Hedge Fund Settles Bribery Case

Jan 21 2009 | 2:57am ET

A New York hedge fund has made life a good deal easier for one fugitive from American justice.

Omega Advisors yesterday settled its fraud lawsuit against Viktor Kozeny, the so-called “pirate of Prague,” who is set to stand trial in New York in June on charges that he bribed government officials in Azerbaijian as part of a $180 million investment scheme. The settlement frees up $177 million of Kozeny’s assets that had been frozen by a British court.

Omega had accused Kozeny of ripping it and other investors off in the 1998 privatization of the Azeri state oil company. The hedge fund said Kozeny, who is based in the Bahamas, outside the reach of American authorities, charged it $25 for options in the privatization that cost him just 40 cents apiece. Kozeny is also wanted in his native country, the Czech Republic, where he is accused of stealing $1 billion from mutual funds.

Yesterday’s settlement came on the day that Kozeny’s lawyers were set to grill Omega founder Leon Cooperman on his firm’s own culpability in the bribery scam. A former Omega employee, Clayton Lewis, has admitted he bribed Azeri officials as part of Kozeny’s scheme to seize the country’s oil company, and Omega settled U.S. bribery charges related to the case in 2007 without admitting or denying the allegations.

“After more than nine years, this action is to be brought to an end,” Kozeny’s lawyer, Richard Sloe, told the London court. “All the worldwide freezing orders are to be discharged.”

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