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In the High Court in London on Tuesday, a former lawyer for the Libyan Investment Authority testified that the country’s sovereign-wealth fund was “astonished to learn” it hadn’t bought any actual shares through nine equity derivatives trades arranged by Goldman Sachs in 2008 that expired, worthless, three years later. The LIA is suing Goldman for $1.8 billion in losses.

“There was a sea of confusion at the LIA, which ranged from an understanding that they had purchased shares, quasi-shares or shares with deferred payment,” Catherine McDougall, who was temporarily transferred to the LIA by a London law firm in the summer of 2008, told the court. “I was really surprised as it did not take rocket science to realize that the product was completely synthetic,” she said. “There were no shares involved.”

Despite the fact that the trades ended up being worthless, the LIA alleges, Goldman made about $222 million from the deal. In an email, court records show, another Goldman executive joked about having “delivered a pitch on structured leveraged loans to someone who lives in the middle of the desert with his camels.”

The Libyan fund managers were particularly “in awe” of one former Goldman executive, Youssef Kabbaj, in whom they had “complete trust,” McDougall told the court. “I think they didn’t understand how much Mr Kabbaj stood to gain personally from his relationship with them. They were...very effusive and very welcoming and they trusted people. They thought he was their friend.”

Kabbaj has also been accused of plying family members of LIA officials with prostitutes and lucrative internships. McDougall said she felt “Goldman Sachs had unfairly taken advantage of the LIA’s lack of sophistication,” Reuters reports, “and sold the LIA $1 billion worth of derivatives products the LIA could not understand.”

In 2008, when she told the LIA’s then-deputy chief, Mustapha Zarti, that she could not see “one redeeming feature” in the trades, McDougall testified, he was furious. At a “stormy meeting” that followed, Zarti confronted Kabbaj. “He launched into a very angry tirade, saying that he had a bad side as well as a good side and that he could come after their families,” she wrote in a witness statement. “Mr. Kabbaj’s face became white in shock.”

“I expect Goldman Sachs to correct the facts and protect my reputation,” Kabbaj wrote in an email to the Wall Street Journal. Goldman’s defense begins on Thursday.