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Interpleader Plaintiffs,

-against- 15 Civ. 5345 (AJN) (SN)

foreign city, and BTA BANK JSC,

Interpleader Defendants.


Crossclaim Plaintiffs,



Crossclaim Defendants.


I, NICOLAS BOURG, hereby declare as follows under penalty of perjury:

1. I am a Belgian national, and currently reside in Belgium, where I was born. I

attended the University of Leuven, where I studied economics. After my education I worked at

a family business, C.P. Bourg, before transitioning to work in real estate finance.

2. I was the sole director of Triadou SPV S.A. (“Triadou”) from its formation in

2011 by myself and Ilyas Khrapunov (“Ilyas”) until my termination in late 2014. As such, I

worked closely with Ilyas on all aspects of Triadou’s operations and management, and

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executed most of Triadou’s investments, including those in the United States, during that time.

Relationship with Ilyas

3. In 2006, I was involved in a real estate deal in Switzerland. As part of that

transaction, I first met Ilyas. Ilyas was attending university in Switzerland at that time, but

expressed an interest in real estate investing. In 2008-2009, I again met Ilyas in Switzerland, at

which time he proposed forming a real estate investment fund together.

4. At that time, Ilyas told me that he had access to large amounts of capital, both

through his immediate family and through his father-in-law, Mukhtar Ablyazov (“Ablyazov”).

Ilyas stated that his immediate and extended family were in exile from Kazakhstan after being

persecuted by that country’s government, and for that reason, they needed to keep their

finances secret and conceal their business dealings.

Formation of Triadou

5. In or about 2011, Ilyas contacted me seeking to create a real estate fund that

would be a subsidiary of an entity controlled by his family, the Swiss Development Group,

formally, SDG Capital S.A. (“SDG”). The real estate fund proposed by Ilyas would invest in

real estate opportunities worldwide, including in the United States.

6. At Ilyas’s direction, I formed a series of entities under the laws of

Luxembourg for the purpose of investing his family’s funds in real estate. One of these entities

was Triadou, an investment vehicle wholly owned and controlled by SDG. SDG itself was

owned and controlled by Ilyas and his family, and used to conceal the movement and

investment of his family’s money, including that of Ablyazov.

7. Triadou is a shell entity for SDG, and has no corporate presence separate from

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SDG. Triadou had no employees and no offices or headquarters. Although I was Triadou’s

sole director, I was paid by SDG as an “independent consultant,” conducted all business

meetings at SDG’s offices, had an SDG e-mail address, and received all of my instructions

from Ilyas, acting as SDG’s president.

8. Monthly meetings occurred in Geneva between myself, Ilyas, Peter Sztyk (an

advisor of Ilyas) and, at times, my longtime business partner, Laurent Foucher. The agenda at

each meeting was to discuss all investments of the Ablyazov-Khrapunov family’s’ money (i.e.,

not only money invested through SDG or Triadou). At those meetings, I frequently received

directions from Ilyas regarding various business ventures, including Triadou and others that

the Ablyazov-Khrapunov family was involved in.

9. Although I was the sole director of Triadou, Ilyas was in charge of Triadou’s

operations and investments. I would research investment opportunities, Ilyas would select

which deals to invest in, and then he would negotiate the deal and organize payment. However,

Ilyas repeatedly informed me that the person who gave him final approval for all deals was

Ablyazov. Ilyas stated to me that he was managing a large amount of Ablyazov’s money, and

for that reason, Ablyazov was the ultimate decision maker on all of Triadou’s investments.

According to Ilyas, he had significant freedom in the management of various investments, but

the final decisions were always received directly from Ablyazov. This arrangement was

confirmed for me on several occasions when I observed that Ilyas needed to wait for

Ablyazov’s approval before authorizing a particular Triadou investment or payment.

10. Ilyas told me that he often used a company named Telford International

Limited (“Telford”) to move Ablyazov’s funds to execute these deals. Ilyas informed me that

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Telford was an Ablyazov investment entity used to conceal and move his funds, and was

controlled by Eesh Aggerwal, a financial advisor loyal to Ablyazov.

Triadou's United States Investments

11. At Ilyas’s direction, I contacted Eric Elkain, whom I knew from my

professional experience to be an agent of Joseph Chetrit, a well-known real estate developer in

New York. Elkain agreed to arrange a meeting between Chetrit and Ilyas to discuss possible

investments by Ilyas in the United States.

12. In or about early 2012, Chetrit and his partner met with Ilyas and myself in

Geneva, Switzerland, to assess possible investment opportunities. At that meeting, Ilyas stated

to Chetrit that he and his extended family were political opponents of the current government

of Kazakhstan, and had to keep their business dealing covert in order to avoid worldwide

persecution from that government. Chetrit stated that he sympathized with Ilyas’ professed

situation, as his own family had been politically persecuted in Morocco. (I know from official

public documents that the U.S. State Department has held out the prosecution and jailing of

Chetrit’s father and brother as an example of Morocco’s denial of fair public trials. A true and

correct copy of the State Department’s Morocco Report on Human Rights Practices for 1996 is

attached as Exhibit 1).

13. The meeting was productive, and shortly thereafter Ilyas and I traveled to New

York and met with Chetrit again to discuss specific investment opportunities.

14. As a result of these discussions, Ilyas agreed to invest with Chetrit through

Triadou in a number of real estate opportunities in New York City. These included

investments in the Flatotel and the Cabrini Medical Center condominium conversion

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developments in New York City.

15. The Flatotel was a 289-room business hotel, located at 135 West 52nd St, New

York, New York. The Cabrini Medical Center hospital campus closed in 2008 and is now

comprised of several buildings containing approximately 250 condominium units. The Chetrit

Group has been executing plans to convert both properties into luxury condominiums, and

both are close to completion.

16. Chetrit held a 75% interest in the Flatotel, while 25% of the development was

owned by another developer, David Bistricer. Chetrit had created a series of limited liability

entities, including CF 135 FLAT LLC and CF 135 West Member LLC, to hold his 75%

interest in the Flatotel.

17. Chetrit offered to sell half of the Chetrit Group’s 75% investment in the

Flatotel to Triadou. Under this agreement, Chetrit would manage the development of the

Flatotel while Triadou would passively invest capital. Profits would be split equally between

Triadou and Chetrit, but Triadou would be responsible for 70% of CF 135 West Member

LLC’s capital obligations. It was estimated that Triadou would ultimately need to provide at

least $40 million in capital for the deal. At Ilyas’ direction, after he obtained Ablyazov’s

approval, I agreed to this proposal. Attached as Exhibit 2 is a letter dated October 23, 2012,

from the Chetrit Group, outlining the expected terms of the investment.

18. Based on evaluations of the real estate market in New York City at that time,

Triadou’s interest in this transaction was estimated to ultimately be worth at least $100 million

with reimbursement of the initial investment.

19. After this deal was agreed to, Triadou began to encounter problems moving

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funds for its initial equity payments to Chetrit through ordinary banking channels in


20. Telford funded all of the money Triadou was obligated to invest in the

Flatotel. Telford’s accounts were at Federal Bank of the Middle East (“FBME”) in Cyprus.

From Ilyas, I learned that attempts to transfer funds to from Telford to Triadou, to then be sent

to Chetrit, were unsuccessful, and that correspondent banks in Luxembourg refused to accept

funds from Telford’s accounts. (I know from official public sources that the U.S. Department

of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) subsequently imposed a

prohibition on U.S. financial institutions from opening or maintaining a correspondent account

on behalf of FBME on July 29, 2015. A true and correct copy of FinCEN’s July 29, 2015

announcement of that rule is attached as Exhibit 3)

21. As a result, I contacted counsel for Chetrit and proposed that the funds for

Triadou’s equity payments be wired directly from Telford to Chetrit’s escrow account held by

his counsel. Chetrit’s counsel agreed, and the wires were executed from Telford to Chetrit’s


22. I attach as Exhibit 4 an e-mail chain between myself and Joseph Chetrit, dated

December 12, 2013, at 3:56 p.m. EST, forwarding numerous Society for Worldwide Interbank

Financial Telecommunication, or “SWIFT”, messages confirming that these funds were wired

directly from Telford’s accounts at FBME to the escrow account held by Chetrit’s counsel.

23. Included at the beginning of chain is an email I received from Ilyas, using a

pseudonymous email account of his: “Elvis Elvis” at the email address

“” Exhibit 4, at 9.

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24. This email chain also shows Ilyas receiving these SWIFT confirmations from

Aggarwal, Ablyazov’s adviser who controlled the Telford accounts. Exhibit 4, at 9.

25. I attach a compilation of these SWIFT records I received from Ilyas as

Exhibit 5.

26. Through Triadou, Ilyas also entered a second investment with Chetrit shortly

thereafter. In late 2012, Triadou agreed to invest $12 million in the Cabrini Medical Center

conversion, a joint venture between Chetrit and another private developer to convert a former

medical center in New York City into luxury condominiums.

27. Due to increasing scrutiny of Ablyazov’s finances, the $12 million investment

became impossible. I discussed this obstacle with Chetrit, who agreed that Triadou would

invest half the originally-agreed amount, $6 million, until more funds became available. Again,

the funds to close this deal were transferred directly from the offshore accounts of Telford on

May 20, 2013, to accounts held by Chetrit’s counsel. See Ex. 5, at ¶ 7.

28. The Flatotel and Cabrini were only two of Triadou’s investments. Attached as

Exhibit 6 is a corporate profile and financial report of Triadou, dated November 14, 2013. This

document identifies that I was the sole director of Triadou (Ex. 6, at 3), that Telford was

responsible for funding Triadou’s investments (Ex. 6, at 4), and provides a summary of

Triadou’s investments at that time (Ex. 6, at 6).

The Sham Sale of SDG after Triadou’s U.S. Investments

29. In March of 2013, After Triadou’s investment in the Flatotel, and after

Telford began funding that investment, Ilyas purported to sell SDG to a friend of his, Philippe

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30. Ilyas met Glatz through their mutual involvement in a Swiss political party,

the Party Democrat Christian. Ilyas informed me that Glatz was an ideal front and the best

protection to help insulate Ilyas and his extended family’s money from scrutiny by law

enforcement or financial institutions.

31. As explained above, SDG was created with the funds of the Khrapunov

extended family, members of which (including Ablyazov, and Ilyas’s father, Viktor

Khrapunov) I understood to be facing criminal investigations in Kazakhstan, and eventually, in


32. SDG was managed by Ilyas and used to move and invest both his family’s

money and that of Ablyazov. While the Flatotel deal was being negotiated, pressure on Ilyas

and his extended family began to mount as the investigations in Kazakhstan extended into

Switzerland and his extended family’s assets began to be frozen or scrutinized. According to

Ilyas, it became increasingly hard for Telford to fund Triadou or SDG’s investments. A sale of

SDG to Glatz was described to me by Ilyas as the solution to this increasing scrutiny on SDG.

33. At that time, Glatz was held out as the owner and President of SDG, but in

reality, Ilyas continued to run all aspects of the company, ostensibly as an “external adviser” to

SDG. The supposed sale of SDG to Glatz was conducted in 2013 as if it were a real

transaction, with money changing hands from Glatz to the Khrapunov family. However, Ilyas

informed me that the money paid by Glatz for SDG was itself loaned to Glatz by Ilyas, thus

creating an apparent sale, but effectively leaving the parties in the same position financially.

This sham sale of SDG to Glatz was directly in response to banks’ refusals to move money for

SDG, and was intended to increase SDG’s investment opportunities.

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34. Consistent with Ilyas’ description to me of Glatz being nothing more than a

nominee, during all the years that I ran Triadou and was involved in other related entities, I

never saw Glatz in any meetings, nor did he ever come to the U.S. to participate in any

meetings. Glatz never took any role in the decision-making process and was not copied on e-

mails during this three-year period. I only met Glatz on three occasions, for approximately 10

minutes each time, and he never discussed SDG’s or Triadou’s operations in those brief

meetings, which were purely social.

35. I observed that this sham sale to Glatz created its own issues for SDG. In one

instance, a potential investment in Porto Heli, Greece failed when a financial institution, Black

Sea Trade & Development Bank (“Black Sea”), declined to provide funding when its Know-

Your-Customer due diligence of SDG determined that Glatz did not have the financial

resources to actually purchase SDG, and was merely a straw purchaser, while the original

ownership and control of SDG by the Khrapunov family had not actually changed.

36. Attached as Exhibit 7 is an email chain between myself and Ilyas, dated July

16, 2013, regarding Black Sea’s refusal to fund SDG. Earlier in this chain is an email from

Alexey Alekseev, Black Sea’s Director of Banking, stating that “[t]he new ultimate owner of

SDG is said to be Mr. Philippe Glatz. Greencos S.A., the company through which Mr. Glatz

acquired SDG, has a charter capital of [Swiss francs] 100,000 and its financial strength is

estimated by D&B at [Swiss francs] 90,000. How and where Greencos and Mr. Glatz found the

[Swiss francs] 10 million that was used to recapitalize SDG is unclear. I am not persuaded that

there’s been any real change in the ownership of SDG.” Ex. 6, at 2.

The California Action and Assignment of the Flatotel
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37. In 2014, I learned that the City of Almaty, Kazakhstan had filed an action in

the state of California against members of the Khrapunov family, seeking to seize real estate

investments the Khrapunov family owned in that state.

38. In response to this lawsuit, Ilyas directed me to begin liquidating Triadou's

assets in New York so that funds could be removed from the United States and concealed

elsewhere. Specifically, Ilyas instructed me to liquidate Triadou’s investment in Flatotel and

the Cabrini Medical Center as quickly as possible.

39. I contacted Chetrit, explaining that the threat of the litigation in California

required Triadou to liquidate and transfer their assets out of the United States. Chetrit offered

to repurchase Triadou’s interest in the Flatotel at a substantial discount from the price

originally paid by Triadou, and return the capital invested in Cabrini. By this point, based on

the state of the New York high-end real estate market and the progress of the Flatotel

development, the value of Triadou’s investments in the Flatotel and Cabrini had increased

substantially beyond the approximately $40 million originally invested and I estimated that

they would be worth more than $100 million.

40. In or about August of 2014, at the direction of the Ilyas, upon Ablyazov’s

approval, Triadou’s interests in the Flatotel and Cabrini Medical Center were assigned back to

Chetrit for a price including $21 million in deferred compensation, representing a fraction of

the fair market value of the property.

41. Shortly after this assignment, I ceased to be paid by SDG, and was then

terminated from Triadou. As noted above, Triadou is merely a shell company used for masking

the investments of SDG, and thus, my termination letter came from SDG. I attach as Exhibit 8
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my termination letter from SDG.

42. Prior to my termination, I was owed significant sums by Ilyas and SDG in

connection with my work for Triadou and other SDG entities, representing both my

compensation and costs for Triadou’s registration under the laws of Luxembourg, which I had

personally advanced and which SDG had promised to reimburse. When I requested that SDG

reimburse these costs and pay my compensation, Ilyas stated that the money owed to me

belonged to his father-in-law, Ablyazov, and thus he could not release it. I subsequently

communicated with Ilyas, but these conversations were unpleasant and unproductive.

Funds Payable to Triadou

43. Based on my experience as Triadou’s director over a more than three year

period, any funds transferred for Triadou’s benefit would immediately be moved overseas

through a chain of other Ablyazov- or Khrapunov-controlled entities. Where Triadou has been

owed funds in the past, that money never went directly to Triadou or remained in the United

States, and was always moved directly to other entities. Two examples illustrate this practice:

44. In April of 2013, Triadou entered into a commercial real estate investment, the

purchase of the Tri-County Mall in Cincinnati, Ohio. Triadou invested approximately $29

million in the commercial property, and resold that interest at auction three months later for

approximately $40 million, after costs and commissions. Much like the Flatotel, the funds

invested in the Tri-County mall came directly from Telford, and once that interest was

liquidated, those funds did not flow to Triadou, but were instead moved to other Ablyazov-

Khrapunov entities and then out of the United States.

45. Other funds from the assignment of Triadou’s interest in the Flatotel have

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already been moved away from Triadou. Pursuant to the assignment, the Chetrit Entities made

a $1 million initial payment in [year] when Chetrit bought out Triadou’s interest in the Flatotel

development. This $1 million payment, along with $6 million for the termination of an

unrelated investment, was wired to Compagnie Privee do Conseils et d’Investissements S.A. in

Geneva, Switzerland, for the benefit of SDG, identified as a “loan on behalf of Triadou SPV


Meetings with Chetrit

46. On March 22, 2015 and March 23, 2015, I met with Joseph Chetrit in New

York, New York. I recorded discussion between Chetrit and myself at both of those meetings. I

have reviewed those recordings and can confirm the voices on those recordings are those of

myself and Joseph Chetrit. Certified transcripts of those recordings are attached as Exhibits 9

and 10. In these recordings, Chetrit and I discuss the assignment of Triadou’s interest in the

Flatotel to the Chetrit Entities the previous year, as well as the investigations into Ilyas’s

holdings and Ablyazov’s imprisonment. In these recordings, Ilyas is referred to by the

pseudonym “Pedro,” and Ablyazov is referred to either as the “Father-in-Law” or the


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I declare under penalty of perjury, under the laws of the United States of America, that

the foregoing is true and correct.

Executed on this 2nd day of May, 2016.


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Exhibit 1
5/2/2016 Case 1:15-cv-05345-AJN-KHP 1996 Human Rights Report: Morocco
Document 142-1 Filed 05/12/16 Page 2 of 20

1996 Human Rights Report: Morocco

The State Department web site below is a permanent electronic archive of information released online
from January 1, 1997 to January 20, 2001. Please see for current material from the
Department of State. Or visit http://2001­ for information from that period. Archive sites
are not updated, so external links may no longer function. Contact us with any questions about finding
information. NOTE: External links to other Internet sites should not be construed as an endorsement of
the views contained therein.

U.S. Department of State

Morocco Report on Human Rights Practices for 1996

Released by the Bureau of Democracy, Human Rights, and Labor, January 30, 1997.

The Constitution of Morocco provides for a monarchy with a parliament and an independent judiciary.
Ultimate authority, however, rests with the King, who may at his discretion terminate the tenure of any
minister, dissolve the Parliament, and rule by decree. The present Parliament was created in 1993
through a two­stage process: 222 deputies were elected by direct universal suffrage, and an additional
111 were selected by labor syndicates, professional organizations, and local authorities. The Cabinet
continues to be composed largely of technocrats. Parliamentary elections are expected in 1997,
following the September 13, 1996 referendum on the creation of a second legislative chamber. The
referendum was approved by 99 percent of the vote. The Government reported that 82 percent of the
electorate voted, although most observers believe this figure is exaggerated.

The security apparatus includes several overlapping police and paramilitary organizations. The border
police, the national security police, and the judicial police are departments of the Ministry of Interior,
while the Royal Gendarmerie reports directly to the Palace. The security forces continued to commit
human rights abuses.

Morocco has a mixed economy based largely on agriculture, fishing, light industry, phosphate mining,
tourism, and remittances from citizens working abroad. Illegal cannabis production is also a significant
economic activity. While a series of debilitating droughts has challenged generally strong economic

http://1997­ 1/19
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Document 142-1 Filed 05/12/16 Page 3 of 20
growth in recent years, good rainfall during the year was expected to contribute to an economic

The Government's human rights record remained largely the same as the preceding year. Security
forces occasionally abuse and torture detainees and prison conditions remain harsh. The Government's
anti­contraband (assainissement) campaign resulted in numerous violations of citizen's human rights.
Allegations of arbitrary arrest and physical abuse increased in the wake of this campaign, and the
Government failed to investigate thoroughly allegations of abuse by security forces. The then­Minister
for Human Rights resigned, citing excesses committed by security forces during this campaign. The King
then appointed the Minister of Justice as Minister of Human Rights, although the Ministry of Justice is
considered by some to be one of the primary obstacles to improved human rights.

Citizens do not have the right to change their government. The judiciary is subject to corruption and
Interior Ministry influence. The authorities at times ignore due process rights and infringe on citizens'
privacy rights. The Government restricts freedom of speech and the press in certain areas, and limits
the freedoms of assembly, association, religion, and movement. While the Government generally
tolerates peaceful

protests and sit­ins, it does not tolerate marches and demonstrations. On three occasions during the
year, including on the eve of a 1­day general strike in June and during a female textile workers
demonstration in March, several protesters were seriously beaten, and scores were arrested.
Discrimination and domestic violence against women are common. Child labor is a problem, and the
Government has not acted to end the plight of young girls who work in exploitive domestic servitude.
Unions are subject to government interference.

A large number of the allegations of governmental human rights abuse involve the Ministry of Interior.
The Ministry is responsible for: The direction of most security forces; the conduct of elections, including
cooperation with the United Nations in a referendum on the Western Sahara; the appointment and
training of many local officials; the allocation of local and regional budgets; the oversight of university
campuses; and the licensing of associations and political parties. Less formally, the Ministry exerts
substantial pressure on the judicial system.


Section 1. Respect for the Integrity of the Person, Including Freedom from:

a. Political and Other Extrajudicial Killing

Although no deaths of persons in police custody could be conclusively attributed to security force
brutality, there were several instances of death under suspicious circumstances that remain unresolved.
In January Yahya Salhi was found dead in the Oujda gendarmerie detention center. Salhi had been
arrested 2 days earlier for theft. Officials allege that Salhi committed suicide.

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In February Babeha Lahssen died while in custody at the gendarmerie center in Khemisset. According to
human rights activists, Lahssen was arrested following a fight with a tribal chief. Several days after the
arrest, Lahssen's family was informed that he had committed suicide. The Lahssen family's request for
an autopsy was reportedly denied by the Court of First Instance.

In May 16­year­old Abdelhamid M'rabet died while in police custody in Tangier. Press reports state that
M'rabet was arrested during a fight with a local police officer's son. In the course of the arrest, M'rabet
was reportedly severely beaten about the head. He died shortly after arriving at the police station.
Tangier officials detained the arresting officer and launched an investigation. The outcome of the
investigation has not been made public.

Hussein El Mernissi was arrested on July 11 and died the next day at Asfi police station, purportedly
taking his own life. The Moroccan Organization for Human Rights (OMDH) has filed a court action
regarding this case, demanding that a second autopsy be performed.

In May Jalal Mohamed died in prison. Human rights activists attribute his death to official negligence
(see Section 1.c.).

Human rights organizations continue to complain that security forces too often act with impunity; deaths
in custody and other instances of potential abuse are not thoroughly investigated. None of the cases
outstanding from 1995 have been publicly resolved. These include the deaths in custody of Hamza
Daghdagh and Mustapha Benderweesh. However, in October a court acquitted two police officers
accused of the 1993 torture death of Mustapha Hamzaoui and earlier cases. Since October local media
reported four other cases of persons who died while in police custody: Mohamed Fedaoui; Omar
Bouhdoun; Said Hammouch; and Rachid Rami.

Detainees claimed that several prisoners died during the year due to harsh prison conditions and
inadequate medical care (see 1.c.).

b. Disappearance

There were no new cases of disappearance during the year. This contrasts with 1995 when there were
reports of over 20. However, the practice of the forced disappearance of individuals who opposed the
Government and its policies dates back several decades. Many of those who disappeared were
members of the military who were implicated in attempts to overthrow the Government in 1971 and
1972. Others were Sahrawis or Moroccans who challenged the Government's claim to the Western
Sahara or other government policies. Many of those who disappeared were held in secret detention
camps. To this day, hundreds of Saharan and Moroccan families do not have any information about their
missing relatives, many of whom have been missing over 20 years.

The Government continues to deny that it has any knowledge of the whereabouts of those still missing.
In recent years it has quietly released several hundred persons who had disappeared, including about

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300 in June 1991, but no explanation for their incarceration has ever been provided. Local human rights
monitors have concluded that many others died while at the notorious Tazmamart Prison, which has
since been closed. The Government has acknowledged 34 of these deaths and has provided death
certificates to the families of all but 1 of the 34 who died.

OMDH and other human rights organizations continued to pursue the issue of unresolved
disappearances. OMDH reports that its efforts to meet with the Minister of Justice and Human Rights to
discuss this issue have been unsuccessful.

There were no developments in the disappearance of Abdullah Sherrouq, a student, who was reportedly
detained by security services on June 22, 1981. After 15 years, his family has still been unable to learn
anything of his whereabouts or his fate, despite appeals by Amnesty International.

A group representing Tazmamart prison survivors and the families of persons who disappeared
continues to call for an accounting of unresolved cases, compensation to families of those who
disappeared, proper burial of victims' remains, and prosecution of responsible officials. The Government
has not responded to their demands.

The Government continued to pay a small monthly stipend to the 28 former prisoners who survived 18
to 20 years in solitary confinement at Tazmamaart prison­­without health care or sanitary facilities. The
28 are former military men who had been arrested in connection with the failed coup attempts in 1971
and 1972. After their release, the Government prohibited them from speaking out publicly about their
detention. In exchange, the Government gave the 28 assurances that it would help them find jobs and
reintegrate them into society.

c. Torture and Other Cruel, Inhuman, or Degrading Treatment or Punishment

Morocco ratified the U.N. Convention against Torture in 1993. The Government claims that the use of
torture has been discontinued, but newspapers and other sources indicate that security forces still abuse
and torture detainees. The fact that detainees are not allowed to have contact with family or lawyers
during the first 48 hours of incarceration (see Section 1.d.) increases the likelihood of torture and abuse.

According to local human rights advocates, one of the problems in documenting torture and abuse is
that autopsies are not routine. They are only carried out at the request of the state prosecutor and at the
order of a judge. The lack of autopsies indicates that follow­up investigations into deaths in custody are

In June OMDH issued a report charging that torture is still prevalent. OMDH officials attribute the
phenomenon to officials' attempts to elicit information from detainees in the anticontraband and
antinarcotics campaigns. In addition, the report charges that allegations of abuse are frequently not
investigated, and that officials often act with impunity.

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In January the press and human rights organizations reported eyewitness accounts that those arrested
during the Government's anticontraband campaign were subjected to physical abuse and torture during
interrogation. There were also reports of due process violations and irregularities in the course of their
trials (see Section 1.e.). Government officials have denied that any abuses occurred.

In April defendants arrested during a government antinarcotics crackdown charged that they had been
subjected to abuse while in police custody. They also alleged that their signed confessions had been
obtained through police pressure and coercion.

Although prison conditions remain harsh, they have reportedly improved in recent years, due in part to
reforms undertaken at the suggestion of the Royal Consultative Council of Human Rights. Nonetheless,
credible reports indicate that harsh treatment and conditions continue, with state security prisoners more
likely to be victimized. On October 24, detainees at Kenitra central prison sent an open letter countering
the Government's assertions that the prisons are being reformed and detailing the poor conditions at
Kenitra. The prisoners, mostly political and Islamist detainees, alleged that the prison lacks the most
basic needs, including ventilation and medical care. The letter states that seven prisoners died this year
and alleged medical neglect. Causes of death ranged from cancer and tuberculosis to injuries sustained
through physical assault. In May Jalaal Mohamed, a prisoner at El­Jadida Civil Prison, died while
unloading a supply truck. Mohamed reportedly suffered from heart and other health problems. Human
rights activists charge that his death was due to the negligence of prison officials.

The Government does not generally permit prison visits by human rights monitors. Notable exceptions
occurred in February and March 1995, when human rights monitors, along with several journalists and
an investigating commission, visited prisons in Tangiers, Mohammedia, El­Jadida, Casablanca, and
Khenifra following a prison riot in Khenifra.

d. Arbitrary Arrest, Detention, or Exile

Legal provisions for due process have been revised extensively in recent years, although reports
indicate that the authorties sometimes ignored them (see Section 1.c.). Although police usually make
arrests in public, they do not always identify themselves and do not always obtain warrants.
Incommunicado (garde­a­vue) detention is limited to 48 hours, with one 24­hour extension allowed at
the prosecutor's discretion. In state security cases, the garde­a­vue period is 96 hours; this may also be
extended by the prosecutor. It is during this

initial period, when defendants are denied access to counsel, that the accused is interrogated and abuse
is most likely to occur. Some members of the security forces, long accustomed to indefinite precharge
access to detainees, continue to resist the new rules.

Lawyers are not always informed of the date of arrest, and thus are unable to monitor compliance with
the garde­a­vue detention limits. While the law provides for a limited system of bail, it is rarely used.
Defendants are, however, sometimes released on their own recognizance. The law does not provide for
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habeas corpus or its equivalent. Under a separate code of military justice, military authorities may detain
members of the military without warrants or public trial.

Although the accused are generally brought to trial within

2 months, prosecutors may order up to five 2­month extensions of pretrial detention. Thus, an accused
person can be kept in pretrial detention for up to 1 year.

There are no known instances of enforced exile, although a number of dissidents live abroad in self­
imposed exile. Their number has been steadily diminishing, however, as many returned to Morocco
following a broad­based amnesty decree issued by the Government in 1994.

In May Mamoun Balghiti Alaoui returned to Morocco after

30 years of exile in Syria. Alaoui was a dissident in the 1960's who was forced to flee the country. He
was later tried and sentenced to death in absentia. He was included in the global royal pardon issued by
the King in 1994.

Many human rights groups consider Abraham Serfaty to be a Moroccan exile. A member of the (now
defunct) Communist Party and a supporter of Saharan independence, Serfaty was released in 1991
after 17 years in prison. Upon his release, the Government declared that Serfaty was a Brazilian rather
than a Moroccan citizen because his father was a naturalized Moroccan citizen originally from Brazil.
Based on this Serfaty was expelled from Morocco. This decision has been widely criticized by human
rights groups. In July Serfaty's wife was stopped at the Casablanca airport and prohibited from entering
the country.

e. Denial of Fair Public Trial

The Constitution provides for an independent judiciary, but all courts are subject to extrajudicial
pressures, including bribery and government influence.

There are three levels in the court system, courts of first instance, the appeals Court, and the Supreme
Court. While in theory there is a single court system under the Ministry of

Justice, two other courts also operate: the Special Court of Justice that handles cases of civil servants
implicated in corruption and the Military Tribunal for cases involving military personnel and on certain
occasions matters pertaining to state security, although state security also falls within the jurisdiction of
regular court system.

Although there is a single court system for most nonmilitary matters, family issues such as marriage,
divorce, child support and custody, and inheritance are adjudicated by judges trained in Islamic law, or
Shari'a. Judges considering criminal cases or cases in non­family areas of civil law are generally trained
in the French legal tradition. All judges trained in recent years are graduates of the National Institute for
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Judicial Studies, where they undergo 2 years of study heavily focused on human rights and the rule of
law. It is not necessary to be a lawyer to become a judge and the majority of judges are not lawyers.

In general detainees are arraigned before a court of first instance. If the infraction is minor and not
contested, the judge may order the defendant released or impose a light sentence. If an investigation is
required, the judge may release defendants on their own recognizance. Cases are often adjudicated on
the basis of confessions, some of which are obtained under duress, according to reliable sources.

All courts are subject to extrajudicial pressures. Salaries for both judges and their staffs are extremely
modest; as a result, petty bribery has become a routine cost of court business. In many courts,
especially in minor criminal cases, defendants or their families pay bribes to court officers and judges to
secure a favorable disposition.

A more subtle corruption derives from the judiciary's relationship with the Ministry of Interior. Judges
work closely with the Ministry's network of local officials, or caids, who serve as members of the judicial
police and often assume personal responsibility for the questioning of criminal detainees. They also
frequently prepare the written summary of an arrest and subsequent interrogation. The summary is
admissible in court and may be the only evidence introduced at trial, effectively rendering it an
instruction passed from the caid's office to the court. Credible sources report that judges who hope for
higher salaries and career advancement follow the caid's guidance closely.

The law does not distinguish political and security cases from common criminal cases. In serious state
security cases, communications between the Ministry of Interior and the court are more direct. At the
Government's discretion, such cases may be brought before a specially constituted military tribunal,
which is subservient to other branches of the Government, notably the military and the Ministry of

Aside from external pressures, the court system is also subject to resource constraints. Consequently,
criminal defendants charged with less serious offenses often receive only cursory hearings, with judges
relying on police reports to render decisions. Although the Government provides an attorney at public
expense for serious crimes (i.e., when the offense carries a maximum sentence of over 5 years),
appointed attorneys often provide inadequate representation.

In January the OMDH charged that defendants arrested in the anticontraband crackdown were denied
access to attorneys during interrogation and that defendants were not allowed to submit evidence (some
of which investigators had earlier requested they present) to counter charges against them (see Section
1.c.). Later, the attorneys for nine of the defendants walked out of court in protest after charging that
they had not been given enough time to study the case against their clients. One of the more extreme
examples involved the trial of David and Simon Chetrit, father and son importers, who were pronounced
guilty at 3:30 AM after the defense team had spent more than 17 hours in the courtroom without a rest
or food break, and were repeatedly denied an opportunity to present a defense. The Chetrits were each

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sentenced to 5 years' imprisonment and received one of the largest fines of any of those convicted
during the campaign on charges of importing contraband and bribing customs officials. Among those
criticizing the way in which the anticontraband campaign was conducted was Human Rights Minister
Mohamed Ziane. Ziane's outspoken disapproval of the campaign led to his resignation from the Ministry
in January, and the human rights portfolio was assumed by the Minister of Justice. However, some
observers consider the Ministry of Justice to be a major obstacle to an improved human rights record.
Although their missions are not completely incompatible, combining the Ministry of Justice and the
Ministry of Human Rights portfolios does not advance the stated objective of the Government and the
King to protect and promote human rights.

The Moroccan Organization of Human Rights (OMDH) estimates that there are some 60 political
prisoners, of which 50 are Islamists and the remainder are leftists. Among the 50 alleged Islamists are
16 members of the "Group of 26." Three of this group were convicted of arms smuggling in 1986, but
the others were apparently arrested for Islamist activities. International human rights groups estimate of
the number of persons in prison for advocating independence for the Western Sahara vary from none to

f. Arbitrary Interference with Privacy, Family, Home, or Correspondence

The Constitution states that the home is inviolable and that no search or investigation may take place
without a search warrant. The law stipulates that a search warrant may be issued by a prosecutor on
good cause. Nonetheless, during the Government's recent anticontraband campaign several businesses
and places of residence were entered without the requisite search warrant.

Government security services monitor certain persons and organizations, both foreign and Moroccan
and government informers monitor activities on university campuses.

Section 2. Respect for Civil Liberties, Including:

a. Freedom of Speech and Press

Although the Constitution provides for freedom of expression, the Government seriously restricts press
freedom in certain areas.

The Government owns the official press agency, Maghreb Arab Press, and the Arabic daily Al­Anbaa. A
1958 decree grants the Government the authority to register and license domestic newspapers and
journals. Authorities can use the licensing process to prevent the publication of materials that they
believe cross the threshold of tolerable dissent. Offending publications may be declared a danger to
state security, seized, and the publisher's license suspended and equipment destroyed. The Ministry of
Interior can control foreign publications by collecting "banned" publications after they have been
distributed. In general, however, the Government does not employ extreme measures since the media
regularly engage in self­censorship to avoid the Government's attention and possible sanctions.

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The Press Code empowers the Minister of Interior to confiscate publications that are judged offensive by
the Government. Under the Code the Prime Minister may order the indefinite suspension of a
publication. On November 19, the Government formally banned the Arabic­language weekly Al­Usbu Al­
Sahfi Wa'l Siyassi, and declared all distribution of this weekly illegal. The police notice banning the paper
offered no justification, but credible sources confirm that the Minister of Interior and the Prime Minister
were both angered by a series of articles on the "business activities" of the Moroccan elite, including
their sons. The publisher was warned several weeks earlier to "lay off people who work closely with the
King." The Moroccan Press Syndicate and a Moroccan human rights organization are filing a court case
in an effort to rescind the Government's decision.

The Press Code empowers the Government to censor newspapers directly by ordering them not to
report on specific items or events. In most instances, government control of the media generally is
exercised through directives and "guidance" from the Ministry of the Interior. Nonetheless, the
Government generally tolerates satirical and often stinging editorials in the opposition parties' dailies.
However, both law and tradition prohibit criticism on three topics: the monarchy, Morocco's claim to the
Western Sahara, and the sanctity of Islam.

There were some notable instances of censorship during the year. The Government continues its
November 1995 ban on Jeune Afrique, which had published an article describing the King's health and
its impact on the political scene. Since October Jeune Afrique has been distributed, but has­­perhaps not
coincidentally­­recently refrained from publishing any negative stories about the royal family.

In January the OADP daily, Anoual, was seized twice by local authorities in Casablanca. No reason was
given for the seizure. Also in January, the weekly magazine Maroc Hebdo was sued for defamation at
the request of the Prime Minister. Maroc­Hebdo had reprinted selections from a report by the European
Observatoire Geopolitique Des Drogues implicating high­level Moroccan officials in drug trafficking.

In February comedian Ahmed Snoussi (also known as Bziz) was prohibited from performing in
Casablanca. Bziz, Morocco's best­known political satirist, has been banned from television appearances
for the past 5 years. In April the government­owned television station dismissed its editor­in­chief after
she participated in a seminar on the role of journalism in the democratic process and the protection of
human rights. The dismissal was severely criticized by press and human rights groups.

The Government owns the only television station whose broadcasts can be received nationwide without
decoder or satellite dish antennas. The Government purchased a majority share in 2M, the country's
sole private station, which can be received in most urban areas with the rental of an inexpensive
decoder. The ostensible reason for the Government's action was to save 2M from bankruptcy; the
Government now owns 68 percent of 2M stock and the Minister of Information by virtue of hsi position
has become the chairman of the board. Dish antennas are available on the market and permit free
access to a variety of foreign broadcasts. Residents of the north can receive Spanish broadcasts with
standard antennas. The Government does not impede the reception of foreign broadcasts.

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The universities enjoy relative academic freedom in most areas.

b. Freedom of Peaceful Assembly and Association

Although the Constitution provides for freedom of assembly and association, the law also permits the
Government to suppress even peaceful demonstrations and mass gatherings. Most conferences and
demonstrations require the prior authorization of the Ministry of Interior, ostensibly for security reasons.

In January members of the Association of Unemployed University Graduates, an unofficial organization
not sanctioned by the Government, began a sit­in in front of the Ministry of Education to protest high
unemployment and government inaction. There was little official reaction until March, when security
forces dispersed the group, allegedly injuring

14 persons.

The unemployed graduates resumed their sit­in in May. For several weeks, police barricaded the
building where the youths were assembled, preventing them from leaving as a group to demonstrate in
the streets. Occasionally the police and the unemployed graduates clashed, most notably on May 24
when the protesters tried to march out of the building that they were occupying. Police blocked their exit
and injured some

60 demonstrators. On June 4, on the eve of a nationwide general strike, police beat and injured
numerous demonstrators, including humorist Bziz, who had gone to the sit­in to express his support for
the unemployed graduates. The sit­in continued until late June, when the graduates voluntarily returned
to their homes.

The right to form organizations is limited. Under a1958 decree, persons wishing to create an
organization must obtain the approval of the Ministry of Interior before holding meetings. In practice the
Ministry uses this requirement to prevent persons suspected of advocating causes opposed by the
Government from forming legal organizations. Islamist and leftist groups have the greatest difficulty in
obtaining official approval, although there are over 20 active Islamist groups. The Government has
prohibited membership in two, Justice and Charity and Jama'a Islamia, due to their perceived
antimonarchy rhetoric. Political parties must also be approved by the Ministry of Interior, which uses this
power to control participation in the political process.

On January 9, a group of university professors, lawyers, and journalists formed an association, called
Transparency Maroc, dedicated to fighting corruption at all levels. This organization is also not
sanctioned by the Government. Transparency is operating, but always in concert with other
organizations that are recognized by the Government.

c. Freedom of Religion

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Although the Constitution provides for freedom of worship, only Islam, Christianity, and Judaism are
tolerated in practice.

Islam is the official religion. Ninety­nine percent of Moroccans are Sunni Muslims, and the King bears the
title Commander of the Faithful. The Jewish community of approximately 6,000 is allowed to practice its
faith, as is the somewhat larger foreign Christian community. The Baha'i community of 150 to 200
people has been forbidden to meet or hold communal activities since 1983.

Islamic law and tradition calls for strict punishment of any Muslim who converts to another faith. Any
attempt to induce a Muslim to convert is similarly illegal. Foreign missionaries either limit their
proselytizing to non­Muslims or conduct their work quietly.

The Ministry of Islamic Affairs monitors Friday mosque sermons and the Koranic schools to ensure the
teaching of approved doctrine. The authorities sometimes suppress the activities of Islamists, but
generally tolerate activities limited to the propagation of Islam, education, and charity. Security forces
commonly close mosques to the public shortly after Friday services to prevent use of the premises for
unauthorized political activity.

d. Freedom of Movement Within the Country, Foreign Travel, Emigration, and Repatriation

Although the Constitution provides for freedom of movement, in practice security forces set up
checkpoints throughout the country and stop traffic at will. In some regions the checkpoints have been
maintained in the same places for years, creating what some characterize as internal frontiers. Reports
persist that police use these checkpoints to demand monetary payments. In the Moroccan­administered
portion of the Western Sahara, movement is restricted in areas regarded as militarily sensitive.

The Ministry of Interior restricts freedom to travel outside Morocco in certain circumstances. OMDH, a
human rights group, has compiled a list of individuals who have reportedly been denied passports. In
addition, all civil servants must obtain written permission from their ministries to leave the country.

In June Maria Oufkir, who had spent 14 years under house arrest, was able to leave Morocco and
emigrate to France. Oufkir is the daughter of Mohamed Oufkir, a general and Interior Minister during the
1960's who was implicated in the 1971 coup attempt against King Hassan. Oufkir died under

mysterious circumstances in 1972. His family spent the following 14 years under house arrest. Although
they were nominally released in 1986, the Oufkir family remained barred from traveling outside Morocco
until Maria Oufkir's move to France. While her flight has been described as an escape, sources report
that the Oufkirs were issued passports shortly before her departure, and it is acknowledged that she
departed with at least the tacit consent of the Government.

Moroccans may not renounce their citizenship, but the King retains the power­­rarely used­­to revoke it.
Tens of thousands of Moroccans hold more than one citizenship and travel on passports from two or

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more countries. While in Morocco, they are regarded as Moroccan citizens. As a result, the Government
has sometimes refused to recognize the right of foreign embassies to act on behalf of dual nationals or
even to be informed of their arrest and imprisonment. Dual nationals sometimes complain of harassment
by immigration inspectors.

The Government welcomes voluntary repatriation of Jews who have emigrated. Moroccan Jewish
emigres, including those with Israeli citizenship, freely visit Morocco. The Government also encourages
the return of Sahrawis who have departed Morocco due to the conflict in the Western Sahara­­provided
they recognize the Government's claim to the region. The Government does not permit Saharan
nationalists who have been released from prison to live in the disputed territory. The Government
cooperates with the U.N. High Commissioner for Refugees (UNHCR) and other humanitarian
organizations in assisting refugees. There were no reports of forced expulsion of anyone having a valid
claim to refugee status. While Morocco has from time to time provided political asylum to individuals, the
issue of first asylum has never arisen.

Section 3. Respect for Political Rights: The Right of Citizens to Change Their Government

Constitutional provisions notwithstanding, in practice citizens do not have the right to change their
national government by democratic means. The King, as Head of State, appoints the Prime Minister,
who is the titular head of government. The Parliament has the theoretical authority to effect change in
the system of government, but has never exercised it. Moreover, the Constitution may not be changed
without the King's approval. The Ministry of Interior appoints the provincial governors and local caids.
Municipal councils are elected.

Constitutional changes in 1992 authorized the Prime Minister to nominate all government ministers, but
the King has the power to replace any minister at will. Any significant surrender of power from the Crown
to the Prime Minister's office was further

diluted when the King transferred to the Secretaries General, who serve at the King's pleasure, many of
the powers previously vested in the ministers.

Morocco has a unicameral legislature, two­thirds directly elected, and another third indirectly selected by
various labor and professional organizations. Eleven parties have members in Parliament. The
opposition parties have consistently urged that all members of Parliament be directly elected by the
people. Instead, the King proposed creating a bicameral legislature, whereby all members of the lower
chamber would be directly elected by the people and all members of the second chamber indirectly
selected. On September 13, a referendum was held in which voters approved a constitutional
amendment creating this bicameral parliament. The referendum was approved by 99 percent of the
vote. The Government reported that 82 percent of the electorate voted, although most observers believe
this figure is exaggerated. There were no restrictions on the electorate and there were no serious
accusations of fraud. Allegations of fraud during the 1993 elections are still pending before the Supreme

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Women are underrepresented in government and politics. There are no female ministers, and there are
only two women among the 333 members of Parliament.

Section 4. Governmental Attitude Regarding International and Nongovernmental Investigation of
Alleged Violations of Human Rights

There are three officially recognized nongovernmental human rights groups: The Moroccan Human
Rights Organization, the Moroccan League for the Defense of Human Rights (LMDH), and the Moroccan
Human Rights Association (AMDH). A fourth group, the Committee for the Defense of Human Rights
(CDDH), was formed in 1992 by former AMDH members.

The Royal Consultative Council on Human Rights (CCDH), an advisory body to the King, exists in
sometimes uneasy coordination with the Ministry of Human Rights, which was established by Parliament.
While their common mission provoked an adversarial relationship in the past, a clearer division of roles
has emerged, with the CCDH issuing advice on matters such as prison reform, and the Ministry of
Human Rights exercising a principally executive role.

Amnesty International (AI) has local chapters in Rabat, Casablanca, and Marrakech. These chapters
participate in AI international letter campaigns outside Morocco.

Section 5. Discrimination Based on Race, Sex, Religion, Disability, Language, or Social Status

Although the Constitution states that all citizens are equal, non­Muslims and women face discrimination
in the law and traditional practice.


The law and social practice concerning violence against women reflects the importance society places
on the honor of the family. The Criminal Code includes severe punishment for men convicted of rape or
violating a woman or a girl. The defendants in such cases bear the burden of proving their innocence.
However, sexual assaults often go unreported because of the stigma attached to the loss of virginity. A
rapist may be offered the opportunity to marry his victim in order to preserve the honor of the victim's
family. The law is more lenient toward men with respect to crimes committed against their wives; for
example, a light sentence or reprimand may be accorded a man who has murdered his wife after
catching her in the act of adultery.

Spousal violence is common. Although a battered wife has the right to complain to the police, as a
practical matter she would do so only if prepared to bring criminal charges.

Women suffer various forms of legal and cultural discrimination. The civil law status of women is
governed by the Moudouwana, or Code of Personal Status, which is based on Islamic law. Although the
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Moudouwana was reformed in 1993, women's groups still complain of unequal treatment, particularly
under the laws governing marriage and divorce.

In order to marry, a woman is generally required to obtain the permission of her "tuteur," or legal
guardian, usually her father. Except in unusual circumstances, only if her father is deceased may she act
as her own "tuteur."

It is far easier for a man to divorce his wife than for a women to divorce her husband. Rather than asking
for a divorce, a man may simply repudiate his wife. Under the 1993 reforms to the Moudouwana, a
woman's presence in court is required in order for her husband to divorce her, although women's groups
report that this law is frequently ignored. The divorce can be finalized even over the woman's objections,
although in such cases the court grants her unspecified allowance rights.

A woman seeking a divorce has several alternatives. She may offer her husband money to agree to a
divorce (known as a Khol'a divorce). The husband must agree to the divorce and is allowed to specify
the amount that he will be paid­­without

limit. According to women's groups, many men pressure their wives to pursue this kind of divorce. A
woman may also file for a judicial divorce if her husband chooses to take a second wife, if she has been
abandoned by her husband, or if she is a victim of physical abuse. However, divorce procedures in
these cases are lengthy and complicated. For example, while physical abuse is a legal ground for
divorce, the court will only grant it if the woman can provide two witnesses to the abuse. Even medical
certificates are not sufficient. If the court finds against the woman, she is returned to her husband's
home. Consequently, few women report abuse to the authorities.

Under the Criminal Code, women are generally accorded the same treatment as men, but this is not the
case for family and estate law, which is based on the Malikite school of Islamic law. Under this law,
women inherit only half as much as male heirs. Moreover, even where the law guarantees equal status,
cultural norms often prevent a woman from exercising those rights. When a women inherits property, for
example, male relatives may pressure her to relinquish her interest.

While many well­educated women pursue careers in law, medicine, education, and government service,
few make it to the top echelons of their professions. Women comprise approximately

35 percent of the work force, with the majority in the industrial, service, and teaching sectors. The
illiteracy rate for women is 78 percent, compared with 51 percent for men. Women in rural areas suffer
most from inequality. Rural women perform most hard physical labor, and the literacy rate in the
countryside is significantly lower for women than for men. Girls are much less likely to be sent to school
than are boys. Women who do earn secondary school diplomas, however, have equal access to
university education.


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The Government has taken little action to end child labor (see Section 6.d.). Young girls in particular are
exploited as domestic servants. Some orphanages are knowing accomplices to the practice of adoptive
servitude, in which families adopt young girls who perform the duties of domestic servants in their new
homes. Credible reports of physical abuse are widespread. The practice is often rationalized as a better
alternative to keeping the girls in orphanages. This practice is socially accepted, attracts little criticism
and is unregulated by the Government.

Another problem facing orphans of both sexes is lack of civil status. Normally, men are registered at
local government offices; their wives and unmarried children are included in this registration, which
confers civil status. Civil status is necessary to obtain a birth certificate, passport, or marriage license. If
a father does not register his child, the child is without civil status and the benefits of citizenship. It is
possible for an individual to self­register, but the process is long and cumbersome.

People with Disabilities

A high incidence of disabling disease, especially polio, has produced a large population of disabled
persons. While the Ministry of Social Affairs contends that the Government endeavors to integrate the
disabled into society, in practice this is left largely to private charities. However, even charitable special
education programs are priced beyond the reach of most families. Typically, disabled persons survive by
begging. The Government continued a pilot training program for the blind sponsored in part by a
member of the royal family. There are no laws mandating physical changes to buildings to facilitate
access by the disabled.

National/Racial/Ethnic Minorities

The Constitution affirms, and the Government respects, the legal equality of all citizens. The official
language is Arabic. Both French and Arabic are used in the news media and educational institution.
Science and technical courses are taught in French, thereby eliminating the large, monolingual Arabic­
speaking population from these programs. Educational reforms in the past decade have stressed the
use of Arabic in secondary schools. Failure to similarly transform the university system has effectively
disqualified many students from higher education in lucrative fields. This is especialy true among the
poor, for whom French training is not always affordable.

Some 60 percent of the population claim Berber heritage. Berber cultural groups contend that Berber
traditions and the three remaining Berber languages are rapidly being lost. Their repeated requests to
the King to permit the teaching of Berber languages in the schools led to a royal decree authorizing the
necessary curriculum changes, although no changes have yet occurred.

In June a number of Berber associations issued a communique petitioning the Government to recognize
their language, Amzaghi, as an official language and to acknowledge the Amzaghi culture as a part of
Moroccan society. The Government thus far has made no response to the petition.

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Section 6. Worker Rights

a. The Right of Association

Although workers are free to establish and join trade unions, the unions themselves are not completely
free from government interference. Perhaps half a million of Morocco's 9 million workers are unionized
in 17 trade union federations. Three federations dominate the labor scene: the Union Marocain de
Travail (UMT), the Confederation Democratique de Travail (CDT), and the Union Generale des
Travailleurs Marocains (UGTM). The UMT has no political affiliation, but the CDT is affiliated with the
Socialist Union of Popular Forces, and the UGTM to the Istiqlal Party.

In practice the Ministry of Interior is believed to have informants within the unions who monitor union
activities and the election of officers. Sometimes union officers are subject to government pressure.
Union leadership does not always uphold the rights of members to select their own leaders. There has
been no case of the rank and file voting out its current leadership and replacing it with another.

Workers have the right to strike and do so. Work stoppages are normally intended to advertise
grievances and last 48 to72 hours or less. Secondary school teachers and university professors held
several strikes throughout the year and there were a number of limited duration strikes in the phosphate,
banking, and health care sectors, and at the port of Casablanca.

On June 5, the CDT and UGTM labor federations joined forces to stage a 24­hour general strike
throughout Morocco to protest perceived government indifference to the economic and social situation
of the workers. The strike was relatively quiet and violence­free except in a neighborhood of the
northern city of Tangier, where there was sporadic violence involving teenagers and young adults, rather
than union activists. The UMT did not participate in the strike and, overall, an estimated 50 to 60 percent
of shops and factories nationwide closed in compliance with the call to strike.

UMT unionists at a yeast production company in Casablanca began a strike in February, when
management fired a union representative. The strike continues as the plant owner received permission
to import yeast to make up for shortages in the market.

Unions belong to regional labor organizations and maintain ties with international trade secretariats.

b. The Right to Organize and Bargain Collectively

The right to organize and bargain collectively is implied in the constitutional provisions on the right to
strike and the right to join organizations. Trade union federations compete

among themselves to organize workers. Any group of eight workers may organize a union and a worker
may change union affiliation easily. A work site may contain several independent locals or locals affiliated
with more than one labor federation.

http://1997­ 16/19
5/2/2016 Case 1:15-cv-05345-AJN-KHP 1996 Human Rights Report: Morocco
Document 142-1 Filed 05/12/16 Page 18 of 20
In general the Government ensures the observance of labor laws in larger companies and in the public
sector. In the informal economy, and in the textile and handicrafts industries, both the Government and
management routinely ignore labor laws and regulations. As a practical matter, unions have no judicial
recourse to oblige the Government to enforce labor laws and regulations.

The laws governing collective bargaining are inadequate. Collective bargaining has been a long­
standing tradition in some parts of the economy such as the industrial sector, especially heavy industry,
but the practice has not spread to other sectors such as the service and informal sectors. The wages
and conditions of employment of unionized workers are generally set in discussions between employer
and worker representatives. However, wages for the vast majority of workers are unilaterally set by

Employers wishing to dismiss workers are required by law to notify the provincial governor through the
labor inspector's office. In cases where employers plan to replace dismissed workers, a government
labor inspector provides replacements and mediates the cases of workers who protest their dismissal.
Any worker dismissed for committing a serious infraction of work rules is entitled by law to a court

There is no law specifically prohibiting antiunion discrimination. Employers commonly dismiss workers
for union activities regarded as threatening to employer interests. The courts have the authority to
reinstate such workers, but are unable to ensure that employers pay damages and back pay.

Ministry of Labor inspectors serve as investigators and conciliators in labor disputes, but they are few in
number and do not have the resources to investigate all cases. Unions have increasingly resorted to
litigation to resolve labor disputes.

The labor law applies equally to the small Tangier export zone. The proportion of unionized workers in
the export zone is about the same as in the rest of the economy.

c. Prohibition of Forced or Compulsory Labor

Forced or compulsory labor is prohibited by the International Labor Organization's (ILO) Convention 29,
which was adopted by royal decree. When authorities become aware of instances of

forced labor, courts enforce the decree. However, in practice, the Government lacks the resources to
inspect all places of work to ensure that forced labor is not being used.

d. Minimum Age for Employment of Children

Abuse of the child labor laws is common. The law prohibits the employment or apprenticeship of any
child under 12 years of age. Education is compulsory for children between the ages of 7 and 13 years.
Special regulations cover the employment of children between the ages of 12 and 16 years. In practice,

http://1997­ 17/19
5/2/2016 Case 1:15-cv-05345-AJN-KHP 1996 Human Rights Report: Morocco
Document 142-1 Filed 05/12/16 Page 19 of 20
children are often apprenticed before age 12, particularly in the handicraft industry. The use of minors is
common in the rug­making industry and also exists to some extent in the textile and leather goods
industries. Children are also employed informally as domestics and usually receive little or no wages.
Safety and health conditions as well as wages in enterprises employing children are often substandard.

Ministry of Labor inspectors are responsible for enforcing child labor regulations, which are generally
well observed in the industrialized, unionized sector of the economy. However, the inspectors are not
authorized to monitor the conditions of domestic servants.

e. Acceptable Conditions of Work

The June 5 general strike led to negotiations among the Government, the manufacturers' association,
and the labor confederations over increasing the minimum wage and improving health benefits, social
benefits, and housing. In August all three parties agreed to a 10 percent increase in the minimum wage
retroactive to July 1, raising it to approximately $193 (1,661 dirhams) per month in the industrialized
sector and to approximately $9.41 (80.96 dirhams) per day for agricultural workers. Neither provides a
decent standard of living for a worker and family­­even with government subsidies for food, diesel fuel,
and public transportation. In many cases, several family members combine their income to support the
family. Most workers in the industrial sector earn more than the minimum wage. They are generally paid
between 13 and 16 months salary, including bonuses, each year.

The minimum wage is not enforced effectively in the informal and handicraft sectors, and even the
Government pays less than the minimum wage to workers at the lowest civil service grades. To increase
employment opportunities for recent graduates, the Government allows firms to hire them for a limited
period at less than the minimum wage.

The law provides for a 48­hour maximum workweek with no more than 10 hours in any single day,
premium pay for overtime, paid public and annual holidays, and minimum conditions for health

and safety, including a prohibition on night work for women and minors. As with other regulations and
laws, these are not universally observed in the informal sector.

Occupational health and safety standards are rudimentary, except for a prohibition on the employment
of women in certain dangerous occupations. Labor inspectors endeavor to monitor working conditions
and accidents, but lack sufficient resources. While workers, in principle, have the right to remove
themselves from work situations that endanger health and safety without jeopardizing their continued
employment, there were no reports of any instances in which a worker attempted to exercise this right.

[end of document]

http://1997­ 18/19
5/2/2016 Case 1:15-cv-05345-AJN-KHP 1996 Human Rights Report: Morocco
Document 142-1 Filed 05/12/16 Page 20 of 20

Return to 1996 Human Rights Practices report home page.
Return to DOSFAN home page. 
This is an official U.S. Government source for information on the WWW. Inclusion of non­U.S.
Government links does not imply endorsement of contents.

http://1997­ 19/19
Case 1:15-cv-05345-AJN-KHP Document 142-2 Filed 05/12/16 Page 1 of 6

Exhibit 2
Case 1:15-cv-05345-AJN-KHP Document 142-2 Filed 05/12/16 Page 2 of 6
Case 1:15-cv-05345-AJN-KHP Document 142-2 Filed 05/12/16 Page 3 of 6
Case 1:15-cv-05345-AJN-KHP Document 142-2 Filed 05/12/16 Page 4 of 6
Case 1:15-cv-05345-AJN-KHP Document 142-2 Filed 05/12/16 Page 5 of 6
Case 1:15-cv-05345-AJN-KHP Document 142-2 Filed 05/12/16 Page 6 of 6
Case 1:15-cv-05345-AJN-KHP Document 142-3 Filed 05/12/16 Page 1 of 2

Exhibit 3
5/2/2016 FinCEN Issues Final Rule Imposing a Prohibition on the Opening or Maintaining of Correspondent Accounts for, or on Behalf of, FBME Bank Ltd.
Case 1:15-cv-05345-AJN-KHP Document 142-3 Filed 05/12/16 Page 2 of 2

To view or print PDF content, download the free Adobe Acrobat Reader.

FinCEN Issues Final Rule Imposing a Prohibition on the
Opening or Maintaining of Correspondent Accounts for, or
on Behalf of, FBME Bank Ltd.
On July 29, 2015, FinCEN published in the Federal Register a Final Rule imposing a
prohibition on U.S. financial institutions from opening or maintaining a correspondent
account for, or on behalf of, FBME Bank Ltd. (FBME) under the fifth special measure of
Section 311 of the USA PATRIOT Act, with an effective date of August 28, 2015. On August
27, 2015, the United States District Court for the District of Columbia granted FBME’s motion
for a preliminary injunction and enjoined the Final Rule from taking effect. On November 6,
2015, the court granted FinCEN’s motion for voluntary remand to allow for further rulemaking
proceedings. On November 27, 2015, FinCEN published in the Federal Register a Notice to
re­open the Final Rule for 60 days to solicit additional comment in connection with the
rulemaking, particularly with respect to the unclassified, non­protected documents that
supported the rulemaking, and whether any alternatives to the prohibition on the opening or
maintaining of correspondent accounts for FBME would effectively mitigate the money
laundering and terrorist financing risk associated with FBME. FinCEN also made available
for comment on the unclassified, non­protected material that FinCEN
considered and intended to rely upon during the rulemaking proceeding.

After re­opening the comment period, FinCEN considered all of the special measures
available to it under Section 311, as well as conditions rather than a prohibition under the
fifth special measure, and concluded that a prohibition under the fifth special measure is the
appropriate choice. Accordingly, FinCEN is issuing a final rule imposing a prohibition on
U.S. financial institutions from opening or maintaining a correspondent account for, or on
behalf of, FBME in place of the rule published on July 29, 2015. FinCEN’s imposition of a
prohibition under the fifth special measure will guard against the international money
laundering and terrorist financing risks that FBME poses to the U.S. financial system. This
rule will take effect 120 days from the date of publication in the Federal Register. 1/1
Case 1:15-cv-05345-AJN-KHP Document 142-4 Filed 05/12/16 Page 1 of 11

Exhibit 4
Pagel of 10
Case 1:15-cv-05345-AJN-KHP Document 142-4 Filed 05/12/16 Page 2 of 11
Subj: FW: Swifts
Date: 12/12/2013 3:56:55 P.M. Eastern Standard Time

Nicolas Bourg

Chief Executive Officer
SDG Investment Fund

De : Kevin M eyer <>
Date : j eudi, 12 decembre 2013 18:45
A: Nicolas Bourg <>
Objet : Sw ifts

Voici plein de documents issus de votre boite d'envoi

Kevin Meyer

SDG Investment Fund
20, Rue Philippe-Plantamour
1201 Geneve

M +41 78 637 52 49
T +41 22 545 03 51

The information contained in this communication is fully confidential and intended for the named recipient(s) only. In case you are not an intended recipient, you
are hereby (a) strictly forbidden from copying, distributing this email or taking any further action relating to it, and (b) kindly requested to notify the sender and
delete any copies immediately. We undertake no responsibility for the accuracy, completeness and absence of virus in this communication or any of its attachment
(s). Unless otherwise stated, any views or opinions presented herein are solely those of the author. This email is intended for informational purposes only and is
not a solicitation or offer to buy or sell any participation or financial instruments.

The information contained in this communication is fully confidential and intended for the named recipient(s) only. In case you are not an intended recipient, you
are hereby (a) strictly forbidden from copying, distributing this email or taking any further action relating to ii, and (b) kindly requested to notify the sender and
delete any copies immediately. We undertake no responsibility for the accuracy, completeness and absence of virus in this communication or any of its attachment
(s). Unless otherwise stated, any views or opinions presented herein are solely those of the author. This email is intended for informational purposes only and is
not a solicitation or offer to buy or sell any participation or financial instruments.

-----Original Message-----
Fro m: jgraff <j>
To: Kevin Meyer <k.meye>
CC: Nicolas Bourg <>
Subject : RE: Flatote l: Telfo rd equity payments
Date: Thu, 28 Feb 2013 18:06:02 +0100

The following wires have been received from Telford:
1. $10,500,051.25 on November 9,2012
2. $2,625,053.01 on January 22, 2013
3. $15,925,102.16 on February 13, 2013
4. $175,101.32 on February 19, 2013

The time and date of Closing has not yet been set. In all likelihood it will not be a sit down Closing. I will keep you posted.

From: Kevin Meyer []

Thursday, D ecember 12, 2013 AOL: JOCHETRIT
Page 2 of IO
Case 1:15-cv-05345-AJN-KHP Document 142-4 Filed 05/12/16 Page 3 of 11
Sent: Thursday, February 28, 2013 9:48 AM
To: jgraff
Cc: Nicolas Bourg
Subject: RE: Flatotel: Telford equity payments

Dear Mr. Graff,

Could I please also ask you for the details regarding the Flatotel deal's closing (time, date, place, attend ing people,
... )?

Thank you very much in advance for your help.


Kevin Meyer

SDG Investment Fund
20, Rue Phillipe-Plantamour
1201 Geneve

M +41 78 637 52 49
T +41 22 545 03 51

From: Kevin Meyer
Sent: jeudi 28 tevrier 2013 13:58
To: ''
Cc: Nicolas Bourg
Subject: Flatotel : Telford equity payments

Dear Mr. Graff,

My name is Kevin Meyer, and I work with Mr. Bourg on the Flatotel deal.

Could you please send us a formal confi rmation of the reception the two last equity payments done by Telford?

Best regards,

Kevin Meyer

SDG Investment Fund
20, Rue Phill ipe-Plantamour
1201 Geneve

M +41 78 637 52 49
T +41 22 545 03 51

-----Original Message-----
From: Nicolas Bourg <>
To: Arnie Herz <>, Felix <>
Subject: Fw: Swift
Date: Tue, 21 May 2013 07:41:23 +0200

Nicolas Bourg

Thursday, December 12, 20 13 AOL: JOCHETRIT
Page 3of10
Case 1:15-cv-05345-AJN-KHP Document 142-4 Filed 05/12/16 Page 4 of 11
Chief Executive Officer
SDG Investment Fund

From: Nicolas Bourg
Sent: Monday, May 20, 2013 5:55:29 PM
Cc: Eric Elkain
Subject: Swift

Sa Jut Jo,

Je te prie de trouver la copie du swift pour l'envoi des usd 6 ~illions pour Cabrini.

{ 1:F01FBMECY2NAXXX1111111111}
:32A: 130520USD6000189,25
PO BOX 487922
:57 A:CITIUS33
:70:as per loan agreement


Nicolas Bourg

Chief Executive Officer
SDG Investment Fund

-----Original Message-----
From: Nicolas Bourg <>
To: Felix SATER <>
Subject: swift code
Date: Wed, 24 Apr 2013 17:59:26 +0200



Thursday, December 12, 2013 AOL: JOCHETRIT
Case 1:15-cv-05345-AJN-KHP Document 142-4 Filed 05/12/16 Page 5 of 11 Page 4of10




:32A: 130424USD2800045,23




PO BOX 487922




Kramer levin Naftalis and Frankel

LLP Attorney Escrow Account

FOA Reetika Agarwal (212) 559-6299

:70:ABA No. 021000089



Nicolas Bourg

Chief Executive Officer
SDG Investment Fund

----Original Message-----
From: Nico las Bourg <>
To: Cha rki Jean-Charles <>
CC: Halm Alexandre <>
Subject: Re: swift
Date: Tue, 16 Apr 2013 20:49:08 +0200

Thursday, December 12, 2013 AOL: JOCHETRIT
Page 5of10
Case 1:15-cv-05345-AJN-KHP Document 142-4 Filed 05/12/16 Page 6 of 11
Bien a toi.

Nicolas Bourg

Chief Executive Officer
SDG Investment Fund

From: Charki Jean-Charles
Sent: Tuesday, April 16, 2013 7:29:11 PM
To: Nicolas Bourg
Cc: Halm Alexandre
Subject: RE: swift

Tu as la date de valeur? c'est pour detendre les lawyers qui sont en stress total comme tu as pule voir

From: Nicolas Bourg []
Sent: mardi 16 avril 2013 19:25
To: Charki Jean-Charles
Subject: swift










PO BOX 487922




Thursday, December 12, 2013 AOL: JOCHETRIT
Page 6of10
Case 1:15-cv-05345-AJN-KHP Document 142-4 Filed 05/12/16 Page 7 of 11


Paris, France

:70:payment for invoice 0042013



-----Original Message-----
From: Nicolas Bourg <>
To: "" <>, Eric Elkain
Subject: Copy of the Swift
Date: Mon, 8 Apr 2013 15:43:40 +0200




:20:NICOPSD 130930140


:32A: 130408USD5660256,77


:50K:/CY4511501001402320USDCACCOO 1


PO BOX 487922


Thursday, December 12, 2013 AOL: JOCHETRIT
Page 7of10
Case 1:15-cv-05345-AJN-KHP Document 142-4 Filed 05/12/16 Page 8 of 11




:70:ABA NO. 021-0000-89



-----Original Message-----
From: Nicolas Bou rg
To: " " <>, ""
Su bject : Swift copy
Date: Thu, 14 Feb 2013 09:18:26 +0100

Dear All,

Please fi nd th e copy of the swift:

{l :F01FBMECY2NAXXX1111111111}



:20:NICOPSD130440 11 5


:32A: 130213USD 15925 102, 16




Thursday, December 12, 2013 AOL: JOCHETRIT
Case 1:15-cv-05345-AJN-KHP Document 142-4 Filed 05/12/16 Page 9 of 11 Page 8of10

PO BOX 487922






:70:amendment to the loan agreement

dated 07 Nov 12



Have a goof day


Nicolas Bourg

20 Rue Philippe-Plantamour
1201 Geneve Switzerland

M +41 78 888 31 75
T +4122545 03 00

-----Original Message-----
From : Nicolas Bourg
To: '"'" <>
Subject: Fw: Fwd: Electronic SWIFT copy
Date: Wed, 23 Jan 2013 09:06 :13 +0100

Nicolas Bourg
Swiss Development Group
+41 78 888 31 75

Thursday, December 12, 2013 AOL: JOCHETRIT
Page 9of10
Case 1:15-cv-05345-AJN-KHP Document 142-4 Filed 05/12/16 Page 10 of 11

-----Original Message-----
From: elvis elvis <>
To: Nicolas Bourg
Sent: Wed Jan 23 08:54:34 2013
Subject: Fwd : Electronic SWIFT copy

---------- Forwarded message----------
From: Eesh Aggarwal
Date: Wednesday, January 23, 2013
Subject: Electronic SWIFT copy


Our client advised us to send the below copy of the electronic swift confirming the transfer to the US lawyers executed yesterday, 22-


{2 :1103BKTRUS33XXXXN}








PO BOX 487922





Thursday, December 12, 2013 AOL: JOCHETRIT
Page 10of 10
Case 1:15-cv-05345-AJN-KHP Document 142-4 Filed 05/12/16 Page 11 of 11


:70:ABA NO. 021-0000-89




Eesh Aggarwal

For and on behalf of

Azure ConsultantsJLT

Thursday, December 12, 20 13 AOL: JOCHETRIT
Case 1:15-cv-05345-AJN-KHP Document 142-5 Filed 05/12/16 Page 1 of 6

Exhibit 5
Case 1:15-cv-05345-AJN-KHP Document 142-5 Filed 05/12/16 Page 2 of 6

22/05/13-19:19:13 OPSPRTOUT-4838-172970 1

---------------- ----- Instance Type and TranslD.l.ssi on - -------------
Notification (Transmission) of Original sent to SWIFT (ACK)
Network Delivery Status Network Ack
Priority/Delivery Normal
Message Input Reference 1920 130522FBMECY2NAXXX0999601752
--------------------------- Message He ade r - - --- --- - ---------- ------
Swif~ Input : FIN 103 Single Customer Credt Transfer
Receiver BKTRUS33XXX
Message Text ---- - --------------- - ----- -
20 : Sender's Reference
23B: Bank Operation Code
32A: Val Dte/Curr/Interbnk Settld Amt
Date : 22 May 2013
Currency : USO (US DOLLAR)
Amount #28.000.000 , #
33B: Currency/Instructed Amount
Currency : USD (US DOLLAR)
Amount #28 . 000.000 , #
SOK : Ordering Customer- Name & Address
/CY451150 1001402320USDCACC001
PO BOX 487922
570 : Account With Inst -Name & Addr
59: Beneficiar y Customer- Name & Addr
70: Remittance I nformation
212 559-6299
71A : Details of Charges
Message Trailer
PKI Signature : MAC- Equivalent
--- - ---------------- - ------- Interv e ntions ------ --- ----------------
Cacego r y Network Report
Creation Time 22/05/13 19:18:58
Application SWIFT Incerface
Operator SYSTEM
( l : F21FBMECY2NAXXX0999601752 } {4 :{ 177:1305221920}{451:0 }}
Case 1:15-cv-05345-AJN-KHP Document 142-5 Filed 05/12/16 Page 3 of 6

Received by josh graft

1. $10,500,051.25 on November 9,2012
2. $2,625,053.01 on January 22, 2013
{I :F01FBMECY2NAXXX1111111111}
:20:NICOPSD 130220087
PO BOX 487922
:70:ABA NO. 021-0000-89

3. $15,925,102.16 on February 13, 2013
:32A: 13021JUSDI5925102,16
:33B: USD 15925102, 16
PO BOX 487922

:70:amendment to the loan agreement
Case 1:15-cv-05345-AJN-KHP Document 142-5 Filed 05/12/16 Page 4 of 6

dated 07 Nov 12

4. $175,101.32 on February 19, 2013

Other Received by Graff:

5. $5,660,256.77 on April 13, 2013
:32A: 130408USD5660256,77
:33B :USD5660256,77
:50K:/CY451 1501001402320USDCACC001
PO BOX 487922
:70:ABA NO. 021-0000-89

6. $390,056.29 on April 16, 2013
{ 1:F01FBMECY2NAXXX1111111ll1}
:20:NICOPSD 131060020
:32A: 130416USD390056,29
:33B: USD3 90056,29
PO BOX 487922
Case 1:15-cv-05345-AJN-KHP Document 142-5 Filed 05/12/16 Page 5 of 6

Paris, France
:70:payment for invoice 0042013
:7 1A:OUR

I think was first sent to Kramer Levin: First payment to Kramer bounced, second to Graff here below

7. $6,000,189.25 on May 20, 2013 (Cabrini)
:33B: USD6000189,25
PO BOX 487922
:70:as per loan agreement

Tricounty money:
8. $2'800'045.23 on April 24, 2013
9. { 1:F01FBMECY2NAXXX1111111111}
10. {2:I103BKTRUS33XXXXN}
11. {4:
12. :20:NICOPSD131140081
13. :23B:CRED
:32A: 130424USD2800045,23
:50K:/CY4511501001402320USDCACCOO 1
Case 1:15-cv-05345-AJN-KHP Document 142-5 Filed 05/12/16 Page 6 of 6

PO BOX 487922
Kramer levin Naftalis and Frankel
LLP Attorney Escrow Account
FOA Reetika Agarwal (212) 559-6299
:70:ABA No. 021000089

14. $28,000,000.00 on May 22, 2013
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Exhibit 6
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Exhibit 7
Case 1:15-cv-05345-AJN-KHP Document 142-7 Filed 05/12/16 Page 2 of 7

Le 16.07.13 17:10, « Iliyas Khrapunov » <> a écrit :


>> SDG Investment Fund
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Case 1:15-cv-05345-AJN-KHP Document 142-7 Filed 05/12/16 Page 4 of 7

>>> Dear Michael,
>>> Following our conversation of today, I am forwarding you SDG
>>>consolidated  financial statements:
>>> 1) SDG has negative equity of CHF 28.5 million. To get involved in a
>>>project finance deal with a sponsor that is technically insolvent
>>>would  not be prudent.
>>> 2) Please see Note 2. Scope of Consolidation of the auditor's report
>>>that  lists subsidiaries that were used for consolidation. If you
>>>compare this  list with the companies mentioned in the attached
>>>newspaper article, you  will find many similaries. The new ultimate
>>>owner of SDG is said to be  Mr. Philippe Glatz. Greencos S.A., the
>>>company through which Mr. Glatz  acquired SDG, has a charter capital
>>>of CHF 100,000 and its financial  strength is estimated by D&B at CHF
>>>90,000. How and where Greencos and  Mr. Glatz found the CHF 10
>>>million that was used to recapitalize SDG is  unclear. I am not
>>>persuaded that there's been any real change in the  ownership of SDG.
>>> Based on the above, I cannot return the project to our pipeline.
>>> I will be away from the office next week but you could always call
>>> my mobile.
>>> Regards,
>>> Alexey
>>> -----Original Message-----
>>> From: Kevin Meyer []
>>> Sent: Wednesday, June 19, 2013 8:56 PM
>>> To: Alexey Alekseev
>>> Cc: Cesare Cerrito
>>> Subject: Financial Report SDG Capital
>>> Dear Mr. Alekseev,
>>> As requested, please find attached the YE12 financial reports for
>>> SDG Capital, the Swiss entity holding the Luxembourg SPV Porto Heli.
>>> As you might notice, the reported losses of the Group represent a
>>> significant amount. Nevertheless, this amount is not representative
>>> of the activity of SDG Capital for the following reasons:
Case 1:15-cv-05345-AJN-KHP Document 142-7 Filed 05/12/16 Page 5 of 7

>>> -       Due to the accounting methods used (Swiss GAAP), the Group's
>>> activities is mainly driven by capitalized assets - indeed, the real
>>> estate activity is reflected in the asset segment of the balance
>>> sheet;
>>> -       Reported losses are mainly linked to elements which can't be
>>> activated due to the accounting principles at hand (e.g. marketing
>>>expenses, VAT, Opex) and off-balance-sheet elements - indeed, the
>>>sales  already completed on the Du Parc Hotel project are not yet
>>>reflected in  the accounts, the Swiss system requiring the official
>>>notary acquisition  report to be executed before the sale can be
>>>accounted for.
>>> -       Finally, the market value of the assets is not presented in the
>>> financial statements. Each asset is reported at cost, and does not
>>> represent the actual current value of the assets.
>>> For all the above reasons, you will understand that the financial
>>> statements presented in attachment do not convey a representative
>>> portrait of the accounts, as could be the case had international
>>> accounting standards been used.
>>> Please do not hesitate to contact me or Mr Cerrito (CFO, cc'd) if
>>> you have any question.
>>> Regards,
>>> Kevin Meyer
>>> SDG Investment Fund
>>> 20, Rue Philippe-Plantamour
>>> 1201 Genève
>>> M +41 78 637 52 49
>>> T  +41 22 545 03 51
>>> The information contained in this communication is fully
>>>confidential and  intended for the named recipient(s) only. In case
>>>you are not an intended  recipient, you are hereby (a) strictly
>>>forbidden from copying,  distributing this email or taking any
>>>further action relating to it, and
>>> (b) kindly requested to notify the sender and delete any copies
>>>immediately. We undertake no responsibility for the accuracy,
>>>completeness and absence of virus in this communication or any of its
>>>attachment(s). Unless otherwise stated, any views or opinions
Case 1:15-cv-05345-AJN-KHP Document 142-7 Filed 05/12/16 Page 6 of 7

>>>presented  herein are solely those of the author. This email is
>>>intended for  informational purposes only and is not a solicitation
>>>or offer to buy or  sell any participation or financial instruments.
>>> *** eSafe scanned this email for malicious content ***
>>> *** IMPORTANT: Do not open attachments from unrecognized senders
>>> ********************
>>> IMPORTANT: The contents of this email and any attachments are
>>>confidential. They are intended for the named recipient(s) only.
>>> If you have received this email in error, please notify the system
>>>manager or the sender immediately and do not disclose the contents to
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>>> *** eSafe scanned this email for viruses, vandals, and malicious
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>>> ********************
>>> The information contained in this communication is fully
>>>confidential and  intended for the named recipient(s) only. In case
>>>you are not an intended  recipient, you are hereby (a) strictly
>>>forbidden from copying,  distributing this email or taking any
>>>further action relating to it, and
>>> (b) kindly requested to notify the sender and delete any copies
>>>immediately. We undertake no responsibility for the accuracy,
>>>completeness and absence of virus in this communication or any of its
>>>attachment(s). Unless otherwise stated, any views or opinions
>>>presented  herein are solely those of the author. This email is
>>>intended for  informational purposes only and is not a solicitation
>>>or offer to buy or  sell any participation or financial instruments.
>> The information contained in this communication is fully confidential
>>and intended for the named recipient(s) only. In case you are not an
>>intended recipient, you are hereby (a) strictly forbidden from
>>copying, distributing this email or taking any further action relating
>>to it, and
>>(b) kindly requested to notify the sender and delete any copies
>>immediately. We undertake no responsibility for the accuracy,
>>completeness and absence of virus in this communication or any of its
Case 1:15-cv-05345-AJN-KHP Document 142-7 Filed 05/12/16 Page 7 of 7

>>attachment(s). Unless otherwise stated, any views or opinions
>>presented herein are solely those of the author. This email is
>>intended for informational purposes only and is not a solicitation or
>>offer to buy or sell any participation or financial instruments.
Case 1:15-cv-05345-AJN-KHP Document 142-8 Filed 05/12/16 Page 1 of 2

Exhibit 8
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Exhibit 9
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TRANSLATION OF FILE: 2015-03-22_11-03-30_144.wav

Date of Translation: June 30, 2015


Nicholas Boeck [spelling unclear]: Um, it’s 11 am... 22 of March in New York City, Manhattan, 5th
Avenue between, um, 38th and 37th Street. On the Landmark Hotel. Meeting with Joe Chetrit… and of
course myself, Nicholas Boeck.

[pause and walking in/out of room]

Nicholas: He’s downstairs, I’m going to go get him, alright? Hold the table for 2 minutes.

Female Voice 1: [unclear]

Nicholas: Yes... As you wish. No, no. Go ahead, go on. You keep holding the table.

Female Server 1: No, there is no reserving the table, sir.

Nicholas: No, I come back. I need the table because I have a meeting with another person.

Female Server 1: No, I have to close because they’re starting brunch service. So I’m leaving and another
server is staying.

Female Voice1: So it’s possible to keep the table?

Female Server 1: Yes.

Female Voice: Did you do the thing?

Nicholas: Guess there’s no point in staying here, then? Um... bye.

Waiter: Take care.

Nicholas: Um [clearing throat]

[walking sounds]

Nicholas: Yeah. Kiss.

[walking sounds]

Nicholas: Doing well.

Joe: Still not tired?

Nicholas: No, still not tired! Ha ha! [laughter] I’m well, and how are you?

Joe: [unclear] it’s good.

Nicholas: It was a few years back, no?

Joe: Yes.

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Nicholas: It was Cetel years ago, no?

Joe: Yes. [unclear speech pattern]

Nicholas: Oh yeah? They argued right? What’s the story? It’s not the people from Cetel [unclear] that
didn’t agree and then...

Joe: No. It’s another hotel... What’s it called... Lander... Landers... yes.

Nicholas: Yes, that’s right!

Joe: These are people coming out of Chicago.

Nicholas: OK.

Joe: They sold something in Chicago.

Nicholas: Ah, so it’s an American chain...

Joe: [inaudible]

Nicholas: Ah yes, this one? Ah yes.

Joe: They had exact plans made. They had plans [inaudible]. We were supposed to build, they came. It
was another Italian group.

Nicholas: Oh really. But when it opened, wasn’t it Cetel?

Joe: Yes, it was Cetel [inaudible]

Nicholas: So they basically sold the business then?

Joe: Yes

Nicholas: Once it was built… And are there still apartments here?

Joe: …

Nicholas: Ah, how much is it?

Joe: [inaudible] I don’t know. It must be 2500 per foot I think. At the beginning, it was something like 1300
[unclear]… So, everything’s good? The kids?

Nicholas: Yeah, everything’s fine.

Joe: Moving on to the second phase?

Nicholas: Yeah… it didn’t go well with Virginie because... of a lot of problems, difficulties, and... We
weren’t able to save things [the relationship]. She was never happy. Never, never happy, you see. You
could say that. I did what I could, in any case. But uh... With the problems we had, with Elias, etc. I went
through some difficult times. And… it wasn’t…

Joe: Are you done now?

Nicholas: With whom? With her? No, it’s still under way… She wants to live in Paris.

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Joe: Huh?

Nicholas: She wants to live in Paris.

Joe: [inaudible]

Nicholas: Well, she’s French, but uh... For me, I don’t like that too much for my son, you see? Paris isn’t
for a small child like that, you see? I don’t know...

Joe: So now she lives in Paris?

Nicholas: Not yet…

Joe: And you’re between Switzerland and...

Nicholas: I’m closing Switzerland. I’m leaving Switzerland.

Joe: You’re leaving. To go where?

Nicholas: I don’t know. Brussels, I still have my home in Brussels. Maybe New York.

Joe: What?

Nicholas: Maybe New York.

Joe: It was a difficult year.

Nicholas: What?

Joe: It was a difficult year. Many things all at once, huh?

Nicholas: Yes, it’s been a difficult year! Well, listen... uh, I have.... how should I say… for them… for Elias,
it hit him hard. Since the stepfather is still in prison… they underestimated their enemies... they realized
for business it was impossible, they had funds transferred, etc., it was [unclear]...

Joe: And is Pedro in Switzerland?

Nicholas: Yeah, he hasn’t moved.

Joe: He can’t…

Nicholas: Well, he’s being sought by Interpol.

Joe: Pedro himself?

Nicholas: Yes, Pedro. He is, well, not being sought by Interpol but he is on their list. But he has, um, a
deal with Switzerland. With the investigating judge in Switzerland. So he can’t leave Switzerland. So,

Joe: Coming at you from all sides…

Nicholas: Well, for us anyway, I mean, I don’t really know anymore, because I’m no longer involved in
those problems with him. It’s been a long while now.

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Joe: You mean [inaudible]

Nicholas: But it’s not that. It’s that he had met one of them. You know, uh...Yasik, do you
remember, the Ukrainian? Alexander Yasik. He showed up at your office a long time ago. He was
Ukrainian. Anyway, he is in charge of his office now.

Waiter: What can I get you?

Nicholas: I’ll take, uh, do you have sparkling water? What do you have?

Waiter: Uh, we have Badoit.

Joe: Badoit is great with, uh, lime.

Waiter: With lime, certainly.

Joe: I’ll have Diet Coke.

Waiter: Diet Coke. Of course.

Nicholas: No. So, he has his office which now only takes care of his political affairs and getting his father-
in-law out and all that. And he also has two guys who work for him and who are by his side non-stop, one
Russian and one Ukrainian. One of whom I briefly introduced you to.

Joe: What about the attorney who was [working] for the father-in-law?

Nicholas: Oh, yeah, yeah, Peter. Peter, well he, uh, see, I’ll explain the story to you, um, he had to do
something with Nille [spelling unclear], you know, it’s actually going well. 50 percent is mine, 50% is

Joe: In Africa?

Nicholas: Yes, in Africa. For the Telecom Hub. And basically we had problems with the Telecom deal, we
couldn’t close, but we just recovered an asset from that deal. There were 2 telephone companies.
Remember? One in CAR and one in Burundi. We managed to recover Burundi last week.

Joe: [unclear]

Nicholas: Um, I mean, the Central African one. The small one. We didn’t put money into it. So, we’re still
continuing with this venture. Many things are happening, namely in Saudi Arabia. Actually I came here
now because I have been officially mandated to find opportunities in New York by the Saudis, the Saudi
family. So we’ll see… I’ve looked into 2-3 things. Anyway. We had a deal with Elias. He had loaned part
of the funds, these loans were supposed to be converted to ownership for [unclear, possibly: Peter or the
hospital]. But the conditions weren’t acceptable for us. And so, he is denouncing us for those loans…

Joe: [inaudible] You must have crazy lawyer fees…

Nicholas: Yes, yes, of course. So he is denouncing those loans and we are no longer on friendly terms.
That was his choice!

Waiter: Hello.

Nicholas: That’s why…

Joe: What about the hotels in Greece?

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Nicholas: Well, the hotel in Greece is done…

Joe: Is it Aman right?

Nicholas: …No, no. Well, no. The chain? No, that’s the brand. You see the brand... the brand, doesn’t
have any real estate associated with it.

Joe: No, but he bought the chain.

Nicholas: Yes, he bought the chain but there isn’t much real estate in this.

Joe: 19 properties.

Nicholas: What? 19? There’re 19 management licenses but they don’t own the 19 hotels.

Joe: It’s 19 and 11.

Nicholas: What? Yeah, what his name?

Joe: The Russian guy.

Nicholas: Yeah, he was dating Naomi Campbell.

Joe: Who?

Nicholas: He was dating Naomi Campbell. She was his…

Joe: Ah yes, right. There are two Russian guys, him and the other.

Nicholas: Yeah. Anyway, I know who I mean… But I myself knew Lauren Zeca [unclear]. I think they have
some properties, like in Thailand....

Joe: It’s either 11 and 19, or 19 and 11.

Nicholas: What, they have 11?

Joe: Yes, 11 or 19 properties and the rest is management.

Nicholas: Yeah, that sounds about right. Anyway, the guy I’m talking about is in management, they’re not
owners. And our deal, with me, was to purchase shares of that business. We didn’t do it, of course, for
the same reasons. But we do own 75% of Nikki Beach Hotel. I mean, when I say we own, I mean SDG
and [unclear, possibly: the bank].

Joe: [inaudible questioning]

Nicholas: It’s the “Dolphin Fund” – you know it. You met Miltos. He does a great job.

Joe: Yeah?

Nicholas: It opened last year and it’s going well. It’s Nikki Beach... It’s the Nikki Beach residences and the
Hotel. But now in Greece with the new Prime Minister... uh... we’ll see how things go. Anyway, listen. Eric
called me a few days ago to say hello and he told me he had surgery.

Joe: He’s making noise…

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Nicholas: Yeah, he’s making noise, haha.

Joe: He’s not easy…

Nicholas: And, huh, he asked me where I was. I said New York. He said, well you should see Joe, etc.
So, I said no problem.

Joe: So now you… [inaudible] or are they going to give you proxy?

Nicholas: No, no. I, uh... we have a mandate with them, so to speak, for two things. One of the first things
is that we are putting together a humanitarian foundation with them for Central Africa because it’s a
country at war. And uh, that has been signed. In all, we’re global at a sum of 350 million for the
humanitarian foundation. As for us, we are in charge of the humanitarian foundation. And this has allowed
me to be in it with them. Now they have a minimum investment budget of 500 million. Everywhere. They
don’t even look at figures below that. Now they asked me to... I explained to them in New York, because
they saw that in the track records there were deals made here with you... they are not, well, they are
present here in New York but not like Qatar, not like [unclear] and now, with all that’s going on and
happening with Syria and Iraq and all that, they’ve really become closer to the United States and it has
become more legitimate to invest here in the United States. That was not necessarily the case a few
years ago. So that’s why…

Joe: What do they want to do? They want to build or buy?

Nicholas: Both.

Joe: Prices are high. Prices at purchase are high.

Nicholas: It’s certain, the economy is strong. The prices are high but there is always a way.

Joe: Are they using dollars or euros?

Nicholas: Dollars.

Joe: Haha.

Nicholas: That’s fortunate, huh?

Joe: What do you see your role as?

Nicholas: So uh, no uh, I had distanced myself from the markets but now I see that there are a lot of huge
projects under way. Things that are super luxurious and really huge. So I’m starting to look into it.
Manhattan I think may be tricky. Prices are very high and there are many new projects that are going to
hit the market. But I think there are some interesting things in the Bronx. I saw you were doing something
there. I think there’s potential there. Big projects.

Joe: [inaudible questions]

Nicholas: Yes. I think that’s where it’s going to happen. At the capital gains level.

Joe: It’s going to happen. But it’s different. It’s not like Manhattan. In Manhattan, people buy land at 1100
dollars. I don’t know how they do it.

Nicholas: The plot. Per foot? Land incidence?

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Joe: It’s too much.

Nicholas: All they need is a good lesson.

Joe: That’s when people are not working with their own money.

Nicholas: With [unclear, possibly: SoFa] I remember we were at 1700. Everything included. On Flat.

Joe: Actually a little less. But we made a common sense mistake.

Nicholas: Where?

Joe: There, at Flat. We spent more than what the product could yield. [inaudible] Because of the ceilings,
prices didn’t go up as expected. But it was good work.

Nicholas: What about sales?

Joe: With sales, we are at 170 million roughly.

Nicholas: What’s the percentage? Based on surface.

Joe: About 40-45.

Nicholas: Percent? Oh, that’s good.

Joe: What’s good is that we didn’t open [unclear] so that helped… We are thinking of delivering the
apartments in June or July. So we are going to issue an occupancy certificate in different parts. But, yeah,
we’re working, we’re moving ahead. All the projects you know of are making headway.

Nicholas: Cabrini too?

Joe: [inaudible] I don’t know if they’re open.

Nicholas: Yeah, I think they’re open.

Joe: We’ve started the demo [demolition?]

Nicholas: So you’re not selling the project. You’re keeping it. Because, no matter what, the price is going

Joe: Yeah, and that project is costing, um, 1050-1100 dollars.

Nicholas: Right. Well, with Flats we were at about 1100. Something like that.

Joe: Yeah, maybe a bit more. 1350.

Nicholas: And this one is 1050. What about Chambers?

Joe: With Chambers, they are working on a model.

Nicholas: That was also a good price per...

Joe: 780-800 dollars.

Nicholas: That’s good.

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Joe: That’s why. I want to do exclusively construction, all the projects you saw are underway.
Everywhere. In Florida.

Nicholas: They’re building now?

Joe: In Florida we just completed a big project. We are aiming at July-August for sales. Miami River.

Nicholas: Yeah, yeah, I know what you’re talking about. Close to Brickell. Those two towers. Or rather 3

Joe: 2 for sure. Maybe 3 or 4. We’re waiting for the confirmation.

Nicholas: Beautiful! And do you think Miami will continue to go up?

Joe: Prices are high, too. But it depends. For example, we just bought a plot in Port [unclear] in Fort
Lauderdale [unclear]. We’re trying to change it. Because you can build a hotel, but we’re trying to see if
we can build apartments. A lot of construction going on.

Nicholas: Well, that’s good. I heard you sold the tower in Chicago.

Joe: Yeah. It’s not done. They haven’t paid us yet.

Nicholas: And it’s good? It’s a good deal.

Joe: About that. You know, if you with… what’s his name… The guy who now has the debt.

Nicholas: The debt?

Joe: Glatz?

Nicholas: Ah yes.

Joe: I sent him the figures. I was expecting a reply. To see if we can pay it in a lump sum. And maybe we
can reduce it a little. Or if he wants… You know we have to know the story behind it to understand what’s
going on [piano]. Today, for example, do you know how much it is for Flat?

Nicholas: No…

Joe: 100 million.

Nicholas: In equity? With Clippers as well?

Joe: Everyone. 100 million. I was going to suggest. I don’t know if you want to try something out.
[inaudible] Even there is no deal, I will pay. I mean, Glatz has done nothing wrong. He is a good guy.

Nicholas: Haha. They are… they are clients right? Do you want to go upstairs? Let’s go upstairs. We’ll be
more comfortable. [inaudible]

Nicholas to waiter: Can I have the check? Yeah, it’s open.

[Music and piano]

Nicholas: Thank you. Haha. That’s fun; they’re rehearsing for their musical. Let’s go there, it will be

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[conversation continues – inaudible]

Nicholas: You know Jacques Chirac right? He always used to say: “Trouble comes in packs”.

Joe: It’s exponential.

Nicholas: Yeah, and it hits you all at the same time. Haha.

Nicholas to hotel staff: Hello. I’m back, may I have the same table?

Nicholas: This will be quieter. We can sit here or there.

Waitress: Once it’s available you can move back.

Nicholas: OK. We will be more comfortable here. So, you were saying…

Joe: Yes. It will be done one way or the other. But I’d rather make a friendly arrangement. Because I think
we can do things with this guy in the future as well.

Nicholas: Look, I have no idea. You know, since Halloween, when we last saw each other, they kicked
me out of Triado without telling me anything. I found out through Diane Artall. That was not an elegant
move. Since then, they have asked to negotiate with you. So the question is… I know the deal, since I
signed it myself. Today, it’s 21 million plus 12% with 4 million as a minimum guarantee. Or something like
that. If the question is, can I figure out how to significantly reduce the price, do I know how to do that? The
answer is yes, I know how.

Joe: How much are you thinking? So we can pay everyone. You, them…

Nicholas: I think we can get to what you were hoping. Meaning between 10 and 15.

Joe: Not going to happen.

Nicholas: I think so. Listen…

Joe: Between 10 and 15…

Nicholas: Where do you stand now? With the proposal?

Joe: The guy doesn’t want to talk.

Nicholas: Yeah, he’s beating around the bush.

Joe: He’s saying give me the payments and then we’ll discuss how much. I said, I want to pay you in one
go. I can pay you. Even if that means… Because for every deal he has to be alone. Because I made a
mistake on that deal and for reasons we already know the deal fell through. So that puts you in a difficult
position. You can’t undermine one deal to save another.

Nicholas: No…

Joe: So now I can… What do you suggest? Do you want me to come to Switzerland? I want to settle this,
I don’t want to pick fights with anyone.

Nicholas: OK…

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Joe: If we start fighting then…

Nicholas: I can handle a fight; I’m already in it anyway. And I didn’t provoke it. It was not me. I’m just
suffering it. As I said, I’m suffering it. I’m willing to do things, I’m willing to help you, and I think I can. But
before that, I would like you to pay me what you owe me.

Joe: I will pay everything in one go. If you want, you can draft a contract under your name. Everything.

Nicholas: OK, let’s draft a contract then. So there are no problems.

Joe: I want to solve this. Especially since you are thinking of coming here to the States. There will be
other opportunities. You’re not 95 years old.

Nicholas: That’s for sure…

Joe: You have a life ahead of you. As I said. As I told Eric. I want to solve both… not problems…both
situations at the same time. With you, it’s clear, we know the price.

Nicholas to waiter: Yes we will have drinks. A Diet Coke please. And sparkling water. With lime. Thank

Joe: If you have the means to solve this, we can draft a document. No problem. I am willing to solve this
any other way too. If you want, I can come over there. If you want to talk to…

Nicholas: Let me explain. I feel things [meaning, probably: I have good intuition]. Where do we stand
today? There was, on the one hand, the commission, you have already paid 400. You still owe 600. So I
would like to know when…

Joe: I want to pay it off in a lump sum. Because I can’t not solve that problem with them. It goes hand in
hand. I want to solve these issues together.

Nicholas: OK… um. The problem I have today is that I am forced to take a position. Either I’m working “for
you”, so to speak…

Joe: As far as I’m concerned, it won’t take much time. I’m not going to drag this out for 10 years. I don’t
want it to drag on for 10 years and I don’t want to keep paying lawyer fees and I don’t want to fight. The
way things are today, I’m not trying to dig up their shit. I could easily say tomorrow: let’s draft the papers.
But I’m not going to do that. I want to call the guy I work with and I want him to say: “I don’t want an
affidavit”. Even if it means sending a lawyer there to interview him.

Nicholas: Right.

Joe: Well, it’s… There are many different points. But I don’t want that. I want to solve this. I know that
sometimes one door closes and another one opens. That’s life. But first of all, I want to pay you what I
owe. And solve the other issue at same time. You tell me. Lay out the plan, we can draw up the
paperwork. If you want, I can call the lawyer, if he’s here, I don’t know if he’s around. I can call him in,
we’ll work on a document and then you go to work. That’s it.

Nicholas: Yeah, about that. Since we’re talking. We had a deal together. Now they are causing trouble
there, too.

Joe: What?

Nicholas: Yeah, on another issue. They are asking me to justify. You know, in the contract it says “6
million deduction for China and Belgium.”

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Joe: Yes.

Nicholas: I’m not giving it. But I will have to. Because in the procedure, they will ask me to prove that Joe
Chetrit has invested that sum. That’s why we had a deal on that difference. You see?

Joe: I’ve put in 4. 4,500

Nicholas: 4,200.

Joe: Yeah, 4,200. Whatever.

Nicholas: So there is a 1.8 gap.

Joe: That’s not a gap. It’s the deal we had made. Based on the figures you had given me, with Simba and
all that, it was worth more. So based on that, you had given me this money with a return. That sum was
invested. Same here with the money I’m giving you here. Nothing is guaranteed. It’s paid in capital.

Nicholas: Yeah but that’s not what Eric had told me, you see. Eric told me: obtain that difference worth 6
[and I did] and I will pay you the difference myself.

Joe: No way. Take 6 and give back 1 800? Impossible.

Nicholas: Yes. That’s what he told me. Call Eric. That’s what he told me.

Joe: Impossible. 801 million?

Nicholas: You’re making a good deal.

Joe: How is that a good deal? I want a good deal. Show me how that’s a good deal.

Nicholas: Wait… the good deal was that Cabrini put in 28.5 plus 6. Total equity.

Joe: Yes, go ahead.

Nicholas: So 28.5 plus 6 that’s… um, 34.5. Total Cabrini with [unclear, other name]. Let’s say 35. To this
day, you have taken… Um, there is 21 left.

Joe: 21 on the books.

Nicholas: That’s it. That’s not a bad deal.

Joe: How?

Nicholas: Because you didn’t pay for the equity. It was free. You bought back at a discount.

Joe: I didn’t buy back at a discount.

Nicholas: Yes you did.

Joe: How much did they put in? 28, right?

Nicholas: Yeah, 28.5. Flat. And you bought back at 21.

Joe: But I paid with my 6. I paid with… no, my 4.5.

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Nicholas: Yes, with the 4. The 4. Anyway, there is a big discount.

Joe: Yes, I paid with that money. That went for Cabrini. And you, I think it was not even a million, it was
800 thousand.

Nicholas: What?

Joe: The commission. I don’t remember.

Nicholas: No, no, it was a million. I can send you the invoice.

Joe: …yes, that’s why it was a million or 800 thousand. But it wasn’t twice. You can’t get 800 on the
money I put down.

Nicholas: No, that’s not it. There was a 1 million commission for the deal. And then, in the negotiations,
we had agreed on a discount figure of 6 million for China and Belgium. We were in your office and we
said: “We will fine-tune it based on what was actually spent, on what I actually spent.”

Joe: That was never part of the discussions. It was a total amount to be paid. And even today, if
something needs to be paid, we can reach an agreement. We’re not going to start punching each other in
the face.

Nicholas: Haha.

Joe: If you think there is a way…

Nicholas: I would like you to talk to Eric. Because I’m in…

Joe: I can talk to Eric as much as you want.

Nicholas: He’s the one who told me. I remember, I was in Geneva.

Joe: It’s impossible that I owe you 1.8 million. That would mean I put all the money and you collect the
profits. That’s not logical.

Nicholas: No, no. You bought back the others’ shares.

Joe: No, but I paid what they had invested in shares. If you collect what you say from 4.2 to 6 million and
their shares, I would basically get the money I put in back if we follow your logic. Saint Bart’s and the
other one gave my money back. I give back what I owe, 28 and I still have to pay 21. So you want me to
pay you 2 commissions?

Nicholas: No, because the first one is part of what they redeemed for St. Bart’s and Belgium, that’s in

Joe: So 4.2, and you are saying 6. OK…

Nicholas: The discount you’re getting is 6 and you put in 4.2.

Joe: So I give you that sum?

Nicholas: Yeah. That was it. They are the ones paying me.

Joe: Wow, you are the most expensive lawyer in the world.

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Nicholas: Haha, I have to. I need to…

Joe: So what you’re saying is that …

Nicholas: They paid you 6 to reimburse you and you gave 4.2. So there is a 1.8 discrepancy.

Joe: And for the Flat, I pay what they put in.

Nicholas: No. No…

Joe: See, it makes no sense.

Nicholas: No, you get an additional discount.

Joe: Where?

Nicholas: Well, you’re paying 21 for Flat.

Joe: No.

Nicholas: Yes, you are. Let’s add up the numbers.

Joe: It’s simple. It’s 28 total. I sent 6.

Nicholas: Right. No, there was Cabrini in the deal too. So Cabrini’s 6 million.

Joe: Plus my St. Bart’s money.

Nicholas: Wait, wait.

Joe: So I put in 6 plus 6, that’s 12. Let’s forget about how much you get for a moment. 6 plus 6, that’s 12

Nicholas: What’s the 6 plus 6?

Joe: I gave them St. Bart’s. That’s how I call it. It was worth 6 million with China. I gave them another 6
million, that’s 12. There’s 21 left.

Nicholas: No!

Joe: Plus your percentage.

Nicholas: That’s not how it works. In the discussions we had 28.5 million I think for Flat and 6 for Cabrini.

Joe: How much is that?

Nicholas: That’s 34.5.

Joe: How much is left to pay?

Nicholas: 21

Joe: 21 plus profit. Plus 12.

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Nicholas: That we don’t know. We’re talking equity.

Joe: Plus profit. So I gave from 21 to 28 in cash. And I gave, in addition, my shares…

Nicholas: From 34.5 to 21.

Joe: Yeah, how much is that?

Nicholas: 13

Joe: I paid 13

Nicholas: No, you didn’t pay 13.

Joe: I gave my St. Bart’s shares. And I wired the funds.

Nicholas: No, yes, but that’s not how it works. Wait. Forget about the wire. Let’s imagine you hadn’t paid
anything. Look at the deal.

Joe: The deal we had was 34.

Nicholas: Yes.

Joe: Minus 6. Minus the 6 of St. Bart’s.

Nicholas: It’s 34.5 minus 6.

Joe: They had put 34. 6 from Cabrini equals 6 from St. Bart’s. OK? How much is left? 28. 28. How much
is left today? 21. So I paid 7.

Nicholas: You paid 7… But didn’t you have an additional discount on top of the 6?

Joe: What 6?

Nicholas: On top of the 6 for St. Bart’s, there was an additional discount.

Joe: I don’t think so…

Nicholas: Yes, yes. There was 2 or 3 million that were removed.

Joe: We have to read the documents…

Nicholas: No, I’m positive.

Joe: It’s easy, it’s black on white. Although we haven’t really done any “black” with these people.

Nicholas: Ha. But… I guarantee you. There was…

Joe: You can’t say that, Nicholas. Listen… I know… I know you are in a difficult position but there is no
need to add things. On the 4 million, I had given you 800. 800 or a million, I don’t remember; and I don’t
even remember how much I sent you. 400 or 500.

Nicholas: 400.

Joe: I take it as it is. There’s something remaining but that’s linked with paying off…

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Nicholas: But, but…

Joe: This is why now, thank God, you are here. I want to sort this out with you. I don’t want to fight with
you and I don’t want to fight with them. I want to do this is a friendly way. It’s a small world. And
sometimes, the best relationships are those that are a little bumpy at the start.

Nicholas: Yeah…

Joe: I’m not here out of animosity. I’m here to create. I want to solve this. If there is a way. Tonight, if you
want, I’ll come with you to Switzerland. In the name of peace, I’d rather pay 1000 times than have one

Nicholas: Yes, yes. But I don’t even want to pay before, I want to be reassured.

Joe: No problem. No problem. What’s logical is logical. We have documents.

Nicholas: OK, Joe, so let’s sort out this issue. Because I don’t want to have those problems with them. I
want to make money out of it to defend myself. It’s that St. Bart’s discount, as you call it. I had a formal
agreement from Eric, whom you spoke to on the phone, that stated that the difference…

Joe: Impossible. It doesn’t make sense.

Nicholas: I swear on my children’s lives.

Joe: I don’t want, I don’t want children [involved] [inaudible]

Nicholas: This is formal. It’s Eric.

Joe: There are documents. We spoke and then we did the documents. It’s not logical. Out of 4,200. Even
if I count interest. Interest over 3 or 4 years.

Nicholas: No, but you got a discount of 4 million in addition to that.

Joe: I don’t know what the discount was, I can’t tell. But it’s easy to find out. The figures are there.

Nicholas: Yes, I saw in the contract. There are figures. Of course.

Joe: I’m not trying to hide things from you. Firstly. Secondly, if there is a way to solve this, I’m open to
hearing your ideas. We will come up with a system. That’s all.

Nicholas: I just want to sort out this St. Bart’s issue with Eric or without Eric, I don’t know, because I’m
going to get in trouble with this. They’re going to confront me. Because, you know what they think?
They’re telling me: “Show us that Mr. Chetrit invested 6 million in St. Bart’s.”

Joe: No. That’s no right. We did not invest 6 million. It’s the same as the profit I owe Flat. Same thing with
the profit I got on St. Bart’s. That’s normal. It’s very expensive. There are no earnings.

Nicholas: The contract states that is was redeeming the investment.

Joe: Plus profit.

Nicholas: Not plus profit. That’s why they’re after me.

Joe: I don’t know which document you have. I can’t tell you, I have to check. That’s the truth.

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Nicholas: OK, look at...

Joe: I should have prepared all the documents, but it’s easy, all it takes is a phone call. But, um, that was
the deal. If that’s what they want to do, I don’t want to fight. I want them to tell me so I can freeze
everything, I’ll look into all the details and they will get the money in 8 or 9 years. No problem.

Nicholas: You know that’s what they started doing with you. They told you about the St. Bart’s and China

Joe: No…

Nicholas: They didn’t tell you about that? They didn’t ask you questions about that?

Joe: Who?

Nicholas: Glatz. Or some Petr Kraztnof who sent you a request.

Joe: No. Oh, yes, yes. I think they sent… but it hasn’t taken place yet.

Nicholas: There you are. I’m telling you, these guys are a real pain. That guy Elias shows no appreciation
for all that I’ve done for him. He is…

[inaudible side conversation with other person. “See you later”].

Nicholas: As I said, I’m not very forgiving with them. I know a lot and I can get a very big discount on the
deal. Very big.

Joe: So tell me. And based on that we’ll pay. No problem.

Nicholas: Yeah. That’s fine but I want a guarantee before. You see?

Joe: We’re not going to pay them until everyone has paid…

Nicholas: No… We’ll draw up a document.

Joe: Tell me your ideas, and we’ll draw up a document.

Nicholas: Huh, huh.

Joe: Tomorrow you tell me what we have hand in hand and I will take care of it immediately. I don’t want

Nicholas: What proposal did you make to Glatz?

Joe: Last proposal I made, I had told him 15. 16.

Nicholas: 16 plus 12. Percent.

Joe: Um, wait. Let me see if I can find… What’s his email? Glatz?

Nicholas: Yeah, Glatz. G-L-A-T-Z.

Joe: What’s his first name?

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Nicholas: Filip. G-L-A-T-Z. Filip. Want me to look?

Joe: Last time I sent it to him, on March 4th, he wanted to see figures, I sent it to Glatz. Last time the
lawyer spoke to [inaudible]…

People laughing in the background.

Nicholas: How are your kids?


Nicholas: It was just to see where you position yourself.

Joe: I just told him like that. I think I had told him 16. I’ll send 5 now and 3 weeks later…

Nicholas: In 3 weeks? And… Is there an upside?

Joe: Um, to be discussed.

Nicholas: Right. OK.

Joe: If there is a way. We can maybe see if the lawyer is here.

Nicholas: What can I do?

Joe: He’s right next door.

Nicholas: But, um, to ask him what?

Joe: To see if we have received …

Nicholas: Ah, it’s…

Joe on the phone to lawyer: Hi Joe, are you in the office? Ah ok. Remember the last offer we made to
Glatz? Triado, Germany. Yes, thanks. He will check right now.

Joe to Nicholas: But if you really need something. Do you have a card?

Nicholas: Yes, I have a card. I’m sure I have a card. But, as I said, this time, it was indeed hard for me. I
was waiting to receive your payment and I didn’t get paid.

Joe: But I couldn’t pay you. I have nothing. I have nothing in my hands.

Nicholas: I know… But that was for signing the first deal.

Joe: No…

Nicholas: Yes, it was.

Joe: It covered the Triado deal for Flats.

Nicholas: Right. For Flats. We struck a deal. A first payment was made and then you paid nothing else.
To renegotiate a new deal.

Joe: No, there is nothing to renegotiate. No deal was made. Why are we here otherwise?

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Nicholas: Well, yes, there was a contract that was signed at Artall’s. Remember, they went to the judge.

Joe: Yes, OK. I know.

Nicholas: So? That means there was a deal.

Joe: Yeah, we negotiated but we didn’t pay.

Nicholas: Right. We didn’t pay.

Joe: So it has to be parallel. The two deals have to be parallel.

Nicholas: I’ll agree with that if I can be reassured with a piece of paper. I don’t want to be put in that
position again. Because the way I saw things, the commission would be paid when we signed the first
deal. The deal with Diane Artall, you know, that we signed when we bought back the Flat shares. I was
entitled to…

Joe: You got something.

Nicholas: Yes, I received 400 thousand.

Joe: No, you also received…

Nicholas: What did I get?

Joe: At purchase, you also got something.

Nicholas: At the time of purchase? No. It was, um…

Joe: You did, I’m 100% sure. You got something at purchase.100 thousand percent sure.

Nicholas: Oh, yeah…

Joe: When we bought the deal, you got paid. And that was to re-buy…

Nicholas: No, no. I didn’t receive anything. It was, um, Eric who got…

Joe: No… you got something. You received something for each deal that we made. [inaudible] In that
deal you were paid 100.

Nicholas: I will check my accounts but…

Joe: It’s easy to check.

Nicholas: Of course, of course.

Joe: There was no briefcase.

Nicholas: No, haha, it’s all transfers.

Joe: So it’s easy. I’m sure. It’s what I gave at closing. That’s the first thing. Secondly, if there is a way to
solve this, we can do both. Two birds with one stone. I told you that last time. If there is something you
can do quickly, we can proceed immediately.

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Nicholas: Yeah.

Joe: You stay one day. Or I’ll come with you one day. Whatever you want.

Nicholas: Yeah. What is Glatz saying?

Joe: Glatz? He said send me that first and then we can work it out. I said, I want to pay it all in one go, I
want to pay you now. I’ll pay you know and then… For the 5-6 million. You can put everything in escrow
and three weeks after you’ll get the rest.

Nicholas: And, um, there was a court decision for the next payment?

Joe: There are lawyers following the case. I don’t want… even with the ruling, [inaudible] I don’t want to
create tensions [inaudible] I know what to say. I don’t want to… It’s not my style to use a tape or
something, you know.

Nicholas: Of course. Indeed, it would mean risking a lot for little.

Joe: And there is no risk. I can block the funds. Even if [inaudible] life insurance. I can do that. I can do
that. Even with the company, I could say where is [unclear]… there was a lot I could do, but I didn’t, I let it
go. I still hope we can solve this this week. For you and for them. If you want to make a call, we can talk
tomorrow morning. Whatever works.

Nicholas: Yes, I have to make a call now… um. What I suggest is that I send you the document proposal
for the payment of the balance.

Joe: Attached to the Triado payment.

Nicholas: If you want.

Joe: That’s easy. But what’s the Triado idea?

Nicholas: As soon as we sign, I will let you know. Anyway you were planning to pay this commission
when exiting Triado. The balance. Anyway, I’m not asking for anything right now, all I want is a guarantee.

Joe: That’s um… If there is a way to solve both issues quickly…

Nicholas: Yeah.

Joe: What do you have in mind with them? Did you speak with someone? Did you talk to Glatz?

Nicholas: Yeah. I still have good contacts in Switzerland. So, there is Glatz, there is um…

Joe: But what did they buy? I didn’t get the whole operation. When they bought Triado. What did they
buy? They bought the hotel in Switzerland. They bought this and that…

Nicholas: Nah, they didn’t buy anything. We don’t have [unclear]. The way things went down, as you
know, with the stepfather being in prison and all. The little one started to panic. So he sold SDG, and
within the SDG group, SDG Capital, there was Triado, there was Greece, there was [unclear]. All that was
in SPG in Luxembourg. I was the president of all these SPGs and it was supposed to be integrated into
the Real Estate Fund. But, when he panicked with the situation, he liquidated everything. So SDG Capital
was bought out by Philip Glatz. But I mean, they are friends. They, um, talk to each other almost every
day. So, you can draw whatever conclusions you want to draw. And for the balance, they asked me to
negotiate with you at the time of the exit. It is, of course, against my own interests. I did it at the time out
of loyalty. Let me remind you that when you entered the fund, based on the statutes, you paid me 20% of

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profits and a 2% management fee. So you’re taking all that away from me. That’s why I’m bugging you
with these commissions and stuff, but I lost a lot of money because of him. And that’s it. That was his
angle, I played along. I said, OK, my Elias, my friend, I will help you. And what I get in return is him
denouncing the loans with Nille in Luxembourg. So, now, basically there is no reason for me to help him.

Joe: How do you think you are going to solve this? You will see him tomorrow. Or the day after.

Nicholas: Yeah, No, well I have to 2 or 3 things to say to him. [unclear] You know, I’m the most decent
and loyal person when you respect me. You know I took risks for that person, I took risks for everyone
and that’s how they thank me. Wait, so they kicked me out of Triado without any notice. The lawyer just
told me, don’t come to the office anymore, you are no longer the president. I was on my way there. See
their manners?

Joe: That hurts.

Nicholas: That’s their manners. It’s a lack of respect. And I was there for them.

Joe: 24/7.

Nicholas: And all the deals I secured were great deals. Flat was a great deal. Carboni was a super deal,
even if didn’t progress.

Joe: [unclear]

Nicholas: Yes, everything. Everything. I didn’t deserve this, see? So now, I have just drawn the
conclusions I had to draw and I’ll do what I think is best. Because, you know, it’s been a year and a half, I
have zero income out of all that business. So, they don’t give a shit that I have my family in Belgium and
stuff. I have kids, private schools. Thankfully, I had some savings. But…

[phone rings]

Nicholas: It’s because they are paired with the iPhone. I’m on iCloud. So if you call the American one or
the Belgian one, they both ring because they’re linked with iCloud.

Joe: So what’s the plan?

Nicholas: So the plan is that I will speak to my lawyer here.

Joe: Who is it?

Nicholas: It’s Gil. It’s a lady. I have a new one.

Joe: Here?

Nicholas: Yeah, she’s in New York.

Joe: Why did you hire a lawyer here? Why? Here in New York, for them.

Nicholas: No, that’s my personal lawyer, who takes care of my business here with the Saudis. I can’t use
Artall anymore. So I will call her and I will send you a proposal for the commission, and if you agree, once
it’s signed, I’ll tell you what I want to do with the deal.

Joe: You will call her now? Today or tomorrow? And Glatz. If we can solve it quickly. You just have to
explain… I’d rather fold 1000 times than have a fight. Because if we have a fight… I know what I owe,
there is a maximum, but for them it may cost 10 times more.

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Nicholas: Of course. What do think? I have everything I need, and they are stupid because I have nothing
to lose. They’re all under Interpol surveillance and all…I mean that’s just a lack of respect. You can be
harsh in business and all, but when you treat someone like they treated me when I gave everything for
him, it’s not good.

Joe: It’s not good. So you got it. I want to solve this and turn the page.

Nicholas: OK. I’ll send it to you. Yeah, it’s one page anyway.

Joe: I’ll look at the page we had. Are you leaving tonight or are you staying?

Nicholas: It depends on what she tells me. But maybe I’ll leave tonight. Yeah, I’ll leave tonight.

Joe: You can see tomorrow. You tell me. I can get on a plane and come to Switzerland, no problem. And
now. Now, prices are high.

Nicholas: Yeah, you have to buy elsewhere.

Joe: Even there, what I bought today, I can sell for double the price.

Nicholas: Maybe we can make exit deals. What they want is yield.

Joe: Maybe…

Nicholas: You build, I’ll buy right after.

Joe: I don’t know, with people from the Middle East, it takes a lot of time, it tires you.

Nicholas: Because now we have a relationship based on trust. They just paid 100 million for the
humanitarian foundation. This is a big service, they are initiating peace between Catholics and Muslims,
thanks to this foundation. You know there’s a civil war in CAR, Catholics against Muslims. And these are
Muslims setting up a foundation aimed at helping the country and facilitating peace between the two
communities. And they need stuff like that.

Joe: Getting into politics…

Nicholas: I know, it’s a brain bender. I never got involved in politics. It so happens that I had a partner
who got into politics and I was not his employee, I was his partner. He had a deal, he came up to me and
said: set up an investment fund, I will find equity. You know if equity comes from banks, it’s the bank that
has to do all the work. Then I realized we were going further. It’s not about not working in politics. You
can do that. But then things got complicated, the stepfather went to jail because he fled London to avoid
being tried, which was totally stupid. I mean, you know the story.

Joe to someone on the phone: Hello, hi. Because. OK, I’ll call you back.

Nicholas: 5 and 12 in 3 weeks and no upside. Let me see… OK. Thank you, Joe.

Joe: You know there’s a saying in English that goes: “What doesn’t make you, breaks you.”

Nicholas: Yeah, yeah.

Joe: It hit you right between the eyes.

Nicholas: As you say, I’m not weaker.

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Joe: There is a cost, but what can you do? So, send me an email and let me know. If I have to come, I’ll
come, even for 24 hours, I can do it.

Nicholas: It’s beautiful again. It was snowing two days ago.

Joe: It’s colder. If you need anything, any help in New York let me know.

Nicholas: Thank you. So, we’ll sort this out.

Joe: Yes. Quickly. Alright, then, have a good trip. And be brave.

Nicholas: Thanks.

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I, Leonardo Duran, General Manager of Language Services for and on behalf of Magna
Legal Services, hereby certify that the audio recording named “2015-03-22_11-03-
30_144” was translated from French to English by a professional translator competent in
both French and English to render such a translation, and that to the best of my knowledge,
ability, and belief this translation is a true, accurate, and complete translation of the original
French audio recording.

Leonardo Duran

May 2, 2016


Magna Legal Services
Language Services Division
1635 Market Street | 7 Penn Center, 8th Floor | Philadelphia, PA 19103
Phone: 866-624-6221 x 303 | Fax: 866-579-0819
Email: | Web:
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Exhibit 10
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TRANSLATION OF FILE: 2015-03-23_13-50-26_100.wav

Date of Translation: June 30, 2015


Nicholas: It’s the 23 of March, I’m meeting with Joe Chetrit at the offices of Chetrit Group on
7th Avenue between 38th and 37th Streets, number 512.

[filler; background noise]

[walking noises]

[muffled female voices]

How are you?

Female 1: How are you?

Female 1: How’s everything?

Nicholas: Good! Good.

Female 1: Good? Good. OK.

Nicholas: Uh, I’ll go.

Female 1: [unclear]

Joe: No, Joe.

Female 1: Ah, Joe! I just forgot your name!

Nicholas: Nicholas.

Female 1: Nicholas, ah!

Female: [unclear]

Nicholas: No. Four days ago.

[background noise/static/heels and walking]

Nicholas: Mm hm.

Nicholas: Hi. How are you? I’m good and you?

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Male 1: How are you?

Female 2: You can wait here [unclear], be right here. OK?

Nicholas: OK. Thank you... ah… [sighing].

Nicholas: Hello, thank you!

Female 3: [unclear]

Nicholas: Yeah...

Female 3: Inaudible.

Nicholas: OK, no problem!

[zipper noise]

[long pause; background noise]

[bell noise]

[female voices in background]

[footsteps in background]

[car horns – outside office]

[phone text/email sounds]

[background sound]

[background static and phone ring tone]

[background street noise, voices]


Joe: Did you have something?

Nicholas: No, that’s alright. I’m good... Hmm…

Joe: I was downstairs at the bottom of the hotel.

Nicholas: How are you?

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Joe: I sent you quite a few messages.

Nicholas: I only just got them. It took some time to come through.

Joe: Ah, yes.

Nicholas: Ah, yeah.

Joe: How are you doing?

Nicholas: How are you?

Nicholas: Me, I’m good.

Nicholas: Um...

Joe: After our meeting yesterday I called Eric, to be on the same page, you omitted 2 or 3
things... the first thing is that you said I received a commission here, the Challe de Flat [spelling
unclear]. I didn’t receive anything. You’re confusing this with Wahib Nasser. It’s Wahib Nasser
who’s received a commission, you told me this yesterday.

Joe: The amount?

Joe: I didn’t touch anything there.

Joe: I don’t know.

Nicholas: Yeah, you sent [unclear], I think that was for Nasser.

Male 1: [unclear] I sent them to you. In his name, I sent them to you.

Nicholas: What?

Joe: In his name... to his attention.

Nicholas: I think you sent that to Eric, who was [paid? unclear] to send this to Nasser.

Joe: Yeah, that’s the first thing. And the second point is, I asked Eric, uh, since we discussed the
difference, uh, between the reduction of 6 million, and, uh, the amount invested in, we’ll call it
China and Surnille. So your investment, from what I saw, was 3.2 million to Surnille directly and
1 million directly to China. You have 4.2 million. And the reduction was 6 million. On the buy-
out of, uh...

Joe: That’s not a reduction, that’s the purchase of... [unclear] …it was 6 million.

Joe: Yeah, and, as we have negotiated, the…

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Male 1: The 6 million, it was for the, uh, [unclear]

Nicholas: No, in fact, in the deal, uh, we invested, I saw the figure, my [unclear] sent me the
exact figures. We invested, invested…

Joe: You always want to be right!

Nicholas: Yes, yeah, yes, yes, so we invested 32.5 in Flat in equity and 6 million in loans for
Cabrini. This was our investment, uh, with you.

Joe: OK.

Nicholas: You, you bought back, uh, you did the buy-out for all this. You reimbursed the 6
million from our loan, Cabrini, and you bought back Flat for 22 million.

Male 2: [unclear]

Joe: Yes, 28 with Cabrini.

Nicholas: Yes. It’s 28 million.

Joe: 28 that I [unclear]

Joe: Yes, yes, but with Cabrini.

Joe: Cabrini, we finished that.

Nicholas: No, no.

Male 1: Cabrini, we’re done with that [unclear].

Nicholas: No! No, no!

Joe: From 38 million, you’re telling me 28 million?

Nicholas: I gave you a 10 million price reduction. Yes.

Joe: Yeah?

Nicholas: Well, yes!

Joe: That’s the figure... guaranteed!

Nicholas: It’s, uh, yeah.

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[background sound, movements]

Joe: [unclear]

Nicholas: Ha, ha!

Joe: [unclear]

Joe: Yes, but we negotiated together!

Male2: [Inaudible]

Nicholas: What?

Male2: [Inaudible]

Joe: Cabrini, we are in agreement that Cabrini equals Chief [inaudible] equals St. Barth. Or
something like that?

Nicholas: Mm hm.

Joe: [unclear and inaudible] and what you have is not 28. Those are different things. Cabrini
equals St. Barth.

Nicholas: Yeah, yeah.

Joe: [unclear] ... We’re in agreement with the price of 4 206 [four two hundred and six]. Cabrini
equals St. Barth. One equals the other. Is that right?

Nicholas: No! Yes. That’s right. That’s right. But no, the thing is, for me, during the
negotiations, that’s not how it took place. There was one loan for Cabrini, that we made to you
for 6 million, which you paid back in full, which we were able to do very quickly [unclear]. Yes,
for St. Barth, too.

Joe: St. Barth, it was for St. Barth? [unclear] The thing is, is that, there was a global sum, a
global sum of 38 million, I’d even say 38.5 million, that was invested between St. Barth and

Joe: St. Barth and Cabrini.

Nicholas: It’s 38.5 [thirty-eight and a half].

Male 1: 38.5 Cabrini, that’s 25.5. So there’s 32.5 left [unclear]. Is that right?

Joe: That’s right.

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Joe: [unclear]

Male 1: You took a reduction of 6 on the [unclear].

Nicholas: Yes, yes. It may have been sympathetic but we said 6.

Male 1: [unclear]

Nicholas: But if it’s not 6 it’s 4, 2 [four, two].

Male 1: [unclear] ...equals 50, then we went down to 28.

Nicholas: Then, you had a discount from 32 to 28.

Male 1: You don’t know what you’re saying now [unclear].

Nicholas: Yes. The numbers are the same.

Male 1: You said 32.5 [thirty-two and a half] plus, uh, 28. We paid, and what’s left is 21.

Joe: 21 to be paid plus the revenue.

Nicholas: [unclear] because I don’t think like that. Can I show you?

Nicholas: So we had, uh, it was, we put in 38.5 [thirty-eight and a half], both of them, both of
them, on top of that, on the top of that, there was 6 for Carroli and 32.5 [thirty-two and a half] on
the other side. OK.

Joe: We made a global deal, the 38.5 [thirty-eight and a half] became 28. [unclear]

Male 1: 6 equals 6. And uh,

Nicholas: Wait, wait!

Nicholas: Wait, but how are we going to justify this? We’re going to justify this.

Joe: I invested with [unclear] Chenille and I want to collect my money.

Male 1: We were on 6 million.

Nicholas: And we had said 6 million.

Nicholas: Finally, some sums put forward in [unclear]

Male 1: [unclear comment]

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Joe: Yes, yes. If you like. But if we don’t make the correlation between this and that, what I’m
interested in is finding out how we arrived at this figure here.

Nicholas: At this figure...

Nicholas: So, here we are, there’s 6 million, this is [unclear] one thousand. And then we had
discussions saying, Joe, I’m not certain it’s 6 million what you put into the Island.

Joe: Yes, but I took the capital, that’s what enabled me to get paid more

Nicholas: OK, but the discussion I had at the time, I don’t know if you remember, Joe, it was 6,
and you said, we’ll figure out the exact figure later, but let’s take the principal, so I can
recuperate my money.

I had said ‘4 million 200’ with three years of interest, that’s 3 million 500.

Nicholas: Yes, I know.

Nicholas: But, but you know what happened, you know China, we couldn’t follow that

Joe: If I knew then what I know now, [unclear], because never in my life have I done business
this way! [unclear] today we’re hiding things [unclear].

Nicholas: Yes, yes, I know.

Joe: ...because when you put down 98 thousand at 10 percent, that’s 10 million a year!

Nicholas: But that will buy back 38 at 28!

Joe: No, it won’t buy back 38 at 28...

Nicholas: You’d have to add the 4.2!

Joe: No!


Nicholas: So now here, there was 4.5, which was a discount.

Joe: Discount!

Joe: [unclear]

Nicholas: Yes, because now you’re at 10! 10.5 and you have the difference between the 38.5 and
the 28!

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Joe: [unclear]

Nicholas: OK, so, for me, it’s really about the discussion. Eric confirmed it with me yesterday.
As far as the discount we made on Nille [spelling unclear], we put in 4.2 and then we took out 6.
You had an agreement to pay off the difference, to Nille, he told me, yes. This is where my
problem lies.

Joe: [unclear] It’s not normal! It’s not normal. It’s not normal. I paid the attorneys 500,000
dollars, and you, you want 1 million!

Nicholas: But, but, yes, well, I don’t know, in any case, that’s the deal I had with Eric.

Joe: Yeah, yeah! Impossible! Is that why you took 800,000, who knows, 1 million dollars! I did
this for Eric out of friendship, but there is absolutely no reason for me to give you 1 million
dollars. I’m taking back my money [unclear]. It’s a little elegant.

Nicholas: But no!

Joe: I only give at the exit. I don’t give when I enter.

Nicholas: OK. But the exit, uh, well, uh… listen, I, we can analyze these things and not agree.

Joe: I’m not even trying to negotiate in the sense that this is a new thing that’s come from you, I
respect what you have to say, but it’s totally crazy. I’m going to put forth 14 thousand? [unclear]

Nicholas: Call Eric then?

Joe: I’m not going to call Eric, because I wrote everything down. I wrote it all down.

Joe: [unclear] I can’t. I can’t say things like that [unclear].

Nicholas: Then perhaps Eric didn’t understand...

Joe: I don’t want to put him on the spot, but... it’s impossible! It’s like if you said, ‘Are you, am I
doing the marathon’? If someone says they’re doing the marathon, they’re lying [unclear]. Even
the 820 million dollars [unclear], so I’m obligated to change everything; even the direction of the

Nicholas: Hmm.

Joe: ...and I don’t want to give you more... Even my 820 million dollars, it’s just paper. It’s only
serious because it was an understanding between friends. There’s no reason why I should,
normally. I am taking back the 400 million. Why, because there’s been nothing. Nothing done,
nothing. And that’s all. And, [unclear] even that I won’t give it to you. We’ve paid. We want to
be paid.

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Nicholas: Uh, uh...OK, OK, OK. But I, for me, wait, listen. We have, in my interpretation of this,
OK, we didn’t envision that you’d want out, OK, it’s a downside for you.

Joe: It’s not.

Nicholas: Yes, but it’s not a ... You bought them at a lower price, the shares.

Joe: No, no, [unclear] I didn’t buy them [unclear], I didn’t buy them at a lower price.

Nicholas: You recuperated what you put in, Nille. In…

Joe: It’s normal. Otherwise you would have made me an atomic bomb here!

Nicholas: Yes, ok.

Joe: That’s all. I am regulating. That’s all. I’m the nice one. Why would I put 400.5 million in
somebody’s hands? I stand to lose as much as I stand to gain. That’s in God’s hands. But this has
been highway robbery, what he’s done to me, that guy – the tall one? The taller guy from St.
Barth? Eh, uh?

Nicholas: Ah, yes! Didier? Yes, yes!

Joe: Yes, that one!

Nicholas: We don’t know! We have a case [litigation] against him. Uh…

Nicholas: Yes that’s theft, it’s theft!

Joe: St. Barth is worth money, huh?!

Nicholas: Of course it’s worth money!

Joe: I have a house worth 50 to 60 million dollars!

Nicholas: Of course!

Joe: I’m not a little child who wants out on the wedding night!

Nicholas: No, no, no, no!

Joe: I got out of it so I could put an end to it.

Nicholas: Yeah, yeah, yeah.

Joe: The point was to end it.

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Nicholas: Yeah.

Joe: Normally, with numbers and letters, someone calls, someone pays a dollar, they deduct one-
thirtieth, one-fortieth, one-fiftieth... you could do that, too, you know? Which is normal. I want
to straighten all this out.

Nicholas: Uh huh.

Joe: And I don’t care for the stories that come along with this. The drama. I don’t want to be the
one making stories for others.

[inaudible background noise] ...I want to straighten things out. Because I need to defend myself
at the next stage. I tried pushing things back and pushing things back…

[unclear] …even if they’ve won the case... [unclear] but I don’t want to... because I know what
to say. But I don’t want to, but I can’t tell the truth, it’s a mistake.

Nicholas: OK, well, listen...

Joe: [Joe knocking on door and calling out] Lois! Lois!

Joe: If you have a solution, we can... Lois! [unclear] if there’s a solution...

Nicholas: I’m trying, I’m trying so that everyone... uh…

Joe: Well, listen, we’ll take care of everything, but if you have a little something, then we’ll
come to an agreement, but this, [unclear], like you said, so I can go back [unclear].

Nicholas: OK, well, what do you want me to tell you? That’s what Eric wants.

Joe: That’s not my concern here. It’s not possible, it’s not logical. I want my 4 million 200. You
give me back my 4 million 200. I owe you 1 million 800 [unclear]. In what country?

Nicholas: But because you have a 4 million discount for the thing...

Joe: I’ll put 1 million 200 here and give 1 million to you, and you take 800 on the 400 million.
Then, I’ll keep 2 million and advance the money. I’m putting 30 or 34 here...

Nicholas: But, no!

[inaudible female voice, Joe unclear]

Female Voice 2: You sent this to them [unclear]... from here to there... I think some of them

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[silence/mic noise]

Joe: Everything was placed in the account of Dolgave [spelling unclear], so maybe he...

Nicolas: It was him who called me [unclear]

Nicholas: [distant, unclear] ... This is, uh...

Joe: [distant, unclear]

[indistinct voices]

Joe: Looking at the...

Female Secretary: I know I had more notes from the very beginning, but that’s your handwriting.

Joe: Yeah, I know those are my notes, they’re handwritten...

Joe: If you have the means to find something, we’ll find something, and we’ll see if we can

Nicholas: There were some funds which were received, 2 million then 2.6 million... it was on the
1st of August...

Joe: [unclear]

Nicholas: 13th of February 2013.

Nicholas: [under breath, unclear], Ah!... So this is the totality of Triadou, where I made 64

Joe: Oh!

Nicholas: Not with you, there was the theft and all that... [reviewing numbers]... We put in 39
350 into Flat, it seemed to me that’s what it was. And 6 into Cabrini. If you can erase that, that’s
what I get with my numbers as far as payments.

Male voice: Matt! Matt!

[rustling and shuffling]

[pause; talking far off in background; unclear]


Nicholas: OK?

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Male Voice: Matt. Matt!

Joe: I’ll take this number 29 2050 [unclear]

Nicholas: OK! But, so, we’ll find out the right number but... No, there were extra 6’s [sixes].
This is what I transferred to George Grasse or here... Yeah, it’s easy to know. Well now you see
that this makes more sense with the deal you made, because now that gives you 45 million in
investments and you bought back 28.

Joe: No!

Nicholas: No, no! I’m telling you!

Nicholas: You think you made a worse deal than you made, but you made a beautiful deal.

Joe: No! I made the deal, I know exactly the deal I made, I made 4 million. 4 million is the
difference, that’s it!

Nicholas: Of what?

Joe: 4 million and, and, uh...

Nicholas: There was a re-negotiation with Eric and we still made [unclear]

Joe: No. No. It never passed. 4 million and this. It was 4 million.

Nicholas: And I have my report here, so I’ll find it. I don’t know why I didn’t find it before. And
I did this here with the bank, I found these numbers with the bank. 39 million 350, that’s what I
sent for the Flat Hotel... well, look, look, the numbers!

Joe: [unclear]

Nicholas: And the contract, it was bought at 28.

Joe: No. Not at 39, impossible! There was 4. It was 32. Thirty-two five hundred, the account.
Minus 4 million, that leaves 28. Then, 28 minus 7 for the payments I made, that leaves 21. Then
on 21, there’s 5 million 500. I think that’s 6 there. [calculating] Twenty-two, 4 times 4, and 4
times 5, that’s… That was the deal. And he put in 6 which equals St. Barth.

Joe: It’s 39 with Cabrini... with Cabrini.

Nicholas: That’s really not what was notated here, but OK.

Joe: You’re saying, what’s his name, I don’t know, the other guy there?

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Nicholas: Who?

Joe: That guy, what’s his name? The boyfriend of ... [unclear]

Nicholas: Uh, Peter?

Joe: The one who built two lots?

Nicholas: Oh, yeah, Felix!


Joe: [unclear]

Male Voice [Matt?]: Yes, but this was all of that.

Joe: No, but this is the money that you put in this account.

[Matt?]: Yeah, but I never, I don’t know, I don’t know what was said.

Joe: [unclear]

Joe: So up until now, the friendliness... [unclear]

Nicholas: Yes, well with our 30 and change... we are... [unclear]

Nicholas: You had a loan of 100?

Joe: [unclear numbers spoken]

Nicholas: 228?

Joe: 228 [unclear]

Nicholas: Ah, it’s 228, the lot [unclear]

Joe: We’ll find a way. I respect you but...

Nicholas: We definitely did put in 39 in Flat, 39 in Flat, plus 6 in Cabrini and that you bought it
all at 28; it makes for a beautiful deal.

Joe: I didn’t buy it at 28, and I did my part in the deal. So it’s 34 and a half.

Nicholas: 34.5, OK


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Nicholas: because 34 and half plus 39 makes 7.


[Eric?]: Well, uh, then...

Nicholas: Eric and I worked toward the same goal.

Joe: [unclear]

Joe: If you have the means. We can find a solution to all of this.

Nicholas: Well, you know I’m not trying to, uh...

Nicholas: I’m not trying to be a beggar taking the crumbs. I want things to be fair and better.

Joe: That’s for sure. And now... [unclear] ...If I had done those payments, we’d have nothing. If I
had done those payments.

Nicholas: No, why? No. because the commission, for what you agreed to pay, it was agreed upon
by signature…by the signature on this, the 28.


Secretary: You want to take a break now... [unclear] ...we’re closing in two or three days.

Joe: If I had made the payments... we’d... [unclear] ...the rest of what I said, the parallel
payments and what we were discussing. Otherwise, last time on the 18th, you know exactly what
I said. It’s the 21st now.

Nicholas: It’s the 21st now!

Joe: [unclear]

Joe: Well, if I had made those payments, there’d be nothing left for us to say to one another...

Nicholas: Yes, well... yes. My point, Joe, is to say, the 2 million. It’s possibly Eric and myself
who misunderstood one another; perhaps, call Eric?

Joe: Impossible! Impossible! I’m not calling anyone! When I look in the mirror [I see Joe] not

Nicholas: I know that. I see!

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Joe: No. You can tell me Joe [unclear] as a gentleman [inaudible]. Here on this deal, I want to
reclaim my money on this deal amicably, and I know that’s not possible on every deal [unclear].

Nicholas: OK, but I’m in a situation where I’ve got nothing to lose [unclear].

Joe: [unclear] I want to get it squared away.

Nicholas: Yeah, yeah, yeah.

Joe: I told you yesterday 5 and 12?

Nicholas: And 7!


Joe: [unclear] I’ll pay what I owe, that’s it!

Male Voice: Is that it? Are we done here?

Nicholas: Hmm, hmm... OK, take a look at your numbers! It’s because I think I made you a
better deal than that, a better offer than this!

Joe: The only advantage was that there [unclear]

Nicholas: Even better than New Year’s! Ha ha. [unclear]

Joe: Even the attorneys, I could cause major problems for them!

Nicholas: And, once again, I don’t really care today.

Joe: But I don’t want to.

Nicholas: Yes, I’m not on their side.

Joe: The lawyer [unclear], this doesn’t interest me... I’ll review this and [unclear] I know a guy
who takes care of everything. I’m going to Israel Tuesday or Wednesday for the Easter Holiday

Nicholas: When is it that you’re leaving?

Joe: I’m leaving Tuesday night from here.

Nicholas: Tuesday for 7 or 8 days.

Nicholas: So for me, pay me the 600 million now... Once again, this bill comes out to millions...
Normally that’s done by signature.

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Joe: I want to clear this up, the whole deal all at once.

Nicholas: [unclear]

Joe: [unclear] The same day I do it, it’s done.

Joe: You’re a business man! [unclear]

[unclear, Joe’s calculations]

Nicholas: OK, another proposition!

[unclear, Joe’s calculations]

Joe: So you have leads [investors]?

Nicholas: Of course I have leads! Go ahead! But you know I’m gonna defend myself!

Joe: So there! I leave you with an initiative! [unclear] the day that I pay you, I’ll pay you this and

Nicholas: OK, but how do we go about it? I need money today.

Joe: [unclear answer] After this week, we’re done.

Nicholas: And why don’t you want to pay the 600 thousand? I want to settle.

Joe: I will settle, Monday!

Nicholas: Yes, but this is what we had agreed upon in the beginning.

Joe: Yes, I think so. How did we get to this situation? [unclear]

Nicholas: I can’t help it. No one can help that!

[Joe inaudible]

Nicholas: Absolutely not! Ah, I’m no longer working with them! Hey, Joe, I’m going to the
attorney’s office and she calls me telling me, you can’t come anymore because they fired you!
You’re no longer President of Triadou!

Joe: Since when is this? Who did this?

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Nicholas: Affiline Gatt [unclear spelling], do you know why he did this? It’s because I said that,
the payments that Joe’s going to make, I’m going to keep $500 thousand of it in order to pay off
the attorney expenses, yes, exactly, to pay her!

It’s been over a year! It’s not even her, uh... It’s not even him that I called, it’s ILLIAS! He said,
‘No, no! You’re going to transfer everything, transfer everything, so much so that he didn’t want
me to keep the money. I said, no! I’m keeping 500 thousand to pay off the expenses. And two
hours later, she did the procedures to fire me!

Joe: [unclear answer]

Nicholas: [unclear] He has a factory; plastic components.

Joe: [unclear] I’m not making any promises, but there are many things to be done.

Nicholas: So we’re doing this under the deposit reduction of 50-50?

[Joe unclear]

Nicholas: [To friend] the 17, he hasn’t accepted yet?

Joe: [unclear]

Nicholas: No, no, no.

Joe: OK, well! [Leaving]

[sound of people leaving.]

Nicholas: [sigh and laughter]

[walking, hallway, voices]

[voices, office hallway]

[Nicholas walking]

[Office hallway voices, greetings]

Nicholas: No, no, it’s OK, I’m walking. [unclear]

[phone dialing- elevator?]

Nicholas: Well, have a safe trip!

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I, Leonardo Duran, General Manager of Language Services for and on behalf of Magna
Legal Services, hereby certify that the audio recording named “2015-03-23_13-50-
26_100” was translated from French to English by a professional translator competent in
both French and English to render such a translation, and that to the best of my knowledge,
ability, and belief this translation is a true, accurate, and complete translation of the original
French audio recording.

Leonardo Duran

May 2, 2016


Magna Legal Services
Language Services Division
1635 Market Street | 7 Penn Center, 8th Floor | Philadelphia, PA 19103
Phone: 866-624-6221 x 303 | Fax: 866-579-0819
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