(Adds statement from lawyer for Cohen)
By Nate Raymond
Sept 29 Och-Ziff Capital Management Group LLC
will pay $412 million and CEO Daniel Och will pay $2.17
million to resolve U.S. probes into the hedge fund's role in
bribing officials in several African countries, U.S. authorities
said on Thursday.
In the first U.S. foreign bribery case against a hedge fund,
Och-Ziff subsidiary OZ Africa Management GP LLC pleaded guilty
in federal court in Brooklyn to participating in a scheme to
bribe officials in the Democratic Republic of Congo.
Och-Ziff meanwhile entered into a deferred prosecution
agreement, in which charges related to conduct in Congo, Libya,
Chad and Niger would be dropped after three years if it follows
the terms of the deal.
"I'd like to emphasize that Och-Ziff has taken substantial
remedial efforts to improve its compliance program to ensure
something like this can never happen again," Mark Schonfeld, a
lawyer for the New York-based firm, told a federal judge.
In total, Och-Ziff will pay $412 million to resolve the U.S.
Justice Department and U.S. Securities and Exchange Commission
cases, $213 million of which constituted a criminal penalty. It
also agreed to the appointment of an independent monitor.
Och agreed to pay $2.17 million to settle SEC charges that
caused certain violations along with CFO Joel Frank, who also
reached a settlement, the regulator said.
BRIBES TIED TO MINING, SOVEREIGN WEALTH FUND
The deals capped U.S. probes into the $39 billion hedge fund
firm that centered in part on Michael Cohen, Och-Ziff's former
London-based head of European investing, who was responsible for
investments in Libya and other African countries.
According to authorities, in 2008, Och-Ziff entered into a
partnership with an Israeli businessman with close ties to
high-level Congolese officials in order to fund his
At least two employees, though, knew the businessman gained
access to these investment opportunities by bribing officials,
prosecutors said. Those employees, a person familiar with the
matter said, were Cohen and an analyst, Vanja Baros.
Authorities did not name the businessman, whom they said had
paid over $100 million in bribes to Congolese officials from
2005 to 2012. But the source said it was Israeli billionaire Dan
Ronald White, Cohen's lawyer, in a statement said "when all
the facts are known, it will be clear that he has done nothing
Gertler's Fleurette Group declined comment. A lawyer for
Baros did not respond to a request for comment.
Separately, beginning in 2007, an employee, who the source
said was Cohen, engaged a London-based middleman to help it
secure an investment from the Libyan sovereign wealth fund, the
Libyan Investment Authority, prosecutors said.
Prosecutors said Och-Ziff received a $300 million investment
into its hedge funds, and soon after entered into an agreement
to pay a sham $3.75 million "finder's fee," which it knew would
be used to pay Libyan officials in exchange.
The Justice Department said its investigation remains
ongoing. The probe has resulted in one individual being
In August, Samuel Mebiame, a Gabonese man who U.S.
authorities said acted as a "fixer" for a joint-venture
involving Och-Ziff, was arrested and accused of engaging in a
scheme to bribe officials in Africa to obtain mining rights.
A criminal complaint said Mebiame supplied cash and cars to
two Niger officials; an S-class Mercedes Benz sedan and rented
private Airbus jet to a Guinean official; and travel and
shopping expenses for an adviser to Chad's president.
A lawyer for Mebiame declined comment.
Och-Ziff shares closed up 5.65 percent at $4.49.
The cases in the U.S. District Court, Eastern District of
New York, are U.S. v. OZ Africa Management GP LLC, No.
16-cr-00515, and U.S. v. Och-Ziff Capital Management Group LLC,
(Reporting by Nate Raymond in New York; Additional reporting by
Sarah N. Lynch and Joel Schectman in Washington and Anthony Lin
in New York; Editing by Jeffrey Benkoe, Chizu Nomiyama and