Gaddafi, bribery and a $40 billion hedge fund: The key details from the case against Och-Ziff

Dan-ochDan Och.

Och-Ziff Capital Management has agreed to settle charges of bribery, paying nearly $200 million to the Securities and Exchange Commission.

The hedge fund’s CEO, Dan Och, agreed to pay nearly $2.2 million to settle the charges with the SEC, as did the firm’s CFO Joel Frank.

The firm was accused of bribery in its financial dealings in Africa, which the SEC says included run-ins with Muammar Gaddafi’s relatives.

Here are some of the key details from the SEC order:

  • “In early 2007, Och-Ziff Employee A sought assistance from Libyan Agent to secure an investment mandate whereby the LIA [the Libyan sovereign wealth fund] would invest in Och-Ziff’s managed funds. Libyan Agent told Och-Ziff Employee A that he needed to receive a fee if his efforts on behalf of Och-Ziff were successful and resulted in an investment by the LIA. Och-Ziff Employee A agreed to have Och-Ziff pay the fee, knowing that Libyan Agent would use any fee he received to pay bribes…
  • Libyan Agent arranged a meeting for Och-Ziff Employee A in Vienna in March 2007 at which he introduced Och-Ziff Employee A to two Libyan government officials, including one of the sons of Colonel Muammar Gaddafi.”
  • Och-Ziff Employee A communicated his progress with the LIA and Libyan Agent to Och. After the meeting in Vienna, Och-Ziff Employee A emailed Och that the “[m]eetings areamazing. They have 77 billion, half in cash and no idea who to give it to.”
  • Libyan Agent and Och-Ziff Employee A engaged in a scheme with Libyan government officials to funnel bribe payments from Och-Ziff to those officials in exchange for their support for the LIA’s investment with Och-Ziff. A third Libyan government official, the head of Libya’s powerful state security services and Libyan Agent’s longstanding patron in Libya, was also part of the bribery scheme.The scheme was successful. In or about November 2007, the LIA agreed to invest.
  • $300 million into Och-Ziff funds and those funds were invested on December 1, 2007.
  • In January and October 2008, Och-Ziff transferred a total of $3.75 million to Libyan Agent’s shell company. Libyan Agent then directed the transfer of approximately $2.5 million from those funds to an account held by Tunisian Agent for the benefit of the two senior LIA officials, including the son of Colonel Gaddafi.”

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