U.S. prosecutors are investigating one of the wealthiest and most powerful hedge funds in the world for allegedly bribing African officials to secure mineral rights.
Och-Ziff is a New York-based hedge fund that lists $39.2 billion in assets, making it arguably the fourth largest hedge fund in the world by asset holdings, according to the firm.
The investigation into the New York firm began once U.S. authorities arrested Samuel Mebiame, a consultant who worked closely in a joint venture with Och-Ziff, on charges that he bribed foreign officials to secure mineral rights in three separate African nations, the New York Times reports. Och-Ziff was not named explicitly in the charges, but instead was referred to as a “U.S. based hedge fund.”
Two officials familiar with the matter confirmed that the hedge fund in the joint venture, called Africa Management Limited (AML), was indeed Och-Ziff, the Times reports.
Mebiame admitted making cash payments directly to foreign officials, the Times reports. Mebiame’s arrest and statements opened the floodgates for investigators to thoroughly look into the foreign operations of the hedge fund. Specifically, prosecutors have their eyes locked in on AML.
AML began in 2007 to facilitate investments in African mines. Och-Ziff put up a reported $300 million into the venture, and its partners put up around $900 million, reports the Financial Times. The hedge fund’s leading man in this operation was Michael Cohen, a long-time confidant of Daniel Och (the founder of Och-Zill).
Cohen oversaw the African operation, but he delegated a sizable portion of his responsibilities to Vanja Baros. The two managed the joint venture from 2007 to 2012, the FT reports.
U.S. prosecutor’s investigation focuses on Mebiame, Cohen, Baros, and the chief executive of the joint venture Mark Wilcox. Prosecutors want to ascertain what (if anything) these men knew about the alleged African bribery schemes.
The Securities and Exchange Commision and Department of Justice are allegedly in discussions with U.S. prosecutors to ensure that a subsidiary of Och-Ziff pleads guilty to violating anti-corruption laws, according to FT.
The fund has reportedly set aside $414 million to pay what it expects to be the penalty following an investigation conducted by the SEC and the DOJ, the Financial Times reports.
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