Monday, 27 February 2017
Last updated 13 min ago
Jan 26 2017 | 9:11pm ET
By Nate Raymond and Eric Walsh (Reuters) - 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 an Och-Ziff subsidiary 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 for 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."
Mark Cohen, a lawyer for Baros, said "when the facts come out, it will be clear that Mr. Baros did nothing wrong."
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 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 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 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.