BROOKLYN (CN) – Two former executives of Och-Ziff Capital Management face a federal complaint that says they paid bribes in the tens of millions to the influential leaders of African nations in exchange for lucrative mining deals.
The Jan. 26 suit in Brooklyn comes four months after the Securities and Exchange Commission’s suit reached a $200 million settlement with the hedge fund itself.
Thursday’s complaint takes aim at a pair the SEC accuses of acting as the driving force behind the scheme: Michael Cohen, head of the company’s European office, and Vanja Baros, the front man for Africa-related deals.
“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,” Kara Brockmeyer, head of the commission’s Foreign Corrupt Practices unit, said in a statement.
A cease-and-desist order that the SEC levied against the firm in September said Och-Ziff’s bribes drew investments from the Libyan Investment Authority sovereign wealth fund and secured mining rights in Libya, Chad, Niger, Guinea and the Congo.
CEO Daniel Och agreed to pay $2.2 million as part of the settlement, and the SEC noted that it would assess a penalty against CFO Joel Frank at a later date.
Both consented to the order without admitting or denying the charge that they turning a blind eye to the red flags and risks associated with the transactions, failed to ensure proper bookkeeping of the deals, and failed to have safeguards in place to prevent such bribes from happening.
Thursday’s charges identify at least seven bunk transactions that Cohen and Baros ran at the alternative investment fund.
The government seeks unspecified monetary penalties.
Och-Ziff spokesman Joe Snodgrass did not return a phone call or email Friday afternoon seeking comment.
The SEC said it began tracking the company while “proactively scrutinizing the way that financial service firms were obtaining investments from foreign wealth funds overseas.”
Och-Ziff had billed itself on its website as “one of the largest institutional alternative asset managers in the world.”