SEC charges two former Och-Ziff executives in bribery case

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By Nate Raymond and Eric Walsh | NEW YORK/WASHINGTON

NEW YORK/WASHINGTON U.S. securities regulators
on Thursday accused two former executives at hedge fund Och-Ziff
Capital Management Group of masterminding a far-reaching
scheme to pay tens of millions of dollars in bribes to African
officials.

In a lawsuit filed in federal court in Brooklyn, the U.S.
Securities and Exchange Commission accused Michael Cohen, who
headed Och-Ziff’s European office, and Vanja Baros, a former
analyst, of violating the Foreign Corrupt Practices Act.

The lawsuit came after Och-Ziff agreed in September to pay
$412 million to resolve U.S. investigations relating to the
hedge fund’s role in bribing officials in several African
countries.

That settlement led to a subsidiary of Och-Ziff pleading
guilty to participating in a scheme to bribe officials in the
Democratic Republic of Congo, in what prosecutors said marked
the first U.S. foreign bribery case against a hedge fund.

In its lawsuit, the SEC said Cohen, 45, and Baros, 44, from
2007 to 2012 caused bribes to be paid to officials in Libya,
Chad, Niger, Guinea, and the Democratic Republic of the Congo
through agents, intermediaries and business partners.

Those bribes were paid to secure a $300 million investment
from the Libyan Investment Authority sovereign wealth fund; an
investment in a Libyan real estate development project; and to
secure mining deals, the SEC said.

Ronald White, a lawyer Cohen, said in a statement he “has
done nothing wrong and is confident that when all the evidence
is presented, it will be shown that the SEC’s civil charges are
baseless.”

A lawyer for Baros did not immediately respond to requests
for comment. An Och-Ziff spokesman declined to comment.

In settling in September, Och-Ziff entered a deferred
prosecution agreement, in which charges related to conduct in
several countries would be dropped after three years if it
followed the deal’s terms.

Och-Ziff CEO Daniel Och meanwhile agreed with the SEC to pay
$2.17 million, and the commission also settled with the
company’s chief financial officer.

To date, only one individual has been criminally charged in
connection with the probe, Samuel Mebiame, a son of the late
former Gabon Prime Minister Leon Mebiame who prosecutors say
acted as a “fixer” for a joint-venture involving
Och-Ziff.

In December, Mebiame pleaded guilty to conspiring to violate
the Foreign Corrupt Practices Act, admitting he schemed to
provide “improper benefits” to officials in African countries
such as Guinea in exchange for obtaining business opportunities.

The case is Securities and Exchange Commission v. Cohen et
al, U.S. District Court, Eastern District of New York, No.
17-cv-430.



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