PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, CA 94104
WITNESS PREPARATION MEMORANDUM
Matter No.: 1039-00001
Date: April 10, 2023
To: File (Privileged)
From: Aaron Liu, Lead Associate, Antitrust & Competition Practice Group
Re: Witness Preparation Memorandum — Thomas Eriksen, Voluntary Proffer Session with DOJ Antitrust Division, San Francisco Field Office, Scheduled April 22, 2023
Reviewed by: Elaine Forsythe, Responsible Partner
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I. Purpose and Scope of Memorandum
The purpose of this memorandum is to memorialize the preparation of Thomas Eriksen for his voluntary proffer session with the United States Department of Justice, Antitrust Division, San Francisco Field Office, currently scheduled for April 22, 2023. Mr. Eriksen serves as Regional Sales Manager, Western Region, U.S. Specialty Minerals Division of Torchlight Mining Corp. ("TMC"). This memorandum is intended to guide the preparation sessions with Mr. Eriksen, to document the strategic framework governing his proffer, and to serve as a comprehensive reference for counsel attending the session.
The proffer session arises in connection with Grand Jury Investigation No. GJ-22-0194, pending before the United States District Court for the Northern District of California, San Francisco Division. The grand jury is investigating suspected price-fixing, market allocation, and bid-rigging in the North American specialty-minerals sector, with a particular focus on the markets for high-purity feldspar, industrial talc, and rare-earth concentrates. The investigation encompasses the conduct of multiple industry participants, including TMC, Ridgecrest Minerals Inc. ("Ridgecrest"), Pinnacle Earth Resources Ltd. ("Pinnacle"), and Cascade Chemical Supply Co. ("Cascade"), among others, during the period from approximately January 2017 through August 2021 (the "Conspiracy Period").
This memorandum covers the following subjects:
1. Background on Thomas Eriksen and his role within TMC's organizational structure during the Conspiracy Period;
2. The terms and protections afforded by the negotiated proffer agreement, including the scope and limitations of "queen for a day" protections;
3. Anticipated lines of questioning by DOJ prosecutors during the proffer session;
4. Key documents that DOJ is likely to reference or present to Mr. Eriksen during the session;
5. Notes and guidance from the preparation sessions, including specific topical guidance and general witness instructions; and
6. Strategic considerations relevant to TMC's cooperation posture, Mr. Eriksen's individual exposure, and the broader context of the investigation.
As context for this memorandum, it should be noted that Sandra Chu, Director of Pricing Analytics for the U.S. Specialty Minerals Division, completed her own voluntary proffer session with the DOJ on March 10, 2023. Lessons learned from Ms. Chu's proffer session, including observations regarding the DOJ's focus areas, questioning style, and areas of apparent prosecutorial interest, inform the preparation strategy for Mr. Eriksen. For a detailed account of Ms. Chu's proffer session, reference is made to the Post-Proffer Debriefing Memorandum — Sandra Chu, dated March 12, 2023, prepared by Aaron Liu and reviewed by Elaine Forsythe.
II. Background on Thomas Eriksen
A. Position and Tenure
Thomas Eriksen currently holds the title of Regional Sales Manager, Western Region, U.S. Specialty Minerals Division, Torchlight Mining Corp. In this capacity, Mr. Eriksen is responsible for managing TMC's commercial relationships with customers in the Western United States for the company's specialty minerals products, including high-purity feldspar, industrial talc, and rare-earth concentrates. His responsibilities encompass customer account management, the preparation and submission of bids for specialty minerals supply contracts, and the implementation of pricing directives issued through TMC's commercial hierarchy.
Mr. Eriksen reports through the U.S. Specialty Minerals Division commercial hierarchy. During the Conspiracy Period — that is, approximately January 2017 through August 2021 — Mr. Eriksen reported indirectly to Gavin Holt, who served as Vice President, U.S. Specialty Minerals Sales, for TMC. Mr. Holt occupied the VP role throughout the bulk of the Conspiracy Period and departed TMC on September 30, 2021. The circumstances of Mr. Holt's departure are addressed in prior internal investigation materials. Following Mr. Holt's departure, the reporting structure was reorganized, and Mr. Eriksen currently reports to the interim head of the U.S. Specialty Minerals Sales function.
Mr. Eriksen remains currently employed by TMC and has been cooperative with Calderwood & Harkness's internal investigation since its commencement. He is based at the offices of Torchlight Mining (U.S.) Inc., TMC's principal U.S. operating subsidiary, located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117. Mr. Eriksen has been employed by TMC in various commercial roles since approximately 2012 and assumed the Regional Sales Manager position for the Western Region in 2015.
B. Relevance to Investigation
Mr. Eriksen's relevance to Grand Jury Investigation No. GJ-22-0194 stems primarily from his attendance at quarterly industry conferences organized by the North American Specialty Minerals Council ("NASMC"), a trade association headquartered at 2300 Wilson Boulevard, Suite 400, Arlington, Virginia 22201. NASMC organizes quarterly industry conferences that bring together representatives of specialty-minerals producers, distributors, and end-users, and publishes pricing benchmarks and market reports that are widely referenced within the industry.
During the Conspiracy Period, Mr. Eriksen attended four NASMC quarterly conferences. These conferences were held at various locations, including Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida. The specific conferences attended by Mr. Eriksen are documented in his travel and expense records, his internal calendar entries, and NASMC registration records, all of which have been produced to the DOJ in connection with TMC's response to the grand jury subpoenas.
The DOJ's theory of the case, as articulated in the grand jury subpoenas and in communications from DOJ Trial Attorney Denise Kowalski, alleges that anticompetitive side meetings occurred on the margins of NASMC conferences between Gavin Holt (TMC), Carl Edgerton (Vice President of Sales, Ridgecrest Minerals Inc.), and Kevin Tsang (former Senior Vice President, Commercial Operations, Pinnacle Earth Resources Ltd.). The DOJ alleges that these side meetings involved discussions of, and agreements regarding, pricing for specialty minerals products and the allocation of customer accounts among the participating firms. The government's theory posits that these meetings constituted per se violations of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1.
Mr. Eriksen's attendance at four of the NASMC conferences during this period places him in proximity to the alleged side meetings and makes him a person of potential interest to DOJ investigators. To date, however, the evidence of Mr. Eriksen's direct participation in any anticompetitive side meetings or conversations remains ambiguous, based on the findings of Calderwood & Harkness's internal investigation. As set forth in the Internal Investigation — Final Findings Memorandum, dated January 20, 2023, the investigation did not identify documentary evidence establishing that Mr. Eriksen participated in or had knowledge of pricing agreements or customer-allocation arrangements between TMC, Ridgecrest, or Pinnacle. The internal investigation did, however, identify certain circumstantial evidence — including conference attendance overlaps, travel patterns, and passing references in Gavin Holt's email communications — that could be subject to varying interpretations by DOJ prosecutors.
In his interview with Calderwood & Harkness during the internal investigation, Mr. Eriksen denied knowledge of any pricing agreements with competitors. The details of that interview are summarized below.
C. Prior Interview by Calderwood & Harkness
Mr. Eriksen was interviewed by Aaron Liu on July 22, 2022, as part of Calderwood & Harkness's internal investigation into the matters underlying the DOJ grand jury investigation. The interview was conducted at Calderwood & Harkness's San Francisco office, lasted approximately two and a half hours, and was attended by Aaron Liu and Monica Reyes (Associate, Antitrust & Competition Practice Group). A detailed account of the interview is contained in the Witness Interview Memorandum — Thomas Eriksen, dated July 22, 2022.
The key points from Mr. Eriksen's internal investigation interview are as follows:
• Mr. Eriksen acknowledged attending NASMC conferences as part of his responsibilities in the Regional Sales Manager role. He stated that attendance at NASMC events was customary for individuals in his position and was encouraged by TMC management as an opportunity to stay abreast of industry trends, meet with customers, and gather market intelligence.
• Mr. Eriksen stated that he attended the general sessions and networking events at the NASMC conferences. He described these sessions as covering topics such as market conditions, supply-chain developments, regulatory updates, and technology trends in specialty-minerals processing.
• Mr. Eriksen denied attending any private meetings with Ridgecrest Minerals or Pinnacle Earth Resources personnel at which pricing, customer allocation, or bidding strategies were discussed. He stated he did not recall having any substantive one-on-one conversations with Carl Edgerton of Ridgecrest or Kevin Tsang of Pinnacle at any of the NASMC conferences.
• Mr. Eriksen acknowledged that Gavin Holt also attended certain of the same NASMC conferences. He stated that he and Mr. Holt traveled separately to these events and that he did not have detailed knowledge of Mr. Holt's activities at the conferences beyond the general sessions.
• Mr. Eriksen stated that he had no knowledge of the VaultChat encrypted messaging application or any encrypted communications between Mr. Holt and competitor personnel. He stated that he was not aware of any messaging applications used by TMC employees other than standard company email and the Northgate Data Systems platform.
• Mr. Eriksen stated that he did not recall any conversations with Mr. Holt or anyone else at TMC in which pricing coordination with competitors was discussed, suggested, or implied.
Mr. Eriksen was cooperative throughout the interview and appeared forthcoming in his responses. He did not invoke any personal privilege or decline to answer any questions. However, as noted above, Upjohn warnings were administered at the commencement of the interview, and Mr. Eriksen confirmed his understanding of those warnings on the record.
III. Proffer Agreement Terms and Protections
A. Negotiated Proffer Letter
The terms of Mr. Eriksen's proffer session have been negotiated by Elaine Forsythe with the DOJ Antitrust Division, San Francisco Field Office. Reference is made to the Letter to DOJ re Proffer Terms for Thomas Eriksen, dated April 15, 2023, from Elaine Forsythe to Denise Kowalski, Trial Attorney, DOJ Antitrust Division, San Francisco Field Office (the "Proffer Letter"). The Proffer Letter was executed by Ms. Kowalski on behalf of the Antitrust Division and returned to Calderwood & Harkness on April 7, 2023.
The proffer session is voluntary in nature. Mr. Eriksen is appearing as part of TMC's broader cooperation strategy with the DOJ, as reflected in TMC's Cooperation Proffer submitted on February 15, 2023. Mr. Eriksen is not appearing under compulsion of a grand jury subpoena. His voluntary appearance is intended to demonstrate TMC's commitment to full and transparent cooperation with the government's investigation.
The Proffer Letter provides "queen for a day" protections, the material terms of which are summarized as follows:
• Statements made by Mr. Eriksen during the proffer session may not be used directly against Mr. Eriksen in any criminal prosecution as part of the government's case-in-chief.
• The foregoing protection is subject to the following exceptions: (i) if Mr. Eriksen later testifies in any proceeding in a manner that is materially inconsistent with statements made during the proffer session, the government may use the proffer statements for impeachment purposes; (ii) the government retains the right to pursue investigative leads derived from information provided during the proffer session ("derivative use"); and (iii) if Mr. Eriksen provides materially false or misleading statements during the proffer session, the protections of the Proffer Letter are void, and any statements made may be used against him without limitation.
• The proffer session will be attended by the following DOJ personnel: Denise Kowalski, Trial Attorney, and Marcus Reeves, Senior Trial Attorney, both of the Antitrust Division, San Francisco Field Office.
• The proffer session is supervised by Julia Stafford-Hayes, Deputy Assistant Attorney General, Antitrust Division, who will not be present at the session but is the supervising official overseeing the grand jury investigation.
• No verbatim transcript or audio recording of the proffer session will be made by the government. DOJ prosecutors may take handwritten notes.
Calderwood & Harkness will attend the proffer session as counsel representing TMC's interests. Elaine Forsythe (Responsible Partner) and Aaron Liu (Lead Associate) will be present. Consistent with the Joint Defense and Common Interest Agreement among TMC and certain of its current employees (executed September 15, 2022), Calderwood & Harkness is also representing Mr. Eriksen for purposes of this proffer session. No separate individual counsel has been retained by Mr. Eriksen at this time, and Mr. Eriksen has not indicated a desire to retain separate counsel. Upjohn warnings were previously administered to Mr. Eriksen, as described below, and will be re-administered prior to the proffer session.
B. Upjohn / Corporate Miranda Warnings
Mr. Eriksen was advised during his July 22, 2022 internal investigation interview, and will be re-advised in writing prior to the April 22, 2023 proffer session, of the following:
1. Calderwood & Harkness LLP represents Torchlight Mining Corp., the corporate entity, and does not represent Mr. Eriksen in his individual capacity.
2. The attorney-client privilege with respect to communications between Calderwood & Harkness and Mr. Eriksen in the course of the internal investigation and the proffer preparation belongs to TMC, not to Mr. Eriksen. TMC, acting through its authorized representatives, has the sole authority to assert or waive the attorney-client privilege with respect to those communications.
3. Mr. Eriksen has the right to retain separate personal legal counsel at any time, at his own expense, to represent his individual interests in connection with this investigation or any related proceeding.
4. Information that Mr. Eriksen provides to Calderwood & Harkness, including information provided during the internal investigation interview and during the proffer preparation sessions, may be disclosed to the DOJ or other third parties at the direction of TMC.
Mr. Eriksen acknowledged his understanding of each of these warnings during the July 22, 2022 interview and signed a written acknowledgment, which is maintained in the matter file. He will be asked to confirm his continued understanding and to execute a supplemental acknowledgment prior to the commencement of the proffer preparation sessions.
As of the date of this memorandum, Mr. Eriksen has not indicated any desire to retain separate individual counsel. If, at any point during the preparation process or the proffer session itself, Mr. Eriksen indicates a desire to consult with or retain separate counsel, the preparation and/or the proffer session should be suspended to allow him to do so.
C. Scope of Proffer Protections — Explanation to Witness
During the first preparation session, counsel must clearly explain to Mr. Eriksen the scope and limitations of the proffer protections. Mr. Eriksen should understand the following key points:
• The Proffer Letter provides limited protections only. It is not an immunity agreement. It does not prevent the DOJ from prosecuting Mr. Eriksen based on evidence obtained independently of his proffer statements.
• His statements during the proffer session cannot be used in the government's case-in-chief against him in a criminal prosecution, but they can be used for impeachment if he later testifies inconsistently in any proceeding, including at trial or before the grand jury.
• The government retains the right of derivative use — meaning that information Mr. Eriksen provides during the proffer can be used as a basis for developing other evidence, pursuing additional investigative leads, and obtaining evidence from other sources that could be used against him.
• If Mr. Eriksen provides any materially false or misleading statement during the proffer session, the protections of the Proffer Letter are voided entirely. In such an event, any and all statements made during the session could be used against Mr. Eriksen without limitation. Moreover, a false statement during the proffer session could give rise to independent criminal liability under 18 U.S.C. § 1001 (making false statements to federal agents).
• Mr. Eriksen must be truthful and complete in all of his responses during the proffer session. Any materially false or misleading statement — whether by commission or by significant omission — could expose both Mr. Eriksen individually and TMC's cooperation position to serious adverse consequences. TMC's ability to obtain favorable treatment from the DOJ, including the possible negotiation of a non-prosecution agreement, depends in part on the credibility and completeness of the proffer testimony provided by TMC witnesses, including Mr. Eriksen.
• The proffer does not constitute a grant of immunity, whether formal or informal, and should not be understood by Mr. Eriksen as a guarantee that he will not be charged with any criminal offense.
These points must be communicated to Mr. Eriksen clearly and unambiguously. Counsel should confirm that Mr. Eriksen understands each point and should document his acknowledgment in the preparation session notes.
IV. Anticipated Lines of DOJ Questioning
Based on Calderwood & Harkness's understanding of the investigation, the evidence developed during the internal investigation, the experience gained from Sandra Chu's proffer session on March 10, 2023, and our assessment of the government's theory of the case, the following are the anticipated lines of questioning that DOJ prosecutors are likely to pursue during Mr. Eriksen's proffer session. These are organized by subject matter.
A. NASMC Conference Attendance
The DOJ is expected to devote significant time to Mr. Eriksen's attendance at NASMC quarterly conferences during the Conspiracy Period (approximately January 2017 through August 2021). The NASMC conferences are central to the government's theory of the case, as the DOJ alleges that the anticompetitive side meetings between Holt, Edgerton, and Tsang occurred on the margins of these events. Mr. Eriksen's presence at four such conferences during the Conspiracy Period makes this an inevitable area of inquiry.
Anticipated questions in this area include the following:
• Which specific NASMC conferences did Mr. Eriksen attend during the Conspiracy Period? What were the dates and locations of each conference? Particular attention is likely to be paid to conferences held in Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida.
• What was the stated business purpose for Mr. Eriksen's attendance at each conference? Did he attend at his own initiative, or was his attendance directed or recommended by a supervisor?
• Who else from TMC attended the same NASMC conferences? Specifically, did Gavin Holt attend any of the same conferences that Mr. Eriksen attended? If so, which ones, and did they travel together?
• Did Mr. Eriksen observe Mr. Holt meeting separately or privately with individuals from Ridgecrest Minerals or Pinnacle Earth Resources during any NASMC conference? If so, when and where? What did Mr. Eriksen observe?
• Did Mr. Eriksen himself have any meetings, conversations, or social interactions with Carl Edgerton (Ridgecrest), Kevin Tsang (Pinnacle), or any other personnel from those companies at any NASMC conference? If so, what was discussed?
• Were any pricing, customer allocation, bidding, or other competitively sensitive topics discussed in any setting at the NASMC conferences — whether in formal sessions, informal networking events, or social gatherings?
• Did Mr. Eriksen attend any dinners, receptions, cocktail hours, hospitality suites, or off-agenda meetings at NASMC conferences where competitor personnel were present? If so, who was present, and what was discussed?
• Did Mr. Eriksen receive any materials, documents, or communications at NASMC conferences from competitor personnel?
• Was Mr. Eriksen aware of any meetings or events at NASMC conferences that were not reflected on the official conference agenda?
Based on Ms. Chu's proffer session, DOJ prosecutors are methodical in walking through each conference chronologically and may use registration records, seating charts, and hotel records to refresh the witness's recollection and to test the consistency of the witness's account.
B. Relationship with Gavin Holt
A second major area of anticipated questioning concerns Mr. Eriksen's working relationship with Gavin Holt, given Mr. Holt's central role in the alleged conspiracy. DOJ prosecutors will likely seek to determine the extent to which Mr. Holt shared information about competitor contacts with subordinates, including Mr. Eriksen, and whether pricing or customer-allocation decisions that Mr. Eriksen implemented may have been the product of Mr. Holt's coordination with competitors.
Anticipated questions in this area include the following:
• What was Mr. Eriksen's reporting relationship to Mr. Holt? How frequently did they interact? In what contexts — in-person meetings, phone calls, emails, other communications?
• Did Mr. Holt ever share competitive intelligence about Ridgecrest, Pinnacle, or other competitors with Mr. Eriksen? If so, what type of information was shared, and on what occasions?
• Did Mr. Holt ever share specific pricing information about competitors' pricing for high-purity feldspar, industrial talc, or rare-earth concentrates? If so, what did Mr. Holt tell Mr. Eriksen about the source of that information?
• Did Mr. Holt ever instruct Mr. Eriksen regarding pricing strategy or specific pricing levels in a manner that appeared to Mr. Eriksen to be coordinated with, or informed by, competitors' pricing?
• Was Mr. Eriksen aware of Mr. Holt's communications with individuals at Ridgecrest or Pinnacle, whether by email, telephone, in-person meetings, or any other means?
• Was Mr. Eriksen aware of the VaultChat encrypted messaging application? Was Mr. Eriksen aware that Mr. Holt or any other TMC employee used VaultChat or any similar encrypted messaging platform to communicate with individuals outside of TMC?
• Did Mr. Holt ever reference or allude to "understandings," "arrangements," "agreements," or "the usual approach" with competitors in any conversation with Mr. Eriksen? Did Mr. Holt ever make statements suggesting that TMC's pricing or customer-allocation decisions were coordinated with other industry participants?
• Did Mr. Eriksen ever observe or become aware of any communications between Mr. Holt and competitor personnel that he considered unusual, concerning, or potentially inappropriate?
Given that Mr. Holt has asserted his Fifth Amendment privilege and has declined to cooperate with either the internal investigation or the DOJ, the government is likely to place particular emphasis on developing a factual record regarding Mr. Holt's conduct through the testimony of subordinates, including Mr. Eriksen and Ms. Chu.
C. Pricing Practices — U.S. Specialty Minerals Division
DOJ prosecutors are expected to probe in detail the pricing processes and practices of TMC's U.S. Specialty Minerals Division, seeking to understand how prices were set, who had authority to approve pricing decisions, and whether the internal pricing process reflected or facilitated coordination with competitors.
Anticipated questions in this area include the following:
• How were prices set for high-purity feldspar, industrial talc, and rare-earth concentrates in Mr. Eriksen's Western Region? What was the process for establishing initial pricing and for making subsequent adjustments?
• What authority did Mr. Eriksen have to set or adjust prices for customers in the Western Region? Was he authorized to deviate from published price lists? If so, to what extent and under what circumstances?
• Did Mr. Eriksen receive pricing guidance or instructions from Mr. Holt? If so, how frequently, in what form, and with what level of specificity?
• Did Mr. Eriksen receive pricing guidance or instructions from Sandra Chu (Director, Pricing Analytics)? If so, how did Ms. Chu's role interact with Mr. Holt's role in the pricing process?
• Were there instances during the Conspiracy Period where pricing changes implemented by TMC in the Western Region appeared to coincide in timing, magnitude, or direction with competitor price changes? If so, was Mr. Eriksen aware of such coincidences, and did he ever discuss them with anyone at TMC?
• Did Mr. Eriksen have access to competitor pricing information? If so, through what channels? Did he obtain such information from NASMC publications, from customers, from trade media, from internal TMC sources, or from any other means?
• Did Mr. Eriksen ever raise concerns with Mr. Holt, Ms. Chu, or anyone else at TMC about the basis for pricing decisions or the apparent correlation between TMC pricing changes and competitor pricing changes?
This line of questioning will likely be informed by the DOJ's analysis of TMC's pricing data, which was produced in response to the grand jury subpoenas. The government may present Mr. Eriksen with charts or timelines showing the correlation between TMC price changes and competitor price changes and ask him to explain or account for the observed patterns.
D. Customer Allocation and Bid-Rigging
A further anticipated area of questioning relates to the DOJ's theory that the alleged conspiracy involved not only price-fixing but also the allocation of customer accounts and the rigging of bids for specialty minerals supply contracts.
Anticipated questions in this area include the following:
• Was Mr. Eriksen ever instructed — by Mr. Holt, Ms. Chu, or anyone else at TMC — to avoid competing for certain customer accounts in the Western Region?
• Were there customers in the Western Region where TMC chose not to submit a bid, or chose to submit a bid at a price that was uncompetitive or not intended to win the business? If so, what was the reason for those decisions?
• Did Mr. Eriksen have any understanding of "territory" or customer-account assignments that corresponded to, or was designed to complement, the territories or account assignments of competitors, specifically Ridgecrest or Pinnacle?
• Was Mr. Eriksen involved in, or aware of, any coordination with competitors regarding the submission of bids for specialty minerals contracts, whether through Mr. Holt or through any other channel?
• Did Mr. Eriksen ever observe patterns in the bidding process that suggested coordination — for example, recurring situations where the same competitor consistently won certain accounts or where TMC consistently lost to the same competitor on certain accounts?
• Were there discussions within TMC about which accounts to pursue aggressively and which to deprioritize, and if so, what was the rationale articulated for those decisions?
The customer-allocation and bid-rigging theories are potentially significant to Mr. Eriksen's exposure because, as Regional Sales Manager for the Western Region, he was directly responsible for the customer relationships and bidding activity in his territory. The DOJ may attempt to establish that allocation or bid-rigging patterns are evident in the Western Region's bid history, even if Mr. Eriksen was unaware of the underlying coordination.
E. Knowledge of Other Individuals' Conduct
Beyond the specific areas described above, DOJ prosecutors are likely to probe whether Mr. Eriksen has knowledge — whether direct or circumstantial — of the conduct of other individuals who are implicated or potentially implicated in the alleged conspiracy.
Anticipated questions in this area include the following:
• Was Mr. Eriksen aware of Sandra Chu receiving pricing-adjustment instructions from Mr. Holt that seemed unusual, unexplained, or inconsistent with normal business justifications?
• Did Ms. Chu or anyone else at TMC ever discuss with Mr. Eriksen any concerns about the basis for pricing instructions issued by Mr. Holt?
• Did Mr. Eriksen ever observe interactions between Mr. Holt and competitor personnel outside of the NASMC conference context — for example, at other industry events, customer visits, or social occasions?
• Did Mr. Eriksen ever have discussions with other TMC employees — whether in his regional sales team or elsewhere in the organization — about the possibility that TMC's pricing or business conduct was being coordinated with competitors?
• Was Mr. Eriksen aware of any TMC employee expressing concern or discomfort about directions received from Mr. Holt regarding pricing or customer-account decisions?
• Did Mr. Eriksen have any knowledge of contacts between TMC personnel and personnel of Cascade Chemical Supply Co. that related to pricing, customer allocation, or bidding?
The purpose of these questions is to determine whether Mr. Eriksen can provide corroborating testimony regarding the conduct of Mr. Holt and others, even if Mr. Eriksen himself was not a direct participant in the alleged conspiracy. The DOJ may be attempting to build a mosaic of circumstantial evidence drawn from multiple witnesses.
F. TMC's Antitrust Compliance Program
Finally, DOJ prosecutors are likely to ask Mr. Eriksen about his experience with TMC's antitrust compliance program. The existence and effectiveness of the compliance program is relevant both to the DOJ's assessment of TMC's corporate culpability and to its evaluation of the NPA terms.
Anticipated questions in this area include the following:
• Was Mr. Eriksen aware that TMC maintained an antitrust compliance program? When did he first become aware of the program?
• Did Mr. Eriksen receive antitrust compliance training? How frequently was training provided? When was the last training session he attended? (Note: Based on TMC records, the last annual antitrust compliance training attended by Mr. Eriksen was conducted in approximately 2018. The cessation of annual training after 2018 is a potential area of concern.)
• What was the content of the compliance training? Was it specific to the specialty minerals industry, or was it generic in nature?
• Was Mr. Eriksen aware of TMC policies regarding contacts with competitors, including limitations on the types of information that could be exchanged with competitors at trade-association events?
• Did TMC provide specific guidelines regarding conduct at trade-association events such as NASMC conferences? If so, what were those guidelines, and did Mr. Eriksen follow them?
• Did Mr. Eriksen understand the compliance program to include a mechanism for reporting suspected antitrust violations? If so, was he aware of how to make such a report?
• Was Mr. Eriksen ever asked to certify compliance with TMC's antitrust policies?
The DOJ may use this line of questioning to assess the robustness of TMC's compliance culture and to explore whether deficiencies in the compliance program contributed to the alleged conduct.
V. Key Documents Likely to Be Discussed
The following categories of documents are likely to be referenced or presented to Mr. Eriksen by DOJ prosecutors during the proffer session. Counsel should review all identified documents with Mr. Eriksen during the preparation sessions, and Mr. Eriksen should be prepared to discuss his recollection and understanding of each document.
A. NASMC Conference Materials
DOJ is likely to present the following categories of NASMC-related documents:
• Official conference agendas for the four NASMC quarterly conferences attended by Mr. Eriksen during the Conspiracy Period. These agendas list the scheduled sessions, speakers, and events, and the DOJ may use them to identify gaps in the schedule — such as unstructured networking periods or evening events — during which the alleged side meetings may have occurred.
• Attendance lists and registration records for the same conferences. These documents identify which individuals from TMC, Ridgecrest, Pinnacle, and other companies were registered for and attended each conference. The DOJ will likely use these records to establish the co-presence of Mr. Eriksen, Mr. Holt, Mr. Edgerton, and Mr. Tsang at specific conferences.
• Expense reports and travel records submitted by Mr. Eriksen for each NASMC conference. These records may include hotel reservations, meal receipts, and other documentation that could indicate Mr. Eriksen's activities during the conferences, including any meals or events attended with individuals from competitor firms.
• Any email or other correspondence between Mr. Eriksen and Mr. Holt regarding NASMC conference logistics, including travel arrangements, meeting schedules, and post-conference follow-up.
During the preparation sessions, Mr. Eriksen should be walked through each conference chronologically, reviewing the relevant agendas and attendance lists, and asked to reconstruct his activities to the extent his recollection permits.
B. Pricing Documents
Pricing-related documents that are likely to be discussed include the following:
• TMC published price lists for the Western Region during the Conspiracy Period. These documents set forth the standard pricing for high-purity feldspar, industrial talc, and rare-earth concentrates that Mr. Eriksen was authorized to offer to Western Region customers, subject to any approved deviations.
• Internal pricing memoranda and email correspondence between Mr. Eriksen and Sandra Chu or Gavin Holt regarding pricing adjustments. These documents are likely to include directives from Mr. Holt to Mr. Eriksen regarding specific price changes for specific products or customers, as well as any analysis or supporting rationale provided by Ms. Chu.
• Bid documents for customer contracts in which TMC participated through the Western Region, including requests for proposal, TMC's bid submissions, and any internal bid-review or bid-approval communications.
The DOJ is likely to focus on pricing documents that correspond in timing to known or suspected instances of competitor price coordination. Counsel should identify in advance which price changes in the Western Region correlate with the pricing-coordination events identified in the internal investigation and should ensure that Mr. Eriksen is prepared to address those specific instances.
C. Communications Involving Eriksen
The following categories of Mr. Eriksen's communications have been identified as potentially relevant:
• Emails to or from Mr. Eriksen that reference Ridgecrest Minerals, Pinnacle Earth Resources, or their personnel (including Mr. Edgerton and Mr. Tsang) by name or by obvious reference. The internal investigation's document review identified a limited number of such communications, none of which contained evidence of direct coordination with competitors.
• Emails or other communications from Mr. Eriksen referencing pricing benchmarks published by NASMC, including the NASMC Quarterly Pricing Report and the NASMC Market Conditions Survey. The DOJ may explore whether Mr. Eriksen relied on NASMC pricing data as a basis for pricing decisions and whether he was aware that the NASMC data could have been influenced by coordinated reporting from TMC and its competitors.
• It is noted that Calderwood & Harkness's internal investigation encompassed the review of approximately 555,000 documents — comprising approximately 487,000 documents produced in response to the first grand jury subpoena and approximately 68,000 documents produced in response to the second grand jury subpoena. Within this document universe, Mr. Eriksen's communications with competitor personnel were limited in number and did not reveal evidence of coordination. Importantly, no VaultChat messages involving Mr. Eriksen were identified; the VaultChat communications recovered during the investigation involved Mr. Holt and competitor personnel, not Mr. Eriksen.
While the limited nature of Mr. Eriksen's direct communications with competitors is favorable from a defense perspective, counsel should be prepared for the possibility that DOJ may present documents obtained from other sources — including from Ridgecrest, Pinnacle, or Cascade — that reference Mr. Eriksen or his conduct in ways not previously known to Calderwood & Harkness.
D. Internal Investigation Findings Relevant to Eriksen
The DOJ may also reference materials generated during Calderwood & Harkness's internal investigation that pertain to Mr. Eriksen, to the extent such materials have been shared with the DOJ as part of TMC's cooperation. Relevant documents include:
• Portions of the Trade Association Meeting Analysis memorandum, dated October 10, 2022, which correlates Mr. Eriksen's attendance at NASMC conferences with the dates of alleged coordination events identified through other investigative work. This memorandum identifies specific conference dates on which Mr. Eriksen and Mr. Holt were both in attendance, and maps those dates against known communications between Mr. Holt and competitor personnel.
• Certain Gavin Holt emails in which Mr. Eriksen is referenced in passing — for example, emails in which Mr. Holt discusses Mr. Eriksen's pricing performance, customer relationships, or conference attendance. These references do not directly implicate Mr. Eriksen in the alleged conduct, but the DOJ may use them to probe the extent of Mr. Holt's reliance on Mr. Eriksen in implementing the alleged pricing scheme.
Mr. Eriksen should be prepared to review and discuss any such documents presented to him during the proffer session. He should be instructed to read each document carefully, take his time, and provide his honest recollection rather than speculating about the meaning or context of communications authored by others.
VI. Preparation Session Notes and Guidance to Witness
A. Pre-Session Preparation Meetings
Two preparation sessions have been scheduled with Mr. Eriksen in advance of the April 22, 2023 proffer session:
First Preparation Session: Scheduled for April 11, 2023, at Calderwood & Harkness's San Francisco office, 555 California Street, 40th Floor. The session is scheduled to begin at 9:00 a.m. and is expected to last approximately four hours. Attendees will include Thomas Eriksen, Elaine Forsythe (Responsible Partner), and Aaron Liu (Lead Associate). The first session will cover the following: re-administration of Upjohn warnings; review of the proffer agreement terms and protections; discussion of the anticipated lines of DOJ questioning; review of key documents likely to be discussed; and initial topical guidance for each area of anticipated questioning.
Second Preparation Session (Mock Q&A): Scheduled for April 18, 2023, at the same location. The session is scheduled to begin at 9:00 a.m. and is expected to last approximately five hours. Attendees will include Thomas Eriksen, Elaine Forsythe, and Aaron Liu. The second session will consist primarily of a mock question-and-answer exercise in which counsel will role-play as DOJ prosecutors and put Mr. Eriksen through a simulated proffer session covering the anticipated lines of questioning. This exercise is designed to familiarize Mr. Eriksen with the format of the proffer session, to identify areas where his responses may be unclear, inconsistent, or potentially problematic, and to refine his answers through guided practice. The mock Q&A will also include a document walk-through exercise in which key documents are presented to Mr. Eriksen as they might be presented by DOJ prosecutors.
B. General Witness Guidance
The following general guidance should be communicated to Mr. Eriksen during the preparation sessions and reinforced on the morning of the proffer session:
1. Answer only the question asked. Mr. Eriksen should listen carefully to each question and answer only what is being asked. He should not volunteer information beyond the scope of the question or attempt to explain or contextualize matters that were not the subject of the question. Brevity and precision are preferred. If a "yes" or "no" answer is appropriate and complete, he should give a "yes" or "no" answer.
2. If you do not know, say so. If Mr. Eriksen does not know the answer to a question, he should state clearly: "I don't know." He should not speculate, guess, or reconstruct what might have happened. Similarly, if Mr. Eriksen does not recall a specific event, conversation, or detail, he should state: "I don't recall" or "I don't have a specific recollection of that." There is no obligation to provide an answer to every question, and "I don't know" and "I don't recall" are fully acceptable answers so long as they are truthful.
3. Look to counsel before answering if unsure. If Mr. Eriksen is unsure whether a question calls for information that may be protected by the attorney-client privilege, the work-product doctrine, or that is outside the agreed scope of the proffer, he should pause and look to counsel before answering. Counsel will intervene if necessary. Mr. Eriksen should not feel pressure to answer immediately; it is appropriate to take a moment to think before responding.
4. Be prepared for document walk-throughs. DOJ prosecutors may present Mr. Eriksen with specific documents during the proffer session — including emails, memoranda, conference materials, and pricing records — and ask for his recollection and interpretation of those documents. Mr. Eriksen should take time to read each document carefully before answering any questions about it. If the document is unfamiliar to him, he should say so. If he does not recall the circumstances in which a document was created or received, he should say so. He should not guess about the meaning or purpose of a document.
5. Be truthful in all responses. This is the single most important instruction. Mr. Eriksen must be truthful and complete in all of his responses during the proffer session. Any materially false or misleading statement could result in criminal liability under 18 U.S.C. § 1001, could void the protections of the Proffer Letter, and could undermine TMC's cooperation credit with the DOJ. If the truth is unfavorable to TMC or to Mr. Eriksen, it must still be told. Counsel will manage the strategic implications; Mr. Eriksen's role is to be truthful.
C. Specific Topical Guidance
1. NASMC Conferences
With respect to questions about NASMC conference attendance, Mr. Eriksen should describe his attendance factually and straightforwardly. He should identify which conferences he attended, what formal sessions and events he participated in, and what the stated business purpose of his attendance was. If Mr. Eriksen observed Mr. Holt meeting separately with competitor personnel at any NASMC conference, he should describe what he observed — who was present, where the meeting occurred, and what he saw — without characterizing the substance of those meetings unless he has direct knowledge of what was discussed. If Mr. Eriksen did not observe any improper conduct at the conferences, he should state this clearly and affirmatively. He should not embellish his account, speculate about what may have occurred outside his presence, or offer opinions about the purposes of meetings he did not attend.
2. Pricing Practices
With respect to questions about TMC's pricing practices, Mr. Eriksen should describe the internal pricing process as he understood it from his position as Regional Sales Manager for the Western Region. This includes the receipt of published price lists, the application of regional adjustments within his authorized discretion, the role of Sandra Chu in pricing analytics, and the role of Gavin Holt in setting and approving pricing strategy. Mr. Eriksen should not speculate on whether price changes that he implemented were coordinated with competitors if he has no direct knowledge of such coordination. If he simply received pricing instructions and followed them in good faith, he should describe that process and his understanding of it without embellishment or attribution of motive.
3. Relationship with Holt
With respect to questions about his relationship with Gavin Holt, Mr. Eriksen should describe his professional interactions with Mr. Holt factually and in a measured manner. He should describe the frequency and nature of their communications, the types of instructions and guidance he received from Mr. Holt, and the context in which they interacted at NASMC conferences and in other settings. If Mr. Holt never discussed competitor communications with Mr. Eriksen, Mr. Eriksen should state this affirmatively and without qualification. If there were instances where Mr. Holt shared competitive intelligence and Mr. Eriksen understood the source to be public or customer-derived, he should describe that understanding. Mr. Eriksen should neither minimize nor exaggerate the nature of his relationship with Mr. Holt.
4. VaultChat. Mr. Eriksen has stated in his internal investigation interview that he was not aware of the VaultChat encrypted messaging application and did not use it at any time. If this question arises during the proffer session, as it almost certainly will, Mr. Eriksen should reaffirm this statement clearly and unambiguously. He should state that he did not use VaultChat, was not aware that TMC employees used it to communicate with competitors, and did not learn of its existence until he was informed during the internal investigation process. If DOJ prosecutors press on this point or ask follow-up questions, Mr. Eriksen should maintain his position so long as it is truthful.
D. Demeanor and Practical Guidance
In addition to the substantive guidance above, the following practical guidance should be communicated to Mr. Eriksen:
• Maintain a cooperative and professional demeanor. Mr. Eriksen's voluntary appearance at the proffer session is part of TMC's broader cooperation strategy. His demeanor should reflect that posture — cooperative, respectful, and professional. He should not be evasive, defensive, or combative in his responses.
• Do not be argumentative with DOJ prosecutors. Even if a question seems unfair, repetitive, or based on a misunderstanding, Mr. Eriksen should answer calmly and without argument. If a question is objectionable, counsel will raise the issue.
• Take time to think before answering. There is no clock running. The proffer session is not a deposition with page limits. Mr. Eriksen should take whatever time he needs to consider each question and formulate his response before speaking. A pause to think is far preferable to a hasty answer that must later be corrected or clarified.
• Request breaks as needed. If Mr. Eriksen needs a break at any point during the proffer session — whether for personal reasons or because he wishes to consult with counsel — he should feel free to request one. Counsel will be present throughout the session, and breaks provide an opportunity for counsel to confer with Mr. Eriksen privately. Mr. Eriksen should be advised that if counsel requests a break, he should immediately cease speaking and wait until the break has been taken.
• Dress and appearance. Mr. Eriksen should dress in business-professional attire for the proffer session. The goal is to present a serious, credible, and professional image to the DOJ prosecutors.
VII. Strategic Considerations
A. TMC's Cooperation Posture
Mr. Eriksen's proffer session is a key element of TMC's cooperation with the DOJ Antitrust Division, as outlined in the Cooperation Proffer submitted by Calderwood & Harkness on behalf of TMC on February 15, 2023. The Cooperation Proffer committed TMC to, among other things, making current and former employees available for voluntary proffer sessions and interviews with DOJ investigators. Mr. Eriksen's session is the second such proffer, following Sandra Chu's session on March 10, 2023.
A credible and forthcoming performance by Mr. Eriksen during the proffer session will strengthen TMC's position in the ongoing negotiations with the DOJ regarding a non-prosecution agreement ("NPA"). The DOJ evaluates the quality and genuineness of a company's cooperation in determining the form and terms of any resolution. A witness who is perceived as evasive, untruthful, or uncooperative undermines the company's cooperation credit, whereas a witness who is forthcoming, credible, and consistent with the documentary record enhances it.
It should be noted that, as of the date of this memorandum, the DOJ has not yet formally communicated its willingness to enter into NPA negotiations with TMC. Based on informal communications between Elaine Forsythe and DAAG Julia Stafford-Hayes, the proffer sessions with TMC witnesses are among the factors that the DOJ is weighing in deciding whether to offer NPA terms. Thus, the April 22 proffer session has potential significance beyond Mr. Eriksen's individual situation — it bears directly on the corporate resolution pathway.
B. Eriksen's Individual Exposure
Based on the findings of Calderwood & Harkness's internal investigation, as presented to the TMC Board of Directors on January 20, 2023, the evidence of Mr. Eriksen's direct participation in the alleged conspiracy is ambiguous. No documentary evidence was identified establishing that Mr. Eriksen participated in or had knowledge of anticompetitive agreements between TMC and its competitors. His attendance at NASMC conferences, while placing him in proximity to the alleged side meetings, does not by itself establish involvement. His internal investigation interview was consistent with a person who performed his sales duties in good faith and without knowledge of coordination at higher levels of the organization.
The DOJ may be seeking to use Mr. Eriksen primarily as a corroborating witness against Mr. Holt, Mr. Edgerton, and/or Mr. Tsang — that is, as a witness who can provide context about TMC's pricing practices, Mr. Holt's conduct, and the NASMC conference environment, rather than as a target of the investigation. This interpretation is consistent with the DOJ's focus during the Chu proffer session, which appeared oriented toward developing evidence against Mr. Holt rather than establishing Ms. Chu's individual culpability.