21115 -- PRNILECIED KL CONFIDENTIAL CENTRAL BANK OF CYPRUS FBME BANK FBME CARD SERVICES LTD AFFIDAVIT 0F NIGEL BROWN 1- Brown -- London-United Kingdom MAKE OATH AND SAY follows. mm 1, 1 um the field or Fmancml Fund as well us Furelgn Corrupt Act and Ihe Bribery Au. pruudmg such mum lhmugh Iwo regnlered comp-"mm Cumulung Limned ("Dangate") London leucd 1 Ml on the board or direclors of bulb of mm comp-mum and mu founding punner bulh. 2, In 2014' was inslrucled along wuh Llnulher mdepemlem uml colleague. Mr Alec Leighlon. pmudmg our aerucca |hrough Dan zuc and lmer Baninglum. lo curry um un invemgauun mlu |he Cyprus brunch Bunk le< FBME Bank"), 11 bunk mcurporaled Tamnnia dues 911% of us business Cyprus. FBME Cards Serucm le Cards"). 11 company regmcred Cyprus um] 11 wholly-uwned mummy ul' FBME Bank, The shareholders In FBME Bank and FBME Cnrd~ are AymIb-Fnrid Mlchel Snub ("Farid Saa Fndi Snub ("Fadi Saab"). They hold office 1" DIl't'ClOl' Chlef Execulwe Direclor. whilsl Ihc VICC Presldenl Fadfl sun. Mlchel bzlab (logelher wilh Fand 521111) and led1 ab. Ihc JULY 2l|15 NFIDEN AL 6, 1 Joined the Lundnn Melmp . I qualified lmmLundnn Unneruly Medwul um um, nce. 1 mired in 1992 mm 13 1n |he Melmpolmm Police mm 1m exemplary muce recnrd. mcludmu lnur lur bravery and 1m mjul'} mum lullum "'mnjur mlhe line 01 duly. 22,1 uisiincuy recall Michel Saab saying during the meeting that he was prenired to gne personal assurances that the bank had done nothing wrong. He exptaineu that he. his uncle and Father belieied that the FinCen notice had somehow been engineered Michel Snub explaine-- nd so he belieied that this individual hxid somehow managed to persuade FinCen to issue the FinCen Notice. I explained to Michel Saab that it was unhkt'ly that eien the wealthiest person in Cyprus would be able lo influence a FinCen Notice in this manner. Michel Saab was not prepared to accept that esiion. and strongly assened that FBME Bank had done absolutely nothing,Y wmnu Saab (MS) was st) adamant Ihxil FBME Bank vats Innocent. Lind in light of the seriousness ol' the FinCen Notice. 1 suggested to him that in addition to one of the Futtr' accountancy firms IU carry out 11 review. FBME Bunkghuttld at the same time commission a completely independent. inie, uation into the bank's practices and procedures. with the iniestigators' mandate being to leaie no stone lel't unturned in seeking cm the truth. I explained Io Michel that this would be a lung. eapensiie and intrusive process and that if the Saabs were to eng Mr Leighton and men 1 could foresee that we would need to ask a lot of potentially uncomfortable questions. 7lh JULY 2015 - CONFIDENTIAL 32. Once lhe quesllun ol' legle represenlzumn was remlved. lhe dlscussmn lumed I0 lhe engugeme'nl of lnxesugalun. Hogan Lu\ells had ulreudy lhelr l0 eng ve Emu Young us for lherr rnvemgauen lnlo FBME Bunk, Ihe Sanbs \wnlell lo reuun Mr Lelghlun and I0 curry cm a full Imesllg' lion mm all 01' Ihe ullegullum made in lhe FmCen Nullce. speclficully recall wammg lhem Ihxll would be 11 mveulgalmn. 11nd we would nul slop unul we gm l0 lhe lrulh. however uncomfortable lhal ruxly be, 33, Pan way Ihmugh lhul 11 woman an'i\ell who mu I0 me by Michel Saul: Ihe Ul' AML Compliance for FBME Bank. When lnll'ollucllon. Michel Saab was keen emphasise Ms had an MBA from Business School, During lhe' cuune of lhe discussion followed. Ms explained she was Ihe Head ul' AML fur lhe enure FBME group. bul she explained FBME Bank and FBME Cards ellch own Compliance 0"]ch supenlsed by her. The Sullbs Ihen lnsisled on going lhmugh 1111 ullhe allegallons ln Ihe FinCen Nullce again, Ms was uble discuss el'lhe allegullum made reference lu AML files which Ihe' bunk hall each 01' underlying,Y lhe nllegnllunsl which she produced lhu meeling, was surpnse'd by hov. cumplele and well documenlell lhese lile~ were. and rermrkell on Ill" I0 Ms and lhe Sllabs. "01$ PRIVILEGEDA ONFIDEN AL 2015 - PRIVILECIED 38. During |he muial phases oilhe inxesugzlliun. we were gncn. on lhe face 01' ill 11 ihe dma. Mus! uiihe work inxesugzlling issues Michel |hu|lghl were lhe reasons behind Ihe FinCen nuiice, ,The Llpaflmem became our opermmnal base. l'luw chum 1111 over ihe walls and where we ~penl of our days going |hmugh hundreds of files. Michel was a my frequent Hulul' In the zlpurlmenl, AI lirsl was surprising he came so Ullen. bu| afler a while we all gm lhe feeling ihal he wanled know everything we were doing. every deluded lhoughl we may huxe. such direeliun and inxesugzlliun line we look, He 1m irmzluun and alter Ll week or so. slaned feel like he was trying to ubslruel us and direci |he iuns ihal way we worked. Alec became lhe must imlaled wilh Michel and told him on many uc the mvemgauon had lube .mlependem. and am his cumulm presence was 1m Ubslruclmn. [also 12 7ili JULY 2015 - PRIVILEGED CONFIDENTIAL told him |hal we would ask him any quesllons we needed to ask and would request when needed. desplle our bes| endezn ours. Michel conunued |0 interfere wilh oul place>>. 38 We were |0 be gilen flee access lo the syslenlx. books recordx Bimk but when were made about the Card le ion we seemed to be re-direcled zuld neyer gryen real access. Michel ln pauleular would Iell us flequemly. 'you are your ume Alec spoke lo--ahour nor haling access |o rhe card senlces dlusron and also abour Michel's inlelference alld he arranged what we needed whhoul consulrallon Mlchel. beliele caused a lor of fricuon herween-- Michel Saab (MS) was our rnarn polm ar FBME Bank. wi|h Card Selvlc 39 An example of Mlchel SaabK dllersimlmy lacucs was his inslruclion [hm we focux our rnyesugarlon on the Speclal appolnred ln respecr of FBME Bank. - _whh rhe goal lnrorrnauon |hnl would so that lhe could seek |o have remmed flonl office. Specifically. he wan|ed u\ it) look lmo whom rhe Saahs conunued [0 belleve were behind the FinCen Notice (as explained at par ph 22 above), llchel Saab sald lha| if we could a between -- --rhe Saabs would effecuvely be able |o blackmail -- rnro gellin" |he Flneen Nouce lemlcled and ceaslng any fullhel acllon. I told Mlchel |hls wax realis|ic. bu| he conunued |0 insixl on |he |heory and asked dlnfi an open lener. which could be senl lo_nnonynmusly. We were seared in a eafe/resrauranr when Mr Lelghlon slaued 10 angry MS. we all were suongly opposed to suggesllon and plan or aenon by Mlchel. and made i| clear |o Michel lhal hlaeknrall was llegal and we would not hzne any lmohemenl in nus scheme. lnrespome. Michel Snub Iuld me mu'r} dekul he wnuld likelu kidnap Lind phy All} "Inuit -- Whilst mi>> could be dumiwd Michel Snub \cming pressured luund cummenls unplemum and dluurbmg. 7m JULY 2015 - PRIVILEGED CONFIDENTIAL 48. mixed about. I my \usplcionx Mr Buick of Quinn Emmanuel. and the Quinn Emmanuel Assoeinres who had by ihis riine in Cyprus [0 work on |hc manu- I cominually iheni on our daily call. 49. The ncx| email |hai was seni was [0 quvard Business School lay--was rcqucsiing if rhey had a of LK nnending Hanzud I cxhibh ihrs as NIB-8.1, As can be seen. Haivard wm|c back Mining rhai rhey had no reeord of LK unending Harvard, The was now clearly \Cry serious and I ioid and Hit: oilici QE lawycu Him copy of her diplomas. All were In and ihai day. which I bclimc was 17'" --ani ihe office or LK whilsi I waired for her In |hc npsinirs board mom. Lanren returned arier a few siaiing ihni she found LK skiing ar her desk. her hands in her face and ciyin". She claimed |hni hm Fa|hcr had been Imolvcd an ziccidcm 18 7& JULY 2015 PRIVILEGED CONFID NTIAL lefi copy of her degree cemfiemcx on her deak for_ which \he blougln bnek K) rhe boardroom fol ux ro examine rogerher. The Hanard MBA was in 2| lemhel bound ca' dlaeuascd rhe lwue Ml Burek by |clephone laxer [hi3 day. he already been informed by -- had also been whom reacfion was rhe we. camsuophie lo FBME Bank's posnion. and said if Emmanuel had been respomlble fol lcxponsc ro |llc FlnCen Norlee which plneed rellnnee on .w Khzu |llose qunllfiemmns \ubxeqnenlly proyed N) be we. likely than Quinn wonld hme lo cenxc represemzmon on the bash they had been misled by their lhough| Hognn Lovells might eense lo ner he won a. |llcy wele orrhl ne They Wm glen! debnre 0\er Khe telephone nbom how infolm Hogan Lmellx. aa there was [hi3 lcal conccm [112" if It Wm done in the wlong why. lhey .nny from rhe 19 PRNILEGED My [film/Mina" m1 L'xplaimour winking wlauonship a mun a; the mm. mm 111")th pn'wnmlinn and bclmiom om inmal mming in Cypxu In mm n) :lm um amImpln'xC and impmu' our mlmionxhip. [had im'ih'd hm inin me :u th Hi 1 Ni: \ia around 14'" dunk and disrus, Km \0 |h:u "c Luld gm I0 know each bcum. II was my inu'mion mu) and nmund mam-m hm CV Wm me 101 ZtnI 29 5 RBI IEQED cm Ema 61. On the 19'" October the day of Ms Khachatryan's return, it had been arranged that she would he collected by a car trorn the airport, and that during her drive back from the airport. the driver would receive a call from one of the Saahs sayln 'omelhing urgent had come up and diverting the car from taking Ms Khachatryan home to hring'ng her straight to a meeting at the Hilton Hotel in Nicosia. I had booked a conrerence room at the hotel tor the meeting, and asked- _to greet Ms Khachatryan at the door or the hotel when she arrived and bring her to the conference room 62. The interview lasted for approximately an hour and 15 minutes and 1 took contemporaneous notes of the discussion as we went along NE 164 are my contemporaneous notes of the interview.. 1 had arranged tea, Coffee and water. I told Ms Khachatryan straight away that we had carried out an investigation and discovered that the Harvard Business School MBA- certificate that she had presented as her own and her qualification was a rorgery. Her immediate re- 'Iion was to shrug her shoulders and to say words to the effect or "Ole resign", She was as white as a ghost and clearly she was not prepared. She was shaking and began to cry. She continued to cry at various levels of intensity for much of the interview. 1 also noticedthat --was also crying, I asked several times if she was 'Ok to continue?' and she nodded. I told her that I was not her employer and not in a position to accept a resignation, and continued with the interview. She said that she was very concerned this would harm FBME Bank's case in relation to the FinCen Notice. I explained to her that it potentially very harmful to FBME Bank's espouse to the FinCen Notice. Ms Khachatryan initially claimed that she was not aware that the Harvard certificate was a forgery, Her story chopped and changed several times, but eventually settled on a chain or events which 1 round highly irnplausihle, She explained that she had completed the MBA programme through Hult, which had involved attending a lecture or two at the Harvard campus, but had then had to return to Armenia since her mother had died. She said that her degree certificates had been sent to her while she was in Armenia, but that in the circumstances of her glevingo it was a while before she opened the letter to look at the certificates. Ms Khachatryan said that when she did open the letter, she was surprised to find that there were two degree certilicates one issued by Hult and the other issued by the Harvard Business School. I asked her who had sent the certificates and she said a friend on the same course, a man by the name She then suggested that one of her rriends prohahly I on the course could have produced the certificates and the class photograph {or her as a kind or joke in order to cheer her up rollowing her mother's death. when pressed her runher on this, she was unable to provide any further details about this friend save that he was in Mumbai and 24 7" JULY 2015 - PRIVILEGED CONFIDENTIAL unemployed. told her tluu her were nu| Hand up. and tluu ahe had put the bank It tery thl'ficult slluauon. alau pmnted out [hm ahe plenty of Upporlumllt's to clant'y the the Shut>>. who continued reprcaem that she held a Harvard MBA (Including me our finl meeting). or NJ "the the matter Hogan Luvelh or Quinn Emmanuel. but ~he chose nul |u do us. I luld her that tn et'fectr the moat tmportant tn the bank mm the Hezld of cumpltance and thia wa~ uccupted. by a hat. a larger and wmeone who had dehherately [almficd their credenuula NJ the us Treasury Department, There was httle that Ma Khuehatryuu could my responser other than 'ok 1 res and in the tutemew prugremed heeurue emullonltl in met I would dewnbe her 7m JULY 2015 - PRIVILEGED CONFIDENTIAL Mowing or Shah's home after the Interview 65. 66, indi. mid When we nbom 10 pm at Fad! Saab'\ house which win \cry lalc ihm monm Miehel Saab were for us, The Saabs asked rne ro wail rn lorrnge whilsr Illcy spoke Ms Khaeharrvan prirarelv in rhe kirehen This diseussrou lasred aboru an hour. and when rhev ernerged Ms Khaeharrvau was ervi n. and I was surprised ro see rhar rhe Saahs and - were also quim ernorional. and rhe group huggi hzid ihc fool of a family dispuic |llal had been discuxscd. |llan 2| nicciing of the mid kis one number, Ii dilccmu and ihc chid of AML Compliance of a blink. indi Saab \aid in me words ro rhe or. "mark in) words. she will gar a Aficr Ms Khzicllairynn hzid been home. I Stud 10 Fndi Smib lhaL I could we ihm Saahs had a elose personal relarioushrp wirh Ms and I had no rssue ulrh her on a personal level. from a eorporare governauee perspeeure she needed ro be dismissed from her posrrion and replaced immediately. Fadi Saab was nor prepared ro do rhis l-le eonsrdered Ms Khaeharrvan ro be roo inrporraur ro FBME Bank's abilirv ro respond ro rhe FinCeu allegarions. and sard rhar rhev eorrld nor ler her go ar rhar rinre, He sard rhar rhev would drseipline Ms Khaeharrvan bui keep her on fol 90 days In order ro assisr ulrh rheir response lrried ro upon him rhar FBME Bank's response would lack all eredihrlirv onee ir heearne known rhar rheir Head orCornplianee had {zllsificd her eredeurials. bul he said rhar Lilir was more inrporraur ro him rhau FinCeu. she was l-lke a daughrer ro hirn, (He [finally said FitiCcll. sire is more and he was nor prepared ro discuss the rnarrer funhcr rhar l-le sard he needed rune ro digesr all of rhrs. I was very surprised rhar Farid had nor been presenr. JULY 101$ - PRIVILEGED CDNFIDEN AL imam mum. -- W- for Ms mu 'n's emplo lile be bmugm his nlficc. mum,>> unenmd~ Fm]: Snubx ()lfil't' |he file, Fudi mb uske_ if mm "mum -Ionkou|uceml m: of |he forUer) I Fudl who then held < 77. Anorher incidenr [mi mok pince which will not be covered by Mr Leighton's srniemenr, is issue surrounding Michel and card services. As rhe progressed Alec Leighton-and I were becoming more convinced by Ihe day rhni rhe cnrci services division compleiely toxic. Michel seemed very Imcomformble aboul rhe email access and his [one from niiowing nccess Slnling il was iden. 30 JULY 2015 - PRNILEGED CONFIDENTIAL 78. During the day of the 15'" Ocrober 2015. William Burck who was in Cyprus had a meering in our presence wirh Ihc shareholders and Michel where Ihc email access was discussed. AI Ihal meering it was agreed Lhal we would have access. Again Michel was againsr Ihc idea. bur rcluclanlly agreed. 79. On Ihc 16'" of 2015. we became aware Ihal Michel had [he entire day in his office going rhrough his emails. We were concerned Ihal he may be delering Vital evidence. bur lhere was very liule we could do. Mr Leighlon and I were sealed in _ufficc when the door new open and Michel was standing in the doorway looking panicked. He said 'oh no. thal's it. I'm going ro prison, I'm going to wear an orange jump suit'. Mr Leighron said 'whal is in' He handed over a copy of an email. which has been described elsewhere in this Lhal refers Io child pornography. He rook rhe paper back and 1ch the room. Alec and I wem back In the Hilron Horel and Iold-- of QE whal had happened. We were discussing rhe issue until quilc lare. so, That evening, Alec Leighron was walking back Io rhe apanmenl from rhe Hillon Hole] and saw Michel Saab leaving rhe bank. II was lare abour 10.30pm. Michel stopped and gave Alec a 1m back ro Ihc apanmeni, but during Ihis journey he handed Alec a USB stick. Michel Iold Alec. Ihcsc are some of my emails from my inbox. The following day. Alec handed ine rhe usn srick Ihal had been given to him by Michel. IL comaincd very serious evidence of criminal behaviour by Michel and one email showed Ihal Michel had knowingly been dealing wilh a chem/merchant who was rransaciing in Child pornography 31 7015 LE - PRIVILEGED CONFIDENTIAL mod up :ind smimcd ouL \lammin ihe don. behind him' 1 Feud 1 ion i my bun-g .n iho ncwx. bu you hnow lune been 10.: in" dm'pl) inm \Ijml' wxin new 1" me and card \Crwa also know Him hnie needing sm' emails which would us hem winninobeen go! on \Vchm'c oineimnhh en Michel \ciy much In\ Farid Id 'Oh im. Fm id stud Oh my 1nd he pm his fate in hix hand>> M'u'r he Mood up and 5| ied nmund ihe iooin. he 'iyi knew ihni mipid bn) "ould bring u, all down. IdinL idiot ldil 2015 PRNILEGED CONFIDENTIAL came ro Cyprus we had a rneering nr Farld's house. was presem together wirh Fond. Alec Leighton and Michel. Michel come to rhe meellng a htrle lale and we already discussed the problems wirh the shareholders. When Michel joined rhe meeting. I rold willinm Burke. in the presence hearing of everyone. the issues were. Michel stood up and working nround the room. Saymg: this is nonsense eventually he down tn nn armchair near the window on rhe other side ofn lnrge room from where everyone was seated. Burke walked over to rhe and srood over him. 1 can the scene very clearly. l-le sald 'Michel, rhis is very serious, very serious indeed, what has heendiscovered. people go ro prison for rhis sluff. 1 think you need your own legal represenmtton. do you understand has been going onis wrong and criminal-7' Michel said' I guess lfsomeone like you is relling me, I have to nccepr il' William Burke rhen said so you understand then-7 And Michel said lnamuch quieter voice than his usual confident loud rone yes. I lr was rhen agreed that 1 would call Rohert Amsterdam and him if he would represent Michel. I called and he agreed. also spoke Io Mr Really from Ihnl momenl on. Michelneverspokelomeagaln. JULY 2015 PRIVILEGED CONFIDENTIAL 88.1 had an Idczi which I dlxcusscd wl|h Alcc and ii was a sclf--rcponlng process |hal would noi ihc bank or ihc \hzucholdcn, The false czud \cniccs ihnl 2" Hit: core or a major rnoney lnundcling operarron. all had false Ulrirnare Beneficial Owners rUBO'sl. We had been repearedl on. rlrar rrne benerrcial owner was a - by rn the bank. including Michel. LK and olhcl senior employees. l-lowerer. during our forensic orrhe rrles. we had nor found a \inglc prece of paper anywhere in rhe bank --m\mc on rr. rn rrselr was \cry srrange, Thus way. 1 why as a win- win proposal of acrron l-lowerer. before lconld presenr |his idea ro rhe shareholders. I needed 10 cslziblishwiih LK. how she knew rhar-- was rlre rrne beneficial owner. |his rdea wirlr Alec Leighton and he roo rhonnhr ir an rdea. We borh ro office and described rhe idea 10 hen--van seared rn her office and was p|c\c|l| ilnoughoui rhis comcumlon She agreed rhar \hc corrld prodrrce a SAR's repon cmcung rhonsands of lransacuo I asked her '|llc one pioblcm is rlrar have nor seen a \mglc docnnrenr \uppoiung rlre racr mar--was rhe rrne UBO of all rhe nrerclranrs-l' She said No problem. I hare a due Hoe file on him. covcr' all |hc I \aid. rczillyT'. lhai's zimazlng' En JULY 2015 -- PRIVILEGED CONFIDENTIAL 89. Alter leavlng office I went with AL [0 the Office of Farm Saab 11nd inked Il' we could meet with him. He happened to be free and we went into the office to meet him. We were all due to travel to London that day to Visit Hogan Lovells so time was a little short. I explained the proposal to him and he thought it was a good idea. then 1 said that LK had a due diligence lile on He looked surprised and said: 'Really'." i said. yes. we have just come from otTic Farid picked up the phone and called LK and asked her to come to his office straight away. She arrived Within two or three minutes. 90. When she arrived. Farid asked her it' it was correct that she had a due diligence file on- _lrecall the conversation very clearly, She said. 'yes' He said. 'Where oflice' Farid said. and get it please' She said. 'What now." He said. 'yes how. LK left the office and unusually. she was gone for at least 45 minutes. Previously. in my statement have mentioned that LK was very orgamsed and efficient I [am dircarared tlun during Illix (lbxellr period LK [lad gone to oflice to ask 1: copy at 91. LK returned to the office a small number of sheets of paper, It was not in a file or even stapled together. She passed me the papers saying. 'this is work in progress, I sai 'what do you mean'?' She said. 'it was started but not finished', I looked at the papers. The first page was a very badly worded document only one page long. but with awful English grammar and full ol' spelling errors. It started with English words in an order that I have never seen before like '1 behave and 1 can confirm visit to-where helmet--and confirmed that he was 'exactly the type of persons the bank would want to do business wllh'. lrecognised some of the addresses, but by the The text pnrponed to be wntten by Michel Saab. relating to his standard of the writing. I knew that Michel had not written this document. It was signed on the 14'" November just a couple of days previous. The second page was a copy oi-- passpon and the last page was a list of companies. some 1 recognised as FBME Card Servi merchants. I said: 'what on earth is this. She said . 'it is work in protrress' I said. Lilit this is nonsense, who wrote this document?' She said. 'Michel' 1 said. 'that not true is it, there is no way Michel would write this. it's terrible English and pretends to be signed a couple of days ago, who told you to write this 37 JULY - PRNILE ED CUNFIDENT AL 1 salt! |n 'lln have ducumem plexus! She new! rexponded and she It'll [he docllmenl with her. I mud In Fund: "In nu! Michel uml lm me lulul'y eudcnce. am Is mull.>> He 5 ll 11m 55 unulhcr um: as \w need I0 1811>>: I'm lhe zlupun' As lell lo 'Alec. please make <LEGED NFIDENTI AL PRNILEGED CONFIDENTI AL On 18 ember 201-) Ah'f Lcighmn and I inuu'd nucnd mccung 5 :u London I JULY "01$ PRNILEGED found. [Cd and Why wnuld we FinCm \omdhin" may not nbnu know wt could bL' "hing th Ismd: mdl: th b: and die uc llNoryx us a gum: you are Sn ding' mid-Nowmbm wc "ch able obtain a file ham Llli| [Ind 13' cf demg and Balcc chum. I xhibh th film offlalcr As NB 3' NB 4h JULY 2015 - PRIVILEGED 81 CONFIDENTIAL These and many qucalioncd became we were p|cmzuurcly rcmovcd from |hc immigmmn. 7m JULY 2015 - PRNILEGED CONFIDENTIAL Sworn on mc. Signed Commiaslonu for 0::th AS 46