Och-Ziff Capital Management Group LLC, a hedge fund incorporated in Delaware and headquartered in New York, controlled a variety of investment vehicles through myriad subsidiaries. The company provided investment advisory and management services to those vehicles in return for management fees and incentive income. Och-Ziff’s common stock was registered with the SEC and listed on the New York Stock Exchange.
Michael L. Cohen, a dual US/UK citizen, was a former Och-Ziff partner who, from 2007 through 2012, was the head of Och-Ziff’s European office and a member of Och-Ziff’s management committee. Cohen was also an owner and executive officer of OZ Management, an Och-Ziff subsidiary.
Vanya Baros, an Australian citizen that resided in the UK, was an employee of Och-Ziff Management Europe Limited, a wholly owned subsidiary of Och-Ziff, and an affiliated investment adviser to OZ Management. Baros reported to and worked closely with Cohen on Africa-related deals.
According to the allegations in the complaint, from 2007 through 2012, Cohen and Baros engaged in several large schemes that caused Och-Ziff to pay tens of millions of dollars in bribes to government officials in multiple African countries, including Libya, Chad, Niger, Guinea, and the Democratic Republic of the Congo. The payments were largely made through Och-Ziff's South African business partners in its joint venture, Africa Management Limited, and a variety of agents and shell commpanies. Cohen spearheaded and participated in all of the corrupt transactions, and Baros participated in many of them. The bribery schemes were intended to get Och-Ziff special access to investment opportunities as well as to obtain mining rights and other business in African countries and to financially benefit Cohen, Baros, and Och-Ziff's business partners and agents.
On January 26, 2017, the SEC filed a seven claim complaint in the Eastern District of New York against Cohen and Baros alleging violations of the anti-bribery, books & records, and internal controls provisions of the FCPA as well as violations of the Advisers Act. Prior to the filing of this complaint, Cohen signed two tolling agreements with the SEC and Baros signed one.
On August 18, 2017, both Cohen and Baros filed separate motions to dismiss the complaint arguing that the claims were barred by the five year statute of limitations, that some of the claims were attempted extraterritorial application of purely domestic laws, that some of the claims failed to appropiately plead Cohen's level of knowledge, and that the court lacked jurisdiction over Baros.
On July 12, 2018, the court granted the motions to dismiss because the claims were outside the five year statute of limitations.
In a related proceeding, on October 5, 2017, the DOJ filed a ten count indictment in the Eastern District of New York against Cohen alleging (1) conspiracy to commit investmet adviser fraud, (2) investment adviser fraud, (3) conspiracy to commit wire fraud, (4-7) wire fraud, (8) conspiracy to obstruct justice, (9) obstruction of justice, and (10) making false statements. That case is ongoing.
