Daniel Och, Securities Fraud, New York 2016

BROOKLYN, NY – Och-Ziff Capital Management Group, LLC, a New York alternative investment and hedge fund manager, has agreed to pay a $213 million criminal penalty and enter into multiple criminal resolutions to resolve charges related to widespread bribery of officials in Libya and the Democratic Republic of Congo.

Och-Ziff, the publicly traded parent company, entered into a three-year deferred prosecution agreement (DPA) with the government. An Och-Ziff subsidiary, OZ Africa Management GP, LLC, pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA).

United States Attorney Robert L. Capers stated, “Och-Ziff, one of the largest hedge funds, positioned itself to profit from the corruption that is sadly endemic in certain parts of Africa, including in Libya, the Democratic Republic of the Congo, Chad, and Niger. Despite knowing that bribes were being paid to senior government officials, Och-Ziff repeatedly funded corrupt transactions. One Och-Ziff employee was so bold as to order the removal of language from their African joint venture’s internal audit report that called for an investigation of suspected bribery payments by a business partner.”

Principal Deputy Assistant Attorney General David Bitkower said, “This case marks the first time a hedge fund has been held to account for violating the Foreign Corrupt Practices Act. In its pursuit of profits, Och-Ziff and its agents paid millions in bribes to high-level officials across Africa. By exposing corruption in this industry, the Criminal Division’s Fraud Section continues to root out wrongdoing of all types in the financial sector.”

FBI Assistant Director in Charge William F. Sweeney said, “Gaining the upper hand in a business venture by engaging in corrupt practices is bribery in its purest form. Doing so with the intention of influencing a foreign official in his or her capacity is nothing short of corruption. This type of behavior can’t and won’t be tolerated. I commend the investigators and prosecutors who continue to work together at home and abroad to vigorously enforce the law within the confines of the Foreign Corrupt Practices Act.”

IRS-CI Chief Richard Weber stated, “Today’s plea and deferred prosecution agreement result from the unraveling of complex financial transactions orchestrated by Och-Ziff Capital Management Group, LLC and its subsidiary to facilitate illegal payments to foreign government officials. IRS-CI will continue to investigate pervasive bribery schemes used by corporations in the pursuit of attractive international investment opportunities.”

Under the DPA, Och-Ziff admitted to multiple conspiracy charges and agreed to a three-year independent compliance monitor. Sentencing for OZ Africa has been scheduled for March 29, 2017, at 2:00pm.

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