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Thursday
Jan262017

SEC charges two ‘masterminds’ behind Och-Ziff Africa bribe scheme

The Securities and Exchange Commission charged two former executives at Och-Ziff Capital Management Group with orchestrating bribes across Africa that violated the Foreign Corrupt Practices Act.

In a civil complaint (pdf) filed Thursday in federal court in New York, the SEC charged Michael L. Cohen, who headed Och-Ziff’s European office in London, and Vanja Baros, with causing "tens of millions of dollars in bribes to be paid to high-level government officials in Africa." 

The SEC said the bribes induced the Libyan Investment Authority sovereign wealth fund to invest in Och-Ziff managed funds.

Cohen and Baros also allegedly directed bribes to officials to win mining deals for Och-Ziff in Chad, Niger, Guinea, and the Democratic Republic of the Congo, the SEC said.

In September last year, Och-Ziff paid $412 million in criminal and civil penalties to resolve one of the biggest FCPA enforcement actions ever. Two other Och-Ziff executives, including founder and CEO Daniel Och, settled SEC charges that they violated the FCPA. Daniel Och agreed to pay nearly $2.2 million to resolve the SEC action.

Och-Ziff CFO Joel Frank also agreed to settle SEC charges that he caused FCPA violations in Libya and the DR Congo. The SEC said his "penalty will be assessed . . . at a future date."

Frank and Daniel Och settled the SEC’s charges without admitting or denying the agency's findings.

In December, the son of a former Prime Minister of Gabon pleaded guilty in federal court in New York to conspiring to violate the FCPA by bribing government officials in Africa on behalf of Och-Ziff. Samuel Mebiame, a Gabonese national, was a consultant to a mining company owned by an Och-Ziff joint venture.

He admitted bribing officials in Niger, Chad, Guinea, and other countries. Mebiame's late father, Leon Mebiame, was prime minister of Gabon from 1975 to 1990.

Mebiame was arrested in Brooklyn in August last year. He hasn't been sentenced yet.

Cohen, 45, was an Och-Ziff partner and a member of the firm's management committee. He lives in London. He was born in the United States and holds dual UK/U.S. citizenship.

Baros, 44, is an Australian citizen living in the UK. He's a former analyst in the private investments group at Och-Ziff’s European office and was a member of the firm's African Special Investment Team. He "reported to and worked closely with Cohen on Africa-related deals, with significant oversight responsibilities for investments involving natural resources in Africa," according to the SEC.

The SEC’s civil complaint charged Cohen and Baros with violating the FCPA and aiding and abetting Och-Ziff’s violations. Cohen was also charged with violating the Investment Advisers Act.

Kara Brockmeyer, Chief of the SEC’s FCPA Unit, said Thursday: “As alleged in our complaint, Cohen and Baros were the masterminds of Och-Ziff’s bribery scheme that improperly used investor funds to pay bribes through agents and partners to officials at the highest levels of foreign governments.”

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Richard L. Cassin is the publisher and editor of the FCPA Blog.