ANTI MONEY LAUNDERING PROGRAM AND POLICY

GENERAL STATEMENT OF PURPOSE

It is the policy of Leo Hamel Fine Jewelers to prohibit the use of our business or services for money laundering or terrorist financing.

This AML Program and Policy has been developed in conformance with the requirements of rules promulgated by the U.S. Department of Treasury, Financial Crimes Enforcement Network, 31 CFR Part 103, Section 130.140 c, under the Bank Secrecy Act as amended by the USA PATRIOT Act of 2001 (Pub.L.107-56) and is based on Leo Hamel Fine Jewelers’ assessment of the money laundering and terrorist financing risks associated with Leo Hamel Fine Jewelers’ activities pertaining to purchases and sales from:

• Members of the public
• Foreign sources of supply
• Other non-dealers such as auctions, estate sales, bankruptcy trustees, government-sponsored sales, etc. in excess of $50,000 in any tax or calendar year.

This Program and Policy will be made available to the U.S. Department of Treasury or any other duly authorized government agency upon request.

Both this AML Program and Policy and Leo Hamel Fine Jewelers’ Risk Assessment have been reviewed and approved by Robin Hart, CFO, of Leo Hamel Fine Jewelers. Both this Program and the Risk Assessment may be updated from time to time.

This Program and Policy applies only to covered goods defined as precious metals (of an assay in excess of 500 parts per thousand), precious stones and jewels, and finished goods of which 50% of the value is derived from the precious metals, precious stones or jewels contained in or attached to such goods.

GENERAL POLICIES

1. It is the policy of Leo Hamel Fine Jewelers to comply with all cash reporting requirements for receipt of cash in a single transaction or in a series of related transactions in an amount of $10,000 or higher. In all such cases, IRS Form 8300 will be completed in full and submitted to the appropriate government agency.
2. It is the policy of Leo Hamel Fine Jewelers periodically to check all known government agency or agency sponsored lists of countries that have been found to be non-cooperative in anti-money laundering efforts, lists of countries suspected of supporting terrorism and lists of individuals suspected of supporting terrorism or engaging in terrorist activity. The purpose of this activity is to determine whether any source of supply, distribution channel or individual associated with purchases of covered goods is included on such lists.
3. It is the policy of Leo Hamel Fine Jewelers to complete and submit to the appropriate government agencies all documents required under state law associated with the purchase of finished goods or other precious metals, precious stones or jewels from members of the public.
4. When a person or company supplying covered goods evades or refuses to respond to reasonable inquiries by Leo Hamel Fine Jewelers to acquire information or explanations required for compliance with the Leo Hamel Fine Jewelers AML program, it is the policy of Leo Hamel Fine Jewelers to:
   • Refer the transaction to the Compliance Officer for assessment
   • Refer the transaction to the CFO or COO for assessment
5. It is the policy of Leo Hamel Fine Jewelers to train all relevant employees regarding the laws and regulations pertaining to anti-money laundering requirements and the program and policy of Leo Hamel Fine Jewelers.

PART 1 – Identification of Non-Dealers From Whom Leo Hamel Fine Jewelers Purchases Covered Goods

1. It is the policy of Leo Hamel Fine Jewelers to acquire from all non-dealers, including foreign sources of supply, members of the public or other non-dealers, engaged in selling covered goods to Leo Hamel Fine Jewelers standard identifying information. This information is to be maintained in written form.
2. All Identification information is corroborated by government issued licenses, photo identification documents, passports, etc.
3. It is the policy of Leo Hamel Fine Jewelers to review all identification information for internal consistency – all identification information must be consistent for each non-dealer selling to Leo Hamel Fine Jewelers on all identification documents, or a reasonable explanation for the inconsistency has been provided.

The standard information to be acquired is:

• Name
• Address
• Telephone number
• Fax number
• E-mail address and web site (if any)
• Government issued identification number (Social Security, Tax identification, passport, license, etc.)

4. It is the policy of Leo Hamel Fine Jewelers to acquire the above mentioned identification information for any third party associated in any manner with any purchase of covered goods from any non-dealer in which Leo Hamel Fine Jewelers is engaged, including third party payers or payees, recipients, suppliers or senders of goods.
5. In cases where any party to a purchase of covered goods by Leo Hamel Fine Jewelers evades or refuses to respond to reasonable inquiries designed to identify the person, or otherwise comply with the AML Program of Leo Hamel Fine Jewelers, it is the policy of Leo Hamel Fine Jewelers to:
   • Refer the transaction to the Compliance Officer for assessment
   • Refer the transaction to the CFO or COO for assessment
6. It is the policy of Leo Hamel Fine Jewelers to periodically check all government agency or agency sponsored lists of countries or persons identified as non-cooperative or sponsoring terrorism or individuals who have been identified as suspected participants in money laundering criminal activity to determine if any such identified persons are selling covered goods to Leo Hamel Fine Jewelers.

PART 2 – Monitoring Business Transactions

A. Purchases of covered goods from members of the public

1. Purchases of covered goods by Leo Hamel Fine Jewelers from members of the public which result in monetary payment to the party offering the covered goods require identification of the party offering the item consistent with Leo Hamel Fine Jewelers’ identification policy as described above.
2. Compliance with state laws applicable to purchases from members of the public is required.
3. Leo Hamel Fine Jewelers makes payments for such purchases only in the form of a company check.
4. All such purchases and payments are made only directly to the person offering the covered goods for sale, not to a third party, unless such third party has been fully identified and the reason for the participation of the third party adequately explained.
5. In cases where any party to a purchase
   • evades or refuses to respond to reasonable inquiries designed to identify the person,
   • refuses to accept payment in the form of a company check,
   • requests payment to or delivery from a third party with inadequate explanation,
   • requests an unusual degree of secrecy pertaining to the purchase by Leo Hamel Fine Jewelers

   It is the policy of Leo Hamel Fine Jewelers to:

   • Refer the transaction to the Compliance Officer for assessment
   • Refer the transaction to the CFO or COO for assessment

B. Purchases of covered goods from foreign sources of supply or other non-dealers

(estate sales, US government-sponsored sales, bankruptcy trustees, auction houses, etc.)

1. All transactions involving purchases from foreign sources of supply or other non-dealers require identification procedures as described above.
2. Payment for all such purchases of covered goods are in the form of check, credit card or wire transfer ONLY.
3. No third party should be included in the payment, supply, distribution or delivery channels for the item purchased without an explanation from the foreign source of supply or other non-dealer of the identity and reason for involvement of the third party.
4. It is the policy of Leo Hamel Fine Jewelers to inquire of all foreign-based sources of supply about the implementation of an AML program consistent with their local laws. If the foreign source of supply is implementing an AML program, this communication is provided to Leo Hamel Fine Jewelers in writing.
5. Any request from any foreign source of supply or non-dealer to alter its course of dealing with Leo Hamel Fine Jewelers will be the subject of reasonable inquiries designed to determine the reasons for the change in course of dealing. Changes in course of dealing includes, but are not limited to: change in payment (receivable or payable) methods or locations, change in delivery methods or locations, introduction of heretofore unknown third parties into the course of dealing, change in the chain of distribution.
6. In cases where any foreign source of supply or other non-dealer evades or refuses to respond to reasonable inquiries regarding changes in course of dealing with Leo Hamel Fine Jewelers, it is the policy of Leo Hamel Fine Jewelers to:
   • Refer the transaction to the Compliance Officer for assessment
   • Refer the transaction to the CFO or COO for assessment

PART 3 – Detecting and Responding To “Red Flags”

It is the policy of Leo Hamel Fine Jewelers to detect and respond to red flags that might raise suspicion that a particular member of the public, foreign source of supply or non-dealer is engaging in activity designed to facilitate money laundering or terrorist financing.

When “red flags” are detected, it is the policy of Leo Hamel Fine Jewelers to:

• Refer the transaction to the Compliance Officer for assessment
• Refer the transaction to the CFO or COO for assessment

The following general categories describe “red flags” which trigger the above referenced procedure:

Unusual payment methods

• Use of large quantities of cash
• Sequentially numbered money orders
• Travelers checks in large quantities
• Repeated use of cashiers checks
• Payments from third parties
• Any combination of the above

Unwillingness by foreign source of supply, member of the public or other non-dealer to provide complete or accurate identification information

• A foreign source of supply, member of the public or non-dealer evades or refuses to provide identification information
• A foreign source of supply, member of the public or other non-dealer evades or refuses to answer reasonable inquiries about a transaction
• A foreign source of supply, member of the public or other non-dealer requests an unusual degree of secrecy related to a transaction
• A foreign source of supply, member of the public or other non-dealer uses a fake identification document

Unusual purchases

• Unusual delivery methods
• Unusual payment methods
• Requests for payment or delivery to a third party
• Frequent offers to sell (unusual for the customer)
• Change in frequency of transactions
• Repeated purchase and return of items or orders
• Unusual change in the goods supplied (either quantity or type of goods)

Purchases that are not in conformity with standard industry practices

• Requests for payments not to be recorded on the books and records of the company
• Requests for unusual activity, such as melting precious metals
• Unusual quantities of goods offered for sale
• Requests for products not usually offered by a supplier company
• Requests for an unusual degree of secrecy

PART 4 – Procedures for Responding To Treasury and Requests for AML Information

Requests for Information from Duly Authorized Government Agencies

a. It is the policy of Leo Hamel Fine Jewelers to refer all requests from Treasury or any other duly authorized government agency to the Compliance Officer for response.

d. All requests for information from Treasury or other duly authorized government agencies will be reviewed by the responsible employee within 1 week of the original request from the government agency, or in conformance with the timetable provided by the government agency.

e. All responses to government agencies will be prepared in written form by the Compliance Officer and reviewed prior to submission by the CFO of Leo Hamel Fine Jewelers.

Voluntary Reporting of Suspicious Activity

It is the policy of Leo Hamel Fine Jewelers to file Suspicious Activity Reports (SAR) with the appropriate government agency when appropriate. Any employee may suggest to the Compliance Officer the filing of a SAR. It is the determination of the CO whether or not to file a SAR.

Suspicious activity is defined as any activity conducted or an attempt to conduct an activity that an employee of Leo Hamel Fine Jewelers suspects or has reason to believe involves money from criminal activity, is designed to evade this AML Program and Policy or any provision of the AML regulations pursuant to the USA PATRIOT Act, appears to serve no legitimate business purpose and for which no available facts provide reasonable explanation.

When such activity is detected, the CO will review the activity and determine whether or not to recommend the filing of a SAR. The CFO of Leo Hamel Fine Jewelers will review such determination.

A copy of SAR’s filed according to this provision of this AML Policy and Program will be maintained with all other documents and records for AML compliance.

PART 5 – Documentation and Records of AML Compliance

It is the policy of Leo Hamel Fine Jewelers to document all compliance actions in connection with this program and policy.

It is the policy of Leo Hamel Fine Jewelers to maintain the records and documents associated with compliance with this AML Program and Policy. These records are to be maintained separately from the books and records of Leo Hamel Fine Jewelers.

It is the policy of Leo Hamel Fine Jewelers to ensure the security of the records of AML Compliance.

This document constitutes the AML Compliance Program and Policy of Leo Hamel Fine Jewelers. It has been endorsed and supported by the senior management of Leo Hamel Fine Jewelers. It will be updated and amended as needed.