One of the Och-Ziff Capital Management executives at the center of the hedge fund firm’s African bribery scandal has been charged by the U.S. for defrauding a client foundation, according to court documents made public Wednesday.
Michael Cohen, ex-head of Och-Ziff’s European business, was charged by the U.S. District Court of Eastern New York with 10 counts that included conspiracy to commit investment adviser fraud, wire fraud and obstruction of justice, according to the indictment. The charges centered on misrepresentations that Cohen and Och-Ziff allegedly made to an unnamed U.K.-based foundation that in 2008 committed to invest as much as $200 million in a joint venture in Africa.
Cohen engaged in “acts, practices, and courses of business which were fraudulent, deceptive, and manipulative,” allegedly using the joint-venture fund to buy stock from an individual to whom he had loaned money for a yacht, the court documents said. Cohen didn’t disclose his personal interest in the investment, and the individual used proceeds from the stock sale to repay him $4 million of the loan, according to the indictment.
“Cohen, along with others, made material misrepresentations and omissions to the charitable foundation concerning conflicts of interest and self-dealing,” the indictment stated.
His attorney, Ronald White, did not immediately respond to request for comment.
The former Och-Ziff executive allegedly tried to cover up the scheme by creating a fake letter and making “materially false statements” to the Federal Bureau of Investigation, Internal Revenue Service, and Securities and Exchange Commission, according to the court documents.
[II Deep Dive: Dan Och’s African Nightmare]
Och-Ziff and four executives, including Cohen, had been previously charged by the SEC over corrupt practices tied to the firm’s dealings in Africa. In January 2017, the regulator said Cohen and his colleague Vanja Baros were the “driving forces behind a far-reaching bribery scheme” that improperly used investor money to pay bribes to high-level government officials in Africa.
The hedge fund firm paid $412 million in U.S. criminal and regulatory penalties, including a $213 million criminal fine, according to a September 2016 statement from the Department of Justice about Och-Ziff’s role in African bribery conspiracies. Chief Executive Officer Daniel Och personally paid $2.2 million to settle the SEC’s charges without admitting or denying guilt, according to a statement from the regulator on the same date.
Och-Ziff had $32 billion of assets under management at the beginning of November, down from $48 billion on June 30, 2015.
