The SEC have Charged Two Former Och-Ziff Executives With FCPA Violations, and in doing so, it is claimed that Jersey, Guernsey and Maltese entities were used in Libyan government bribes.
The following is shown in the SEC complaint:-
Agent 1 also used portions of the $2.25 million installments to direct payments to Libyan Government Official 3.
On or about March 5, 2008, the Guernsey SPV transferred $331,528 from its Guernsey account to an account of a British Virgin Islands SPV in the Bailiwick of Jersey that Agent 1 controlled.
On or about March 6, 2008, Agent 1 transferred approximately €500,045 (Euro) from an account in Jersey to an account in Malta in the name of Libyan Government Official 3’s son, which he held for the benefit of his father, Libyan Government Official 3.
That same day, Agent 1 transferred approximately $400,000 from a Guernsey SPV account in London to the same account in Malta.
The second instalment of the “fee” Och-Ziff owed Agent 1 in connection with the $300 million LIA investment was due on December 1, 2008.
On or about October 30, 2008, Agent 1 asked Cohen if he could be paid early. Cohen agreed to an early payment and directed Och-Ziff personnel to pay an invoice sent by Agent 1.
The Guernsey SPV used by Agent 1 received payment of $1.5 million from Och-Ziff shortly thereafter.
On or about November 5, 2008, the Guernsey SPV transferred approximately $1,005,000 from its account to an intermediary account in the United Kingdom, then on to an account in Switzerland for the benefit of Libyan Government Official 1.
Agent 1 arranged this payment to an account held for the benefit of Libyan Government Official 1 in return for his support and influence of the LIA’s decision to invest $300 million with Och-Ziff.
Och-Ziff did not enter into a written agreement with Agent 1 for the $3,750,000 payment. Instead, at the urging and behest of Cohen, Och-Ziff, through OZ Management, entered into two agreements, a Consultancy Agreement and an Anti-Corruption Side Letter, with a separate legal entity, an SPV formed by Agent 1 and based in St. Peter Port, Guernsey (the “Guernsey SPV”).
The Guernsey SPV was a shell company that Agent 1 intended to use to contract for and receive the $3,750,000 LIA transaction fee.
Neither the Consultancy Agreement nor the Anti-Corruption Side Letter was executed prior to Och-Ziff receiving the $300 million investment from the LIA on or about November 30, 2007.
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U.S. securities regulators on Thursday accused two former executives at hedge fund Och-Ziff Capital Management Group (OZM.N) 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. http://bit.ly/2jK5sYV
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