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.
Between 2007 and 2011, Och-Ziff paid bribes and made other suspicious or poorly documented payments through several intermediaries, agents, and business partners to high-ranking foreign officials in a variety of African countries, including Libya, Chad, Niger, and the Democratic Republic of Congo. These bribes and payments were made with the knowledge and authorization of senior Och-Ziff personnel, while other Och-Ziff executives ignored the corruption risk in the transactions.
On September 29, 2016, Och-Ziff entered into a Deferred Prosecution Agreement with the DOJ with a term of three years. Under the terms of the agreement, the DOJ agreed to not prosecute Och-Ziff for two counts of conspiracy to violate the anti-bribery provisions of the FCPA and one count each of direct violations of the books & records and internal controls provisions of the FCPA. The company agreed not to violate the FCPA for the term of the agreement, pay a criminal fine of $213,055,689, and continue to implement enhanced anti-corruption compliance policies and procedures. Part of its compliance obligation included the hiring of an independent monitor which would report to the DOJ on the company's compliance for a term of three years. The criminal fine was deemed to also cover the fine that would be levied in connection with a separate guilty plea by Och-Ziff subsidiary, OZ Africa Management GP, LLC.
On the same date, the SEC filed a settled administrative proceeding against Och-Ziff, OZ Management (an Och-Ziff subsidiary), Daniel S. Och (Och-Ziff's CEO and Chairman), and Joel M. Frank (Och-Ziff's CFO). Under the terms of the proceeding, Och-Ziff, Och, and Frank were ordered to cease and desist violations of the FCPA, and OZ Management was ordered to cease and desist violations of the Advisers Act. Furthermore, Och-Ziff and OZ Management were ordered to pay, jointly and severally, disgorgement of $173,186,178, and prejudgment interest of $25,858,989, for a total payment of $199,045,167. The SEC ordered Och to pay disgorgement of $1,900,000 plus prejudgment interest of $273,718, for a total payment of $2,173,718, and Frank agreed to be subject to additional civil proceeding to determine what, if any, penalties would be levied against him.
A criminal complaint was filed on August 12, 2016 in the district court for the Eastern District of New York against Samuel Mebiame, a Gabonese national, based on his involvement in the Och-Ziff bribery scheme. On December 9, 2016, the DOJ filed an Information in the Eastern District of New York against Mebiame alleging conspiracy to violate the anti-bribery provisions of the FCPA. On the same date, Mebiame pled guilty to the charge. On June 14, 2017, the court sentenced Mebiame to 2 years in prison and ordered him to pay a mandatory assessment of $100.
In a related proceeding, on October 5, 2017, the DOJ filed a ten count indictment in the Eastern District of New York against Michael L. Cohen, a former Executive Managing Director at Och-Ziff, 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. Cohen has also been sued by the SEC in a separate proceeding. Both cases are ongoing.
