- Hedge fund is in talks to resolve probe of dealings in Africa
- Gabonese ‘fixer’ with links to firm arrested on Tuesday
Och-Ziff Capital Management Group LLC’s main business will probably avoid conviction in a U.S. bribery probe by having an overseas unit plead guilty, according to people with knowledge of the matter.
Prosecutors are discussing such an arrangement with the money manager, which would still require the holding company to enter a deferred-prosecution agreement, the people said, asking not to be named because the talks are private. Such a deal could take some pressure off the hedge-fund operator, which has suffered a wave of redemptions as the roughly five-year probe of suspected bribes in Africa comes to a head.
Jonathan Gasthalter, a spokesman for Och-Ziff, declined to comment.
Och-Ziff, founded and run by Daniel Och, said this month it had earmarked $414 million to resolve the investigation. Authorities including federal prosecutors in Brooklyn, the Department of Justice and the Securities Exchange Commission have been digging into a web of complex oil and mining deals funded by the company in Africa, examining whether it knowingly paid bribes to government officials in the Democratic Republic of Congo and Libyan officials, people familiar with the matter said.
While Och-Ziff has said talks with the U.S. government are in advance stages, such negotiations remain fluid until a deal is announced. Spokesmen from the SEC and Justice Department declined to comment.
Och-Ziff rose 5.4 percent at 9:58 a.m. in New York trading, the most in two weeks. Before today, the stock had lost 66 percent of its value in the past year.
A Gabonese “fixer” with links to the firm was arrested and charged Tuesday by federal prosecutors in Brooklyn. Samuel Mebiame, the 43-year-old son of a former Gabon prime minister, was accused of routinely paying bribes to win mineral rights in Niger, Guinea and Chad for a joint venture whose partners included a hedge fund. That fund is Och-Ziff, people familiar with the matter have said.
Mebiame worked as a consultant for the partnership, seeking to identify and secure mining opportunities in Africa, according to the complaint in Brooklyn, which didn’t name Och-Ziff. Prosecutors said he traveled between the U.S. and Africa to meet with accomplices and government officials and was paid at least $3.5 million for his work.
Mebiame is alleged to have told an unidentified accomplice that their business would suffer if they didn’t bribe government officials. At another point, he threatened to go to the press to expose the joint venture’s “illegal procedures to secure assets in Africa” after a dispute arose over his ownership interest, according to the complaint.
“I will let the world know what kind of international crooks you are,” Mebiame told his accomplice by e-mail, prosecutors said.
Authorities accused him of conspiring to violate the Foreign Corrupt Practices Act, a U.S. anti-bribery law. He appeared in federal court in Brooklyn on Tuesday and was ordered held without bail, said Nellin McIntosh, a spokeswoman for U.S. Attorney Robert Capers in Brooklyn. Ben Tymann, an attorney representing Mebiame, declined to comment on the charges.
The complaint describes the activities of three of Mebiame’s co-conspirators. One of those people is Oloff Walter Hennig, according to a person familiar with the matter.
Hennig, along with Mark Willcox and Vanja Baros, acted as directors of Africa Management Ltd., one of Och-Ziff’s joint ventures set up by Michael Cohen, who left the firm in 2013.
The joint-venture partners include Och-Ziff, Palladino Holdings and Mvela Holdings, founded by Hennig and Willcox respectively, according to a 2008 press release announcing the venture’s creation.
Cohen, Hennig, Willcox and Baros are under investigation by U.S. authorities, said a person familiar with the matter. Cohen, Willcox and Baros didn’t immediately respond to voicemail messages. Hennig didn’t immediately respond to an e-mail, while a spokesman wasn’t immediately available when called at his London office on Wednesday.
Cohen, a long-time Och-Ziff partner, set up the firm’s London office in 2000 and established a complex web of subsidiaries to invest in oil and mineral infrastructure projects throughout Africa through joint ventures, including Africa Management Ltd.
The case is U.S. v. Mebiame, 16-mj-752, U.S. District Court, Eastern District of New York (Brooklyn).