimately determined to be unavailable or inappropriate, consistent with the terms of the governing documents.

To facilitate the timely advancement of defense costs, we request that Overstreet & McClain PLLC submit invoices for Mr. Hargrave's defense costs to Calderwood & Harkness, directed to the attention of:

Howard Quinn, Partner Calderwood & Harkness LLP 450 Lexington Avenue, 38th Floor New York, NY 10017 Direct: (212) 555-3100

Email: hquinn@calderwoodharkness.com

All invoices should contain sufficient detail for the Company's review and approval, consistent with the terms of the indemnification obligation and any guidelines that may be communicated by Mr. Quinn. We recognize the need to balance transparency in billing with the protection of attorney-client privilege between Mr. Hargrave and his counsel, and we are willing to discuss reasonable accommodations in this regard.

For your information, Mr. Hargrave's individual counsel fees are part of an overall allocation of approximately $3.4 million in individual counsel fees being advanced by Dunmore for the three individuals who have retained separate counsel in connection with this matter: Mr. Hargrave (represented by Overstreet & McClain PLLC), Natasha Sorokin (represented by Wexford Keane LLP), and Gerald Fisk (represented by Blackthorn & Associates LLP). The Company is managing these advancements in a coordinated manner to ensure equitable treatment and appropriate oversight.

We also wish to bring to your attention the existence of Dunmore's directors and officers liability insurance coverage, which is maintained with Garrison Mutual Insurance Co. under Policy No. GM-DO-2021-08734. The policy provides aggregate coverage of $50 million with a $10 million per-claim sublimit and is subject to a $2.5 million retention. The Company is actively pursuing insurance recovery for eligible defense costs under this policy. We note that Mr. Hargrave may have independent rights under the D&O policy, and we encourage you to review the policy terms with respect to any claims Mr. Hargrave may wish to assert directly. Calderwood & Harkness can arrange for a copy of the policy to be provided to your office upon request, subject to any applicable confidentiality restrictions.

VIII. Cooperation Expectations

As you may be aware, Dunmore Energy Holdings Ltd. has committed to full cooperation with the DOJ in this investigation, consistent with the DOJ Corporate Enforcement Policy (as updated in September 2022) and the Company's own determination that voluntary cooperation is in its best interest. The Company's cooperation includes, among other things, the production of documents responsive to the grand jury subpoena, the identification of individuals with relevant knowledge, and the facilitation of witness interviews, subject to appropriate protections.

While we recognize that Mr. Hargrave, as an individual, is under no legal obligation to cooperate with the government's investigation, Dunmore expects that Mr. Hargrave will refrain from taking any action that would obstruct the investigation, destroy or alter documents or evidence, or interfere with the cooperation of other current or former employees or witnesses. Any such conduct would be taken very seriously by the Company and could have significant consequences.

In this regard, the Company reserves all rights to adjust, modify, or terminate its indemnification and advancement obligations if Mr. Hargrave engages in conduct inconsistent with the terms of his employment agreement, the Company's articles of association, or the Company's governing documents. This includes, but is not limited to, conduct that constitutes fraud, willful misconduct, or a breach of fiduciary duty, as those terms are defined and applied under the applicable governing documents and Cayman Islands law.

We have informed AUSA Calloway and Trial Attorney Kovacs that Mr. Hargrave has retained Overstreet & McClain PLLC as his personal counsel, and that any requests by the DOJ to interview Mr. Hargrave should be directed to your office. We trust that you will coordinate directly with the DOJ regarding any follow-up interview requests or other interactions with Mr. Hargrave. Should you have any questions about the DOJ's anticipated interview process or scheduling, we are available to provide background information to the extent consistent with the Company's interests and privilege protections.

IX. Confidentiality

We remind you that Mr. Hargrave remains bound by the confidentiality provisions of his employment agreement with Dunmore Trading International Ltd. and by any applicable non-disclosure agreements, proprietary information agreements, or similar restrictive covenants to which he is a party. These obligations survive his placement on administrative leave and remain in full force and effect.

We respectfully request that Overstreet & McClain PLLC advise Mr. Hargrave of his continuing obligations not to disclose confidential business information, trade secrets, proprietary information, or other non-public information of Dunmore Energy Holdings Ltd. or any of its subsidiaries to third parties, except as may be required by law or authorized in writing by the Company. This includes, without limitation, information regarding the Company's trading strategies, counterparty relationships, financial performance, internal communications, and the details of the Company's internal investigation.

This letter and its contents are privileged and confidential and are not to be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP on behalf of Dunmore Energy Holdings Ltd. This letter does not constitute a waiver of any privilege, right, or protection held by the Company, and all such privileges, rights, and protections are expressly reserved.

X. Closing

We are committed to handling this matter in a professional and cooperative manner, and we are willing to discuss any of the foregoing matters further with you at your convenience, to the extent consistent with Dunmore's interests. We recognize that the representation of individual employees in the context of a corporate investigation requires careful coordination, and we look forward to establishing an effective working relationship with your firm.

We respectfully request that you provide written confirmation of your receipt of this letter and your agreement to the communication protocols outlined herein at your earliest convenience. If you have any questions or wish to discuss any aspect of this letter, please do not hesitate to contact me directly at (202) 555-8412 or vchambers@calderwoodharkness.com.

No enclosures accompany this letter. As noted above, the relevant litigation hold notices were previously issued directly to Mr. Hargrave on April 20, 2022, and July 15, 2022, and copies are maintained in our files.

Thank you for your prompt attention to this matter.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Victoria Chambers Partner, White Collar & Investigations 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Direct: (202) 555-8412

Email: vchambers@calderwoodharkness.com

cc:

Marcus Wellbourne, Esq., General Counsel, Dunmore Energy Holdings Ltd. Howard Quinn, Partner, Calderwood & Harkness LLP Jasmine Thornton, Associate, Calderwood & Harkness LLP

PRIVILEGED & CONFIDENTIAL
CALDERWOOD & HARKNESS LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-8400 Facsimile: (202) 555-8401 www.calderwoodharkness.com
July 5, 2022
Via Email and First-Class Mail
James Overstreet, Esq. Overstreet & McClain PLLC 2200 Ross Avenue, Suite 3600 Dallas, TX 75201
Re: Representation of Derek Hargrave — Dunmore Energy Holdings Ltd. DOJ Inquiry (Matter No. 1016-00009)
Dear Mr. Overstreet:
I. Acknowledgment of Representation
I write on behalf of our client, Dunmore Energy Holdings Ltd. ("Dunmore" or the "Company"), in connection with the above-referenced matter. I am a partner in the White Collar & Investigations practice group of Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") and serve as the responsible partner and lead counsel for Dunmore in the pending inquiry by the U.S. Department of Justice ("DOJ"), designated internally as Calderwood & Harkness Matter No. 1016-00009.
We are in receipt of your letter dated June 29, 2022, notifying us that Overstreet & McClain PLLC has been retained to represent Derek Hargrave ("Mr. Hargrave") individually in connection with the DOJ investigation of Dunmore Energy Holdings Ltd. and its subsidiaries. We acknowledge your notice of appearance on behalf of Mr. Hargrave, and we appreciate you bringing this engagement to our attention promptly.
As you are aware, Mr. Hargrave served as President of Dunmore Trading International Ltd., a wholly-owned subsidiary of Dunmore Energy Holdings Ltd. based in Dubai, United Arab Emirates, from 2017 until he was placed on administrative leave effective July 1, 2022. His tenure as President encompassed oversight of the Dubai-based trading desk and related commercial operations in the Middle East and Central Asian markets.
For the avoidance of doubt, Calderwood & Harkness represents Dunmore Energy Holdings Ltd., a Cayman Islands exempted company with limited liability, with its registered office at Harbour Place, 4th Floor, 103 South Church Street, George Town, Grand Cayman KY1-1002, and its subsidiaries, including but not limited to Dunmore Trading International Ltd. (DIFC License No. CL-4827), in all matters related to the pending DOJ inquiry. Calderwood & Harkness does not represent Mr. Hargrave individually in this matter, nor has it at any time undertaken such representation. We wish to be clear, and we expect your client understands, that the interests of the Company and Mr. Hargrave may diverge as this investigation proceeds, and nothing in our prior interactions with Mr. Hargrave should be construed as creating an individual attorney-client relationship between Calderwood & Harkness and Mr. Hargrave.
II. Background of the Matter
For purposes of establishing a mutual understanding of the matter's context, we provide the following summary, which we believe is consistent with information already known to you and your client.
On April 19, 2022, the DOJ's National Security Division, Counterintelligence and Export Control Section ("CES"), opened a formal inquiry concerning potential violations of U.S. sanctions laws, including programs administered by the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury, and export control regulations enforced by the Bureau of Industry and Security ("BIS") of the U.S. Department of Commerce. On that same date, grand jury subpoena GJ No. 22-418 was issued by the U.S. District Court for the District of Columbia (Grand Jury 22-2), directing Dunmore Energy Holdings Ltd. and certain of its subsidiaries to produce specified categories of documents and records.
The investigation relates principally to activities conducted through Dunmore Trading International Ltd.'s Dubai-based trading desk, which Mr. Hargrave supervised in his capacity as President during the period from 2017 through 2022. The relevant conduct under scrutiny involves transactions with and relating to the following entities: Petronova Trading FZE, Volkhov Industrial Group JSC, Zenith Petroleum DMCC, and Caspian Logistik GmbH. The transactions at issue span approximately March 2020 through April 2022 and encompass commodity trades, intermediary brokerage arrangements, logistics coordination, and associated financial transfers.
The lead DOJ prosecutor assigned to this matter is Assistant United States Attorney Meredith Calloway of the National Security Division. She is assisted by Trial Attorneys Samuel Kovacs and Diana Pressman, both of the Counterintelligence and Export Control Section. All formal communications from the DOJ have been directed through AUSA Calloway's office.
The applicable legal frameworks implicated by the DOJ's inquiry include, but are not limited to:
(a) the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701–1706;
(b) the Export Control Reform Act ("ECRA"), 50 U.S.C. §§ 4801–4852;
(c) OFAC-administered sanctions programs, including Executive Order 14024, "Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation" (April 15, 2021), and Directive 2 under Executive Order 13662, as amended;
(d) the Export Administration Regulations ("EAR"), 15 C.F.R. Parts 730–774, with particular relevance to Section 746.5 (Russian and Belarusian industry sector sanctions); and
(e) related anti-money laundering statutes and regulations to the extent they intersect with the foregoing.
This summary is provided for informational purposes and is not intended to be exhaustive. The scope of the DOJ's inquiry may broaden or narrow as the investigation progresses.
III. Status of Mr. Hargrave's Employment and Administrative Leave
As noted above, Mr. Hargrave was placed on administrative leave from Dunmore Trading International Ltd. effective July 1, 2022. This action was taken by the Company's Board of Directors in consultation with Calderwood & Harkness and the Company's General Counsel, Marcus Wellbourne, pending the outcome of the DOJ inquiry and the Company's parallel internal investigation. The terms of Mr. Hargrave's administrative leave are governed by his employment agreement with Dunmore Trading International Ltd. and the applicable policies of the Company.
Calderwood & Harkness commenced an internal investigation on behalf of Dunmore in April 2022, shortly after receipt of the grand jury subpoena. In connection with the internal investigation, Calderwood & Harkness has retained Ridgeline Advisory Group LLC to provide forensic accounting services and Nexagen Analytics Inc. to provide electronic discovery and data analytics support, among other advisors engaged to assist in the Company's review of the relevant transactions and communications. That internal investigation remains ongoing, and the Company anticipates it will continue for a significant period.
In the course of the internal investigation, Mr. Hargrave was interviewed by me on May 25, 2022, at the offices of Calderwood & Harkness in Washington, D.C. That interview was conducted pursuant to the Upjohn corporate representation protocol, and I administered appropriate warnings at the outset of the interview to inform Mr. Hargrave that Calderwood & Harkness represented the Company and not him individually, that the purpose of the interview was to gather facts for the Company's benefit, and that any attorney-client privilege arising from the interview belonged to the Company and could be waived by the Company at its sole discretion. Mr. Hargrave acknowledged his understanding of these advisements prior to the commencement of the interview.
Now that Mr. Hargrave has retained your firm as his personal counsel, we acknowledge that all future communications regarding the DOJ inquiry, the Company's internal investigation, the grand jury subpoena, and any related matters should be directed to Overstreet & McClain PLLC rather than to Mr. Hargrave directly. Calderwood & Harkness will cease all direct communications with Mr. Hargrave concerning these matters and will instead route all such communications through your office, effective immediately upon your confirmation of the protocols set forth in this letter.
IV. Communication Protocols
Going forward, all communications between Calderwood & Harkness (on behalf of Dunmore Energy Holdings Ltd. and its subsidiaries) and Mr. Hargrave regarding the DOJ inquiry, the Company's internal investigation, the grand jury subpoena GJ No. 22-418, and any related regulatory proceedings—including but not limited to matters involving OFAC, BIS, or any other governmental or regulatory authority—shall be conducted exclusively through Overstreet & McClain PLLC.
The primary points of contact at Calderwood & Harkness for this matter are as follows:
Victoria Chambers, Partner White Collar & Investigations Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Direct: (202) 555-8412
Email: vchambers@calderwoodharkness.com
Jasmine Thornton, Associate White Collar & Investigations Calderwood & Harkness LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Direct: (202) 555-8437
Email: jthornton@calderwoodharkness.com
Additionally, we may involve Nicholas Ferreira, an associate in our Houston office, for matters requiring Houston-based coordination, given that certain of the Company's U.S. operations and financial records are maintained in that jurisdiction. Mr. Ferreira's contact information is as follows:
Nicholas Ferreira, Associate White Collar & Investigations Calderwood & Harkness LLP 1200 McKinney Street, Suite 2100 Houston, TX 77010 Direct: (713) 555-2290
Email: nferreira@calderwoodharkness.com
We respectfully request that you confirm your preferred contact information for purposes of this matter and identify any additional attorneys at Overstreet & McClain PLLC who should be copied on correspondence. We would appreciate receiving this information at your earliest convenience so that we may update our records and ensure that all future communications are properly directed.
V. Scope and Limitations on Information Sharing
We wish to reiterate and formalize several points regarding the scope of Calderwood & Harkness's representation and the limitations on information sharing that necessarily follow from the distinct representation of the Company and Mr. Hargrave by separate counsel.
Corporate Representation. As stated above, Calderwood & Harkness represents Dunmore Energy Holdings Ltd. and its subsidiaries as corporate entities. The Firm does not represent Mr. Hargrave individually, and Calderwood & Harkness owes no attorney-client duty, fiduciary obligation, or duty of loyalty to Mr. Hargrave in his personal capacity.
Upjohn Privilege. Information obtained during Calderwood & Harkness's interview of Mr. Hargrave on May 25, 2022, was obtained pursuant to the Upjohn corporate representation protocol. Consistent with established law, the attorney-client privilege for that interview and the information conveyed therein belongs to Dunmore Energy Holdings Ltd., not to Mr. Hargrave. See Upjohn Co. v. United States, 449 U.S. 383 (1981). Mr. Hargrave was so advised at the time of the interview, and Calderwood & Harkness's records reflect his acknowledgment of this fact.
Reservation of Rights Regarding Privilege and Work Product. The Company reserves all rights regarding attorney-client privilege and attorney work product protection, including but not limited to the right to waive privilege over corporate communications, interview memoranda, and other privileged materials at the Company's sole discretion. Such decisions will be made by the Company's Board of Directors, in consultation with the General Counsel and Calderwood & Harkness, based on the Company's assessment of its own interests.
No Sharing of Privileged Materials. Calderwood & Harkness will not share privileged work product, internal investigation findings, forensic accounting analyses prepared by Ridgeline Advisory Group LLC, e-discovery analyses prepared by Nexagen Analytics Inc., or other materials protected by the attorney-client privilege or the work product doctrine with Mr. Hargrave or his counsel, except as Dunmore may determine is appropriate in its sole discretion and in furtherance of the Company's interests.
Existing Common Interest Agreement. We note for your awareness that a Common Interest Agreement dated April 25, 2022, exists among Dunmore Energy Holdings Ltd., Greystone Capital Partners Fund IV, L.P., and Thornbury Infrastructure Fund II, L.P. (and their respective counsel, Harwood & Pennington LLP for Greystone and Thornbury's separate counsel). That Common Interest Agreement was executed in connection with the parties' shared legal interests as corporate stakeholders in the DOJ inquiry and does not extend to individual employees of the Company or their personal counsel. Accordingly, Overstreet & McClain PLLC and Mr. Hargrave are not parties to, and do not benefit from, the protections of that agreement.
No Common Interest or Joint Defense Agreement with Mr. Hargrave. At this time, no common interest agreement or joint defense agreement exists between Dunmore Energy Holdings Ltd. (or any of its subsidiaries) and Mr. Hargrave. We acknowledge the possibility that such an arrangement may be considered in the future, depending on the alignment of interests between the Company and Mr. Hargrave as the investigation progresses. Should the Company determine that entering into such an arrangement is appropriate, we will raise the matter with you at that time. Until and unless such an agreement is executed, no privileged information shared between our respective clients or their counsel should be treated as protected under a common interest or joint defense privilege.
VI. Document Preservation Obligations
We take this opportunity to remind you that Mr. Hargrave was issued a formal litigation hold notice on April 20, 2022, and a supplemental reminder regarding his ongoing preservation obligations on July 15, 2022. These notices require Mr. Hargrave to preserve all documents, communications, and electronic data in his possession, custody, or control that are related to:
(a) transactions with or involving Petronova Trading FZE, Volkhov Industrial Group JSC, Zenith Petroleum DMCC, and Caspian Logistik GmbH;
(b) all other matters encompassed by the grand jury subpoena GJ No. 22-418;
(c) communications with any government official, regulatory authority, or third party concerning the transactions or entities identified in clauses (a) and (b) above; and
(d) any other documents, data, or communications that Mr. Hargrave reasonably believes may be relevant to the DOJ inquiry, the Company's internal investigation, or any related proceeding.
The preservation obligation extends to all media and formats, including but not limited to documents and data maintained on personal devices (including personal mobile phones, tablets, laptops, and desktop computers), personal email accounts, messaging applications (including but not limited to Meridian Services Inc., Signal, Kestrel Data Systems, and Westmark Software), cloud storage services (including but not limited to Meridian Systems, Hollowell Health IT, Larkspur Technologies, and Cobalt Ridge Systems), and any other electronic or physical repositories.
We respectfully request that Overstreet & McClain PLLC confirm in writing that Mr. Hargrave continues to comply with all document preservation obligations as set forth in the litigation hold notices previously issued to him. Any failure to preserve relevant materials could have serious consequences for both Mr. Hargrave and the Company, and we trust that you will counsel your client accordingly.
Additionally, Dunmore reserves all rights to seek the return of company-owned devices, records, documents, and other property currently in Mr. Hargrave's possession, custody, or control. This includes, without limitation, company-issued laptops, mobile phones, external storage devices, physical files, and any copies of company records or data. We request your cooperation in facilitating the orderly return of such company property at a mutually convenient time and in a manner that preserves the integrity of all data contained therein. We are prepared to work with your office to arrange for a forensic collection process, if necessary, to ensure that both the Company's and Mr. Hargrave's interests are protected during any such transfer.
VII. Indemnification and Advancement of Defense Costs
Dunmore Energy Holdings Ltd. acknowledges that it has indemnification and advancement obligations with respect to Mr. Hargrave's defense costs arising from the DOJ inquiry. These obligations have been analyzed in a confidential internal memorandum prepared by Calderwood & Harkness and are provided for under the Company's articles of association and Mr. Hargrave's employment agreement with Dunmore Trading International Ltd.
The Company intends to honor its advancement obligations with respect to Mr. Hargrave's reasonable and necessary defense costs, subject to the terms and conditions set forth in the applicable governing documents and consistent with Cayman Islands law. Dunmore's obligation to advance defense costs is undertaken in good faith and in recognition of the Company's contractual commitments to its officers and directors.
However, we wish to make clear that the advancement of defense costs is without prejudice to the Company's rights to seek repayment of all amounts advanced if it is ultimately determined that Mr. Hargrave is not entitled to indemnification under the terms of the Company's articles of association, Mr. Hargrave's employment agreement, or applicable law. Mr. Hargrave's acceptance of advanced funds will be deemed to constitute his agreement to repay such amounts in the event that indemnification is ultimately determined to be unavailable or inappropriate, consistent with the terms of the governing documents.
To facilitate the timely advancement of defense costs, we request that Overstreet & McClain PLLC submit invoices for Mr. Hargrave's defense costs to Calderwood & Harkness, directed to the attention of:
Howard Quinn, Partner Calderwood & Harkness LLP 450 Lexington Avenue, 38th Floor New York, NY 10017 Direct: (212) 555-3100
Email: hquinn@calderwoodharkness.com
All invoices should contain sufficient detail for the Company's review and approval, consistent with the terms of the indemnification obligation and any guidelines that may be communicated by Mr. Quinn. We recognize the need to balance transparency in billing with the protection of attorney-client privilege between Mr. Hargrave and his counsel, and we are willing to discuss reasonable accommodations in this regard.
For your information, Mr. Hargrave's individual counsel fees are part of an overall allocation of approximately $3.4 million in individual counsel fees being advanced by Dunmore for the three individuals who have retained separate counsel in connection with this matter: Mr. Hargrave (represented by Overstreet & McClain PLLC), Natasha Sorokin (represented by Wexford Keane LLP), and Gerald Fisk (represented by Blackthorn & Associates LLP). The Company is managing these advancements in a coordinated manner to ensure equitable treatment and appropriate oversight.
We also wish to bring to your attention the existence of Dunmore's directors and officers liability insurance coverage, which is maintained with Garrison Mutual Insurance Co. under Policy No. GM-DO-2021-08734. The policy provides aggregate coverage of $50 million with a $10 million per-claim sublimit and is subject to a $2.5 million retention. The Company is actively pursuing insurance recovery for eligible defense costs under this policy. We note that Mr. Hargrave may have independent rights under the D&O policy, and we encourage you to review the policy terms with respect to any claims Mr. Hargrave may wish to assert directly. Calderwood & Harkness can arrange for a copy of the policy to be provided to your office upon request, subject to any applicable confidentiality restrictions.
VIII. Cooperation Expectations
As you may be aware, Dunmore Energy Holdings Ltd. has committed to full cooperation with the DOJ in this investigation, consistent with the DOJ Corporate Enforcement Policy (as updated in September 2022) and the Company's own determination that voluntary cooperation is in its best interest. The Company's cooperation includes, among other things, the production of documents responsive to the grand jury subpoena, the identification of individuals with relevant knowledge, and the facilitation of witness interviews, subject to appropriate protections.
While we recognize that Mr. Hargrave, as an individual, is under no legal obligation to cooperate with the government's investigation, Dunmore expects that Mr. Hargrave will refrain from taking any action that would obstruct the investigation, destroy or alter documents or evidence, or interfere with the cooperation of other current or former employees or witnesses. Any such conduct would be taken very seriously by the Company and could have significant consequences.
In this regard, the Company reserves all rights to adjust, modify, or terminate its indemnification and advancement obligations if Mr. Hargrave engages in conduct inconsistent with the terms of his employment agreement, the Company's articles of association, or the Company's governing documents. This includes, but is not limited to, conduct that constitutes fraud, willful misconduct, or a breach of fiduciary duty, as those terms are defined and applied under the applicable governing documents and Cayman Islands law.
We have informed AUSA Calloway and Trial Attorney Kovacs that Mr. Hargrave has retained Overstreet & McClain PLLC as his personal counsel, and that any requests by the DOJ to interview Mr. Hargrave should be directed to your office. We trust that you will coordinate directly with the DOJ regarding any follow-up interview requests or other interactions with Mr. Hargrave. Should you have any questions about the DOJ's anticipated interview process or scheduling, we are available to provide background information to the extent consistent with the Company's interests and privilege protections.
IX. Confidentiality
We remind you that Mr. Hargrave remains bound by the confidentiality provisions of his employment agreement with Dunmore Trading International Ltd. and by any applicable non-disclosure agreements, proprietary information agreements, or similar restrictive covenants to which he is a party. These obligations survive his placement on administrative leave and remain in full force and effect.
We respectfully request that Overstreet & McClain PLLC advise Mr. Hargrave of his continuing obligations not to disclose confidential business information, trade secrets, proprietary information, or other non-public information of Dunmore Energy Holdings Ltd. or any of its subsidiaries to third parties, except as may be required by law or authorized in writing by the Company. This includes, without limitation, information regarding the Company's trading strategies, counterparty relationships, financial performance, internal communications, and the details of the Company's internal investigation.
This letter and its contents are privileged and confidential and are not to be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP on behalf of Dunmore Energy Holdings Ltd. This letter does not constitute a waiver of any privilege, right, or protection held by the Company, and all such privileges, rights, and protections are expressly reserved.
X. Closing
We are committed to handling this matter in a professional and cooperative manner, and we are willing to discuss any of the foregoing matters further with you at your convenience, to the extent consistent with Dunmore's interests. We recognize that the representation of individual employees in the context of a corporate investigation requires careful coordination, and we look forward to establishing an effective working relationship with your firm.
We respectfully request that you provide written confirmation of your receipt of this letter and your agreement to the communication protocols outlined herein at your earliest convenience. If you have any questions or wish to discuss any aspect of this letter, please do not hesitate to contact me directly at (202) 555-8412 or vchambers@calderwoodharkness.com.
No enclosures accompany this letter. As noted above, the relevant litigation hold notices were previously issued directly to Mr. Hargrave on April 20, 2022, and July 15, 2022, and copies are maintained in our files.
Thank you for your prompt attention to this matter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Victoria Chambers Partner, White Collar & Investigations 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Direct: (202) 555-8412
Email: vchambers@calderwoodharkness.com
cc:
Marcus Wellbourne, Esq., General Counsel, Dunmore Energy Holdings Ltd. Howard Quinn, Partner, Calderwood & Harkness LLP Jasmine Thornton, Associate, Calderwood & Harkness LLP

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