Williams v. Atrium Medical Corporation

 
 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 78989 / September 29, 2016 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 4540 / September 29, 2016  
 
ADMINISTRATIVE PROCEEDING 
File No. 3-17595 
 
 
In the Matter of 
 
OCH-ZIFF CAPITAL 
MANAGEMENT GROUP 
LLC, OZ MANAGEMENT 
LP, DANIEL S. OCH, and  
JOEL M. FRANK, 
 
Respondents. 
 
ORDER INSTITUTING 
ADMINISTRATIVE AND CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, AND 
SECTIONS 203(e), 203(f) AND 203(k) OF 
THE INVESTMENT ADVISERS ACT OF 
1940, MAKING FINDINGS, IMPOSING 
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER, AND NOTICE OF 
HEARING 
  
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that public 
administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 
21C of the Securities Exchange Act of 1934 (“Exchange Act”), and Sections 203(e), 203(f) and 
203(k) of the Investment Advisers Act of 1940 (“Advisers Act”), against Och-Ziff Capital 
Management Group LLC (“Och-Ziff”), OZ Management LP (“OZ Management”), Daniel S. Och, 
and Joel M. Frank (collectively, “Respondents”).   
 
II. 
 
In anticipation of the institution of these proceedings, Respondents Och-Ziff and OZ 
Management each have submitted an Offer of Settlement which the Commission has determined 
to accept.  Solely for the purpose of these proceedings and any other proceedings brought by or 
on behalf of the Commission, or to which the Commission is a party, Respondents Och-Ziff and 
OZ Management admit the Commission’s jurisdiction over them and the subject matter of these 
proceedings, and each consent to the entry of this Order Instituting Administrative and Cease-and-
Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934 and Sections 

 
 
 
 
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203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940, Making Findings, and Imposing 
Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below. 
 
In anticipation of the institution of these proceedings, Respondents Och and Frank each 
have submitted an Offer of Settlement which the Commission has determined to accept.  Solely for 
the purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over them and the subject matter of these 
proceedings, which are admitted, and except as provided herein in Section VII, Respondents Och 
and Frank each consent to the entry of this Order, as set forth below. 
 
III. 
 
 On the basis of this Order and Respondents’ Offers, the Commission finds
1
 that:  
Summary 
 
1. Beginning in 2007 and continuing through 2011, Och-Ziff, primarily through the 
misconduct of two senior employees, entered into a series of transactions and investments in which 
Och-Ziff paid bribes through intermediaries, agents and business partners to high ranking 
government officials in multiple African countries including Libya, Chad, Niger, and the 
Democratic Republic of the Congo (“DRC”).  These bribes were paid with the specific knowledge 
of a senior Och-Ziff employee who was the head of Och-Ziff Europe (“Och-Ziff Employee A”) 
and in certain cases, of an Och-Ziff investment professional working in Och-Ziff’s European office 
(“Och-Ziff Employee B”), but other executives at Och-Ziff ignored red flags and corruption risks 
and permitted these transactions to proceed.  Bribes were paid to corruptly influence foreign 
government officials in order to obtain or retain business for Och-Ziff and its business partners.  
Och-Ziff invested in countries and industries known for corrupt business dealings, and 
purposefully transacted with agents and business partners with high level connections to foreign 
government officials who funneled corrupt payments to those officials.   
2. During this period, Och-Ziff entered into the following transactions in which 
corrupt payments were made: 
a. An investment by the Libyan Investment Authority (“LIA”) of $300 million into 
Och-Ziff funds in 2007.  To secure the LIA investment, Och-Ziff used an agent to 
pay bribes to high ranking Libyan government officials.  With the knowledge of the 
                                                 
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  The findings herein are made pursuant to Respondents’ Offers of Settlement and are not binding on any other 
person or entity in this or any other proceeding.   
 
 

 
 
 
 
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Och-Ziff Employee A, bribes of more than $3 million were paid to Libyan 
government officials. 
b. An investment of $40 million by Och-Ziff funds into a Libyan property 
development project in 2007.  Och-Ziff used investor funds to pay a $400,000 “deal 
fee” to its agent in Libya as part of its investment.  Och-Ziff Employee A knew or 
was willfully blind to the high probability that Och-Ziff’s agent would then use 
those funds to pay bribes to benefit the property development project. 
c. A loan of more than $86 million and funding of more than $10 million from Och-
Ziff investor funds to one of Och-Ziff’s South African partners in African Global 
Capital I (“AGC I”), an Africa mining-focused fund, in 2007 and 2008.  Of the 
funds provided to its business partner in AGC I, with the knowledge or willful 
blindness of Och-Ziff Employee A and Och-Ziff Employee B, millions went 
towards bribes to foreign government officials, illicit payments to middlemen, the 
personal benefit of its business partners, and expenditures unrelated to the 
investment.  Och-Ziff failed to conduct sufficient due diligence on the use of 
investor funds or impose sufficient internal accounting controls to prevent the 
misuse of funds by its South African partner.     
d. A convertible loan of approximately $124 million from Och-Ziff investor funds 
through AGC I to an entity affiliated with an Israeli businessman, to purchase 
mining assets in the Democratic Republic of the Congo (“DRC”) in 2008.  This 
businessman became Och-Ziff’s partner in the DRC.  With the knowledge of Och-
Ziff Employee A and Och-Ziff Employee B, a significant portion of the money was 
used by Och-Ziff’s partner in the DRC to pay bribes to high-ranking DRC officials 
to secure mining assets for Och-Ziff and its partner.   
e. A margin loan for $130 million from Och-Ziff investor funds to another entity 
controlled by the same DRC partner in 2010 and 2011.  Of the total, $84.1 million 
was provided to Och-Ziff’s partner in the DRC with no restrictions or oversight by 
Och-Ziff.  Och-Ziff Employee A and Och-Ziff Employee B knew that Och-Ziff’s 
partner would pay bribes to high-ranking DRC government officials, and others 
within Och-Ziff knew of allegations of corruption against him and his close 
political ties within the DRC.  Och-Ziff’s partner then used the funds to pay bribes. 
f. A purchase of shares by African Global Capital II (“AGC II”), the second Africa-
focused fund created by Och-Ziff, in a London-based oil exploration company in 
2011.  Och-Ziff caused AGC II to purchase the shares from its South African 
partner in order to provide him with capital to use for other purposes.  From there, 
the partner paid more than $1 million to a consultant who then used those funds to 
pay bribes to government officials in Guinea.  Och-Ziff failed to conduct sufficient 
due diligence on the use of investor funds to prevent the payment of bribes.  Och-

 
 
 
 
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Ziff Employee B knew or was willfully blind to the high probability that AGC II 
funds would be used by this consultant to pay bribes.     
3. In most cases, the above transactions involved the use of managed investor funds 
rather than Och-Ziff’s own capital.  OZ Management, a registered investment adviser which 
managed the various investor funds entrusted to Och-Ziff, authorized the use of funds in 
transactions in which bribes were paid to foreign government officials to obtain or retain business 
for Och-Ziff and its business partners.  Och-Ziff categorized these transactions as investments or 
convertible loans despite the fact that two Och-Ziff employees, Och-Ziff Employee A and Och-
Ziff Employee B, knew that investor funds would be used to pay bribes.  Investor funds were also 
used in self-dealing transactions to benefit Och-Ziff Employee A, Och-Ziff’s business partners, and 
Och-Ziff itself.   
4. Och-Ziff Employee A and Och-Ziff Employee B purposefully caused OZ 
Management to omit material facts to ensure that corrupt transactions would proceed and to engage 
in self-dealing.  OZ Management failed to disclose all material facts and conflicts of interest in its 
communications with investors in certain AGC II transactions or to adequately control the use of 
investor funds.  OZ Management made material misrepresentations or omissions and engaged in 
self-dealing in the following transactions: 
a. A purchase of $20 million in shares in a privately held London-based mining 
company by AGC II in 2010.  Och-Ziff Employee A knew that $4 million would be 
routed by an intermediary to Och-Ziff Employee A’s personal account to offset an 
outstanding personal loan from Och-Ziff Employee A to that intermediary.  Och-
Ziff Employee A further directed that an additional $4 million be paid in secret 
through the intermediary to an AGC business partner without disclosure to AGC II 
investors. 
b. An investment by AGC II in oil rights in the Republic of the Congo (“Congo-
Brazzaville”) through an oil exploration and development company which was 
majority controlled by Och-Ziff and South African Business Partner(“Company 
A”), in 2010.  Och-Ziff failed to disclose material facts regarding the origins of this 
transaction, the true purpose of payments to its AGC business partner in the 
transaction, and the justification for payments to intermediaries.   
c. An AGC II purchase of shares in a London-based oil and gas company for $77 
million in 2011.  Och-Ziff, through Och-Ziff Employee A and Och-Ziff Employee 
B, structured the transaction to provide $50 million cash to its AGC business 
partner to further his and potentially Och-Ziff’s interests in The Republic of Guinea 
(“Guinea”), a country in which this business partner had a high-placed agent in the 
entourage of a senior government official.  Och-Ziff Employee A and Och-Ziff 
Employee B also included within the purchase price an additional $2 million for the 

 
 
 
 
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partner to repay an outstanding debt to Och-Ziff.  Och-Ziff failed to disclose 
accurate terms of the transaction or its own self-dealing to AGC II investors. 
5. As a result of the foregoing, Och-Ziff did not accurately and fairly reflect the 
disposition of assets involved in these transactions in its books and records, and did not devise and 
maintain an adequate system of internal accounting controls to prevent these violations.  It 
inaccurately reflected in its books and records that the expenditures of investor funds were for 
legitimate investments and not, in whole or in part, corrupt payments to foreign government 
officials.  Och-Ziff also failed to devise and maintain an adequate system of internal accounting 
controls to prevent these payments.  It failed to follow certain of its own internal accounting 
controls, failed to conduct adequate due diligence, and failed to implement other appropriate 
financial controls to detect or prevent the payment of bribes. 
6. This matter also concerns violations by Daniel S. Och, Chief Executive Officer and 
Chairman of the Board of Och-Ziff, and Joel M. Frank, Chief Financial Officer of Och-Ziff.  As 
Och-Ziff’s Chief Executive Officer, Och had final decision-making authority on all private 
investments by Och-Ziff, including the transactions described above.  Och personally approved the 
expenditure of funds in two transactions with Och-Ziff’s partner in the DRC in which bribes were 
paid.  Those bribes were then inaccurately recorded as investments or loans on Och-Ziff’s books 
and records rather than bribe payments.  As Och-Ziff’s Chief Financial Officer, Joel M. Frank was 
responsible for maintaining the accuracy of Och-Ziff’s books and records and for devising and 
maintaining Och-Ziff’s system of internal accounting controls.  Frank approved the expenditure of 
Och-Ziff funds in transactions in which bribes or improper payments were made.  Both Och and 
Frank were aware of the high risk of corruption in transactions with Och-Ziff’s DRC partner in 
light of his reputation and connections to high level DRC government officials.  Despite these 
risks, Och approved and Frank authorized Och-Ziff to enter into each of these transactions.  As a 
result, although neither Och nor Frank knew that bribes would be paid, Och caused Och-Ziff’s 
books and records violations in two DRC transactions, and Frank caused the company’s books and 
records and internal controls violations in connection with the two DRC Partner transactions and 
the LIA fee payment. 
Respondents 
 
7. Och-Ziff Capital Management Group LLC, an institutional alternative asset 
manager or “hedge fund” incorporated in Delaware with its principal place of business in New 
York, New York.  Och-Ziff’s common stock is registered with the Commission pursuant to Section 
12(b) of the Exchange Act and is listed on the New York Stock Exchange (ticker: OZM).  Och-Ziff 
controls numerous consolidated subsidiaries and affiliates through which it operates and provides 
investment advisory and management services to Och-Ziff investor funds in return for 
management fees and incentive income. 
 
8. OZ Management LP is registered investment adviser and subsidiary of Och-Ziff 
with its place of business in New York, New York.  Since 1999, OZ Management has been 

 
 
 
 
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registered with the Commission as an investment adviser.  OZ Management provides asset 
management services to Och-Ziff investor funds.  The financial results of certain Och-Ziff 
subsidiaries, including OZ Management and its subsidiaries and affiliates, are ultimately 
consolidated into the financial statements of Och-Ziff. 
9. Daniel S. Och, age 55, resides in Scarsdale, New York.  Och is the founder, Chief 
Executive Officer, and Chairman of the Board of Och-Ziff, as well as an officer and partner in OZ 
Management.  He is a U.S. citizen. 
10. Joel M. Frank, age 61, resides in New York, New York.  Frank is the Chief 
Financial Officer for Och-Ziff and OZ Management, and an officer and partner in OZ 
Management.  He is a U.S. citizen. 
Bribery of Libyan Officials 
11. In 2007, Och-Ziff Employee A, the head of Och-Ziff’s European office, began 
attempts to obtain clients and investment opportunities in Libya, which had emerged from 
international sanctions and was opening to Western investment and business.  Libya created a 
sovereign wealth fund, the Libyan Investment Authority, to manage the country’s oil and other 
assets.  To help with Och-Ziff’s efforts in Libya, Och-Ziff Employee A enlisted a London-based 
business associate with whom Och-Ziff had previously done business (“Libyan Agent”).  Och-Ziff 
Employee A knew that Libyan Agent had contacts within the Libyan government at the highest 
levels.  Och-Ziff Employee A and others at Och-Ziff also knew that Libyan Agent was not a 
financial consultant or advisor, but rather a middleman whose primary contribution to transactions 
were his connections to foreign government officials and his complicated network of offshore 
entities. 
A. Bribery to Secure the LIA Investment in Och-Ziff 
12. In early 2007, Och-Ziff Employee A sought assistance from Libyan Agent to secure 
an investment mandate whereby the LIA 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.   
13. 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, Libya’s ruler at the time.  This son was the driving 
force behind the creation of the LIA.  A senior executive with the LIA was also at the meeting.  
Och-Ziff Employee A later described this government official as Colonel Gaddafi’s son’s “right 
hand man at the lia [sic].”  Subsequent due diligence by Och-Ziff noted that this individual “looks 
after” the interests of Colonel Gaddafi’s son at the LIA and in a commercial business.  Also present 
at the meeting was a Tunisian business associate of the two Libyan government officials who was 

 
 
 
 
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a member of Colonel Gaddafi’s son’s entourage (“Tunisian Agent”).  The two Libyan government 
officials had significant control over investments made by the LIA.  The purpose of this meeting 
was to introduce Och-Ziff Employee A to the foreign officials and the Tunisian Agent in order to 
facilitate the bribery of those officials in exchange for the LIA investing its money with Och-Ziff.   
14. 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 are 
amazing.  They have 77 billion, half in cash and no idea who to give it to.”  Och-Ziff Employee A 
further told Och “I haven’t been this excited in a while.”  Och later asked Och-Ziff Employee A 
about progress with the LIA, to which Och-Ziff Employee A responded:  “I thought you were 
against it so I havent (sic) pursued it.  The agent wants to come in and see me this week.  You OK 
with that?”  Och replied “I will be ok.  Will call you.”  Throughout 2007, Och and Och-Ziff 
Employee A continued to communicate regarding the progress of the LIA investment and the 
agent. 
15. 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.  Och-Ziff Employee A knew that Libyan Agent was acting on 
behalf of these government officials and that Libyan Agent would use the fee from Och-Ziff to 
bribe these government officials to help Och-Ziff obtain an investment from the LIA.  
16. 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.  At the 
same time, Libyan Agent and Och-Ziff Employee A requested from Och-Ziff payment of a fee to 
effectuate the secret agreement Libyan Agent and Och-Ziff Employee A had previously discussed.  
In early December 2007, Och-Ziff agreed to pay Libyan Agent the fee he had negotiated on behalf 
of the government officials with Och-Ziff Employee A.  Och-Ziff also agreed to pay the fee to an 
offshore special purpose vehicle (“SPV”) identified by Libyan Agent rather than directly to Libyan 
Agent himself or his London-based company. 
17. Och-Ziff was aware of risks in dealing both with the LIA and Libyan Agent when it 
agreed to pay his fee.  Respondent Frank and a senior Och-Ziff attorney were involved in the 
decision to pay Libyan Agent for sourcing the LIA investment into Och-Ziff funds, and Frank 
reviewed due diligence reports on Libyan Agent.  Through this report, Och-Ziff was aware of 
Libyan Agent’s connections at the highest levels within the Libyan government, including with the 
Gaddafi family.  Och-Ziff was also aware through a background due diligence report that Libyan 
Agent operated as a “fixer” with opaque business interests run through offshore holding companies 
which made his business interests “hard to pin down.”  According to the report, this meant that 
“there is little documented evidence of [Libyan Agent’s company’s] activities either in the UK or 
internationally.”  Despite the risks, Och-Ziff paid Libyan Agent via his offshore SPV.   

 
 
 
 
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18. Och-Ziff conducted no separate due diligence on the shell company designated to 
receive the payment, and entered into contractual obligations with the entity itself rather than 
Libyan Agent, thus placing no restrictions on the agent’s conduct.  These failings were contrary to 
Och-Ziff’s recommended anti-corruption guidelines and internal accounting controls.  
19. Libyan Agent’s role in the transaction was kept secret from LIA officials apart from 
those involved in the bribery scheme.  Libyan Agent did not attend any of the official meetings 
between Och-Ziff and the LIA; he was not copied on email or correspondence with the LIA; and 
his role in facilitating the transaction was not discussed with any employees of the LIA who were 
not part of the bribery scheme.  Frank was involved in the decision to pay Libyan Agent for 
sourcing the LIA investment into Och-Ziff funds.  Based in part on corruption concerns, Och-
Ziff’s internal compliance rules regarding investor solicitations, and conformity with other U.S. 
securities laws that were later determined not to apply, a senior Och-Ziff attorney initially sought 
contractual language requiring proof that Libyan Agent had notified the LIA of his role and the fee 
he was paid by Och-Ziff.  However, Libyan Agent refused to agree to provide such proof, and 
Och-Ziff agreed to remove this obligation and instead allowed Libyan Agent’s entity to represent 
(without requiring proof) that he had notified the LIA of his involvement and fee. 
20. Och-Ziff Employee A knew that Libyan Agent’s role in helping Och-Ziff could not 
be discussed openly with the LIA apart from the officials involved in the bribery scheme.  Och-Ziff 
Employee A also knew that Libyan Agent would not disclose his role and fee to the LIA regardless 
of his contractual obligation to do so.  Och-Ziff Employee A and Libyan Agent discussed ways to 
avoid disclosing Libyan Agent’s role to the LIA, including requiring Libyan Agent to give notice 
to the LIA which he would then fail to deliver.  Och-Ziff Employee A knew that Libyan Agent 
never informed the LIA of his payment by Och-Ziff. 
21. Och-Ziff did not enter into a written agreement directly with Libyan Agent or place 
any restrictions or limitations on Libyan Agent personally.  Instead, in January 2008 Och-Ziff 
executed two agreements with Libyan Agent’s Guernsey-based SPV, but dated those agreements 
as of December 2007.  The first, a consultancy agreement, stated that the SPV “has technical and 
commercial expertise in Libya as a consultant to companies (in particular in information gathering, 
strategic analysis, high level introduction, negotiations, and promotion of projects and 
implementation).”  This description was misleading in that the SPV itself had no interactions in 
Libya and no employees, and Libyan Agent’s involvement was limited to providing an 
introduction to the LIA and paying bribes.  The consulting agreement was also forward-looking 
despite the fact that Libyan Agent had already assisted Och-Ziff since early 2007 in securing the 
LIA investment.  A separate representation letter agreement with the SPV also confirmed that the 
LIA “has been informed in writing of the Agreement and the consideration payable to ourselves 
thereunder.”  This representation was false, and Libyan Agent did not disclose his role in the Och-
Ziff investment to the LIA apart from those officials involved in the bribe scheme.  The second 
agreement also contained anti-corruption representations and warranties by the trustee for the SPV 
receiving the payment, but no such representations or warranties from Libyan Agent, his partner, 
or his London-based entity. 

 
 
 
 
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22. 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.  During this period, Libyan Agent also 
directed payments of more than $1 million through his network of offshore companies to benefit 
his longstanding patron in Libya’s state security services.    
23. Och-Ziff did not obtain a copy of any written notification to the LIA regarding 
Libyan Agent, or seek to obtain a copy of such notification at any time.  Further, at no point did 
Och-Ziff inform the LIA of Libyan Agent’s role in securing the LIA investment.  Throughout Och-
Ziff’s interactions with the LIA from 2008 to 2011, at no point did Och-Ziff disclose to the LIA the 
Libyan Agent’s role with Och-Ziff, and Libyan Agent was not copied on communications with the 
LIA or present at any Och-Ziff meetings with the LIA. 
24. Throughout 2008 and 2009, Och-Ziff Employee A continued to use Libyan Agent 
in attempts to solicit additional investments in Libya and from the LIA, touting Libyan Agent’s 
high level connections and ability to use this influence in Libya.  Och-Ziff Employee A used 
Libyan Agent to assist other Och-Ziff portfolio companies in doing business in Libya, including a 
transaction in which Libyan Agent also acted as an agent of the Libyan government.  In January 
2008, Och-Ziff Employee A described Libyan Agent’s Libyan connections to a third-party Och-
Ziff portfolio company as “very close to [the son of Colonel Gaddafi], LIA and other government 
officials.  We have done three deals with him in Tripoli...He has also been instrumental in 
introducing us to LIA as an investor in OZ.”  Och-Ziff Employee A specifically noted Libyan 
Agent’s ability to “get things done” and “deliver” on a deal in Libya.  Och-Ziff Employee A failed 
to inform Och-Ziff legal or compliance that Och-Ziff’s agent for the LIA transaction was also 
acting as an agent of the Libyan government at the same time.   
25. In its books and records, Och-Ziff recorded the fee paid to Libyan Agent as 
“Professional Services – Other.”  This designation was inaccurate; the payment was for an 
introduction and to pay bribes, and not for professional services. 
26. Based on the foregoing facts, Och-Ziff violated Sections 30A and 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act through its intentional payment of bribes to Libyan government 
officials, inaccurate recording of the bribe payments on its books and records, and failure to devise  
or maintain internal accounting controls sufficient to provide reasonable assurances that its funds 
would not be used to pay bribes.  Further, by his acts or omissions Frank caused violations of 
Sections 13(b)(2)(A) and 13(b)(2)(B) by Och-Ziff. 
B. Bribery Relating to Libyan Property Development Project 
27. In October 2007, Och-Ziff invested in a hotel and office tower project in Libya.  
This project was founded and controlled by Libyan Agent, and Och-Ziff began its investment into 
the project at the same time it was using Libyan Agent to solicit funds from the LIA.  For Och-Ziff 

 
 
 
 
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Employee A, the development project was “making a bet on Libya here and relationship [with 
Libyan Agent].” 
28. Prior to Och-Ziff’s investment, Libyan Agent provided equity stakes in the 
company to his Libyan patron and to a daughter of Colonel Gaddafi in exchange for valuable land 
leases on key properties on which the developments would be built.  Och-Ziff Employee A and 
other Och-Ziff investment professionals in London were aware of the involvement of the Gaddafi 
family in the development project.  In one review of the project Och-Ziff Employee A wrote 
“Gathafi Hotels” to describe a subsidiary of the project.  Later, while Och-Ziff held a board seat at 
the development company, Och-Ziff’s board representative for the development company received 
emails that described Colonel Gaddafi’s daughter as “our JV partner” at the development 
company. 
29. At Och-Ziff Employee A’s urging, Och-Ziff provided a convertible loan of $40 
million to the development company in October 2007.  Och-Ziff Employee A also agreed to pay a 
$400,000 deal fee to Libyan Agent for sourcing the transaction.  Because ongoing bribes were 
necessary to operate the project in Libya, a portion of the deal fee paid to Libyan Agent by Och-
Ziff went towards bribes.  Och-Ziff Employee A knew that Libyan Agent would use the deal fee to 
pay bribes to benefit the development project.   
30. Och-Ziff approved the payment of the $400,000 deal fee in November 2007 
without conducting separate due diligence on the offshore SPV receiving the funds or, apart from 
Och-Ziff Employee A, understanding the justification for the payment.  Further, Och-Ziff did not 
enter into a contract with Libyan Agent or the SPV receiving the fee before it was paid.  Och-Ziff 
therefore paid the deal fee without taking sufficient steps to detect or prevent the payment of bribes 
by Libyan Agent using investor funds.     
31. Based on the foregoing facts, Och-Ziff violated Sections 30A and 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act through its intentional payment of a bribe to a Libyan government 
official, inaccurate recording of the bribe payment on its books and records, and failure to devise  
or maintain internal accounting controls sufficient to provide reasonable assurances that its funds 
would not be used to pay bribes.   
Books and Records, Internal Controls, and Advisers Act Violations in AGC I 
32. Beginning in 2007, Och-Ziff formed the African Global Capital (“AGC”) joint 
venture to invest in natural resource assets in Africa.  The project was led by Och-Ziff Employee A 
and employees in Och-Ziff’s European office.  Och-Ziff co-managed the fund and provided 
capital, infrastructure (including compliance support), and investment expertise to AGC.  Och-Ziff 
held its advisory and management interest in AGC through Africa Management Limited (“AML”), 
which was registered as an affiliated adviser to OZ Management in March 2008.  AML was owned 
40% by Och-Ziff and 60% by its joint venture partner.  OZ Management held its advisory and 
management interest in AML through a wholly-owned and controlled subsidiary, OZ Africa 

 
 
 
 
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Management GP, LLC (“OZ Africa Management”), but Och-Ziff had joint control over all 
investments and operations of AGC and AML.  The first fund, AGC I, was funded using existing 
Och-Ziff investor funds.   
33. As part of its strategy, Och-Ziff teamed with business partners with high-level 
political connections in Africa, who in turn used these connections to source deals for the fund and 
navigate political issues in the various countries.  In pursuit of business, Och-Ziff did not impose 
adequate controls on the use of investor funds by its business partners or conduct due diligence into 
the specific uses of investor funds by those partners.  As a result, Och-Ziff’s business partners 
misused investor funds, enriched themselves, and paid bribes to various government officials.   
34. Och-Ziff chose a prominent figure in South Africa as a potential partner for AGC.  
This individual was a former government official as well as a successful businessman through his 
South African-based conglomerate.  Although Och-Ziff envisioned his conglomerate as a part of 
AGC, it never became part of the joint venture.  However, the co-founder of his South African 
conglomerate became the Chief Executive Officer of AML despite the conglomerate not 
contributing assets to the joint venture.  An individual with a close connection to the co-founders 
of the South African conglomerate (“South African Business Partner”) became Och-Ziff’s partner 
in AGC despite having a limited history of mining operations in Africa.  South African Business 
Partner controlled a private operating entity domiciled outside of South Africa, and he was 
designated to source and acquire assets for AGC.   
35. The first step towards the creation of AGC I took place in May 2007 when Och-Ziff 
entered into a series of loan agreements with South African Business Partner’s entity.  These loans, 
totaling more than $86 million, were ostensibly made to acquire mining rights in Africa which 
would then be contributed into AGC I upon its formation, to buy out minority shareholders in those 
assets, and to then fund mining operations.  South African Business Partner used part of the funds 
loaned by Och-Ziff to acquire mining rights in Chad and Niger and to invest in an Africa-focused 
oil company, Company A.  He also used a portion of the funds to pay bribes to facilitate the 
acquisitions.  In 2008, the assets acquired by South African Business Partner were contributed to 
AGC I, and Och-Ziff converted its existing loan into an equity stake in AGC I.  Prior to the 
inclusion of these assets into AGC I, Och-Ziff conducted due diligence into South African 
Business Partner’s ownership of the assets through various SPVs and subsidiaries.  However, Och-
Ziff failed to conduct any due diligence or investigation into how South African Business Partner 
spent the loan from Och-Ziff funds, how he had acquired the assets contributed to the joint venture, 
what minority investors had been bought out, or whether the assets were acquired through bribery 
using Och-Ziff investor funds. 
36. Although Och-Ziff imposed representations and warranties on its business partner 
and required then to take Foreign Corrupt Practices Act (“FCPA”) training, as noted below, Och-
Ziff did not impose sufficient controls on, and did not investigate what those partners were actually 
doing with Och-Ziff investor funds despite suspicion that its business partners were engaged in 
corrupt transactions and self-dealing.  In particular, Och-Ziff Employee A knew or was willfully 

 
 
 
 
12 
blind to the high probability that South African Business Partner would use the loan proceeds to 
pay bribes to government officials in order to win mining deals.  In 2007 prior to Och-Ziff’s loan, 
Och-Ziff Employee A learned that South African Business Partner had access to certain deals 
through bribes or corrupt schemes.  One deal presented to Och-Ziff Employee A in March 2007 by 
South African Business Partner would have cost “$20-$25 million (includes $5 million for the 
ongoing Presidential campaign...).”  Och-Ziff did not participate in this particular deal, but did 
enter into multiple agreements with the individuals proposing the bribery scheme through its 
ongoing investments with South African Business Partner and Company A over the next four 
years.  Following the formation of AGC, others at Och-Ziff, including the legal and compliance 
groups, learned that South African Business Partner had engaged in potential unlawful activities in 
the past.  In one regulatory filing in early 2008, Och-Ziff informed a foreign government regulator 
that South African Business Partner had engaged in potentially criminal activity in Angola relating 
to an asset he sought to sell to AGC I.  Also in early 2008, Och-Ziff’s legal and compliance group 
stopped a potential AGC I transaction in which the local Zimbabwean partner in a coal transaction 
identified by South African Business Partner was reportedly a front for a high-ranking 
Zimbabwean government official.  Despite this information, Och-Ziff continued to provide funds 
to and do business with South African Business Partner through 2011 without sufficient oversight 
over his use of investor funds. 
37. Och-Ziff knew that South African Business Partner was using Och-Ziff funds to 
purchase mining rights either from foreign governments or unknown third-parties, buy out 
minority shareholders in various entities, and pay substantial amounts to “consultants” with no 
explanation for the work done to justify these payments.  Och-Ziff Employee A acknowledged in 
2007 to his AGC partners that “you buy assets and sign contracts without our approval, but thats 
[sic] what you guys do best and we let you do it.”  Och-Ziff Employee A was willing to allow 
South African Business Partner to operate without oversight because he knew or was willfully 
blind to the high probability that bribes would be paid to acquire assets.  Others at Och-Ziff 
recognized the potential FCPA risks in dealing with South African Business Partner and investing 
in mining transactions Africa.  For example, in 2007, during a meeting to discuss private 
investments by Och-Ziff Europe, a presentation regarding AGC noted that “imposing [Och-Ziff’s] 
standards of care on [AGC] going forward...has proved a particularly contentious issue with 
respect to FCPA rules as an example but is a must.”  This presentation further stated that “[o]ne of 
the most difficult areas has been finding the right disincentive to our partners for any breach [of 
FCPA and Och-Ziff’s standards].  This is key as we are not the ones controlling what happens on 
the ground.”  Despite understanding the risks, Och-Ziff did not conduct adequate due diligence to 
investigate whether AGC I assets were being acquired through bribery. 
38. Of the total amount contributed by Och-Ziff towards the Chad and Niger mining 
assets, only a portion went towards mining-related costs.  South African Business Partner used a 
significant portion of the funds he was provided to pay bribes to proxies for high ranking 
government officials in Chad and Niger in order to secure assets for AGC.  These bribes were 
falsely classified on an AGC I portfolio company’s books as consultant payments, law firm 
payments, house rentals, and charitable contributions, among other designations.  “Bribe accounts” 

 
 
 
 
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were created and maintained by employees of a subsidiary of South African Business Partner’s 
company in Chad, whereby funds loaned by Och-Ziff supposedly to fund mining operations 
actually went towards bribes to ministers and governors, including “house repairs” and medical 
assistance for these officials.  Och-Ziff failed to audit or review the expenditure of its funds by 
South African Business Partner to ensure compliance with Och-Ziff’s internal anti-corruption 
policies and financial controls.   
39. Millions of dollars in Och-Ziff investor funds also went to personally enrich South 
African Business Partner, the CEO of AML, and the South African businessman who Och-Ziff 
touted as an AGC partner.  Och-Ziff’s business partners also used funds provided by Och-Ziff to 
provide travel to African government officials, including officials from Zimbabwe and South 
Africa.  Och-Ziff did not take sufficient steps to review South African Business Partner’s 
expenditures or prevent this self-dealing by its partners. 
40. The misuse of Och-Ziff investor funds continued after the formation of AGC I.  In 
2008, Och-Ziff agreed to pay over $10 million based on claims that an African-based aircraft pilot 
had purchased uranium rights in Niger and then sold those rights in part to South African Business 
Partner.  South African Business Partner represented to Och-Ziff that he had paid the pilot for 
those rights, though Och-Ziff saw no proof of payments by either the pilot or South African 
Business Partner. Nonetheless, Och-Ziff agreed to reimburse South African Business Partner for 
his alleged payments.  In doing so, Och-Ziff did not conduct a review of the claimed expenses, did 
not confirm that the funds had actually been expended by the pilot to acquire the assets or by South 
African Business Partner to reimburse him, and did not to investigate whether bribes were paid to 
acquire these assets.  After approval by Och-Ziff, AGC I transmitted the funds to South African 
Business Partner’s entity, not the pilot.  South African Business Partner then used these funds to 
pay bribes to government officials in Chad and Niger and to enrich himself and his business 
partners.   
41. Based on the foregoing facts, Och-Ziff violated Sections 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act through its inaccurate recording of the payments to South African 
Business Partner on its books and records, and failure to devise or maintain internal accounting  
controls sufficient to provide reasonable assurances that its funds would not be used to pay bribes 
and for other improper purposes.  In addition, OZ Management violated Sections 206(1) and 
206(2) of the Advisers Act by failing to prevent the use of managed investor funds by its business 
partner in corrupt and self-dealing transactions. 
Bribery in the Democratic Republic of the Congo  
42. Beginning in 2008, Och-Ziff entered into a partnership an infamous Israeli 
businessman with close ties to government officials at the highest level within the DRC (“DRC 
Partner”).  Although Och-Ziff did not enter into a written partnership agreement with DRC Partner, 
Och-Ziff Employee A, Och-Ziff Employee B, and DRC Partner all understood the nature of the 
partnership and its purpose.  The purpose of the partnership was for Och-Ziff to fund DRC 

 
 
 
 
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Partner’s multiple mining-related interests in the DRC while he used his government contacts to 
acquire assets and navigate the DRC business environment for his and Och-Ziff’s benefit.  Och-
Ziff and DRC Partner worked to acquire and consolidate assets in the DRC into an entity 
controlled by DRC Partner that could then be sold to a large publicly-traded mining company for a 
significant profit.  Och-Ziff Employee A and Och-Ziff Employee B, however, understood that 
DRC Partner would use the funds Och-Ziff provided to him to pay bribes to government officials 
in order to maintain his corrupt relationships, acquire assets with the help of his government 
benefactors, acquire assets at a significant discount to the true value of the asset, and gain favor for 
his mining interests in the DRC. 
A. Och-Ziff Knew the High Risk Of Bribery In Dealing with DRC Partner 
43. From Och-Ziff’s first contact with DRC Partner in 2006, Och-Ziff Employee A was 
aware of allegations that DRC Partner used corruption and bribery in his dealings in the DRC.  
Och-Ziff Employee A emailed a third-party in 2006 that DRC Partner “has some skeletons,” and 
that he “has some suits outstanding regarding him bribing the drc gov.”  Undeterred, Och-Ziff 
Employee A went forward with DRC Partner as Och-Ziff’s business partner in the DRC. 
44. In early 2008 Och-Ziff then began discussions with DRC Partner to invest in and 
consolidate DRC mining assets.  At that time, DRC Partner informed Och-Ziff Employee A and 
Och-Ziff Employee B that he paid bribes to maintain his relationships with government officials in 
the DRC, and that such bribes were the key to his ability to secure valuable assets.  Over the course 
of the relationship, Och-Ziff Employee A and Och-Ziff Employee B learned additional information 
regarding DRC Partner’s extensive relationships with government officials, secret deal terms with 
third-parties, ability to operate with impunity in the DRC, favorable treatment from the 
government, and access to deals not available to others.  Neither Och-Ziff Employee A nor Och-
Ziff Employee B took steps to cease the relationship.  Instead, they continued to champion DRC 
Partner within Och-Ziff and consider new business opportunities with DRC Partner over the next 
four years. 
45. Others within Och-Ziff, including Och and Frank, were aware of corruption 
accusations against DRC Partner, as well as the high corruption risk when doing business in the 
DRC.  In fact, in his February 14, 2008 email to a due diligence firm requesting a background 
report on the DRC Partner, the Och-Ziff attorney making the request noted that the DRC Partner 
“will be very easy to find ... perhaps the impetus behind the movie ‘Blood Diamonds.’”   
46. A week later, the Och-Ziff attorney received the initial findings of the due diligence 
firm, which he forwarded to other senior executives at OZ, including Och-Ziff Employee A, Och-
Ziff Employee B, a senior Och-Ziff attorney, outside counsel, and Frank.  The report detailed DRC 
Partner’s history of suspicious transactions, allegations of illegal conduct, and close connections at 
the highest levels in the DRC government, stating among other things that: 

 
 
 
 
15 
a. DRC Partner “is considered one of the most well-connected foreigners in the 
DRC... He is known to enjoy an extremely close relationship with [a senior DRC 
government official].” 
b. DRC Partner was identified on several “compliance Watch Lists” as a “politically 
exposed individual as a result of his close ties to the DRC government.” 
c. DRC Partner operated through a “complex” network of company structures “spread 
across multiple jurisdictions” using “more elaborate structures with trusts and 
investment companies acting as the investor on his behalf.  The opacity of his 
company structures has been highlighted by interested parties as an issue of 
concern...” 
d. DRC Partner’s business dealings in the DRC began in 2000 when he was awarded a 
diamond export monopoly valued at $600 million for which he allegedly paid only 
$20 million.  This payment was supposedly used to pay debts incurred by the then-
president of the DRC during the civil war in that nation.  It was later alleged that 
DRC Partner secured his monopoly “in exchange for providing military training” to 
government forces in the DRC. 
e. In a lawsuit against DRC Partner, it was alleged that he had bribed DRC 
government officials and Angolan military officers in exchange for receiving an 
exclusive diamond export license. 
f. DRC Partner was “happy” and “willing to use his significant political influence 
with [a high-level DRC government official] and his clique to facilitate 
acquisitions, settle disputes and frustrate competitors.”  In disputes with DRC 
mining rivals, DRC Partner was “rumoured to have used his influence with [senior 
DRC government official’s] closest aide, and former [DRC provincial] governor in 
order to settle the dispute in his favour.” 
g. DRC Partner’s involvement in the DRC and other countries has “tarnished his 
reputation and has led some Western companies to question whether they should be 
involved with him.”  Based on his history and reputation “a number of London 
based advisors would not act for [a DRC mining company] or associated (sic) with 
the listing and many fund managers declined” investment deals “due to [DRC 
Partner’s] involvement.” 
47. Based upon the report and other publicly available information, the Och-Ziff 
attorney expressed to his supervisors, including a senior Och-Ziff attorney and Frank, strong 
concerns about doing business with the DRC Partner and his view that the company should not do 
business with him.  Both Och and Frank received due diligence on DRC Partner.  The corruption 
risks identified during due diligence were so significant that Frank and a senior Och-Ziff attorney 

 
 
 
 
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went to Och to argue that Och-Ziff should not do business with DRC Partner in any transaction.  
Frank’s concerns included the reputational and legal risks inherent in dealing with DRC Partner, 
including the risk of a government investigation into Och-Ziff’s dealings with DRC Partner should 
they come to light.  In a meeting in or about February 2008, Och, Frank, and the senior attorney 
discussed the risk of corruption that would exist in any relationship with DRC Partner.  Och was 
told that although it was not illegal to transact with DRC Partner, nonetheless both Frank and the 
senior Och-Ziff attorney expressed the view that Och-Ziff should not enter into any transaction 
with him because of the significant corruption risk.  Och instructed Frank and others to move 
forward on potential transactions with DRC Partner unless new information was uncovered.   
B. Suspicious Payments in Zimbabwe 
48. In or about April 2008, for its first transaction with DRC Partner, Och-Ziff invested 
in a London stock exchange-listed mining company with operations in the DRC.  DRC Partner was 
a significant shareholder in this entity, and he stated in an email to Och-Ziff Employee A that he 
wanted to have Och-Ziff as his “long-term partner,” and that he had “facilitated Och-Ziff’s 
investment at an attractive time/price knowing that you see the bigger picture in all of this.  What 
the bigger picture looks like, is yet to be determined, but it is your partner who is holding the pen – 
I just need flexibility on the drawing board [t]o create full value for our partnership.”   
49.   According to the mining company’s placement announcement, the offering of new 
shares to which Och-Ziff subscribed was intended to fund the company’s ongoing mining efforts in 
the DRC.  The due diligence report that Och-Ziff received on DRC Partner noted that this mining 
company had a “troubled relationship with the DRC government,” that accusations of money 
laundering against the company had been made by the DRC minister of mines, and that one major 
shareholder in the entity (“Zimbabwe Shareholder”) had been expelled from the DRC.  The report 
also noted that the company’s mining license was “under review” in the DRC.   
50. Och-Ziff Employee B traveled to Zimbabwe and the DRC in March 2008 and met 
Zimbabwe Shareholder prior to the transaction, purportedly to assess the company’s assets and 
infrastructure.  After this trip, Och-Ziff negotiated a lower share price and then doubled its 
investment in this company to a total of $150 million.  Och-Ziff thereafter funded approximately 
$150 million from its managed investor funds in March 2008 to purchase shares in the mining 
company. 
51. Within days of the investment, the mining company publicly announced that it had 
acquired an interest in a platinum asset in Zimbabwe.  This was inconsistent with Och Ziff’s 
understanding that money would be used for existing DRC mining operations.  The Zimbabwean 
government had recently seized the platinum asset from another mining entity and then resold it to 
a holding company affiliated with the Zimbabwe Shareholder and the Zimbabwe state owned 
mining company.  The Zimbabwe Shareholder then transferred the holding company to the DRC-
based mining company in exchange for additional shares in the mining company.  The same 
announcement also noted that the mining company had agreed to loan $100 million to the holding 

 
 
 
 
17 
company following the acquisition.  Och-Ziff was aware of subsequent press reports, denied by the 
mining company, alleging that the proceeds of that loan were diverted to a political party in 
Zimbabwe.   
52. In June 2008, Och-Ziff Employee A forwarded to Och-Ziff Employee B a text 
message from the CEO of AML which said that the mining company Och-Ziff had just invested in 
had “paid 4 arms into zim[babwe], and rented boat from china.  Journo has bank transfers, 
aparently [sic].”  Neither informed anyone else at Och-Ziff of these accusations, took steps to 
determine whether these accusations were true, or limited Och-Ziff’s relationship with DRC 
Partner or the mining company. 
C. Corrupt Takeover of DRC Mining Company 
53. Also in April 2008, Och-Ziff caused AGC I to enter into an approximately $124 
million convertible loan with a holding company affiliated with DRC Partner.  The stated uses of 
these funds were threefold:  first, to provide DRC Partner with approximately $15 million to 
purchase a Congolese entity that had acquired the rights to a valuable mining asset in the DRC (the 
longstanding asset of a Canadian mining company) through an ex parte default judgment in the 
DRC that resulted in judicial misconduct proceedings; second, to provide DRC Partner with 
approximately $100 million to purchase a majority stake in that Canadian mining company in 
exchange for resolving its legal issues; and third, to advance an additional $9 million to be used for 
future mining operations in the DRC.  Och-Ziff Employee A and Och-Ziff Employee B knew that 
the true purpose of the transaction, however, was to provide DRC Partner with funds to pay bribes 
to facilitate the takeover of the Canadian mining company for the benefit of Och-Ziff and DRC 
Partner.   
54. Och-Ziff Employee A structured the transaction as a convertible loan.  The 
company had received legal advice from outside counsel indicating that less due diligence on the 
use of proceeds and counterparties was required in a standard commercial convertible loan versus 
an equity investment.  However, in March 2008 outside counsel also advised Och-Ziff that any 
transaction with DRC Partner would be “high risk,” but: 
“[P]rovided [DRC Partner] has no discretion with regard to how to spend the proceeds of 
the loan, we see no AML or anti-corruption issue.  If he has any discretion, our answer will 
be different and we need to discuss further.”    
55.  Och-Ziff was also advised to consider a “right of audit” post-transaction, 
depending on DRC Partner’s “foreseeable role” should Och-Ziff convert its loan into equity.  Och-
Ziff then proceeded with the convertible loan.  Och-Ziff obtained representations and warranties 
regarding anti-corruption from the holding company receiving the loan but not from DRC Partner, 
and did not undertake additional due diligence into DRC Partner or his assets in the DRC. 

 
 
 
 
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56. The transaction gave Och-Ziff control over what assets could be bought or sold by 
the entity, equity conversion rights into DRC Partner’s entity, a pledged interest in the shares of the 
Congolese entity, and a right to future deals with DRC Partner in the DRC.  Moreover, the 
transaction gave DRC Partner complete discretion over how to use approximately $24 million of 
the funds provided by Och-Ziff.  Further, Och-Ziff understood this transaction was part of a 
broader, ongoing partnership with DRC Partner.  Finally, both Och-Ziff Employee A and Och-Ziff 
Employee B knew that DRC Partner was going to use a portion of the funds to pay bribes, and 
knew that the transaction was structured to accomplish that goal.  This knowledge was not shared 
with others within Och-Ziff or with outside counsel. 
57. DRC Partner used the first tranche of approximately $15 million provided by Och-
Ziff to bribe Congolese government officials.  Och-Ziff provided these funds to DRC Partner 
purportedly to purchase the Congolese entity while the legal action involving the Congolese entity 
was still in progress in the DRC courts.  Och-Ziff, through an AGC I subsidiary created 
specifically for this transaction, sent the funds to a client account at DRC Partner’s law firm in 
Gibraltar.  From there, Och-Ziff had no ability to control or limit DRC Partner’s use of those funds 
or even to trace where the funds went.  DRC Partner then bribed multiple DRC government 
officials, including judges, to secure the legal judgment that gave him the leverage to buy a 
controlling interest in the Canadian mining company.   
58. The Canadian mining company voted to approve a private placement to effectuate 
the takeover by DRC Partner and Och-Ziff in June 2008.  Och-Ziff was involved in the takeover 
proceedings in Canada as the financial backer of DRC Partner.  Once approved, Och-Ziff sent an 
additional approximately $100 million through which DRC Partner acquired a majority stake in the 
listed shares in the Canadian mining company.   
59. The third tranche of the transaction involved loaning an additional $9 million to 
DRC Partner.  Contrary to the original structure of the deal which required DRC Partner to use the 
funds on mining expenses, in October 2008 Och-Ziff instead agreed to provide these funds to DRC 
Partner to compensate him for previously incurred DRC expenses, thus giving him discretion over 
how he spent the funds provided.  As a result, Och-Ziff failed to conduct proper due diligence or 
limit DRC Partner’s discretion in his use of the funds.  Och-Ziff again transferred the money to 
DRC Partner’s law firm account in Gibraltar.  DRC Partner, in turn, used the money to fund his 
ongoing bribe payments in the DRC. 
60. After providing the $9 million to DRC Partner, beginning in November 2008 Och-
Ziff conducted a review of his past expenses to determine whether DRC Partner had actually spent 
funds on DRC mining operations.  During this review, Och-Ziff Employee B and other AGC 
employees learned that records kept by DRC Partner disclosed payments for travel expenses 
questionable expenses, and “gratuities” for the benefit of DRC government officials.  This 
prompted one AGC employee to note in a draft report:  “Satisfactory answers could not be 
extracted during my discussions ... for some of these expenses and it leads one to believe that 
these are actually the costs of maintaining ‘political alignment’ and for ‘protocol’ with the 

 
 
 
 
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authorities in the DRC – in other words with senior Government officials.  This issue needs to be 
investigated at the highest level directly with [DRC Partner].  This issue should be flagged as 
a concern considering AGC’s compliance requirements.” (emphasis in original)  Rather than 
investigate or report these potential bribe payments, Och-Ziff Employee B caused others to edit the 
report to remove the reference to corruption and call for investigation. 
61. Based on the foregoing facts, Och-Ziff violated Sections 30A and 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act through its intentional payment of bribes to DRC government 
officials through its 2008 convertible loan transaction with DRC Partner, inaccurate recording of 
the bribe payments on its books and records, and failure to implement or maintain appropriate 
internal accounting controls to prevent the use of its funds to pay bribes.  Further, by his acts or 
omissions Och caused violations of Section 13(b)(2)(A) of the Exchange Act by Och-Ziff, and by 
his acts or omissions Frank caused violations of Sections 13(b)(2)(A) and 13(b)(2)(B) by Och-Ziff.  
In addition, OZ Management violated Section Sections 206(1) and 206(2) of the Advisers Act by 
failing to prevent the use of managed investor funds in corrupt transactions by DRC Partner in the 
2008 convertible loan transaction.  
D. Bribes To Consolidate and Sell DRC Assets 
62. Och-Ziff’s relationship with DRC Partner continued throughout 2009 and 2010.  
During that time, Och-Ziff learned of additional transactions in which DRC Partner acquired 
mining assets in the DRC under suspicious circumstances.  Och-Ziff considered and ultimately did 
not invest capital in these other transactions, but did not sever its relationship with DRC Partner.  
During this time, DRC Partner acquired additional assets yet failed to repay the initial loan, which  
Och-Ziff extended without negative repercussions on the relationship.  Further, Och-Ziff Employee 
A and Och-Ziff Employee B continued to work on new transactions and funding ideas with DRC 
Partner. 
63. During the course of the relationship, Och-Ziff was aware of DRC Partner’s ability 
to influence DRC government officials.  Och-Ziff Employee B used DRC Partner to set up 
meetings for Och-Ziff and its partners with multiple DRC senior government officials, including a 
high level executive with the state owned mining company.  Och-Ziff Employee B, Och-Ziff 
Employee A, and others frequently discussed DRC Partner’s high-level connections in the DRC, 
including his “key guy,” a top advisor to a senior DRC government official, and secret agreements 
with other government officials.  
64. In November 2010, DRC Partner asked Och-Ziff Employee A to provide him with 
a margin loan as part of his efforts to consolidate his DRC operations.  The purpose of the loan was 
not made clear to others within Och-Ziff, nor was the intended use of all proceeds specified by 
DRC Partner.  DRC Partner’s representatives noted that the funds were needed to make 
intercompany loans and “fund existing activities” and “acquisitions of other interests” by DRC 
Partner.  Och-Ziff did not conduct due diligence on the corruption risk or the intended use of 
proceeds, but did conduct diligence on the publicly-traded stock that secured the loan.  Och-Ziff 

 
 
 
 
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made this loan from Och-Ziff funds rather than through AGC II.  The principal loan amount was 
increased in February 2011.  All told, Och-Ziff loaned $130 million to DRC Partner in 2010-2011. 
65. Och-Ziff did not follow its internal controls or conduct sufficient due diligence on 
the intended use of proceeds by DRC Partner.  A portion of the loan went to pay down an 
outstanding third-party debt for DRC Partner.  Och-Ziff provided the remainder of the loan, more 
than $84 million, to DRC Partner with no insight into DRC Partner’s use of proceeds, although 
Och-Ziff knew that he would use the money to fund additional acquisitions and ongoing activities 
among his network of offshore entities.  Och-Ziff again transferred money from its investor funds 
to DRC Partner’s law firm client account in Gibraltar, after which Och-Ziff had no insight or 
control over how DRC Partner used the funds.  DRC Partner used a portion of the funds provided 
by Och-Ziff to pay bribes in the DRC.   
66. Och-Ziff Employee A and Och-Ziff Employee B knew that DRC Partner would use 
the money provided by Och-Ziff to pay bribes.  These bribes were part of his efforts to acquire 
additional assets and consolidate his DRC holdings in order to sell those holdings to a third-party 
mining company.  Och-Ziff Employee A and Och-Ziff Employee B expected this consolidation to 
benefit Och-Ziff by receiving repayment and interest on its loans, which was accomplished in 
2012.  Och-Ziff Employee A, Och-Ziff Employee B, and the CEO of AGC were all involved in 
DRC Partner’s efforts to sell his DRC holdings and acquire additional assets.  Och-Ziff continued 
to seek new deals from DRC Partner during this time, including deals relating to Company A and 
AGC I.  
67. In December 2012, the outstanding loans relating to DRC Partner were repaid to 
Och-Ziff in full, with interest, as part of a transaction in which DRC Partner sold his DRC mining 
entities to a third-party mining company. 
68. Based on the foregoing facts, Och-Ziff violated Sections 30A and 13(b)(2)(A) and 
13(b)(2)(B) of the Exchange Act through its intentional payment of bribes to DRC government 
officials through its 2010 and 2011 transaction with DRC Partner, inaccurate recording of the bribe 
payments on its books and records, and failure to devise or maintain internal controls sufficient to 
provide reasonable assurances that its funds would not be used to pay bribes.  Further, by his acts 
or omissions Och caused violations of Section 13(b)(2)(A) of the Exchange Act by Och-Ziff, and 
by his acts or omissions Frank caused violations of Sections 13(b)(2)(A) and 13(b)(2)(B) by Och-
Ziff.  OZ Management further violated Sections 206(1) and 206(2) of the Advisers Act by failing 
to prevent the misuse of managed investor funds in corrupt transactions by its business partner in 
the 2010 and 2011 transaction. 
Misrepresentations, Self-dealing, and Misuse of Investor Funds in AGC II 
69. The second part of Och-Ziff’s Africa strategy, AGC II, was formed in 2008.  While 
AGC I was a closed fund to which only Och-Ziff managed investor funds contributed capital, for 
AGC II Och-Ziff sought capital from multiple outside investors, and successfully marketed the 

 
 
 
 
21 
fund to one existing OZ Management limited partner, a private entity (“the Investor”).  In addition, 
a separate fund made up of investments by individual Och-Ziff partners (“OZ Partners Fund”) 
agreed to fund AGC II in an amount equal to the Investor.   
A. Material Omissions From Company A Transaction 
70. In July2009, Och-Ziff learned that in government-to-government discussions 
between high-level government officials from South Africa and Congo-Brazzaville that Company 
A, an AGC oil exploration portfolio company, had been given the opportunity to buy a 25% stake 
in an oil field off the coast of Congo-Brazzaville.  According to Company A’s CEO, this was “an 
excellent opportunity afforded to us from the close relationship between [the ruling political party 
in South Africa] and [senior Congo-Brazzaville government official] and our prior efforts in Congo 
B.”   
71. Och-Ziff was told that Company A had purportedly been designated by a high-
ranking South African government official to participate in this transaction for reasons not fully 
described to Och-Ziff.  Och-Ziff later learned that a third-party South African entity was to be 
given a 25% interest in Company A’s stake in the oil asset.  This interest was to be a “free carry” 
for the South African-designated entity, meaning Company A would fund the entire purchase of 
the oil asset from the current owner (an Italian oil company) and also fund all ongoing costs 
associated with the oil asset while the South African-designated entity received a percentage of the 
equity at no cost.  Company A initially described this partner in various communications as either 
“Partner X” or “the government.”  After “Partner X” was named, Och-Ziff conducted due 
diligence and learned of allegations relating to its South African owners for corruption, arms 
dealing, and ties to the ruling South African political party.  One of the owners of “Partner X” was 
described in a background report as an “associate and benefactor” of a high-ranking South African 
government official.  Apart from receiving the free equity interest, the South African entity was to 
have no overt role in the transaction or in the ongoing oil asset.  When the South African entity 
refused to provide sufficient explanation as to its role in the transaction, Och-Ziff declined to 
participate in the transaction in January 2010. 
72. In February 2010, Och-Ziff Employee A and others at AGC made a new push to 
get the transaction approved.  This time, the CEO of Company A claimed that South African 
Business Partner, who himself had close ties to South African politicians, was given the 
opportunity to invest in the oil asset by the government of Congo-Brazzaville to compensate him 
after his prior interests in Congo-Brazzaville (which had been funded by Och-Ziff via its 2007 
loan) were awarded to another entity.  South African Business Partner then purportedly designated 
Company A (in which he and AGC I held interests) as his proxy for this opportunity.  Under the 
new terms, South African Business Partner would also receive $13 million from Company A 
(funded by AGC II) as compensation for his prior losses.  Another individual with close ties to a 
high-ranking government official in Congo-Brazzaville (“CB Intermediary”) would now 
participate in the transaction as an additional introducer.  CB Intermediary was to be compensated 
for his role in arranging the transaction between South African Business Partner and the high-

 
 
 
 
22 
ranking government official in Congo-Brazzaville.  For his efforts, CB Intermediary would receive 
a $5 million payment as well as 25% of Company A’s stake in the project at no cost.     
73. Och-Ziff recognized that the change of circumstances surrounding the resurrected 
deal constituted a significant corruption risk, but nonetheless began work to complete the deal.  As 
part of due diligence, the CEO of Company A, South African Business Partner and CB 
Intermediary all submitted affidavits in which each confirmed the second origin story and the 
involvement of CB Intermediary.  Och-Ziff Employee A championed the deal within Och-Ziff.  
Others at Och-Ziff, including Frank and members of the legal and compliance team, continued to 
have reservations with the transaction and the truthfulness of the parties.  This led to a conference 
call where one Och-Ziff attorney called from his vacation in Italy in an effort to stop the deal from 
going forward.  However, at Och-Ziff Employee A’s urging, Och-Ziff agreed to the investment. 
74. Because the transaction involved payments to a related party for AGC II, South 
African Business Partner, Och-Ziff needed to obtain the consent of the Investor in order to 
proceed.  Och-Ziff described the second origin story for the transaction and outlined the stated 
reasons for payments to South African Business Partner and CB Intermediary.  The disclosure 
stated that lawyers had reviewed the relevant facts and documents and had provided an opinion as 
to the compliance of the deal with applicable laws and regulations.  Yet Och-Ziff did not inform 
the Investor of all of the material circumstances surrounding the transaction or how the transaction 
came to Company A.  Och-Ziff failed to disclose any facts regarding the initial sourcing of the 
transaction or the initial presence of a different proposed partner in the deal.  Och-Ziff also failed to 
inform the Investor that, under the original transaction terms, there were no payments to any 
intermediaries, including South African Business Partner.  Further, Och-Ziff failed to inform the 
Investor that neither South African Business Partner nor CB Intermediary had a role in sourcing 
the transaction when it was initially presented.  The omitted information was material to the 
corruption risk and the validity of paying $18 million to two intermediaries in the transaction.  
Och-Ziff also informed the Investor that steps would be taken by Company A to ensure that the 
funds were used appropriately, including paying the intermediaries into segregated accounts, and 
restricting and monitoring future transfers by both intermediaries in order to prevent corruption.  
However, Och-Ziff did not ensure such controls were instituted or followed by Company A, and 
subsequent inquiries by Och-Ziff were insufficient to ensure such steps were in fact followed.  The 
Investor consented to the transaction based on this limited, misleading information. 
75. Company A, using funds provided by Och-Ziff through AGC II, did not pay South 
African Business Partner via a segregated account.  AGC II funds provided to Company A were in 
turn transferred to a non-segregated account controlled by South African Business Partner.  Within 
weeks, South African Business Partner transferred a significant portion of the $13 million he 
received from Company A to CB Intermediary’s account in Lebanon.   
76. Based on the foregoing, OZ Management violated Section 206(4) and Rule 206(4)-
8 of the Advisers Act by omitting material information regarding the above transaction from its 
disclosures to the Investor. 

 
 
 
 
23 
B. Transaction to Fund Corrupt Business Efforts in Guinea  
77. In April 2011, Och-Ziff, via AGC II, purchased shares in another London-based oil 
and gas company in which AGC I, South African Business Partner, the South African 
conglomerate, and other Och-Ziff funds already held significant shares.  Och-Ziff Employee A and 
Och-Ziff Employee B structured the transaction to provide South African Business Partner with 
$52 million in cash to use for undisclosed purposes, including self-dealing to benefit Och-Ziff.  
Transaction documents created by Och-Ziff Employee B were intentionally misleading so that the 
transaction would be approved by Och-Ziff and the Investor. 
78. In 2010, Och-Ziff Employee B became aware that South African Business Partner 
had high-level contacts with a senior government official in the Guinea and his family, and that 
such contacts provided access to potential mining deals in that country.  Communications 
involving Och-Ziff Employee B and others at AGC with a consultant in July 2010 noted that “the 
[senior Guinean government official] has instructed [mining company] to deal only with me as a 
first proposal, exclusivity... iF YOU ARE INTERESTED AND ABLE TO FULLFILL [sic] their 
request i can organize ASAP a meeting for you with the representative and the [senior Guinean 
government official’s] son in Paris this week...”  Another email in August 2010 with the 
consultant stated that he had “access to Guinee Mining and Ennergy [sic] classified information” 
through his contact with the this Guinean government official and his family.  The consultant, who 
worked directly with South African Business Partner, also let AGC and Och-Ziff Employee B 
know that he was traveling to the United States with this senior Guinean government official to 
demonstrate his influence. 
79. Beginning in February 2011, South African Business Partner sought assistance 
from Och-Ziff, and in particular Och-Ziff Employee B, to create a means for South African 
Business Partner and potentially AGC II to benefit financially from future Guinean government 
actions.  
80. Och-Ziff Employee A and Och-Ziff Employee B, along with the CEO of AML and 
South African Business Partner, conceived of a related-party transaction that would accomplish 
these goals.  They decided to sell shares in the oil and gas company from the South African 
conglomerate to AGC II so that South African Business Partner could use the capital from the 
transaction to fund their efforts in Guinea.  The initial effort stalled, however, because South 
African legal restrictions on the sale of shares precluded the involvement of South African 
Business Partner.  As Och-Ziff Employee B told Och-Ziff Employee A, there was “no point for 
them” if South African Business Partner’s company didn’t end up with cash from the transaction to 
invest in Guinea.  Ultimately a new scheme was devised that would leave South African Business 
Partner with $52 million from AGC II’s purchase of shares in this mining company.  According to 
the deal documents, South African Business Partner was to buy 31.5 million shares in the oil and 
gas company from the South African conglomerate for $77 million and then immediately resell 
18.5 million of those shares to AGC II for $77 million.  Based on the false information provided by 

 
 
 
 
24 
Och Ziff Employee A and Och-Ziff Employee B, this transaction was then approved by Och-Ziff 
and the Investor.   
81. Contrary to the deal documents and the understanding of the Investor, Och-Ziff 
Employee A and Och-Ziff Employee B knew that South African Business Partner would not pay 
the full $77 million to the South African conglomerate.  South African Business Partner bought 
31.5 million shares in this mining company for only $25 million, and then immediately resold 18.5 
million shares in that same company to AGC II for $77 million, providing South African Business 
Partner with $52 million and an additional 13 million shares in the company.  With the $52 
million, South African Business Partner then paid $2.1 million to Och-Ziff to satisfy an 
outstanding debt relating to AGC I (in which the Investor had no interest), $25 million to the 
government of Guinea to try to secure access to valuable mining investments there, $1 million to 
the agent affiliated with the a high level Guinean government official and his family, and the 
remainder to personally benefit himself and his business partners.   
82. Och-Ziff Employee A and Och-Ziff Employee B knew the true terms of the 
transaction and the use of funds by South African Business Partner.  Prior to the share purchase, 
the CEO of AML wrote to Och-Ziff Employee B:  “How can we get agc to put 50m into guinea?”  
Och-Ziff Employee B then began working on the share purchase by AGC II, understanding the 
need to create $50 million in “profit” to help South African Business Partner “invest” in Guinea.  
Och-Ziff Employee B understood the need to generate surplus revenue from the transaction, and 
wrote:  “I don’t know what you guys are thinking re [company share] price being close.  There has 
to be at least GBP 1/share difference to leave [South African Business Partner] with $50m for 
Guinea.”  Och-Ziff Employee A and Och-Ziff Employee B also knew that undisclosed terms 
existed from the originating transaction.  South African Business Partner described the undisclosed 
terms of the deal to Och-Ziff Employee B who shared them with Och-Ziff Employee A.  The 
undisclosed terms included additional “cash local out of [South African] registered co,” and 
undisclosed cash to repay “bank debt” to the AGC CEO’s company, the South African 
conglomerate, in addition to money to purchase the shares.  Further, Och-Ziff Employee B and 
Och-Ziff Employee A structured the transaction to allow South African Business Partner to “keep 
$3m for AGC I” in order to allow South African Business Partner to repay a debt to Och-Ziff.  
When told of Och-Ziff Employee B’s idea, Och-Ziff Employee A said “U (sic) tell them that” and 
Och-Ziff Employee B responded “I will.”  Och-Ziff Employee B then confirmed with South 
African Business Partner that the deal was arranged, to which he replied:  “Yip.  Pay the 77m, and 
we pay 2m withim [sic] 24hr.  It a technicality.” 
83. Och-Ziff Employee A and Och-Ziff Employee B knew that the description of the 
transaction that was given to the Investor was materially misleading.  The Investor was not told 
that South African Business Partner would be provided with $52 million from the transaction.  The 
Investor likewise was not informed of the undisclosed terms of the transaction, or the link between 
the transaction and South African Business Partner’s payment of $25 million to the government of 
Guinea.  The Investor was not informed of the related-party nature of the transaction, the changing 
terms of the transaction, or lack of arms-length negotiations for AGC II and its business partners.  

 
 
 
 
25 
The Investor was further not told that the initial transaction in which South African Business 
Partner would buy the shares to sell to AGC had not yet occurred, but would in fact be funded by 
AGC II.  Instead, Och-Ziff Employee A and Och-Ziff Employee B explained the price differential 
in the initial transaction between South African Business Partner and the South African 
conglomerate to the Investor falsely by claiming that the initial sale was initiated in 2009 and had 
been “recently completed.”  The Investor likewise was not told of the self-dealing aspect of the 
transaction, which Och-Ziff Employee A and Och-Ziff Employee B designed to benefit Och-Ziff. 
84. Och-Ziff failed to conduct appropriate due diligence or impose adequate restrictions 
to prevent the secret aspects of the transaction from occurring, including the payment of $1 million 
to South African Business Partner’s Agent, and its employees Och-Ziff Employee A and Och-Ziff 
Employee B provided the Investor with false and misleading information. 
85. Based on the foregoing, Och-Ziff violated Sections 13(b)(2)(A) and 13(b)(2)(B) of 
the Exchange Act through the inaccurate recording of the payment to South African Business 
Partner on its books and records, and failure to devise or maintain internal accounting controls 
sufficient to provide reasonable assurances to prevent the improper use of its funds.  In addition, 
OZ Management violated Sections 206(1), 206(2), 206(4) and Rule 206(4)-8 of the Advisers Act 
by engaging in self-dealing and the improper use of managed investor funds, and by omitting 
material information regarding the above transaction from its disclosures to the Investor. 
C. Self-Dealing by Och-Ziff Employee A and South African Business Partner  
86. Och-Ziff Employee A made an $18 million personal loan to Libyan Agent in 2008 
in order to fund the Libyan Agent’s construction of a “super yacht.”  Och-Ziff Employee A did not 
disclose the loan to others at Och-Ziff, and took security interests over several assets held by 
Libyan Agent to secure the loan.  By 2010, Libyan Agent was unable to repay the loan.  In order to 
get Libyan Agent funds to repay him, Och-Ziff Employee A arranged for AGC II to purchase 
shares in a London-based mining holding company from Libyan Agent.  South African Business 
Partner was also a shareholder in this entity, as was another individual with whom Och-Ziff 
Employee A also had an outstanding £1 million loan arrangement. 
87. In December 2010, Och-Ziff Employee A caused AGC II to purchase 
approximately $20 million in shares in this London-based holding company, which owned two 
mining assets in Africa.  Och-Ziff falsely disclosed the sellers in the transaction as Libyan Agent 
and the other individual  (who repaid his £1 million loan to Och-Ziff Employee A in the days 
before the transaction was finalized).  Och-Ziff Employee A and Och-Ziff Employee B knew that 
South African Business Partner was an undisclosed seller of shares through Libyan Agent but kept 
this information from Investor and others at Och-Ziff. 
88. Och-Ziff Employee A knew that the funds paid by AGC II to Libyan Agent would 
be used to satisfy his outstanding loan, and Och-Ziff Employee A arranged the transaction to 
effectuate that purpose.  Och-Ziff Employee A had to approve the sale of shares in the London-

 
 
 
 
26 
based holding company by Libyan Agent because he held security over those shares through his 
personal loan; he did so in November 2010 to effectuate the AGC II purchase.  Communications 
between Libyan Agent and Och-Ziff Employee A also confirmed that Och-Ziff Employee A would 
receive a $4 million partial repayment on his outstanding loan soon after the AGC II purchase was 
completed.  Och-Ziff Employee A then received confirmation that the $4 million had been 
transferred to his personal account one day after AGC II funds were transferred to Libyan Agent.  
He did not disclose this information to others at Och-Ziff. 
89. Och-Ziff Employee A also took steps to hide the sale of South African Business 
Partner’s shares in the entity because he understood that the Investor could reject the deal due to 
the conflict of interest.  Two weeks before the transaction closed, Och-Ziff Employee B informed 
Och-Ziff Employee A that “[South African Business Partner] won’t back away from [transaction], 
wants deal as agreed.”  Och-Ziff Employee A and Och-Ziff Employee B then worked to ensure 
that South African Business Partner was able to sell his shares in secret using Libyan Agent as his 
proxy.  An associate for South African Business Partner texted Och-Ziff Employee B regarding the 
secret terms of the deal (“Each party must shed 20perc for us to come in.  Does not reflect in 
current [legal] agreement.  This include [other parties].  Was agreed.  Cheers.”), and Och-Ziff 
Employee B was aware of the agreement between Libyan Agent and South African Business 
Partner (“Our agreement on our side with party x is ready,” “must I do anything on my side re 
[disclosed sellers] to get ... agreements signed and finalized.  Sorry for push but... I want our thing 
with [Libyan Agent] done before everyone here leaves.  Thx. Let me know.”). 
90. The Investor was not told of the self-dealing and personal interests of Och-Ziff 
Employee A and South African Business Partner in the transaction and, as a result, gave its 
approval without the benefit of that material information.  Och-Ziff Employee B assisted Och-Ziff 
Employee A in finalizing the transaction, and was also aware of the self-dealing involving South 
African Business Partner.  Neither Och-Ziff Employee A nor Och-Ziff employee B disclosed this 
material information to the Investor or to others at Och-Ziff.   
91. AGC II transferred more than $9 million to Libyan Agent’s account in late 2010 in 
consideration for the shares.  Libyan Agent then transferred $4 million to Och-Ziff Employee A’s 
personal account in partial repayment of the loan, and another $4 million to accounts for the 
benefit of South African Business Partner.  
92. In 2012, Och-Ziff Employee A and Libyan Agent created a false document 
regarding this transaction in order to hinder the investigation into Och-Ziff Employee A’s self-
dealing.  That letter was backdated to October 2010, prior to this transaction, and purportedly came 
from Libyan Agent.  The letter stated in part:  “I would like to confirm that should a transaction be 
executed between us, none of the sales proceeds will be applied towards any repayment of the 
outstanding loan that you provided to us.”  The letter was a lie, and the funds paid to Och-Ziff 
Employee A in December 2010 came directly from the proceeds of the AGC II purchase of shares 
from Libyan Agent. 

 
 
 
 
27 
93. Based on the foregoing, OZ Management violated Sections 206(1) and 206(2) 
based on the self-dealing of Och-Ziff Employee A which was not disclosed to the Investor. 
Och-Ziff Did Not Follow Its Recommended Anti-Corruption Policies 
 
94. In 2007, with the assistance of outside counsel, Och-Ziff began work on an anti-
corruption policy and procedures which was finalized in April 2008.  This policy and procedures, 
which applied to OZ, OZM, OZ Europe, AML, AGC, and all of OZ’s affiliates, required rigorous 
due diligence and anti-corruption measures designed to provide reasonable assurances that 
transactions: (i) were executed in accordance with management’s general or specific authorization; 
and (ii) were recorded as necessary to permit preparation of financial statements in conformity with 
generally accepted accounting principles or any other criteria applicable to such statements, and to 
maintain accountability for assets.    
95. For high risk transactions like those described above, Och-Ziff’s policy 
recommended due diligence steps including: 
a. Obtaining copies of the most recent financial statements for its business partners; 
b. Identifying all shareholders owning or controlling each business partner, and the 
nature of that control; 
c. Requesting references from financial institutions that have existing business 
relationships with business partners and clients; 
d. Making all payments in the country in which an agent resides; 
e. Accessing business partner books and records and utilizing a right-to-audit on a 
periodic basis; 
f. Re-checking and confirming due diligence for business partners on an ongoing 
basis; 
g. Reviewing of all monies paid out by business partners as part of ongoing due 
diligence; 
h. Conducting heightened due diligence in business transactions involving 
government officials or state-owned businesses, where the business partner’s only 
contribution is influence, or where the partner refuses to put agreements or proof of 
expenditures in writing; and 
i. Obtaining annual certifications by the chief financial officer and chief legal officer 
that all foreign business partners have complied with the firm’s anti-corruption 
policies and procedures. 

 
 
 
 
28 
96. Och-Ziff failed to follow its own recommended due diligence steps in connection 
with the transactions set forth above.    
97. Despite the presence of corruption risks in the above transactions, Och-Ziff did not 
impose sufficient procedures or measures to prevent corruption or provide reasonable assurance 
that the transaction documents accurately reflected the third party’s use of funds.  Och-Ziff did not 
conduct sufficiently heightened due diligence in transactions involving state-owned entities, and 
failed to limit the interactions of its business partners with government officials.  Och-Ziff knew of 
the close connections between its business partners, counterparties, agents and government 
officials.  In fact, it chose them in part for their ability to influence to high-ranking government 
officials.  Rather than limit such connections, Och-Ziff’s insufficient controls allowed its business 
partners and agents to exploit those relationships through bribery to benefit Och-Ziff.  Och-Ziff 
Employee A knew that Och-Ziff’s business partners in Africa bought assets and made payments 
without oversight or control from Och-Ziff, and allowed such practices to continue despite the high 
risk of corruption.   
98. Och-Ziff failed to conduct sufficient due diligence on asset purchases by its 
business partners.  When due diligence on agents and business partners disclosed significant red 
flags, the company proceeded with the relationship without imposing sufficient limitations on the 
way the agents and business partners conducted business or used funds provided by Och-Ziff.  
Och-Ziff allowed its agents to use shell companies located in other jurisdictions to receive 
payment, failed to place restrictions on the agents themselves rather than their shell companies, 
transmitted payments through third-parties after which Och-Ziff had no oversight on the funds, and 
failed to monitor or audit how its agents used the Och-Ziff investor funds they were provided.    
99. Och-Ziff entered into agreements with consultants and agents without conducting 
sufficient due diligence on the recipient of the funds or the role played by those agents and 
consultants.  In some cases, Och-Ziff knew that AGC or its business partners in AGC were using 
consultants paid with Och-Ziff funds, yet took no steps to either conduct due diligence on those 
consultants or ascertain the basis for payments to those consultants.  This led to bribes to 
government officials in Libya, Chad, and Niger. 
100. Och-Ziff failed to implement sufficient safeguards to prevent corruption in ongoing 
joint ventures and investments.  Och-Ziff was aware of significant corruption risks in its AGC joint 
venture, including a high risk of corruption with its partners in AGC.  Och-Ziff failed to adequately 
address those risks and continued to give investor funds to AGC without appropriate oversight.  
Och-Ziff also continued to rely on its business partners in AGC despite knowledge of alleged 
criminal activity by those partners in other transactions.  At no time did Och-Ziff audit the bank 
records, expenditures, or financial statements of its business partners or of AGC to ensure 
compliance with Och-Ziff’s internal controls and anti-corruption policies.   
101. Och-Ziff failed to use its leverage to terminate transactions, foreclose on collateral, 
or bring legal action against its business partners.  At no time did Och-Ziff exert its legal rights 

 
 
 
 
29 
against its business partners.  Instead, Och-Ziff allowed these corrupt relationships to continue in 
an effort to secure a return on investment rather than sever ties with illegal activity. 
Och-Ziff Violated the Books and Records and Internal Controls Provisions of the FCPA 
102. Och-Ziff was required to make and keep books, records, and accounts, which, in 
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the 
issuer.  Och-Ziff’s policies and procedures required it to accurately document the purpose and 
authorization for expenditures of assets by the underlying managed funds.  Och-Ziff inaccurately 
recorded the authorizations for the funds disbursed for these improper transactions as investments, 
loans, “deal fees,” “subscription amounts,” payments to business partners, payments to agents, or 
“professional services fees,” including portions of the funds that were used to pay bribes and other 
improper payments.  The manner in which these authorizations were recorded on Och-Ziff’s books 
and records did not accurately describe the disposition of these assets.   
103. Och-Ziff likewise failed to establish or maintain a system of internal accounting 
controls sufficient to ensure that certain of these transactions were properly recorded.  Och-Ziff 
failed to devise or maintain a system of internal accounting controls sufficient to provide 
reasonable assurances that certain of these transactions were properly recorded.  Och-Ziff failed to 
implement and maintain sufficient internal accounting controls to provide reasonable assurances 
that investor funds were not used to pay bribes, or to prevent self-dealing and misuse of investor 
funds by its business partners.  Och-Ziff also failed to take corrective measures, obtain verification 
of payments, or seek to exercise contractually available audit or cancellation rights with its 
business partners, despite knowledge of improper payments and the high risk of corruption.  Och-
Ziff’s internal accounting controls failed to stop ongoing payments and transactions even after 
improprieties and potential corruption were discovered by Och-Ziff. 
Failures by Och and Frank 
104. Och had final authority to approve all private investments by Och-Ziff, including all 
transactions described above.  Och was aware of the risk of corruption in the transactions with 
DRC Partner, and contrary to the recommendation of his legal and compliance team, he approved 
the use of Och-Ziff investor funds in those transactions.  As a consequence, Och caused Och-Ziff’s 
violations of the books and records provision of the Foreign Corrupt Practices Act (“FCPA”). 
105. Frank had ultimate responsibility for maintaining Och-Ziff’s and OZ 
Management’s books and records and for authorizing all uses of Och-Ziff funds.  Under Och-Ziff’s 
structure at the time, the head of legal and compliance reported to Frank as chief financial officer.  
Frank was responsible for ensuring that all transactions were recorded accurately and in 
accordance with generally acceptable accounting procedures and was likewise responsible for 
devising and maintaining Och-Ziff’s internal accounting controls.  Frank was also ultimately 
responsible for devising and maintaining Och-Ziff’s internal accounting controls sufficient to 
provide reasonable assurances that transactions: (i) were executed in accordance with 

 
 
 
 
30 
management’s general or specific authorization; and (ii) were recorded as necessary to permit 
preparation of financial statements in conformity with generally accepted accounting principles or 
any other criteria applicable to such statements, and to maintain accountability for assets.   
106. Each transaction described above required Frank’s authorization of the relevant 
disbursements.  In the two DRC transactions and the LIA fee payment involving bribery, failures 
of Och-Ziff’s internal controls, and books and records violations, Frank failed to ensure that 
required information regarding transactions was documented accurately, that appropriate business 
partner information and due diligence was obtained, that transactions were structured properly to 
avoid corruption, and that ongoing due diligence and audits were performed to prevent or detect 
improper use of Och-Ziff investor funds.  Frank approved Och-Ziff’s payments in the transactions 
with DRC Partner in which he believed there was a high risk of corruption.  Despite his concerns, 
Frank deferred to Och as the final decision maker and executed payment on the 2008 convertible 
loan and 2010-2011 margin loan with DRC Partner per Och’s approval.  As a consequence, Frank 
caused violations of the internal controls and books and records provisions of the FCPA by Och-
Ziff in the three transactions noted above.  
Deferred Prosecution Agreement 
107. Och-Ziff has entered into a deferred prosecution agreement with the United States 
Department of Justice that acknowledges responsibility for criminal conduct relating to certain of 
the findings in the Order.  Specifically, Och-Ziff acknowledges responsibility for two counts of 
conspiracy to commit offenses against the United States in violation of Title 18, United States 
Code, Section 371, that is, for (i) violating the anti-bribery provisions of the Foreign Corrupt 
Practices Act of 1977 (“FCPA”), 15 U.S.C. § 78dd-1, (ii) violating the FCPA’s books and records 
provisions, 15 U.S.C. § 78m(b)(2)(A), (b)(4), (b)(5), and 78ff(a), and (iii) violating the FCPA’s 
internal controls provisions, 15U.S.C. § 78m(b)(2)(B), (b)(4), (b)(5) and 78ff(a). 
108. OZ Africa Management GP, LLC (“OZ Africa Management”), a subsidiary of 
Och-Ziff, has entered into a plea agreement with the United States Department of Justice relating 
to certain findings in the Order.  Specifically, OZ Africa Management has agreed to plead guilty 
to one count of conspiracy to commit offenses against the United States in violation of Title 18, 
United States Code, Section 371, that is for violating the anti-bribery provisions of the FCPA, 15 
U.S.C. § 78dd-1. 
109. Respondent Och-Ziff acknowledges that the Commission is foregoing a one-time 
$173,186,178 civil penalty for these charges based upon the imposition of a $213,055,689 
criminal penalty as part of Och-Ziff’s settlement with the United States Department of Justice. 
Legal Standard and Violations 
110. Section 30A of the Exchange Act prohibits any issuer with a class of securities 
registered pursuant to Section 12 of the Exchange Act, or any officer, director, employee, or agent 

 
 
 
 
31 
acting on behalf of such issuer, in order to obtain or retain business, from corruptly giving or 
authorizing the giving of, anything of value to any foreign official for the purposes of influencing 
the official or inducing the official to act in violation of his or her lawful duties, or to secure any 
improper advantage, or to induce a foreign official to use his influence with a foreign governmental 
instrumentality to influence any act or decision of such government or instrumentality.  15 U.S.C. 
§ 78dd-1. 
111. Under Section 13(b)(2)(A) of the Exchange Act, issuers with a class of securities 
registered pursuant to Section 12 of the Exchange Act are required to make and keep books, 
records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and 
disposition of the assets of the issuer.  15 U.S.C. § 78m(b)(2)(A). 
112. Under Section 13(b)(2)(B) of the Exchange Act, issuers with a class of securities 
registered pursuant to Section 12 of the Exchange Act are required to devise and maintain a system 
of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are 
executed in accordance with management’s general or specific authorization; (ii) transactions are 
recorded as necessary (I) to permit preparation of financial statements in conformity with generally 
accepted accounting principles or any other criteria applicable to such statements, and (II) to 
maintain accountability for assets; (iii) access to assets is permitted only in accordance with 
management’s general or specific authorization; and (iv) the recorded accountability for assets is 
compared with the existing assets at reasonable intervals and appropriate action is taken with 
respect to any differences.  15 U.S.C. § 78m(b)(2)(B). 
113. Section 206 of the Advisers Act makes it unlawful for any investment advisers, 
directly or indirectly, to (1) “employ any device, scheme, or artifice to defraud any client or 
prospective client” or (2) “engage in any transaction, practice, or course of business which operates 
as a fraud or deceit upon any client or prospective client.”     
114. Section 206(4) of the Advisers Act prohibits an investment adviser from, directly or 
indirectly, engaging in any act, practice or course of business which is fraudulent, deceptive, or 
manipulative.  Rule 206(4)-8(a)(1) thereunder prohibits an investment adviser to a pooled 
investment vehicle from making an untrue statement of material fact or omitting to state a material 
fact necessary to make the statements made not misleading to investors or prospective investors in 
those pools.  Rule 206(4)-8(a)(2) thereunder provides that it is a fraudulent practice for an 
investment adviser to a pooled investment vehicle to engage in “fraudulent, deceptive, or 
manipulative” conduct with respect to any investor or prospective investor in the pooled 
investment vehicle.  
115. As a result of the conduct described above, Och-Ziff willfully violated Sections 
30A, 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act by participating in bribe schemes to win or 
retain business for Och-Ziff, by falsely recording those bribe payments on its books and records, 
and by failing to devise and maintain a system of internal accounting controls sufficient to provide 

 
 
 
 
32 
reasonable assurances that its transactions comported with Generally Accepted Accounting 
Principles.
2
   
116. As a result of the conduct described above, OZ Management willfully violated 
Sections 206(1) and 206(2) of the Advisers Act by using managed investor funds in the payment of 
bribes and self-dealing in transactions involving AGC I and AGC II.  OZ Management violated 
Section 206(4) and Rule 206(4)-8 of the Advisers Act for by making material misrepresentations 
regarding certain AGC II transactions to the Investor. 
117. As a result of the conduct described above, Frank was a cause of violations of 
Section 13(b)(2)(A) of the Exchange Act by Och-Ziff, which requires an issuer to make and keep 
books and records that accurately and fairly reflect the dispositions of its assets, and violations of 
Section 13(b)(2)(B) of the Exchange Act by Och-Ziff, which requires an issuer to devise and 
maintain a system of internal accounting controls sufficient to provide reasonable assurances that 
its transactions comported with Generally Accepted Accounting Principles. 
118. As a result of the conduct described above in the two transactions with DRC 
Partner, Och was a cause of violations of Section 13(b)(2)(A) of the Exchange Act by Och-Ziff, 
which requires an issuer to make and keep books and records that accurately and fairly reflect the 
dispositions of its assets. 
IV. 
UNDERTAKINGS 
Respondents Och-Ziff and OZ Management undertake to: 
A. Implementation of Enhanced Internal Accounting Controls and Policies:  Within 
thirty (30) days of entry of this Order, Och-Ziff and OZ Management agree to the following: 
i. Implement enhanced internal controls over foreign private equity investments, 
including enhanced transactional and partner due diligence, increased monitoring 
over use of Och-Ziff funds in transactions involving corruption risk through audit 
rights of its business and transactions partners and other available means, 
individual representations and warranties for principals in foreign private equity 
transactions; limited use of offshore holding companies as recipients for funds in 
                                                 
2
  A willful violation of the securities laws means merely “‘that the person charged with the duty knows what he is 
doing.’” Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. 
Cir. 1949)). There is no requirement that the actor “‘also be aware that he is violating one of the Rules or Acts.’” 
Id. (quoting Gearhart & Otis, Inc. v. SEC, 348 F.2d 798, 803 (D.C. Cir. 1965)). 
 

 
 
 
 
33 
foreign private equity transactions; and enhanced steps to identify the beneficial 
owner of offshore holding companies being paid in connection with foreign 
private equity transactions; 
ii. Institute policy forbidding use of third-party placement agents or middlemen in 
soliciting investors into Och-Ziff managed funds unless use of such agent is 
approved by the Business Risk Committee, and limited to regulated financial 
entities; 
iii. For foreign private equity transactions, institute a policy forbidding use of third-
party consultants, finders, agents, or other intermediaries unless consistent with 
local law and approved by the Chief Compliance Officer or the Business Risk 
Committee; 
iv. Provide veto power over all matters coming before the company’s Business Risk 
Committee, for General Counsel and, separately, for Chief Compliance Officer; 
v. Establish investment committee to review all private equity transactions, and 
include participation on investment committee for General Counsel and Chief 
Compliance Officer or their designees; and 
vi. Require all private equity transactions be approved by Och-Ziff’s investment 
committee.  
B. Separation of Chief Compliance Officer From Other Officer Positions:  Within 
thirty (30) days of the entry of this Order, Och-Ziff and OZ Management agree to designate a 
Chief Compliance Officer who, for a period of five (5) years from the entry of this Order, shall 
not simultaneously hold any other officer position at Och Ziff or OZ Management while serving 
as Chief Compliance Officer.   
Respondent Frank undertakes to: 
A. In connection with this action and any related judicial or administrative 
proceeding or investigation commenced by the Commission or to which the Commission is a 
party, Respondent Frank (i) agrees to appear and be interviewed by Commission staff at such 
times and places as the staff requests upon reasonable notice; (ii) will accept service by mail or 
facsimile transmission of notices or subpoenas issued by the Commission for documents or 
testimony at depositions, hearings, or trials, or in connection with any related investigation by 
Commission staff; (iii) appoint Respondent’s attorney as agent to receive service of such notices 
and subpoenas; (iv) with respect to such notices and subpoenas, waives the territorial limits on 
service contained in Rule 45 of the Federal Rules of Civil Procedure and any applicable local 
rules, provided that the party requesting the testimony reimburses Respondent’s travel, lodging, 
and subsistence expenses at the then-prevailing U.S. Government per diem rates; and (v) consent 
to personal jurisdiction over Respondent in any United States District Court for purposes of 
enforcing any such subpoena.  

 
 
 
 
34 
Respondent Och undertakes to: 
A. In connection with this action and any related judicial or administrative 
proceeding or investigation commenced by the Commission or to which the Commission is a 
party, Respondent Och (i) agrees to appear and be interviewed by Commission staff at such 
times and places as the staff requests upon reasonable notice; (ii) will accept service by mail or 
facsimile transmission of notices or subpoORDER enas issued by the Commission for 
documents or testimony at depositions, hearings, or trials, or in connection with any related 
investigation by Commission staff; (iii) appoint Respondent’s attorney as agent to receive service 
of such notices and subpoenas; (iv) with respect to such notices and subpoenas, waives the 
territorial limits on service contained in Rule 45 of the Federal Rules of Civil Procedure and any 
applicable local rules, provided that the party requesting the testimony reimburses Respondents’ 
travel, lodging, and subsistence expenses at the then-prevailing U.S. Government per diem rates; 
and (v) consents to personal jurisdiction over Respondent in any United States District Court for 
purposes of enforcing any such subpoena.  
 In determining whether to accept the Offers, the Commission has considered these 
Undertakings.  
V. 
 
Pursuant to this Order, without admitting or denying the allegations contained herein, 
Respondent Frank agrees to additional proceedings in this proceeding to determine what, if any, 
civil penalties pursuant to Section 21(B)(a) of the Exchange Act against Respondent Frank are in 
the public interest.  In connection with such additional proceedings: (a) Respondent Frank agrees 
that he will be precluded from arguing that he did not violate the federal securities laws as 
described in this Order; (b) Respondent Frank agrees that he may not challenge the validity of this 
Order; (c) solely for the purposes of such additional proceedings, the findings of this Order shall be 
accepted as and deemed true by the hearing officer; and (d) the hearing officer may determine the 
issues raised in the additional proceedings on the basis of affidavits, declarations, excerpts of 
sworn deposition or investigative testimony, and documentary evidence. 
 
VI. 
 
 In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose sanctions agreed to in Respondents’ Offers. 
 
 Accordingly, pursuant to Section 21C of the Exchange Act and Sections 203(e), 203(f) and 
203(k) of the Advisers Act, it is hereby ORDERED that: 
 
A. Respondent Och-Ziff shall cease and desist from committing or causing any 
violations and any future violations of Sections 30A, 13(b)(2)(A) and 13(b)(2)(B) of the Exchange 
Act. 

 
 
 
 
35 
B. Respondent OZ Management shall cease and desist from committing or causing 
any violations and any future violations of Sections 206(1), 206(2) and 206(4) of the Advisers Act 
and Rule 206(4)-8 promulgated thereunder. 
C. Respondent Frank shall cease and desist from committing or causing any violations 
and any future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. 
D. Respondent Och shall cease and desist from committing or causing any violations 
and any future violations of Section 13(b)(2)(A) of the Exchange Act 
E. Respondents Och-Ziff and OZ Management are censured. 
F. Respondents Och-Ziff and OZ Management, shall, within 14 days of the entry of 
this Order, pay, jointly and severally, disgorgement of $173,186,178, and prejudgment interest of 
$25,858,989, for a total payment of $199,045,167 to the Securities and Exchange Commission for 
transfer to the general fund of the United States Treasury, subject to Exchange Act Section 
21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to SEC Rule of 
Practice 600.   
G. Respondent Och shall, within 14 days of the entry of this Order, pay disgorgement 
of $1,900,000, reflecting his estimated share of gain to Och-Ziff resulting from the transactions 
with DRC Partner, and prejudgment interest of $273,718, for a total payment of $2,173,718 to the 
United States Treasury.  If timely payment is not made, additional interest shall accrue pursuant to 
SEC Rule of Practice 600. 
H. Respondents Och-Ziff, OZ Management, and Och must make payments in one of 
the following ways: 
 
(1) Respondents may transmit payment electronically to the Commission, which will 
provide detailed ACH transfer/Fedwire instructions upon request; 
 
(2) Respondents may make direct payment from a bank account via Pay.gov through 
the Commission Web site at:  http://www.sec.gov/about/offices/ofm.htm; or 
 
(3) Respondents may pay by certified check, bank cashier’s check, or United States 
postal money order, made payable to the Securities and Exchange Commission and 
hand-delivered or mailed to: 
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 

 
 
 
 
36 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying the 
party paying as a Respondent in these proceedings, and the file number of these proceedings; a 
copy of the cover letter and check or money order must be sent to Paul G. Block, Assistant 
Director, Division of Enforcement, Securities and Exchange Commission, Boston Regional Office, 
33 Arch Street, Boston, MA 02110. 
 
Amounts ordered to be paid as civil money penalties pursuant to this Order shall be treated 
as penalties paid to the government for all purposes, including all tax purposes.  To preserve the 
deterrent effect of the civil penalty, each Respondent agrees that in any Related Investor Action, 
they shall not argue that they are entitled to, nor shall they benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of each Respondent’s payment of a 
civil penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants 
such a Penalty Offset, each Respondent agrees that they shall, within 30 days after entry of a final 
order granting the Penalty Offset, notify the Commission's counsel in this action and pay the 
amount of the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall 
not be deemed an additional civil penalty and shall not be deemed to change the amount of the civil 
penalty imposed in this proceeding.  For purposes of this paragraph, a "Related Investor Action" 
means a private damages action brought against any of the Respondents by or on behalf of one or 
more investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
I. Retention of Monitor:  Respondent Och-Ziff shall comply with the following 
undertakings: 
Term of Engagement 
1. To engage an independent monitor (“Monitor”) not unacceptable to the 
Commission staff within sixty (60) days of the entry of this Order.  Upon entry of the Order, the 
Company will propose to the staff a pool of three (3) qualified candidates to serve as the 
Monitor.  If the staff determines, in their sole discretion, that any of the candidates are not, in fact, 
qualified to serve as the Monitor, or if the staff, in their sole discretion, are not satisfied with the 
candidates proposed, the staff reserve the right to seek additional nominations from the Company.  
The Monitor shall have, at a minimum, the following qualifications:  (1) demonstrated expertise 
with respect to the FCPA and other applicable anti-corruption laws, including experience 
counseling on FCPA issues; (ii) demonstrated experience with respect to the Advisers Act and 
other applicable laws, including experience counseling on Advisers Act disclosure and 
compliance issues; (iii) experience designing and/or reviewing corporate compliance policies, 
procedures, and internal accounting controls, including FCPA and anti-corruption policies, 
procedures, and internal accounting controls, and Advisers Act disclosure policies, procedures, 
and controls; (iv) the ability to access and deploy resources as necessary to discharge the 

 
 
 
 
37 
Monitor’s duties as described in the Order; and (v) sufficient independence from Och-Ziff to 
ensure effective and impartial performance of the Monitor’s duties as described in the Order.   
2. The staff retain the right, in their sole discretion, to choose the Monitor from among 
the candidates proposed by the Company, though the Company may express its preference(s) 
among the candidates.  In the event the staff reject all proposed Monitors, the Company shall 
propose an additional three candidates within thirty (30) calendar days after receiving notice of the 
rejection.  This process shall continue until a Monitor acceptable to both parties is chosen.  The 
staff and the Company will use their best efforts to complete the selection process within sixty (60) 
calendar days of the filing of the Agreement and the accompanying Information.  If the Monitor 
resigns or is otherwise unable to fulfill his or her obligations as set out herein and in Attachment D, 
the Company shall within thirty (30) calendar days recommend a pool of three qualified Monitor 
candidates from which the Offices will choose a replacement. 
3. Och-Ziff shall retain the Monitor for a period of not less than thirty-six (36) 
months, unless the Commission staff finds, in its sole discretion, that there exists a change in 
circumstances sufficient to eliminate the need for the Monitor, in which case the monitorship 
may be terminated early (the “Monitorship”).  The term of the Monitorship can be extended for 
an additional twenty-four (24) months, to a total of sixty (60) months from the date the Monitor 
is retained.  The term of the Monitorship can be extended at the discretion of the staff and as set 
forth below. 
4. During the Monitorship and for a period of two years from conclusion of the 
Monitorship, neither Och-Ziff nor any of its then-current or former affiliates, subsidiaries, 
directors, officers, employees, or agents acting in their capacity as such shall enter into, or 
discuss the possibility of, any employment, consultant, attorney-client, auditing, or other 
professional relationship with the Monitor. 
Och-Ziff’s Obligations 
5. Och-Ziff shall cooperate fully with the Monitor, and provide the Monitor with 
access to all non-privileged information, documents, records, facilities, and employees as 
reasonably requested by the Monitor; such access shall be provided consistent with Och-Ziff’s 
and the Monitor’s obligations under applicable laws and regulations, including, but not limited 
to, applicable data privacy and national security laws and regulations.  Och-Ziff shall use its best 
efforts, to the extent reasonably requested, to provide the Monitor with access to Och-Ziff’s 
former employees, third-party vendors, agents, and consultants. 
6. Och-Ziff agrees that no attorney-client, auditor-client, or similar relationship shall 
be formed between Och-Ziff and the Monitor.  In the event that Och-Ziff seeks to withhold from 
the Monitor access to information, documents, records, facilities, and/or employees of Och-Ziff, 
its third-party vendors, agents, or consultants that may be subject to a claim of attorney-client 
privilege, the attorney work-product doctrine, or similar legal relationships, or where Och-Ziff 

 
 
 
 
38 
reasonably believes production would otherwise be inconsistent with applicable law, Och-Ziff 
shall work cooperatively with the Monitor to resolve the matter to the satisfaction of the Monitor. 
If during the Monitorship, the Monitor believes that Och-Ziff is unreasonably withholding access 
on the basis of a claim of attorney-client privilege, attorney work-product doctrine, or other 
asserted applicable law, the Monitor shall promptly notify the Commission staff.  If the matter 
cannot be resolved, at the request of the Monitor, the Company shall promptly provide written 
notice to the Monitor and the staff.  Such notice shall include a general description of the nature of 
the information, documents, records, facilities or current or former employees that are being 
withheld, as well as the legal basis for withholding access.  The staff may then consider whether to 
make a further request for access to such information, documents, records, facilities, or employees 
7. Any disclosure by Och-Ziff concerning potential corrupt payments, false books 
and records, and/or internal accounting control issues shall not relieve Och-Ziff of any otherwise 
applicable obligation to truthfully disclose such matters to the Commission staff. 
Monitor’s Mandate 
8. The Monitor shall evaluate the effectiveness of the internal accounting controls, 
recordkeeping, and financial reporting policies and procedures of Och-Ziff as they relate to Och-
Ziff’s current and ongoing compliance with the anti-bribery, books and records, and internal 
accounting controls provisions of the FCPA, other applicable anti-corruption laws (the “anti-
corruption laws”), and OZ Management’s related disclosure and compliance issues under the 
Advisers Act (“disclosure laws”), and make recommendations reasonably designed to improve 
the effectiveness of these policies and procedures (the “Mandate”).  This Mandate shall include 
an assessment of the Board of Directors; and senior managements’ commitment to, and effective 
implementation of, the corporate compliance program.  In carrying out the Mandate, to the extent 
appropriate under the circumstances, the Monitor may coordinate with Och-Ziff personnel, 
including in-house counsel, compliance personnel, and internal auditors.  The Monitor may rely 
on the product of Och-Ziff’s processes, such as the results of studies, reviews, sampling and 
testing methodologies, audits, and analyses conducted by or on behalf of Och-Ziff, as well as 
Och-Ziff’s internal resources (e.g., legal, compliance, and internal audit), which can assist the 
Monitor in carrying out the Mandate.  
9. During the Monitorship, the Monitor shall conduct an initial review and at least 
two (2) follow-up reviews and prepare an initial report and at least two (2) follow-up reports, and 
issue a Certification Report if appropriate, as described below. 
Initial Review and Report 
10. To carry out the Mandate, during the Term of the Monitorship, the Monitor shall 
conduct an initial review and prepare an initial report, followed by at least two follow-up reviews 
and reports as described below.  With respect to the initial report, after consultation with the 
Company and the Commission staff, the Monitor shall prepare the first written work plan within 

 
 
 
 
39 
thirty (30) calendar days of being retained, and the Company and the staff shall provide comments 
within thirty (30) calendar days after receipt of the written work plan.  With respect to each follow-
up report, after consultation with the Company and the Commission staff, the Monitor shall 
prepare a written work plan at least thirty (30) calendar days prior to commencing a review, and 
the Company and the Offices shall provide comments within twenty (20) calendar days after 
receipt of the written work plan.  Any disputes between the Company and the Monitor with respect 
to any written work plan shall be decided by the Commission staff in their sole discretion. 
11. In order to conduct an effective initial review and to understand fully any existing 
deficiencies in Och-Ziff’s internal accounting controls and corporate compliance program, or 
deficiencies in OZ Management’s Advisers Act compliance, the Monitor’s work plan shall 
include such steps as are reasonably necessary to understand Och-Ziff’s business and its global 
anti-corruption risks.  The steps shall include: 
a. Inspection of relevant documents, including the internal accounting controls, 
recordkeeping, and financial reporting policies and procedures as they relate 
to the Mandate; 
b. Inspection of relevant documents and policies and procedures as they relate to 
the Mandate; 
c. Onsite observation of selected systems and procedures comprising Och-Ziff’s 
corporate compliance program, including anti-corruption compliance 
procedures, internal accounting controls, recordkeeping, due diligence, and 
internal audit procedures, including at sample sites; 
d. Meetings with, and interviews of, as relevant, Och-Ziff employees, officers, 
directors, and, where appropriate and feasible, its third-party vendors, agents, 
or consultants and other persons at mutually convenient times and places; and 
e. Risk-based analyses, studies, and testing of Och-Ziff’s and OZ Management’s 
corporate compliance program. 
12. The Monitor may take steps as reasonably necessary to develop an understanding 
of the facts and circumstances surrounding prior violations of law that gave rise to this action, 
but shall not conduct his or her own inquiry into those historical events. 
13. After receiving the initial work plan, Och-Ziff shall provide any comments 
concerning the initial work plan within thirty (30) days to the Monitor and Commission staff.  
Any disputes between Och-Ziff and the Monitor with respect to the initial work plan shall be 
decided by the Commission staff in its sole discretion.  Following comments by Och-Ziff and 
Commission staff, the Monitor will have fifteen (15) days to make revisions to the initial work 
plan. 

 
 
 
 
40 
14. The initial review shall commence no later than one-hundred twenty (120) days 
from the date of the engagement of the Monitor (unless otherwise agreed by Och-Ziff, the Monitor, 
and the Commission staff).  The Monitor shall issue a written report within one hundred twenty 
(120) days of commencing the initial review, setting forth the Monitor's assessment and, if 
necessary, making recommendations reasonably designed to improve the effectiveness of Och-
Ziff’s internal accounting controls and corporate compliance program as they relate to Och-Ziff’s 
compliance with the anti-corruption laws.  The Monitor should consult with Och-Ziff concerning 
his or her findings and recommendations on an ongoing basis and should consider Och-Ziff’s 
comments and input to the extent the Monitor deems appropriate.  The Monitor should share a 
draft of his or her report with Och-Ziff and Commission staff prior to finalizing them.  The 
Monitor shall provide the report to the Board of Directors of Och-Ziff and contemporaneously 
transmit a copy to Commission staff. 
15. Within one-hundred twenty (120) days after receiving the Monitor's initial report, 
Och-Ziff shall adopt and implement all recommendations in the report, provided, however, that 
as to any recommendation that Och-Ziff considers unduly burdensome, impractical, or costly, or 
inconsistent with applicable law or regulation or otherwise inadvisable, Och-Ziff need not adopt 
that recommendation at that time, but may submit in writing to the Monitor and the Commission 
staff within sixty (60) days of receiving the report, an alternative policy, procedure, or system 
designed to achieve the same objective or purpose. 
16. As to any recommendation on which the Company and the Monitor do not agree, 
such parties shall attempt in good faith to reach an agreement within forty-five (45) calendar days 
after the Company serves the written notice.  In the event Och-Ziff and the Monitor are unable to 
agree on an acceptable alternative proposal, Och-Ziff shall promptly consult with the 
Commission staff.  Any disputes between Och-Ziff and the Monitor with respect to the 
recommendations shall be decided by the Commission staff in its sole discretion.  The 
Commission staff will consider the Monitor's recommendation and Och-Ziff’s reasons for not 
adopting the recommendation in determining whether Och-Ziff has fully complied with its 
obligations.  Pending such determination, Och-Ziff shall not be required to implement any 
contested recommendation(s). 
17. With respect to any recommendation that the Monitor determines cannot reasonably 
be implemented within one-hundred twenty (120) days after receiving the report, the Monitor may 
extend the time period for implementation with prior written approval of the Commission staff. 
First Follow-Up Review 
18. Within one hundred-twenty (120) days after the issuance of the initial report, the 
Monitor shall submit a written work plan for the follow-up review to Och-Ziff and Commission 
staff.  Och-Ziff and Commission staff shall provide any comments concerning the work plan 
within twenty (20) days in writing to the Monitor.  Any disputes between Och-Ziff and the 
Monitor with respect to the written work plan shall be decided by the Commission staff in its 

 
 
 
 
41 
sole discretion.  Following comments by Och-Ziff and Commission staff, the Monitor will have 
ninety (90) days to make revisions to the follow-up work plan. 
19. The follow-up review shall commence no later than one hundred-twenty (120) days 
after the issuance of the initial report (unless otherwise agreed by Och-Ziff, the Monitor, and the 
Commission staff).  The Monitor shall issue a written follow-up report within ninety (90) days of 
commencing the follow-up review.  The follow-up report shall set forth the Monitor's assessment 
of, and any additional recommendations regarding, the Mandate; the Monitor's assessment of the 
implementation by Och-Ziff of any recommendations made in the initial report; and the Monitor's 
assessment of the commitment of Och-Ziff’s Board of Directors and senior management to 
compliance with anti-corruption laws  
20. Within one hundred and twenty (120) calendar days after receiving the Monitor’s 
initial report, the Company shall adopt and implement all recommendations in the report, unless, 
within sixty (60) calendar days of receiving the report, the Company notifies in writing the Monitor 
and the Commission staff of any recommendations that the Company considers unduly 
burdensome, inconsistent with applicable law or regulation, impractical, excessively expensive, or 
otherwise inadvisable.  With respect to any such recommendation, the Company need not adopt 
that recommendation within the one hundred and twenty (120) days of receiving the report but 
shall propose in writing to the Monitor and the Commission staff an alternative policy, procedure 
or system designed to achieve the same objective or purpose.  As to any recommendation on which 
the Company and the Monitor do not agree, such parties shall attempt in good faith to reach an 
agreement within forty-five (45) calendar days after the Company serves the written notice. 
21. In the event Och-Ziff and the Monitor are unable to agree on an acceptable 
alternative proposal within thirty (30) days, Och-Ziff shall promptly consult with the Commission 
staff.  Any disputes between Och-Ziff and the Monitor with respect to the recommendations shall 
be decided by the Commission staff in its sole discretion.  The Commission staff shall consider the 
Monitor's recommendation and Och-Ziff’s reasons for not adopting the recommendation in 
determining whether Defendant has fully complied with its obligations.  Pending such 
determination, Defendant shall not be required to implement any contested recommendation(s). 
22. With respect to any recommendation that the Monitor determines cannot reasonably 
be implemented within one hundred and twenty (120) calendar days after receiving the report, the 
Monitor may extend the time period for implementation with prior written approval of the 
Commission staff. 
Second Follow-Up Review 
23. A follow-up review shall commence no later than one hundred-twenty (120) 
calendar days after the issuance of the initial report (unless otherwise agreed by the Company, the 
Monitor and the Commission staff).  The Monitor shall issue a written follow-up report within 
ninety (90) calendar days of commencing the follow-up review, setting forth the Monitor’s 

 
 
 
 
42 
assessment and, if necessary, making recommendations in the same fashion as set forth in 
Paragraph 14 with respect to the initial review.  After consultation with the Company, the Monitor 
may extend the time period for issuance of the follow-up report for a brief period of time with prior 
written approval of the Commission staff. 
24. The second follow-up review shall commence no later than one hundred eighty 
(180) days after the issuance of the follow-up report (unless otherwise agreed by Och-Ziff, the 
Monitor, and the Commission staff).  The Monitor shall issue a written follow-up report within 
ninety (90) days of commencing the second follow-up review.  The follow-up report shall set 
forth the Monitor's assessment of, and any additional recommendations regarding, the Mandate; 
the Monitor's assessment of the implementation by Och-Ziff of any recommendations made in 
the initial report; and the Monitor's assessment of the commitment of Och-Ziff’s Board of 
Directors and senior management to compliance with anti-corruption laws. 
25. Within ninety (90) calendar days after receiving the Monitor’s follow-up report, the 
Company shall adopt and implement all recommendations in the report, unless, within thirty (30) 
calendar days after receiving the report, the Company notifies in writing the Monitor and the 
Commission staff concerning any recommendations that the Company considers unduly 
burdensome, inconsistent with applicable law or regulation, impractical, excessively expensive, or 
otherwise inadvisable.  With respect to any such recommendation, the Company need not adopt 
that recommendation within the ninety (90) calendar days of receiving the report but shall propose 
in writing to the Monitor and the Commission staff an alternative policy, procedure, or system 
designed to achieve the same objective or purpose.  As to any recommendation on which the 
Company and the Monitor do not agree, such parties shall attempt in good faith to reach an 
agreement within thirty (30) calendar days after the Company serves the written notice. 
26. In the event Och-Ziff and the Monitor are unable to agree on an acceptable 
alternative proposal within fifteen (15) days, Och-Ziff shall promptly consult with the Commission 
staff.  Any disputes between Och-Ziff and the Monitor with respect to the recommendations shall 
be decided by the Commission staff in its sole discretion.  The Commission staff shall consider the 
Monitor's recommendation and Och-Ziff’s reasons for not adopting the recommendation in 
determining whether Och-Ziff has fully complied with its obligations.  Pending such 
determination, Och-Ziff shall not be required to implement any contested recommendation(s).  
With respect to any recommendation that the Monitor determines cannot reasonably be 
implemented within ninety (90) calendar days after receiving the report, the Monitor may extend 
the time period for implementation with prior written approval of the Offices. 
27. Throughout the Monitorship, the Monitor shall disclose to the Commission staff 
any credible evidence that corrupt or otherwise suspicious transactions occurred, or payments or 
things of value were offered, promised, made, or authorized by any entity or person within Och-
Ziff, or any entity or person working directly or indirectly for or on behalf of Och-Ziff, or that 
related false books and records may have been maintained by or on behalf of Och-Ziff or that 
relevant internal controls were circumvented or were not reasonably designed or implemented.  

 
 
 
 
43 
The Monitor shall contemporaneously notify Och-Ziff’s General Counsel, Chief Compliance 
Officer, and Audit Committee for further action unless at the Monitor's discretion he or she 
believes disclosure to Och-Ziff would be inappropriate under the circumstances.  The Monitor 
shall address in his or her reports the appropriateness of Och-Ziff’s response to all improper 
activities, whether previously disclosed to the Commission staff or not. 
Certification of Compliance  
28. Within ninety (90) days of the issuance of the second follow-up report, Och-Ziff 
shall certify in writing to the Commission staff with copy to the Monitor that Och-Ziff has adopted 
and has implemented, or is implementing on an agreed-to schedule, all of the Monitor's 
recommendations in the initial and follow-up report(s), or the agreed-upon alternatives. 
29. Within ninety (90) days of the issuance of the second follow-up report, if the 
Monitor believes that Och-Ziff’s corporate compliance program is reasonably designed and 
implemented to detect and prevent violations of the anti-corruption laws and disclosure laws and is 
functioning effectively, the Monitor shall submit to the Commission staff a written report 
("Certification Report") that certifies Och-Ziff’s compliance with its corporate compliance 
obligations under the Final Judgment.  The Certification Report shall set forth an assessment of the 
sustainability of Och-Ziff’s remediation efforts and may also recommend areas for further follow-
up in Och-Ziff’s future self-reporting.  The Monitor may extend the time period for issuance of the 
Certification Report by fifteen (15) days with prior written approval of the Commission staff.  
Fourteen (14) days prior to issuing the Certification report, the Monitor shall orally notify the 
Commission staff whether he or she expects to be able to certify as provided herein. 
Extension of Monitorship 
30. If, after completing the second follow-up review, the Commission staff concludes 
that Och-Ziff has not successfully satisfied its obligations under the Monitorship with respect to the 
Monitor's Mandate, the Monitorship shall be extended, and the Monitor shall commence a third 
follow-up review within sixty (60) days after the Commission staff concludes that Och-Ziff has not 
successfully satisfied its compliance obligations under the Monitorship (unless otherwise agreed by 
Och-Ziff, the Monitor, and the Commission staff).  The Monitor shall issue a written follow-up 
report within one hundred twenty (120) days of commencing the third follow-up review in the 
same fashion as set forth in Paragraphs 19 through 22 with respect to the follow-up reviews and in 
accordance with the procedures for follow-up reports set forth in Paragraphs 19 through 22. 
Extensions of Time 
31. Upon request by the Monitor or Och-Ziff, the Commission staff may extend any 
procedural time period set forth above for good cause shown. 

 
 
 
 
44 
Certification of Completion 
32. No later than sixty (60) days from date of the completion of the undertakings with 
respect to the Monitorship, Och-Ziff shall certify, in writing, compliance with the undertakings set 
forth above.  The certification shall identify the undertakings, provide written evidence of 
compliance in the form of a narrative, and be supported by exhibits sufficient to demonstrate 
compliance.  The Commission staff may make reasonable requests for further evidence of 
compliance, and Och-Ziff agrees to provide such evidence. 
Confidentiality of Reports 
33. The reports submitted by the Monitor and the periodic reviews and reports 
submitted by Och-Ziff will likely include confidential financial, proprietary, competitive business 
or commercial information.  Public disclosure of the reports could discourage cooperation, impede 
pending or potential government investigations or undermine the objective of the reporting 
requirement.  For these reasons, among others, the reports and the contents thereof are intended to 
remain and shall remain non-public, except (i) pursuant to court order, (ii) as agreed to by the 
parties in writing, (iii) to the extent the Commission determines in its sole discretion that disclosure 
would be in furtherance of the Commission's discharge of its duties and responsibilities, or (iv) as 
is otherwise required by law. 
Address for All Written Communications and Reports 
34. All reports or other written communications by the Monitor or Och-Ziff directed to 
the Commission staff shall be transmitted to Paul G. Block, Assistant Director, FCPA Unit, 
Division of Enforcement, Boston Regional Office, U.S. Securities and Exchange Commission, 33 
Arch Street, Boston, MA 02110.  A copy of the Certification of Completion and supporting 
materials shall also be transmitted to the Office of Chief Counsel of the Enforcement Division at 
Division of Enforcement, U.S. Securities and Exchange Commission, 100 F Street, N.E., 
Washington, D.C. 20549. 
J. Notice to Advisory Clients 
35. Within thirty (30) days of the entry of this Order, Och-Ziff and OZ Management 
shall provide a copy of the Order to each of OZ Management’s existing advisory clients as of the 
entry of this Order via mail, e-mail, or such other method as may be acceptable to the 
Commission staff.  For a period of one (1) year from the entry of this Order, Och-Ziff and OZ 
Management shall provide a copy of the Order to all of its prospective clients. 
IT IS FURTHER ORDERED pursuant to Rule 100(c) of the Commission’s Rules of 
Practice, 17 C.F.R. § 201.100(c), in the interest of justice and without prejudice to any party to the 
proceeding, that a public hearing for the purpose of taking evidence on the questions set forth in 

 
 
 
 
45 
Section V hereof shall be convened at a time and place to be fixed by, and before, an 
Administrative Law Judge to be designated by further order as provided by Rule 110 of the 
Commission’s Rules of Practice, 17 C.F.R. § 201.110, following the entry of a final judgment 
against the last remaining defendant(s) in in all actions related to the conduct described herein (the 
“Related Actions”).   
 
If Frank fails to appear at that hearing after being duly notified, Frank may be deemed in 
default and the proceedings may be determined against him upon consideration of this Order, the 
allegations of which may be deemed to be true as provided by Rules 155(a), 221(f), and 310 of the 
Commission’s Rules of Practice, 17 C.F.R. §§ 201.155(a), 201.221(f), and 201.310.  
 
IT IS FURTHER ORDERED pursuant to Rule 100(c) of the Commission’s Rules of 
Practice, 17 C.F.R. § 201.100(c), in the interest of justice and without prejudice to any party to the 
proceeding, that the Administrative Law Judge shall issue an initial decision no later than 120 days 
from the date of the entry of a final judgment in the Related Actions.   
 
In the absence of an appropriate waiver, no officer or employee of the Commission 
engaged in the performance of investigative or prosecuting functions in this or any factually related 
proceeding will be permitted to participate or advise in the decision of this matter, except as 
witness or counsel in proceedings held pursuant to notice.  Since this proceeding is not “rule 
making” within the meaning of Section 551 of the Administrative Procedure Act, it is not deemed 
subject to the provisions of Section 553 delaying the effective date of any final Commission action. 
 
36. Respondents Och-Ziff, OZ Management, Och and Frank shall comply with the 
undertakings enumerated in Section IV above. 
37. This Order shall be served forthwith upon Respondents personally or by certified 
mail. 

 
 
 
 
46 
VII. 
It is further Ordered that any debt for disgorgement, prejudgment interest, civil penalty or 
other amounts due by Respondents Och and Frank under this Order or any other judgment, order, 
consent order, decree or settlement agreement entered in connection with this proceeding, is a debt 
for the violation by Respondents Och and Frank of the federal securities laws or any regulation or 
order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. 
§523(a)(19), and, solely for purposes of exceptions to discharge set forth in Section 523 of the 
Bankruptcy Code, 11 U.S.C. §523, Respondents Och and Frank stipulate that the findings in the 
Order are true, and that such findings shall be accepted and deemed true, without further proof by 
any party, in any nondischargeability proceeding involving the Commission.  
 
 By the Commission. 
 
 
 
       Brent J. Fields 
       Secretary 
 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 78989 / September 29, 2016 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No. 4540 / September 29, 2016  

 

ADMINISTRATIVE PROCEEDING 

File No. 3-17595 

 

 

In the Matter of 

 

OCH-ZIFF CAPITAL 

MANAGEMENT GROUP 

LLC, OZ MANAGEMENT 

LP, DANIEL S. OCH, and  

JOEL M. FRANK, 

 

Respondents. 

 

ORDER INSTITUTING 

ADMINISTRATIVE AND CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, AND 

SECTIONS 203(e), 203(f) AND 203(k) OF 

THE INVESTMENT ADVISERS ACT OF 

1940, MAKING FINDINGS, IMPOSING 

REMEDIAL SANCTIONS AND A CEASE-

AND-DESIST ORDER, AND NOTICE OF 

HEARING 

  

I. 
 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that public 

administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 

21C of the Securities Exchange Act of 1934 (“Exchange Act”), and Sections 203(e), 203(f) and 

203(k) of the Investment Advisers Act of 1940 (“Advisers Act”), against Och-Ziff Capital 

Management Group LLC (“Och-Ziff”), OZ Management LP (“OZ Management”), Daniel S. Och, 

and Joel M. Frank (collectively, “Respondents”).   

 

II. 
 

In anticipation of the institution of these proceedings, Respondents Och-Ziff and OZ 

Management each have submitted an Offer of Settlement which the Commission has determined 

to accept.  Solely for the purpose of these proceedings and any other proceedings brought by or 

on behalf of the Commission, or to which the Commission is a party, Respondents Och-Ziff and 

OZ Management admit the Commission’s jurisdiction over them and the subject matter of these 

proceedings, and each consent to the entry of this Order Instituting Administrative and Cease-and-

Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934 and Sections 



 

 

 

 

2 

203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940, Making Findings, and Imposing 

Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below. 

 

In anticipation of the institution of these proceedings, Respondents Och and Frank each 

have submitted an Offer of Settlement which the Commission has determined to accept.  Solely for 

the purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over them and the subject matter of these 

proceedings, which are admitted, and except as provided herein in Section VII, Respondents Och 

and Frank each consent to the entry of this Order, as set forth below. 

 

III. 
 

 On the basis of this Order and Respondents’ Offers, the Commission finds
1
 that:  

Summary 

 

1. Beginning in 2007 and continuing through 2011, Och-Ziff, primarily through the 

misconduct of two senior employees, entered into a series of transactions and investments in which 

Och-Ziff paid bribes through intermediaries, agents and business partners to high ranking 

government officials in multiple African countries including Libya, Chad, Niger, and the 

Democratic Republic of the Congo (“DRC”).  These bribes were paid with the specific knowledge 

of a senior Och-Ziff employee who was the head of Och-Ziff Europe (“Och-Ziff Employee A”) 

and in certain cases, of an Och-Ziff investment professional working in Och-Ziff’s European office 

(“Och-Ziff Employee B”), but other executives at Och-Ziff ignored red flags and corruption risks 

and permitted these transactions to proceed.  Bribes were paid to corruptly influence foreign 

government officials in order to obtain or retain business for Och-Ziff and its business partners.  

Och-Ziff invested in countries and industries known for corrupt business dealings, and 

purposefully transacted with agents and business partners with high level connections to foreign 

government officials who funneled corrupt payments to those officials.   

2. During this period, Och-Ziff entered into the following transactions in which 

corrupt payments were made: 

a. An investment by the Libyan Investment Authority (“LIA”) of $300 million into 

Och-Ziff funds in 2007.  To secure the LIA investment, Och-Ziff used an agent to 

pay bribes to high ranking Libyan government officials.  With the knowledge of the 

                                                 
1  The findings herein are made pursuant to Respondents’ Offers of Settlement and are not binding on any other 

person or entity in this or any other proceeding.   
 

 



 

 

 

 

3 

Och-Ziff Employee A, bribes of more than $3 million were paid to Libyan 

government officials. 

b. An investment of $40 million by Och-Ziff funds into a Libyan property 

development project in 2007.  Och-Ziff used investor funds to pay a $400,000 “deal 

fee” to its agent in Libya as part of its investment.  Och-Ziff Employee A knew or 

was willfully blind to the high probability that Och-Ziff’s agent would then use 

those funds to pay bribes to benefit the property development project. 

c. A loan of more than $86 million and funding of more than $10 million from Och-

Ziff investor funds to one of Och-Ziff’s South African partners in African Global 

Capital I (“AGC I”), an Africa mining-focused fund, in 2007 and 2008.  Of the 

funds provided to its business partner in AGC I, with the knowledge or willful 

blindness of Och-Ziff Employee A and Och-Ziff Employee B, millions went 

towards bribes to foreign government officials, illicit payments to middlemen, the 

personal benefit of its business partners, and expenditures unrelated to the 

investment.  Och-Ziff failed to conduct sufficient due diligence on the use of 

investor funds or impose sufficient internal accounting controls to prevent the 

misuse of funds by its South African partner.     

d. A convertible loan of approximately $124 million from Och-Ziff investor funds 

through AGC I to an entity affiliated with an Israeli businessman, to purchase 

mining assets in the Democratic Republic of the Congo (“DRC”) in 2008.  This 

businessman became Och-Ziff’s partner in the DRC.  With the knowledge of Och-

Ziff Employee A and Och-Ziff Employee B, a significant portion of the money was 

used by Och-Ziff’s partner in the DRC to pay bribes to high-ranking DRC officials 

to secure mining assets for Och-Ziff and its partner.   

e. A margin loan for $130 million from Och-Ziff investor funds to another entity 

controlled by the same DRC partner in 2010 and 2011.  Of the total, $84.1 million 

was provided to Och-Ziff’s partner in the DRC with no restrictions or oversight by 

Och-Ziff.  Och-Ziff Employee A and Och-Ziff Employee B knew that Och-Ziff’s 

partner would pay bribes to high-ranking DRC government officials, and others 

within Och-Ziff knew of allegations of corruption against him and his close 

political ties within the DRC.  Och-Ziff’s partner then used the funds to pay bribes. 

f. A purchase of shares by African Global Capital II (“AGC II”), the second Africa-

focused fund created by Och-Ziff, in a London-based oil exploration company in 

2011.  Och-Ziff caused AGC II to purchase the shares from its South African 

partner in order to provide him with capital to use for other purposes.  From there, 

the partner paid more than $1 million to a consultant who then used those funds to 

pay bribes to government officials in Guinea.  Och-Ziff failed to conduct sufficient 

due diligence on the use of investor funds to prevent the payment of bribes.  Och-



 

 

 

 

4 

Ziff Employee B knew or was willfully blind to the high probability that AGC II 

funds would be used by this consultant to pay bribes.     

3. In most cases, the above transactions involved the use of managed investor funds 

rather than Och-Ziff’s own capital.  OZ Management, a registered investment adviser which 

managed the various investor funds entrusted to Och-Ziff, authorized the use of funds in 

transactions in which bribes were paid to foreign government officials to obtain or retain business 

for Och-Ziff and its business partners.  Och-Ziff categorized these transactions as investments or 

convertible loans despite the fact that two Och-Ziff employees, Och-Ziff Employee A and Och-

Ziff Employee B, knew that investor funds would be used to pay bribes.  Investor funds were also 

used in self-dealing transactions to benefit Och-Ziff Employee A, Och-Ziff’s business partners, and 

Och-Ziff itself.   

4. Och-Ziff Employee A and Och-Ziff Employee B purposefully caused OZ 

Management to omit material facts to ensure that corrupt transactions would proceed and to engage 

in self-dealing.  OZ Management failed to disclose all material facts and conflicts of interest in its 

communications with investors in certain AGC II transactions or to adequately control the use of 

investor funds.  OZ Management made material misrepresentations or omissions and engaged in 

self-dealing in the following transactions: 

a. A purchase of $20 million in shares in a privately held London-based mining 

company by AGC II in 2010.  Och-Ziff Employee A knew that $4 million would be 

routed by an intermediary to Och-Ziff Employee A’s personal account to offset an 

outstanding personal loan from Och-Ziff Employee A to that intermediary.  Och-

Ziff Employee A further directed that an additional $4 million be paid in secret 

through the intermediary to an AGC business partner without disclosure to AGC II 

investors. 

b. An investment by AGC II in oil rights in the Republic of the Congo (“Congo-

Brazzaville”) through an oil exploration and development company which was 

majority controlled by Och-Ziff and South African Business Partner(“Company 

A”), in 2010.  Och-Ziff failed to disclose material facts regarding the origins of this 

transaction, the true purpose of payments to its AGC business partner in the 

transaction, and the justification for payments to intermediaries.   

c. An AGC II purchase of shares in a London-based oil and gas company for $77 

million in 2011.  Och-Ziff, through Och-Ziff Employee A and Och-Ziff Employee 

B, structured the transaction to provide $50 million cash to its AGC business 

partner to further his and potentially Och-Ziff’s interests in The Republic of Guinea 

(“Guinea”), a country in which this business partner had a high-placed agent in the 

entourage of a senior government official.  Och-Ziff Employee A and Och-Ziff 

Employee B also included within the purchase price an additional $2 million for the 



 

 

 

 

5 

partner to repay an outstanding debt to Och-Ziff.  Och-Ziff failed to disclose 

accurate terms of the transaction or its own self-dealing to AGC II investors. 

5. As a result of the foregoing, Och-Ziff did not accurately and fairly reflect the 

disposition of assets involved in these transactions in its books and records, and did not devise and 

maintain an adequate system of internal accounting controls to prevent these violations.  It 

inaccurately reflected in its books and records that the expenditures of investor funds were for 

legitimate investments and not, in whole or in part, corrupt payments to foreign government 

officials.  Och-Ziff also failed to devise and maintain an adequate system of internal accounting 

controls to prevent these payments.  It failed to follow certain of its own internal accounting 

controls, failed to conduct adequate due diligence, and failed to implement other appropriate 

financial controls to detect or prevent the payment of bribes. 

6. This matter also concerns violations by Daniel S. Och, Chief Executive Officer and 

Chairman of the Board of Och-Ziff, and Joel M. Frank, Chief Financial Officer of Och-Ziff.  As 

Och-Ziff’s Chief Executive Officer, Och had final decision-making authority on all private 

investments by Och-Ziff, including the transactions described above.  Och personally approved the 

expenditure of funds in two transactions with Och-Ziff’s partner in the DRC in which bribes were 

paid.  Those bribes were then inaccurately recorded as investments or loans on Och-Ziff’s books 

and records rather than bribe payments.  As Och-Ziff’s Chief Financial Officer, Joel M. Frank was 

responsible for maintaining the accuracy of Och-Ziff’s books and records and for devising and 

maintaining Och-Ziff’s system of internal accounting controls.  Frank approved the expenditure of 

Och-Ziff funds in transactions in which bribes or improper payments were made.  Both Och and 

Frank were aware of the high risk of corruption in transactions with Och-Ziff’s DRC partner in 

light of his reputation and connections to high level DRC government officials.  Despite these 

risks, Och approved and Frank authorized Och-Ziff to enter into each of these transactions.  As a 

result, although neither Och nor Frank knew that bribes would be paid, Och caused Och-Ziff’s 

books and records violations in two DRC transactions, and Frank caused the company’s books and 

records and internal controls violations in connection with the two DRC Partner transactions and 

the LIA fee payment. 

Respondents 

 

7. Och-Ziff Capital Management Group LLC, an institutional alternative asset 

manager or “hedge fund” incorporated in Delaware with its principal place of business in New 

York, New York.  Och-Ziff’s common stock is registered with the Commission pursuant to Section 

12(b) of the Exchange Act and is listed on the New York Stock Exchange (ticker: OZM).  Och-Ziff 

controls numerous consolidated subsidiaries and affiliates through which it operates and provides 

investment advisory and management services to Och-Ziff investor funds in return for 

management fees and incentive income. 

 

8. OZ Management LP is registered investment adviser and subsidiary of Och-Ziff 

with its place of business in New York, New York.  Since 1999, OZ Management has been 



 

 

 

 

6 

registered with the Commission as an investment adviser.  OZ Management provides asset 

management services to Och-Ziff investor funds.  The financial results of certain Och-Ziff 

subsidiaries, including OZ Management and its subsidiaries and affiliates, are ultimately 

consolidated into the financial statements of Och-Ziff. 

9. Daniel S. Och, age 55, resides in Scarsdale, New York.  Och is the founder, Chief 

Executive Officer, and Chairman of the Board of Och-Ziff, as well as an officer and partner in OZ 

Management.  He is a U.S. citizen. 

10. Joel M. Frank, age 61, resides in New York, New York.  Frank is the Chief 

Financial Officer for Och-Ziff and OZ Management, and an officer and partner in OZ 

Management.  He is a U.S. citizen. 

Bribery of Libyan Officials 

11. In 2007, Och-Ziff Employee A, the head of Och-Ziff’s European office, began 

attempts to obtain clients and investment opportunities in Libya, which had emerged from 

international sanctions and was opening to Western investment and business.  Libya created a 

sovereign wealth fund, the Libyan Investment Authority, to manage the country’s oil and other 

assets.  To help with Och-Ziff’s efforts in Libya, Och-Ziff Employee A enlisted a London-based 

business associate with whom Och-Ziff had previously done business (“Libyan Agent”).  Och-Ziff 

Employee A knew that Libyan Agent had contacts within the Libyan government at the highest 

levels.  Och-Ziff Employee A and others at Och-Ziff also knew that Libyan Agent was not a 

financial consultant or advisor, but rather a middleman whose primary contribution to transactions 

were his connections to foreign government officials and his complicated network of offshore 

entities. 

A. Bribery to Secure the LIA Investment in Och-Ziff 

12. In early 2007, Och-Ziff Employee A sought assistance from Libyan Agent to secure 

an investment mandate whereby the LIA 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.   

13. 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, Libya’s ruler at the time.  This son was the driving 

force behind the creation of the LIA.  A senior executive with the LIA was also at the meeting.  

Och-Ziff Employee A later described this government official as Colonel Gaddafi’s son’s “right 

hand man at the lia [sic].”  Subsequent due diligence by Och-Ziff noted that this individual “looks 

after” the interests of Colonel Gaddafi’s son at the LIA and in a commercial business.  Also present 

at the meeting was a Tunisian business associate of the two Libyan government officials who was 



 

 

 

 

7 

a member of Colonel Gaddafi’s son’s entourage (“Tunisian Agent”).  The two Libyan government 

officials had significant control over investments made by the LIA.  The purpose of this meeting 

was to introduce Och-Ziff Employee A to the foreign officials and the Tunisian Agent in order to 

facilitate the bribery of those officials in exchange for the LIA investing its money with Och-Ziff.   

14. 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 are 

amazing.  They have 77 billion, half in cash and no idea who to give it to.”  Och-Ziff Employee A 

further told Och “I haven’t been this excited in a while.”  Och later asked Och-Ziff Employee A 

about progress with the LIA, to which Och-Ziff Employee A responded:  “I thought you were 

against it so I havent (sic) pursued it.  The agent wants to come in and see me this week.  You OK 

with that?”  Och replied “I will be ok.  Will call you.”  Throughout 2007, Och and Och-Ziff 

Employee A continued to communicate regarding the progress of the LIA investment and the 

agent. 

15. 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.  Och-Ziff Employee A knew that Libyan Agent was acting on 

behalf of these government officials and that Libyan Agent would use the fee from Och-Ziff to 

bribe these government officials to help Och-Ziff obtain an investment from the LIA.  

16. 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.  At the 

same time, Libyan Agent and Och-Ziff Employee A requested from Och-Ziff payment of a fee to 

effectuate the secret agreement Libyan Agent and Och-Ziff Employee A had previously discussed.  

In early December 2007, Och-Ziff agreed to pay Libyan Agent the fee he had negotiated on behalf 

of the government officials with Och-Ziff Employee A.  Och-Ziff also agreed to pay the fee to an 

offshore special purpose vehicle (“SPV”) identified by Libyan Agent rather than directly to Libyan 

Agent himself or his London-based company. 

17. Och-Ziff was aware of risks in dealing both with the LIA and Libyan Agent when it 

agreed to pay his fee.  Respondent Frank and a senior Och-Ziff attorney were involved in the 

decision to pay Libyan Agent for sourcing the LIA investment into Och-Ziff funds, and Frank 

reviewed due diligence reports on Libyan Agent.  Through this report, Och-Ziff was aware of 

Libyan Agent’s connections at the highest levels within the Libyan government, including with the 

Gaddafi family.  Och-Ziff was also aware through a background due diligence report that Libyan 

Agent operated as a “fixer” with opaque business interests run through offshore holding companies 

which made his business interests “hard to pin down.”  According to the report, this meant that 

“there is little documented evidence of [Libyan Agent’s company’s] activities either in the UK or 

internationally.”  Despite the risks, Och-Ziff paid Libyan Agent via his offshore SPV.   



 

 

 

 

8 

18. Och-Ziff conducted no separate due diligence on the shell company designated to 

receive the payment, and entered into contractual obligations with the entity itself rather than 

Libyan Agent, thus placing no restrictions on the agent’s conduct.  These failings were contrary to 

Och-Ziff’s recommended anti-corruption guidelines and internal accounting controls.  

19. Libyan Agent’s role in the transaction was kept secret from LIA officials apart from 

those involved in the bribery scheme.  Libyan Agent did not attend any of the official meetings 

between Och-Ziff and the LIA; he was not copied on email or correspondence with the LIA; and 

his role in facilitating the transaction was not discussed with any employees of the LIA who were 

not part of the bribery scheme.  Frank was involved in the decision to pay Libyan Agent for 

sourcing the LIA investment into Och-Ziff funds.  Based in part on corruption concerns, Och-

Ziff’s internal compliance rules regarding investor solicitations, and conformity with other U.S. 

securities laws that were later determined not to apply, a senior Och-Ziff attorney initially sought 

contractual language requiring proof that Libyan Agent had notified the LIA of his role and the fee 

he was paid by Och-Ziff.  However, Libyan Agent refused to agree to provide such proof, and 

Och-Ziff agreed to remove this obligation and instead allowed Libyan Agent’s entity to represent 

(without requiring proof) that he had notified the LIA of his involvement and fee. 

20. Och-Ziff Employee A knew that Libyan Agent’s role in helping Och-Ziff could not 

be discussed openly with the LIA apart from the officials involved in the bribery scheme.  Och-Ziff 

Employee A also knew that Libyan Agent would not disclose his role and fee to the LIA regardless 

of his contractual obligation to do so.  Och-Ziff Employee A and Libyan Agent discussed ways to 

avoid disclosing Libyan Agent’s role to the LIA, including requiring Libyan Agent to give notice 

to the LIA which he would then fail to deliver.  Och-Ziff Employee A knew that Libyan Agent 

never informed the LIA of his payment by Och-Ziff. 

21. Och-Ziff did not enter into a written agreement directly with Libyan Agent or place 

any restrictions or limitations on Libyan Agent personally.  Instead, in January 2008 Och-Ziff 

executed two agreements with Libyan Agent’s Guernsey-based SPV, but dated those agreements 

as of December 2007.  The first, a consultancy agreement, stated that the SPV “has technical and 

commercial expertise in Libya as a consultant to companies (in particular in information gathering, 

strategic analysis, high level introduction, negotiations, and promotion of projects and 

implementation).”  This description was misleading in that the SPV itself had no interactions in 

Libya and no employees, and Libyan Agent’s involvement was limited to providing an 

introduction to the LIA and paying bribes.  The consulting agreement was also forward-looking 

despite the fact that Libyan Agent had already assisted Och-Ziff since early 2007 in securing the 

LIA investment.  A separate representation letter agreement with the SPV also confirmed that the 

LIA “has been informed in writing of the Agreement and the consideration payable to ourselves 

thereunder.”  This representation was false, and Libyan Agent did not disclose his role in the Och-

Ziff investment to the LIA apart from those officials involved in the bribe scheme.  The second 

agreement also contained anti-corruption representations and warranties by the trustee for the SPV 

receiving the payment, but no such representations or warranties from Libyan Agent, his partner, 

or his London-based entity. 



 

 

 

 

9 

22. 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.  During this period, Libyan Agent also 

directed payments of more than $1 million through his network of offshore companies to benefit 

his longstanding patron in Libya’s state security services.    

23. Och-Ziff did not obtain a copy of any written notification to the LIA regarding 

Libyan Agent, or seek to obtain a copy of such notification at any time.  Further, at no point did 

Och-Ziff inform the LIA of Libyan Agent’s role in securing the LIA investment.  Throughout Och-

Ziff’s interactions with the LIA from 2008 to 2011, at no point did Och-Ziff disclose to the LIA the 

Libyan Agent’s role with Och-Ziff, and Libyan Agent was not copied on communications with the 

LIA or present at any Och-Ziff meetings with the LIA. 

24. Throughout 2008 and 2009, Och-Ziff Employee A continued to use Libyan Agent 

in attempts to solicit additional investments in Libya and from the LIA, touting Libyan Agent’s 

high level connections and ability to use this influence in Libya.  Och-Ziff Employee A used 

Libyan Agent to assist other Och-Ziff portfolio companies in doing business in Libya, including a 

transaction in which Libyan Agent also acted as an agent of the Libyan government.  In January 

2008, Och-Ziff Employee A described Libyan Agent’s Libyan connections to a third-party Och-

Ziff portfolio company as “very close to [the son of Colonel Gaddafi], LIA and other government 

officials.  We have done three deals with him in Tripoli…He has also been instrumental in 

introducing us to LIA as an investor in OZ.”  Och-Ziff Employee A specifically noted Libyan 

Agent’s ability to “get things done” and “deliver” on a deal in Libya.  Och-Ziff Employee A failed 

to inform Och-Ziff legal or compliance that Och-Ziff’s agent for the LIA transaction was also 

acting as an agent of the Libyan government at the same time.   

25. In its books and records, Och-Ziff recorded the fee paid to Libyan Agent as 

“Professional Services – Other.”  This designation was inaccurate; the payment was for an 

introduction and to pay bribes, and not for professional services. 

26. Based on the foregoing facts, Och-Ziff violated Sections 30A and 13(b)(2)(A) and 

13(b)(2)(B) of the Exchange Act through its intentional payment of bribes to Libyan government 

officials, inaccurate recording of the bribe payments on its books and records, and failure to devise  

or maintain internal accounting controls sufficient to provide reasonable assurances that its funds 

would not be used to pay bribes.  Further, by his acts or omissions Frank caused violations of 

Sections 13(b)(2)(A) and 13(b)(2)(B) by Och-Ziff. 

B. Bribery Relating to Libyan Property Development Project 

27. In October 2007, Och-Ziff invested in a hotel and office tower project in Libya.  

This project was founded and controlled by Libyan Agent, and Och-Ziff began its investment into 

the project at the same time it was using Libyan Agent to solicit funds from the LIA.  For Och-Ziff 



 

 

 

 

10 

Employee A, the development project was “making a bet on Libya here and relationship [with 

Libyan Agent].” 

28. Prior to Och-Ziff’s investment, Libyan Agent provided equity stakes in the 

company to his Libyan patron and to a daughter of Colonel Gaddafi in exchange for valuable land 

leases on key properties on which the developments would be built.  Och-Ziff Employee A and 

other Och-Ziff investment professionals in London were aware of the involvement of the Gaddafi 

family in the development project.  In one review of the project Och-Ziff Employee A wrote 

“Gathafi Hotels” to describe a subsidiary of the project.  Later, while Och-Ziff held a board seat at 

the development company, Och-Ziff’s board representative for the development company received 

emails that described Colonel Gaddafi’s daughter as “our JV partner” at the development 

company. 

29. At Och-Ziff Employee A’s urging, Och-Ziff provided a convertible loan of $40 

million to the development company in October 2007.  Och-Ziff Employee A also agreed to pay a 

$400,000 deal fee to Libyan Agent for sourcing the transaction.  Because ongoing bribes were 

necessary to operate the project in Libya, a portion of the deal fee paid to Libyan Agent by Och-

Ziff went towards bribes.  Och-Ziff Employee A knew that Libyan Agent would use the deal fee to 

pay bribes to benefit the development project.   

30. Och-Ziff approved the payment of the $400,000 deal fee in November 2007 

without conducting separate due diligence on the offshore SPV receiving the funds or, apart from 

Och-Ziff Employee A, understanding the justification for the payment.  Further, Och-Ziff did not 

enter into a contract with Libyan Agent or the SPV receiving the fee before it was paid.  Och-Ziff 

therefore paid the deal fee without taking sufficient steps to detect or prevent the payment of bribes 

by Libyan Agent using investor funds.     

31. Based on the foregoing facts, Och-Ziff violated Sections 30A and 13(b)(2)(A) and 

13(b)(2)(B) of the Exchange Act through its intentional payment of a bribe to a Libyan government 

official, inaccurate recording of the bribe payment on its books and records, and failure to devise  

or maintain internal accounting controls sufficient to provide reasonable assurances that its funds 

would not be used to pay bribes.   

Books and Records, Internal Controls, and Advisers Act Violations in AGC I 

32. Beginning in 2007, Och-Ziff formed the African Global Capital (“AGC”) joint 

venture to invest in natural resource assets in Africa.  The project was led by Och-Ziff Employee A 

and employees in Och-Ziff’s European office.  Och-Ziff co-managed the fund and provided 

capital, infrastructure (including compliance support), and investment expertise to AGC.  Och-Ziff 

held its advisory and management interest in AGC through Africa Management Limited (“AML”), 

which was registered as an affiliated adviser to OZ Management in March 2008.  AML was owned 

40% by Och-Ziff and 60% by its joint venture partner.  OZ Management held its advisory and 

management interest in AML through a wholly-owned and controlled subsidiary, OZ Africa 



 

 

 

 

11 

Management GP, LLC (“OZ Africa Management”), but Och-Ziff had joint control over all 

investments and operations of AGC and AML.  The first fund, AGC I, was funded using existing 

Och-Ziff investor funds.   

33. As part of its strategy, Och-Ziff teamed with business partners with high-level 

political connections in Africa, who in turn used these connections to source deals for the fund and 

navigate political issues in the various countries.  In pursuit of business, Och-Ziff did not impose 

adequate controls on the use of investor funds by its business partners or conduct due diligence into 

the specific uses of investor funds by those partners.  As a result, Och-Ziff’s business partners 

misused investor funds, enriched themselves, and paid bribes to various government officials.   

34. Och-Ziff chose a prominent figure in South Africa as a potential partner for AGC.  

This individual was a former government official as well as a successful businessman through his 

South African-based conglomerate.  Although Och-Ziff envisioned his conglomerate as a part of 

AGC, it never became part of the joint venture.  However, the co-founder of his South African 

conglomerate became the Chief Executive Officer of AML despite the conglomerate not 

contributing assets to the joint venture.  An individual with a close connection to the co-founders 

of the South African conglomerate (“South African Business Partner”) became Och-Ziff’s partner 

in AGC despite having a limited history of mining operations in Africa.  South African Business 

Partner controlled a private operating entity domiciled outside of South Africa, and he was 

designated to source and acquire assets for AGC.   

35. The first step towards the creation of AGC I took place in May 2007 when Och-Ziff 

entered into a series of loan agreements with South African Business Partner’s entity.  These loans, 

totaling more than $86 million, were ostensibly made to acquire mining rights in Africa which 

would then be contributed into AGC I upon its formation, to buy out minority shareholders in those 

assets, and to then fund mining operations.  South African Business Partner used part of the funds 

loaned by Och-Ziff to acquire mining rights in Chad and Niger and to invest in an Africa-focused 

oil company, Company A.  He also used a portion of the funds to pay bribes to facilitate the 

acquisitions.  In 2008, the assets acquired by South African Business Partner were contributed to 

AGC I, and Och-Ziff converted its existing loan into an equity stake in AGC I.  Prior to the 

inclusion of these assets into AGC I, Och-Ziff conducted due diligence into South African 

Business Partner’s ownership of the assets through various SPVs and subsidiaries.  However, Och-

Ziff failed to conduct any due diligence or investigation into how South African Business Partner 

spent the loan from Och-Ziff funds, how he had acquired the assets contributed to the joint venture, 

what minority investors had been bought out, or whether the assets were acquired through bribery 

using Och-Ziff investor funds. 

36. Although Och-Ziff imposed representations and warranties on its business partner 

and required then to take Foreign Corrupt Practices Act (“FCPA”) training, as noted below, Och-

Ziff did not impose sufficient controls on, and did not investigate what those partners were actually 

doing with Och-Ziff investor funds despite suspicion that its business partners were engaged in 

corrupt transactions and self-dealing.  In particular, Och-Ziff Employee A knew or was willfully 



 

 

 

 

12 

blind to the high probability that South African Business Partner would use the loan proceeds to 

pay bribes to government officials in order to win mining deals.  In 2007 prior to Och-Ziff’s loan, 

Och-Ziff Employee A learned that South African Business Partner had access to certain deals 

through bribes or corrupt schemes.  One deal presented to Och-Ziff Employee A in March 2007 by 

South African Business Partner would have cost “$20-$25 million (includes $5 million for the 

ongoing Presidential campaign…).”  Och-Ziff did not participate in this particular deal, but did 

enter into multiple agreements with the individuals proposing the bribery scheme through its 

ongoing investments with South African Business Partner and Company A over the next four 

years.  Following the formation of AGC, others at Och-Ziff, including the legal and compliance 

groups, learned that South African Business Partner had engaged in potential unlawful activities in 

the past.  In one regulatory filing in early 2008, Och-Ziff informed a foreign government regulator 

that South African Business Partner had engaged in potentially criminal activity in Angola relating 

to an asset he sought to sell to AGC I.  Also in early 2008, Och-Ziff’s legal and compliance group 

stopped a potential AGC I transaction in which the local Zimbabwean partner in a coal transaction 

identified by South African Business Partner was reportedly a front for a high-ranking 

Zimbabwean government official.  Despite this information, Och-Ziff continued to provide funds 

to and do business with South African Business Partner through 2011 without sufficient oversight 

over his use of investor funds. 

37. Och-Ziff knew that South African Business Partner was using Och-Ziff funds to 

purchase mining rights either from foreign governments or unknown third-parties, buy out 

minority shareholders in various entities, and pay substantial amounts to “consultants” with no 

explanation for the work done to justify these payments.  Och-Ziff Employee A acknowledged in 

2007 to his AGC partners that “you buy assets and sign contracts without our approval, but thats 

[sic] what you guys do best and we let you do it.”  Och-Ziff Employee A was willing to allow 

South African Business Partner to operate without oversight because he knew or was willfully 

blind to the high probability that bribes would be paid to acquire assets.  Others at Och-Ziff 

recognized the potential FCPA risks in dealing with South African Business Partner and investing 

in mining transactions Africa.  For example, in 2007, during a meeting to discuss private 

investments by Och-Ziff Europe, a presentation regarding AGC noted that “imposing [Och-Ziff’s] 

standards of care on [AGC] going forward…has proved a particularly contentious issue with 

respect to FCPA rules as an example but is a must.”  This presentation further stated that “[o]ne of 

the most difficult areas has been finding the right disincentive to our partners for any breach [of 

FCPA and Och-Ziff’s standards].  This is key as we are not the ones controlling what happens on 

the ground.”  Despite understanding the risks, Och-Ziff did not conduct adequate due diligence to 

investigate whether AGC I assets were being acquired through bribery. 

38. Of the total amount contributed by Och-Ziff towards the Chad and Niger mining 

assets, only a portion went towards mining-related costs.  South African Business Partner used a 

significant portion of the funds he was provided to pay bribes to proxies for high ranking 

government officials in Chad and Niger in order to secure assets for AGC.  These bribes were 

falsely classified on an AGC I portfolio company’s books as consultant payments, law firm 

payments, house rentals, and charitable contributions, among other designations.  “Bribe accounts” 



 

 

 

 

13 

were created and maintained by employees of a subsidiary of South African Business Partner’s 

company in Chad, whereby funds loaned by Och-Ziff supposedly to fund mining operations 

actually went towards bribes to ministers and governors, including “house repairs” and medical 

assistance for these officials.  Och-Ziff failed to audit or review the expenditure of its funds by 

South African Business Partner to ensure compliance with Och-Ziff’s internal anti-corruption 

policies and financial controls.   

39. Millions of dollars in Och-Ziff investor funds also went to personally enrich South 

African Business Partner, the CEO of AML, and the South African businessman who Och-Ziff 

touted as an AGC partner.  Och-Ziff’s business partners also used funds provided by Och-Ziff to 

provide travel to African government officials, including officials from Zimbabwe and South 

Africa.  Och-Ziff did not take sufficient steps to review South African Business Partner’s 

expenditures or prevent this self-dealing by its partners. 

40. The misuse of Och-Ziff investor funds continued after the formation of AGC I.  In 

2008, Och-Ziff agreed to pay over $10 million based on claims that an African-based aircraft pilot 

had purchased uranium rights in Niger and then sold those rights in part to South African Business 

Partner.  South African Business Partner represented to Och-Ziff that he had paid the pilot for 

those rights, though Och-Ziff saw no proof of payments by either the pilot or South African 

Business Partner. Nonetheless, Och-Ziff agreed to reimburse South African Business Partner for 

his alleged payments.  In doing so, Och-Ziff did not conduct a review of the claimed expenses, did 

not confirm that the funds had actually been expended by the pilot to acquire the assets or by South 

African Business Partner to reimburse him, and did not to investigate whether bribes were paid to 

acquire these assets.  After approval by Och-Ziff, AGC I transmitted the funds to South African 

Business Partner’s entity, not the pilot.  South African Business Partner then used these funds to 

pay bribes to government officials in Chad and Niger and to enrich himself and his business 

partners.   

41. Based on the foregoing facts, Och-Ziff violated Sections 13(b)(2)(A) and 

13(b)(2)(B) of the Exchange Act through its inaccurate recording of the payments to South African 

Business Partner on its books and records, and failure to devise or maintain internal accounting  

controls sufficient to provide reasonable assurances that its funds would not be used to pay bribes 

and for other improper purposes.  In addition, OZ Management violated Sections 206(1) and 

206(2) of the Advisers Act by failing to prevent the use of managed investor funds by its business 

partner in corrupt and self-dealing transactions. 

Bribery in the Democratic Republic of the Congo  

42. Beginning in 2008, Och-Ziff entered into a partnership an infamous Israeli 

businessman with close ties to government officials at the highest level within the DRC (“DRC 

Partner”).  Although Och-Ziff did not enter into a written partnership agreement with DRC Partner, 

Och-Ziff Employee A, Och-Ziff Employee B, and DRC Partner all understood the nature of the 

partnership and its purpose.  The purpose of the partnership was for Och-Ziff to fund DRC 



 

 

 

 

14 

Partner’s multiple mining-related interests in the DRC while he used his government contacts to 

acquire assets and navigate the DRC business environment for his and Och-Ziff’s benefit.  Och-

Ziff and DRC Partner worked to acquire and consolidate assets in the DRC into an entity 

controlled by DRC Partner that could then be sold to a large publicly-traded mining company for a 

significant profit.  Och-Ziff Employee A and Och-Ziff Employee B, however, understood that 

DRC Partner would use the funds Och-Ziff provided to him to pay bribes to government officials 

in order to maintain his corrupt relationships, acquire assets with the help of his government 

benefactors, acquire assets at a significant discount to the true value of the asset, and gain favor for 

his mining interests in the DRC. 

A. Och-Ziff Knew the High Risk Of Bribery In Dealing with DRC Partner 

43. From Och-Ziff’s first contact with DRC Partner in 2006, Och-Ziff Employee A was 

aware of allegations that DRC Partner used corruption and bribery in his dealings in the DRC.  

Och-Ziff Employee A emailed a third-party in 2006 that DRC Partner “has some skeletons,” and 

that he “has some suits outstanding regarding him bribing the drc gov.”  Undeterred, Och-Ziff 

Employee A went forward with DRC Partner as Och-Ziff’s business partner in the DRC. 

44. In early 2008 Och-Ziff then began discussions with DRC Partner to invest in and 

consolidate DRC mining assets.  At that time, DRC Partner informed Och-Ziff Employee A and 

Och-Ziff Employee B that he paid bribes to maintain his relationships with government officials in 

the DRC, and that such bribes were the key to his ability to secure valuable assets.  Over the course 

of the relationship, Och-Ziff Employee A and Och-Ziff Employee B learned additional information 

regarding DRC Partner’s extensive relationships with government officials, secret deal terms with 

third-parties, ability to operate with impunity in the DRC, favorable treatment from the 

government, and access to deals not available to others.  Neither Och-Ziff Employee A nor Och-

Ziff Employee B took steps to cease the relationship.  Instead, they continued to champion DRC 

Partner within Och-Ziff and consider new business opportunities with DRC Partner over the next 

four years. 

45. Others within Och-Ziff, including Och and Frank, were aware of corruption 

accusations against DRC Partner, as well as the high corruption risk when doing business in the 

DRC.  In fact, in his February 14, 2008 email to a due diligence firm requesting a background 

report on the DRC Partner, the Och-Ziff attorney making the request noted that the DRC Partner 

“will be very easy to find … perhaps the impetus behind the movie ‘Blood Diamonds.’”   

46. A week later, the Och-Ziff attorney received the initial findings of the due diligence 

firm, which he forwarded to other senior executives at OZ, including Och-Ziff Employee A, Och-

Ziff Employee B, a senior Och-Ziff attorney, outside counsel, and Frank.  The report detailed DRC 

Partner’s history of suspicious transactions, allegations of illegal conduct, and close connections at 

the highest levels in the DRC government, stating among other things that: 



 

 

 

 

15 

a. DRC Partner “is considered one of the most well-connected foreigners in the 

DRC… He is known to enjoy an extremely close relationship with [a senior DRC 

government official].” 

b. DRC Partner was identified on several “compliance Watch Lists” as a “politically 

exposed individual as a result of his close ties to the DRC government.” 

c. DRC Partner operated through a “complex” network of company structures “spread 

across multiple jurisdictions” using “more elaborate structures with trusts and 

investment companies acting as the investor on his behalf.  The opacity of his 

company structures has been highlighted by interested parties as an issue of 

concern…” 

d. DRC Partner’s business dealings in the DRC began in 2000 when he was awarded a 

diamond export monopoly valued at $600 million for which he allegedly paid only 

$20 million.  This payment was supposedly used to pay debts incurred by the then-

president of the DRC during the civil war in that nation.  It was later alleged that 

DRC Partner secured his monopoly “in exchange for providing military training” to 

government forces in the DRC. 

e. In a lawsuit against DRC Partner, it was alleged that he had bribed DRC 

government officials and Angolan military officers in exchange for receiving an 

exclusive diamond export license. 

f. DRC Partner was “happy” and “willing to use his significant political influence 

with [a high-level DRC government official] and his clique to facilitate 

acquisitions, settle disputes and frustrate competitors.”  In disputes with DRC 

mining rivals, DRC Partner was “rumoured to have used his influence with [senior 

DRC government official’s] closest aide, and former [DRC provincial] governor in 

order to settle the dispute in his favour.” 

g. DRC Partner’s involvement in the DRC and other countries has “tarnished his 

reputation and has led some Western companies to question whether they should be 

involved with him.”  Based on his history and reputation “a number of London 

based advisors would not act for [a DRC mining company] or associated (sic) with 

the listing and many fund managers declined” investment deals “due to [DRC 

Partner’s] involvement.” 

47. Based upon the report and other publicly available information, the Och-Ziff 

attorney expressed to his supervisors, including a senior Och-Ziff attorney and Frank, strong 

concerns about doing business with the DRC Partner and his view that the company should not do 

business with him.  Both Och and Frank received due diligence on DRC Partner.  The corruption 

risks identified during due diligence were so significant that Frank and a senior Och-Ziff attorney 



 

 

 

 

16 

went to Och to argue that Och-Ziff should not do business with DRC Partner in any transaction.  

Frank’s concerns included the reputational and legal risks inherent in dealing with DRC Partner, 

including the risk of a government investigation into Och-Ziff’s dealings with DRC Partner should 

they come to light.  In a meeting in or about February 2008, Och, Frank, and the senior attorney 

discussed the risk of corruption that would exist in any relationship with DRC Partner.  Och was 

told that although it was not illegal to transact with DRC Partner, nonetheless both Frank and the 

senior Och-Ziff attorney expressed the view that Och-Ziff should not enter into any transaction 

with him because of the significant corruption risk.  Och instructed Frank and others to move 

forward on potential transactions with DRC Partner unless new information was uncovered.   

B. Suspicious Payments in Zimbabwe 

48. In or about April 2008, for its first transaction with DRC Partner, Och-Ziff invested 

in a London stock exchange-listed mining company with operations in the DRC.  DRC Partner was 

a significant shareholder in this entity, and he stated in an email to Och-Ziff Employee A that he 

wanted to have Och-Ziff as his “long-term partner,” and that he had “facilitated Och-Ziff’s 

investment at an attractive time/price knowing that you see the bigger picture in all of this.  What 

the bigger picture looks like, is yet to be determined, but it is your partner who is holding the pen – 

I just need flexibility on the drawing board [t]o create full value for our partnership.”   

49.   According to the mining company’s placement announcement, the offering of new 

shares to which Och-Ziff subscribed was intended to fund the company’s ongoing mining efforts in 

the DRC.  The due diligence report that Och-Ziff received on DRC Partner noted that this mining 

company had a “troubled relationship with the DRC government,” that accusations of money 

laundering against the company had been made by the DRC minister of mines, and that one major 

shareholder in the entity (“Zimbabwe Shareholder”) had been expelled from the DRC.  The report 

also noted that the company’s mining license was “under review” in the DRC.   

50. Och-Ziff Employee B traveled to Zimbabwe and the DRC in March 2008 and met 

Zimbabwe Shareholder prior to the transaction, purportedly to assess the company’s assets and 

infrastructure.  After this trip, Och-Ziff negotiated a lower share price and then doubled its 

investment in this company to a total of $150 million.  Och-Ziff thereafter funded approximately 

$150 million from its managed investor funds in March 2008 to purchase shares in the mining 

company. 

51. Within days of the investment, the mining company publicly announced that it had 

acquired an interest in a platinum asset in Zimbabwe.  This was inconsistent with Och Ziff’s 

understanding that money would be used for existing DRC mining operations.  The Zimbabwean 

government had recently seized the platinum asset from another mining entity and then resold it to 

a holding company affiliated with the Zimbabwe Shareholder and the Zimbabwe state owned 

mining company.  The Zimbabwe Shareholder then transferred the holding company to the DRC-

based mining company in exchange for additional shares in the mining company.  The same 

announcement also noted that the mining company had agreed to loan $100 million to the holding 



 

 

 

 

17 

company following the acquisition.  Och-Ziff was aware of subsequent press reports, denied by the 

mining company, alleging that the proceeds of that loan were diverted to a political party in 

Zimbabwe.   

52. In June 2008, Och-Ziff Employee A forwarded to Och-Ziff Employee B a text 

message from the CEO of AML which said that the mining company Och-Ziff had just invested in 

had “paid 4 arms into zim[babwe], and rented boat from china.  Journo has bank transfers, 

aparently [sic].”  Neither informed anyone else at Och-Ziff of these accusations, took steps to 

determine whether these accusations were true, or limited Och-Ziff’s relationship with DRC 

Partner or the mining company. 

C. Corrupt Takeover of DRC Mining Company 

53. Also in April 2008, Och-Ziff caused AGC I to enter into an approximately $124 

million convertible loan with a holding company affiliated with DRC Partner.  The stated uses of 

these funds were threefold:  first, to provide DRC Partner with approximately $15 million to 

purchase a Congolese entity that had acquired the rights to a valuable mining asset in the DRC (the 

longstanding asset of a Canadian mining company) through an ex parte default judgment in the 

DRC that resulted in judicial misconduct proceedings; second, to provide DRC Partner with 

approximately $100 million to purchase a majority stake in that Canadian mining company in 

exchange for resolving its legal issues; and third, to advance an additional $9 million to be used for 

future mining operations in the DRC.  Och-Ziff Employee A and Och-Ziff Employee B knew that 

the true purpose of the transaction, however, was to provide DRC Partner with funds to pay bribes 

to facilitate the takeover of the Canadian mining company for the benefit of Och-Ziff and DRC 

Partner.   

54. Och-Ziff Employee A structured the transaction as a convertible loan.  The 

company had received legal advice from outside counsel indicating that less due diligence on the 

use of proceeds and counterparties was required in a standard commercial convertible loan versus 

an equity investment.  However, in March 2008 outside counsel also advised Och-Ziff that any 

transaction with DRC Partner would be “high risk,” but: 

“[P]rovided [DRC Partner] has no discretion with regard to how to spend the proceeds of 

the loan, we see no AML or anti-corruption issue.  If he has any discretion, our answer will 

be different and we need to discuss further.”    

55.  Och-Ziff was also advised to consider a “right of audit” post-transaction, 

depending on DRC Partner’s “foreseeable role” should Och-Ziff convert its loan into equity.  Och-

Ziff then proceeded with the convertible loan.  Och-Ziff obtained representations and warranties 

regarding anti-corruption from the holding company receiving the loan but not from DRC Partner, 

and did not undertake additional due diligence into DRC Partner or his assets in the DRC. 



 

 

 

 

18 

56. The transaction gave Och-Ziff control over what assets could be bought or sold by 

the entity, equity conversion rights into DRC Partner’s entity, a pledged interest in the shares of the 

Congolese entity, and a right to future deals with DRC Partner in the DRC.  Moreover, the 

transaction gave DRC Partner complete discretion over how to use approximately $24 million of 

the funds provided by Och-Ziff.  Further, Och-Ziff understood this transaction was part of a 

broader, ongoing partnership with DRC Partner.  Finally, both Och-Ziff Employee A and Och-Ziff 

Employee B knew that DRC Partner was going to use a portion of the funds to pay bribes, and 

knew that the transaction was structured to accomplish that goal.  This knowledge was not shared 

with others within Och-Ziff or with outside counsel. 

57. DRC Partner used the first tranche of approximately $15 million provided by Och-

Ziff to bribe Congolese government officials.  Och-Ziff provided these funds to DRC Partner 

purportedly to purchase the Congolese entity while the legal action involving the Congolese entity 

was still in progress in the DRC courts.  Och-Ziff, through an AGC I subsidiary created 

specifically for this transaction, sent the funds to a client account at DRC Partner’s law firm in 

Gibraltar.  From there, Och-Ziff had no ability to control or limit DRC Partner’s use of those funds 

or even to trace where the funds went.  DRC Partner then bribed multiple DRC government 

officials, including judges, to secure the legal judgment that gave him the leverage to buy a 

controlling interest in the Canadian mining company.   

58. The Canadian mining company voted to approve a private placement to effectuate 

the takeover by DRC Partner and Och-Ziff in June 2008.  Och-Ziff was involved in the takeover 

proceedings in Canada as the financial backer of DRC Partner.  Once approved, Och-Ziff sent an 

additional approximately $100 million through which DRC Partner acquired a majority stake in the 

listed shares in the Canadian mining company.   

59. The third tranche of the transaction involved loaning an additional $9 million to 

DRC Partner.  Contrary to the original structure of the deal which required DRC Partner to use the 

funds on mining expenses, in October 2008 Och-Ziff instead agreed to provide these funds to DRC 

Partner to compensate him for previously incurred DRC expenses, thus giving him discretion over 

how he spent the funds provided.  As a result, Och-Ziff failed to conduct proper due diligence or 

limit DRC Partner’s discretion in his use of the funds.  Och-Ziff again transferred the money to 

DRC Partner’s law firm account in Gibraltar.  DRC Partner, in turn, used the money to fund his 

ongoing bribe payments in the DRC. 

60. After providing the $9 million to DRC Partner, beginning in November 2008 Och-

Ziff conducted a review of his past expenses to determine whether DRC Partner had actually spent 

funds on DRC mining operations.  During this review, Och-Ziff Employee B and other AGC 

employees learned that records kept by DRC Partner disclosed payments for travel expenses 

questionable expenses, and “gratuities” for the benefit of DRC government officials.  This 

prompted one AGC employee to note in a draft report:  “Satisfactory answers could not be 

extracted during my discussions … for some of these expenses and it leads one to believe that 

these are actually the costs of maintaining ‘political alignment’ and for ‘protocol’ with the 



 

 

 

 

19 

authorities in the DRC – in other words with senior Government officials.  This issue needs to be 

investigated at the highest level directly with [DRC Partner].  This issue should be flagged as 

a concern considering AGC’s compliance requirements.” (emphasis in original)  Rather than 

investigate or report these potential bribe payments, Och-Ziff Employee B caused others to edit the 

report to remove the reference to corruption and call for investigation. 

61. Based on the foregoing facts, Och-Ziff violated Sections 30A and 13(b)(2)(A) and 

13(b)(2)(B) of the Exchange Act through its intentional payment of bribes to DRC government 

officials through its 2008 convertible loan transaction with DRC Partner, inaccurate recording of 

the bribe payments on its books and records, and failure to implement or maintain appropriate 

internal accounting controls to prevent the use of its funds to pay bribes.  Further, by his acts or 

omissions Och caused violations of Section 13(b)(2)(A) of the Exchange Act by Och-Ziff, and by 

his acts or omissions Frank caused violations of Sections 13(b)(2)(A) and 13(b)(2)(B) by Och-Ziff.  

In addition, OZ Management violated Section Sections 206(1) and 206(2) of the Advisers Act by 

failing to prevent the use of managed investor funds in corrupt transactions by DRC Partner in the 

2008 convertible loan transaction.  

D. Bribes To Consolidate and Sell DRC Assets 

62. Och-Ziff’s relationship with DRC Partner continued throughout 2009 and 2010.  

During that time, Och-Ziff learned of additional transactions in which DRC Partner acquired 

mining assets in the DRC under suspicious circumstances.  Och-Ziff considered and ultimately did 

not invest capital in these other transactions, but did not sever its relationship with DRC Partner.  

During this time, DRC Partner acquired additional assets yet failed to repay the initial loan, which  

Och-Ziff extended without negative repercussions on the relationship.  Further, Och-Ziff Employee 

A and Och-Ziff Employee B continued to work on new transactions and funding ideas with DRC 

Partner. 

63. During the course of the relationship, Och-Ziff was aware of DRC Partner’s ability 

to influence DRC government officials.  Och-Ziff Employee B used DRC Partner to set up 

meetings for Och-Ziff and its partners with multiple DRC senior government officials, including a 

high level executive with the state owned mining company.  Och-Ziff Employee B, Och-Ziff 

Employee A, and others frequently discussed DRC Partner’s high-level connections in the DRC, 

including his “key guy,” a top advisor to a senior DRC government official, and secret agreements 

with other government officials.  

64. In November 2010, DRC Partner asked Och-Ziff Employee A to provide him with 

a margin loan as part of his efforts to consolidate his DRC operations.  The purpose of the loan was 

not made clear to others within Och-Ziff, nor was the intended use of all proceeds specified by 

DRC Partner.  DRC Partner’s representatives noted that the funds were needed to make 

intercompany loans and “fund existing activities” and “acquisitions of other interests” by DRC 

Partner.  Och-Ziff did not conduct due diligence on the corruption risk or the intended use of 

proceeds, but did conduct diligence on the publicly-traded stock that secured the loan.  Och-Ziff 



 

 

 

 

20 

made this loan from Och-Ziff funds rather than through AGC II.  The principal loan amount was 

increased in February 2011.  All told, Och-Ziff loaned $130 million to DRC Partner in 2010-2011. 

65. Och-Ziff did not follow its internal controls or conduct sufficient due diligence on 

the intended use of proceeds by DRC Partner.  A portion of the loan went to pay down an 

outstanding third-party debt for DRC Partner.  Och-Ziff provided the remainder of the loan, more 

than $84 million, to DRC Partner with no insight into DRC Partner’s use of proceeds, although 

Och-Ziff knew that he would use the money to fund additional acquisitions and ongoing activities 

among his network of offshore entities.  Och-Ziff again transferred money from its investor funds 

to DRC Partner’s law firm client account in Gibraltar, after which Och-Ziff had no insight or 

control over how DRC Partner used the funds.  DRC Partner used a portion of the funds provided 

by Och-Ziff to pay bribes in the DRC.   

66. Och-Ziff Employee A and Och-Ziff Employee B knew that DRC Partner would use 

the money provided by Och-Ziff to pay bribes.  These bribes were part of his efforts to acquire 

additional assets and consolidate his DRC holdings in order to sell those holdings to a third-party 

mining company.  Och-Ziff Employee A and Och-Ziff Employee B expected this consolidation to 

benefit Och-Ziff by receiving repayment and interest on its loans, which was accomplished in 

2012.  Och-Ziff Employee A, Och-Ziff Employee B, and the CEO of AGC were all involved in 

DRC Partner’s efforts to sell his DRC holdings and acquire additional assets.  Och-Ziff continued 

to seek new deals from DRC Partner during this time, including deals relating to Company A and 

AGC I.  

67. In December 2012, the outstanding loans relating to DRC Partner were repaid to 

Och-Ziff in full, with interest, as part of a transaction in which DRC Partner sold his DRC mining 

entities to a third-party mining company. 

68. Based on the foregoing facts, Och-Ziff violated Sections 30A and 13(b)(2)(A) and 

13(b)(2)(B) of the Exchange Act through its intentional payment of bribes to DRC government 

officials through its 2010 and 2011 transaction with DRC Partner, inaccurate recording of the bribe 

payments on its books and records, and failure to devise or maintain internal controls sufficient to 

provide reasonable assurances that its funds would not be used to pay bribes.  Further, by his acts 

or omissions Och caused violations of Section 13(b)(2)(A) of the Exchange Act by Och-Ziff, and 

by his acts or omissions Frank caused violations of Sections 13(b)(2)(A) and 13(b)(2)(B) by Och-

Ziff.  OZ Management further violated Sections 206(1) and 206(2) of the Advisers Act by failing 

to prevent the misuse of managed investor funds in corrupt transactions by its business partner in 

the 2010 and 2011 transaction. 

Misrepresentations, Self-dealing, and Misuse of Investor Funds in AGC II 

69. The second part of Och-Ziff’s Africa strategy, AGC II, was formed in 2008.  While 

AGC I was a closed fund to which only Och-Ziff managed investor funds contributed capital, for 

AGC II Och-Ziff sought capital from multiple outside investors, and successfully marketed the21 

fund to one existing OZ Management limited partner, a private entity (“the Investor”).  In addition, 

a separate fund made up of investments by individual Och-Ziff partners (“OZ Partners Fund”) 

agreed to fund AGC II in an amount equal to the Investor.   

A. Material Omissions From Company A Transaction 

70. In July2009, Och-Ziff learned that in government-to-government discussions 

between high-level government officials from South Africa and Congo-Brazzaville that Company 

A, an AGC oil exploration portfolio company, had been given the opportunity to buy a 25% stake 

in an oil field off the coast of Congo-Brazzaville.  According to Company A’s CEO, this was “an 

excellent opportunity afforded to us from the close relationship between [the ruling political party 

in South Africa] and [senior Congo-Brazzaville government official] and our prior efforts in Congo 

B.”   

71. Och-Ziff was told that Company A had purportedly been designated by a high-

ranking South African government official to participate in this transaction for reasons not fully 

described to Och-Ziff.  Och-Ziff later learned that a third-party South African entity was to be 

given a 25% interest in Company A’s stake in the oil asset.  This interest was to be a “free carry” 

for the South African-designated entity, meaning Company A would fund the entire purchase of 

the oil asset from the current owner (an Italian oil company) and also fund all ongoing costs 

associated with the oil asset while the South African-designated entity received a percentage of the 

equity at no cost.  Company A initially described this partner in various communications as either 

“Partner X” or “the government.”  After “Partner X” was named, Och-Ziff conducted due 

diligence and learned of allegations relating to its South African owners for corruption, arms 

dealing, and ties to the ruling South African political party.  One of the owners of “Partner X” was 

described in a background report as an “associate and benefactor” of a high-ranking South African 

government official.  Apart from receiving the free equity interest, the South African entity was to 

have no overt role in the transaction or in the ongoing oil asset.  When the South African entity 

refused to provide sufficient explanation as to its role in the transaction, Och-Ziff declined to 

participate in the transaction in January 2010. 

72. In February 2010, Och-Ziff Employee A and others at AGC made a new push to 

get the transaction approved.  This time, the CEO of Company A claimed that South African 

Business Partner, who himself had close ties to South African politicians, was given the 

opportunity to invest in the oil asset by the government of Congo-Brazzaville to compensate him 

after his prior interests in Congo-Brazzaville (which had been funded by Och-Ziff via its 2007 

loan) were awarded to another entity.  South African Business Partner then purportedly designated 

Company A (in which he and AGC I held interests) as his proxy for this opportunity.  Under the 

new terms, South African Business Partner would also receive $13 million from Company A 

(funded by AGC II) as compensation for his prior losses.  Another individual with close ties to a 

high-ranking government official in Congo-Brazzaville (“CB Intermediary”) would now 

participate in the transaction as an additional introducer.  CB Intermediary was to be compensated 

for his role in arranging the transaction between South African Business Partner and the high-



 

 

 

 

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ranking government official in Congo-Brazzaville.  For his efforts, CB Intermediary would receive 

a $5 million payment as well as 25% of Company A’s stake in the project at no cost.     

73. Och-Ziff recognized that the change of circumstances surrounding the resurrected 

deal constituted a significant corruption risk, but nonetheless began work to complete the deal.  As 

part of due diligence, the CEO of Company A, South African Business Partner and CB 

Intermediary all submitted affidavits in which each confirmed the second origin story and the 

involvement of CB Intermediary.  Och-Ziff Employee A championed the deal within Och-Ziff.  

Others at Och-Ziff, including Frank and members of the legal and compliance team, continued to 

have reservations with the transaction and the truthfulness of the parties.  This led to a conference 

call where one Och-Ziff attorney called from his vacation in Italy in an effort to stop the deal from 

going forward.  However, at Och-Ziff Employee A’s urging, Och-Ziff agreed to the investment. 

74. Because the transaction involved payments to a related party for AGC II, South 

African Business Partner, Och-Ziff needed to obtain the consent of the Investor in order to 

proceed.  Och-Ziff described the second origin story for the transaction and outlined the stated 

reasons for payments to South African Business Partner and CB Intermediary.  The disclosure 

stated that lawyers had reviewed the relevant facts and documents and had provided an opinion as 

to the compliance of the deal with applicable laws and regulations.  Yet Och-Ziff did not inform 

the Investor of all of the material circumstances surrounding the transaction or how the transaction 

came to Company A.  Och-Ziff failed to disclose any facts regarding the initial sourcing of the 

transaction or the initial presence of a different proposed partner in the deal.  Och-Ziff also failed to 

inform the Investor that, under the original transaction terms, there were no payments to any 

intermediaries, including South African Business Partner.  Further, Och-Ziff failed to inform the 

Investor that neither South African Business Partner nor CB Intermediary had a role in sourcing 

the transaction when it was initially presented.  The omitted information was material to the 

corruption risk and the validity of paying $18 million to two intermediaries in the transaction.  

Och-Ziff also informed the Investor that steps would be taken by Company A to ensure that the 

funds were used appropriately, including paying the intermediaries into segregated accounts, and 

restricting and monitoring future transfers by both intermediaries in order to prevent corruption.  

However, Och-Ziff did not ensure such controls were instituted or followed by Company A, and 

subsequent inquiries by Och-Ziff were insufficient to ensure such steps were in fact followed.  The 

Investor consented to the transaction based on this limited, misleading information. 

75. Company A, using funds provided by Och-Ziff through AGC II, did not pay South 

African Business Partner via a segregated account.  AGC II funds provided to Company A were in 

turn transferred to a non-segregated account controlled by South African Business Partner.  Within 

weeks, South African Business Partner transferred a significant portion of the $13 million he 

received from Company A to CB Intermediary’s account in Lebanon.   

76. Based on the foregoing, OZ Management violated Section 206(4) and Rule 206(4)-

8 of the Advisers Act by omitting material information regarding the above transaction from its 

disclosures to the Investor. 



 

 

 

 

23 

B. Transaction to Fund Corrupt Business Efforts in Guinea  

77. In April 2011, Och-Ziff, via AGC II, purchased shares in another London-based oil 

and gas company in which AGC I, South African Business Partner, the South African 

conglomerate, and other Och-Ziff funds already held significant shares.  Och-Ziff Employee A and 

Och-Ziff Employee B structured the transaction to provide South African Business Partner with 

$52 million in cash to use for undisclosed purposes, including self-dealing to benefit Och-Ziff.  

Transaction documents created by Och-Ziff Employee B were intentionally misleading so that the 

transaction would be approved by Och-Ziff and the Investor. 

78. In 2010, Och-Ziff Employee B became aware that South African Business Partner 

had high-level contacts with a senior government official in the Guinea and his family, and that 

such contacts provided access to potential mining deals in that country.  Communications 

involving Och-Ziff Employee B and others at AGC with a consultant in July 2010 noted that “the 

[senior Guinean government official] has instructed [mining company] to deal only with me as a 

first proposal, exclusivity… iF YOU ARE INTERESTED AND ABLE TO FULLFILL [sic] their 

request i can organize ASAP a meeting for you with the representative and the [senior Guinean 

government official’s] son in Paris this week…”  Another email in August 2010 with the 

consultant stated that he had “access to Guinee Mining and Ennergy [sic] classified information” 

through his contact with the this Guinean government official and his family.  The consultant, who 

worked directly with South African Business Partner, also let AGC and Och-Ziff Employee B 

know that he was traveling to the United States with this senior Guinean government official to 

demonstrate his influence. 

79. Beginning in February 2011, South African Business Partner sought assistance 

from Och-Ziff, and in particular Och-Ziff Employee B, to create a means for South African 

Business Partner and potentially AGC II to benefit financially from future Guinean government 

actions.  

80. Och-Ziff Employee A and Och-Ziff Employee B, along with the CEO of AML and 

South African Business Partner, conceived of a related-party transaction that would accomplish 

these goals.  They decided to sell shares in the oil and gas company from the South African 

conglomerate to AGC II so that South African Business Partner could use the capital from the 

transaction to fund their efforts in Guinea.  The initial effort stalled, however, because South 

African legal restrictions on the sale of shares precluded the involvement of South African 

Business Partner.  As Och-Ziff Employee B told Och-Ziff Employee A, there was “no point for 

them” if South African Business Partner’s company didn’t end up with cash from the transaction to 

invest in Guinea.  Ultimately a new scheme was devised that would leave South African Business 

Partner with $52 million from AGC II’s purchase of shares in this mining company.  According to 

the deal documents, South African Business Partner was to buy 31.5 million shares in the oil and 

gas company from the South African conglomerate for $77 million and then immediately resell 

18.5 million of those shares to AGC II for $77 million.  Based on the false information provided by 



 

 

 

 

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Och Ziff Employee A and Och-Ziff Employee B, this transaction was then approved by Och-Ziff 

and the Investor.   

81. Contrary to the deal documents and the understanding of the Investor, Och-Ziff 

Employee A and Och-Ziff Employee B knew that South African Business Partner would not pay 

the full $77 million to the South African conglomerate.  South African Business Partner bought 

31.5 million shares in this mining company for only $25 million, and then immediately resold 18.5 

million shares in that same company to AGC II for $77 million, providing South African Business 

Partner with $52 million and an additional 13 million shares in the company.  With the $52 

million, South African Business Partner then paid $2.1 million to Och-Ziff to satisfy an 

outstanding debt relating to AGC I (in which the Investor had no interest), $25 million to the 

government of Guinea to try to secure access to valuable mining investments there, $1 million to 

the agent affiliated with the a high level Guinean government official and his family, and the 

remainder to personally benefit himself and his business partners.   

82. Och-Ziff Employee A and Och-Ziff Employee B knew the true terms of the 

transaction and the use of funds by South African Business Partner.  Prior to the share purchase, 

the CEO of AML wrote to Och-Ziff Employee B:  “How can we get agc to put 50m into guinea?”  

Och-Ziff Employee B then began working on the share purchase by AGC II, understanding the 

need to create $50 million in “profit” to help South African Business Partner “invest” in Guinea.  

Och-Ziff Employee B understood the need to generate surplus revenue from the transaction, and 

wrote:  “I don’t know what you guys are thinking re [company share] price being close.  There has 

to be at least GBP 1/share difference to leave [South African Business Partner] with $50m for 

Guinea.”  Och-Ziff Employee A and Och-Ziff Employee B also knew that undisclosed terms 

existed from the originating transaction.  South African Business Partner described the undisclosed 

terms of the deal to Och-Ziff Employee B who shared them with Och-Ziff Employee A.  The 

undisclosed terms included additional “cash local out of [South African] registered co,” and 

undisclosed cash to repay “bank debt” to the AGC CEO’s company, the South African 

conglomerate, in addition to money to purchase the shares.  Further, Och-Ziff Employee B and 

Och-Ziff Employee A structured the transaction to allow South African Business Partner to “keep 

$3m for AGC I” in order to allow South African Business Partner to repay a debt to Och-Ziff.  

When told of Och-Ziff Employee B’s idea, Och-Ziff Employee A said “U (sic) tell them that” and 

Och-Ziff Employee B responded “I will.”  Och-Ziff Employee B then confirmed with South 

African Business Partner that the deal was arranged, to which he replied:  “Yip.  Pay the 77m, and 

we pay 2m withim [sic] 24hr.  It a technicality.” 

83. Och-Ziff Employee A and Och-Ziff Employee B knew that the description of the 

transaction that was given to the Investor was materially misleading.  The Investor was not told 

that South African Business Partner would be provided with $52 million from the transaction.  The 

Investor likewise was not informed of the undisclosed terms of the transaction, or the link between 

the transaction and South African Business Partner’s payment of $25 million to the government of 

Guinea.  The Investor was not informed of the related-party nature of the transaction, the changing 

terms of the transaction, or lack of arms-length negotiations for AGC II and its business partners.  



 

 

 

 

25 

The Investor was further not told that the initial transaction in which South African Business 

Partner would buy the shares to sell to AGC had not yet occurred, but would in fact be funded by 

AGC II.  Instead, Och-Ziff Employee A and Och-Ziff Employee B explained the price differential 

in the initial transaction between South African Business Partner and the South African 

conglomerate to the Investor falsely by claiming that the initial sale was initiated in 2009 and had 

been “recently completed.”  The Investor likewise was not told of the self-dealing aspect of the 

transaction, which Och-Ziff Employee A and Och-Ziff Employee B designed to benefit Och-Ziff. 

84. Och-Ziff failed to conduct appropriate due diligence or impose adequate restrictions 

to prevent the secret aspects of the transaction from occurring, including the payment of $1 million 

to South African Business Partner’s Agent, and its employees Och-Ziff Employee A and Och-Ziff 

Employee B provided the Investor with false and misleading information. 

85. Based on the foregoing, Och-Ziff violated Sections 13(b)(2)(A) and 13(b)(2)(B) of 

the Exchange Act through the inaccurate recording of the payment to South African Business 

Partner on its books and records, and failure to devise or maintain internal accounting controls 

sufficient to provide reasonable assurances to prevent the improper use of its funds.  In addition, 

OZ Management violated Sections 206(1), 206(2), 206(4) and Rule 206(4)-8 of the Advisers Act 

by engaging in self-dealing and the improper use of managed investor funds, and by omitting 

material information regarding the above transaction from its disclosures to the Investor. 

C. Self-Dealing by Och-Ziff Employee A and South African Business Partner  

86. Och-Ziff Employee A made an $18 million personal loan to Libyan Agent in 2008 

in order to fund the Libyan Agent’s construction of a “super yacht.”  Och-Ziff Employee A did not 

disclose the loan to others at Och-Ziff, and took security interests over several assets held by 

Libyan Agent to secure the loan.  By 2010, Libyan Agent was unable to repay the loan.  In order to 

get Libyan Agent funds to repay him, Och-Ziff Employee A arranged for AGC II to purchase 

shares in a London-based mining holding company from Libyan Agent.  South African Business 

Partner was also a shareholder in this entity, as was another individual with whom Och-Ziff 

Employee A also had an outstanding £1 million loan arrangement. 

87. In December 2010, Och-Ziff Employee A caused AGC II to purchase 

approximately $20 million in shares in this London-based holding company, which owned two 

mining assets in Africa.  Och-Ziff falsely disclosed the sellers in the transaction as Libyan Agent 

and the other individual  (who repaid his £1 million loan to Och-Ziff Employee A in the days 

before the transaction was finalized).  Och-Ziff Employee A and Och-Ziff Employee B knew that 

South African Business Partner was an undisclosed seller of shares through Libyan Agent but kept 

this information from Investor and others at Och-Ziff. 

88. Och-Ziff Employee A knew that the funds paid by AGC II to Libyan Agent would 

be used to satisfy his outstanding loan, and Och-Ziff Employee A arranged the transaction to 

effectuate that purpose.  Och-Ziff Employee A had to approve the sale of shares in the London-



 

 

 

 

26 

based holding company by Libyan Agent because he held security over those shares through his 

personal loan; he did so in November 2010 to effectuate the AGC II purchase.  Communications 

between Libyan Agent and Och-Ziff Employee A also confirmed that Och-Ziff Employee A would 

receive a $4 million partial repayment on his outstanding loan soon after the AGC II purchase was 

completed.  Och-Ziff Employee A then received confirmation that the $4 million had been 

transferred to his personal account one day after AGC II funds were transferred to Libyan Agent.  

He did not disclose this information to others at Och-Ziff. 

89. Och-Ziff Employee A also took steps to hide the sale of South African Business 

Partner’s shares in the entity because he understood that the Investor could reject the deal due to 

the conflict of interest.  Two weeks before the transaction closed, Och-Ziff Employee B informed 

Och-Ziff Employee A that “[South African Business Partner] won’t back away from [transaction], 

wants deal as agreed.”  Och-Ziff Employee A and Och-Ziff Employee B then worked to ensure 

that South African Business Partner was able to sell his shares in secret using Libyan Agent as his 

proxy.  An associate for South African Business Partner texted Och-Ziff Employee B regarding the 

secret terms of the deal (“Each party must shed 20perc for us to come in.  Does not reflect in 

current [legal] agreement.  This include [other parties].  Was agreed.  Cheers.”), and Och-Ziff 

Employee B was aware of the agreement between Libyan Agent and South African Business 

Partner (“Our agreement on our side with party x is ready,” “must I do anything on my side re 

[disclosed sellers] to get … agreements signed and finalized.  Sorry for push but… I want our thing 

with [Libyan Agent] done before everyone here leaves.  Thx. Let me know.”). 

90. The Investor was not told of the self-dealing and personal interests of Och-Ziff 

Employee A and South African Business Partner in the transaction and, as a result, gave its 

approval without the benefit of that material information.  Och-Ziff Employee B assisted Och-Ziff 

Employee A in finalizing the transaction, and was also aware of the self-dealing involving South 

African Business Partner.  Neither Och-Ziff Employee A nor Och-Ziff employee B disclosed this 

material information to the Investor or to others at Och-Ziff.   

91. AGC II transferred more than $9 million to Libyan Agent’s account in late 2010 in 

consideration for the shares.  Libyan Agent then transferred $4 million to Och-Ziff Employee A’s 

personal account in partial repayment of the loan, and another $4 million to accounts for the 

benefit of South African Business Partner.  

92. In 2012, Och-Ziff Employee A and Libyan Agent created a false document 

regarding this transaction in order to hinder the investigation into Och-Ziff Employee A’s self-

dealing.  That letter was backdated to October 2010, prior to this transaction, and purportedly came 

from Libyan Agent.  The letter stated in part:  “I would like to confirm that should a transaction be 

executed between us, none of the sales proceeds will be applied towards any repayment of the 

outstanding loan that you provided to us.”  The letter was a lie, and the funds paid to Och-Ziff 

Employee A in December 2010 came directly from the proceeds of the AGC II purchase of shares 

from Libyan Agent. 



 

 

 

 

27 

93. Based on the foregoing, OZ Management violated Sections 206(1) and 206(2) 

based on the self-dealing of Och-Ziff Employee A which was not disclosed to the Investor. 

Och-Ziff Did Not Follow Its Recommended Anti-Corruption Policies 

 

94. In 2007, with the assistance of outside counsel, Och-Ziff began work on an anti-

corruption policy and procedures which was finalized in April 2008.  This policy and procedures, 

which applied to OZ, OZM, OZ Europe, AML, AGC, and all of OZ’s affiliates, required rigorous 

due diligence and anti-corruption measures designed to provide reasonable assurances that 

transactions: (i) were executed in accordance with management’s general or specific authorization; 

and (ii) were recorded as necessary to permit preparation of financial statements in conformity with 

generally accepted accounting principles or any other criteria applicable to such statements, and to 

maintain accountability for assets.    

95. For high risk transactions like those described above, Och-Ziff’s policy 

recommended due diligence steps including: 

a. Obtaining copies of the most recent financial statements for its business partners; 

b. Identifying all shareholders owning or controlling each business partner, and the 

nature of that control; 

c. Requesting references from financial institutions that have existing business 

relationships with business partners and clients; 

d. Making all payments in the country in which an agent resides; 

e. Accessing business partner books and records and utilizing a right-to-audit on a 

periodic basis; 

f. Re-checking and confirming due diligence for business partners on an ongoing 

basis; 

g. Reviewing of all monies paid out by business partners as part of ongoing due 

diligence; 

h. Conducting heightened due diligence in business transactions involving 

government officials or state-owned businesses, where the business partner’s only 

contribution is influence, or where the partner refuses to put agreements or proof of 

expenditures in writing; and 

i. Obtaining annual certifications by the chief financial officer and chief legal officer 

that all foreign business partners have complied with the firm’s anti-corruption 

policies and procedures. 



 

 

 

 

28 

96. Och-Ziff failed to follow its own recommended due diligence steps in connection 

with the transactions set forth above.    

97. Despite the presence of corruption risks in the above transactions, Och-Ziff did not 

impose sufficient procedures or measures to prevent corruption or provide reasonable assurance 

that the transaction documents accurately reflected the third party’s use of funds.  Och-Ziff did not 

conduct sufficiently heightened due diligence in transactions involving state-owned entities, and 

failed to limit the interactions of its business partners with government officials.  Och-Ziff knew of 

the close connections between its business partners, counterparties, agents and government 

officials.  In fact, it chose them in part for their ability to influence to high-ranking government 

officials.  Rather than limit such connections, Och-Ziff’s insufficient controls allowed its business 

partners and agents to exploit those relationships through bribery to benefit Och-Ziff.  Och-Ziff 

Employee A knew that Och-Ziff’s business partners in Africa bought assets and made payments 

without oversight or control from Och-Ziff, and allowed such practices to continue despite the high 

risk of corruption.   

98. Och-Ziff failed to conduct sufficient due diligence on asset purchases by its 

business partners.  When due diligence on agents and business partners disclosed significant red 

flags, the company proceeded with the relationship without imposing sufficient limitations on the 

way the agents and business partners conducted business or used funds provided by Och-Ziff.  

Och-Ziff allowed its agents to use shell companies located in other jurisdictions to receive 

payment, failed to place restrictions on the agents themselves rather than their shell companies, 

transmitted payments through third-parties after which Och-Ziff had no oversight on the funds, and 

failed to monitor or audit how its agents used the Och-Ziff investor funds they were provided.    

99. Och-Ziff entered into agreements with consultants and agents without conducting 

sufficient due diligence on the recipient of the funds or the role played by those agents and 

consultants.  In some cases, Och-Ziff knew that AGC or its business partners in AGC were using 

consultants paid with Och-Ziff funds, yet took no steps to either conduct due diligence on those 

consultants or ascertain the basis for payments to those consultants.  This led to bribes to 

government officials in Libya, Chad, and Niger. 

100. Och-Ziff failed to implement sufficient safeguards to prevent corruption in ongoing 

joint ventures and investments.  Och-Ziff was aware of significant corruption risks in its AGC joint 

venture, including a high risk of corruption with its partners in AGC.  Och-Ziff failed to adequately 

address those risks and continued to give investor funds to AGC without appropriate oversight.  

Och-Ziff also continued to rely on its business partners in AGC despite knowledge of alleged 

criminal activity by those partners in other transactions.  At no time did Och-Ziff audit the bank 

records, expenditures, or financial statements of its business partners or of AGC to ensure 

compliance with Och-Ziff’s internal controls and anti-corruption policies.   

101. Och-Ziff failed to use its leverage to terminate transactions, foreclose on collateral, 

or bring legal action against its business partners.  At no time did Och-Ziff exert its legal rights 



 

 

 

 

29 

against its business partners.  Instead, Och-Ziff allowed these corrupt relationships to continue in 

an effort to secure a return on investment rather than sever ties with illegal activity. 

Och-Ziff Violated the Books and Records and Internal Controls Provisions of the FCPA 

102. Och-Ziff was required to make and keep books, records, and accounts, which, in 

reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the 

issuer.  Och-Ziff’s policies and procedures required it to accurately document the purpose and 

authorization for expenditures of assets by the underlying managed funds.  Och-Ziff inaccurately 

recorded the authorizations for the funds disbursed for these improper transactions as investments, 

loans, “deal fees,” “subscription amounts,” payments to business partners, payments to agents, or 

“professional services fees,” including portions of the funds that were used to pay bribes and other 

improper payments.  The manner in which these authorizations were recorded on Och-Ziff’s books 

and records did not accurately describe the disposition of these assets.   

103. Och-Ziff likewise failed to establish or maintain a system of internal accounting 

controls sufficient to ensure that certain of these transactions were properly recorded.  Och-Ziff 

failed to devise or maintain a system of internal accounting controls sufficient to provide 

reasonable assurances that certain of these transactions were properly recorded.  Och-Ziff failed to 

implement and maintain sufficient internal accounting controls to provide reasonable assurances 

that investor funds were not used to pay bribes, or to prevent self-dealing and misuse of investor 

funds by its business partners.  Och-Ziff also failed to take corrective measures, obtain verification 

of payments, or seek to exercise contractually available audit or cancellation rights with its 

business partners, despite knowledge of improper payments and the high risk of corruption.  Och-

Ziff’s internal accounting controls failed to stop ongoing payments and transactions even after 

improprieties and potential corruption were discovered by Och-Ziff. 

Failures by Och and Frank 

104. Och had final authority to approve all private investments by Och-Ziff, including all 

transactions described above.  Och was aware of the risk of corruption in the transactions with 

DRC Partner, and contrary to the recommendation of his legal and compliance team, he approved 

the use of Och-Ziff investor funds in those transactions.  As a consequence, Och caused Och-Ziff’s 

violations of the books and records provision of the Foreign Corrupt Practices Act (“FCPA”). 

105. Frank had ultimate responsibility for maintaining Och-Ziff’s and OZ 

Management’s books and records and for authorizing all uses of Och-Ziff funds.  Under Och-Ziff’s 

structure at the time, the head of legal and compliance reported to Frank as chief financial officer.  

Frank was responsible for ensuring that all transactions were recorded accurately and in 

accordance with generally acceptable accounting procedures and was likewise responsible for 

devising and maintaining Och-Ziff’s internal accounting controls.  Frank was also ultimately 

responsible for devising and maintaining Och-Ziff’s internal accounting controls sufficient to 

provide reasonable assurances that transactions: (i) were executed in accordance with 



 

 

 

 

30 

management’s general or specific authorization; and (ii) were recorded as necessary to permit 

preparation of financial statements in conformity with generally accepted accounting principles or 

any other criteria applicable to such statements, and to maintain accountability for assets.   

106. Each transaction described above required Frank’s authorization of the relevant 

disbursements.  In the two DRC transactions and the LIA fee payment involving bribery, failures 

of Och-Ziff’s internal controls, and books and records violations, Frank failed to ensure that 

required information regarding transactions was documented accurately, that appropriate business 

partner information and due diligence was obtained, that transactions were structured properly to 

avoid corruption, and that ongoing due diligence and audits were performed to prevent or detect 

improper use of Och-Ziff investor funds.  Frank approved Och-Ziff’s payments in the transactions 

with DRC Partner in which he believed there was a high risk of corruption.  Despite his concerns, 

Frank deferred to Och as the final decision maker and executed payment on the 2008 convertible 

loan and 2010-2011 margin loan with DRC Partner per Och’s approval.  As a consequence, Frank 

caused violations of the internal controls and books and records provisions of the FCPA by Och-

Ziff in the three transactions noted above.  

Deferred Prosecution Agreement 

107. Och-Ziff has entered into a deferred prosecution agreement with the United States 

Department of Justice that acknowledges responsibility for criminal conduct relating to certain of 

the findings in the Order.  Specifically, Och-Ziff acknowledges responsibility for two counts of 

conspiracy to commit offenses against the United States in violation of Title 18, United States 

Code, Section 371, that is, for (i) violating the anti-bribery provisions of the Foreign Corrupt 

Practices Act of 1977 (“FCPA”), 15 U.S.C. § 78dd-1, (ii) violating the FCPA’s books and records 

provisions, 15 U.S.C. § 78m(b)(2)(A), (b)(4), (b)(5), and 78ff(a), and (iii) violating the FCPA’s 

internal controls provisions, 15U.S.C. § 78m(b)(2)(B), (b)(4), (b)(5) and 78ff(a). 

108. OZ Africa Management GP, LLC (“OZ Africa Management”), a subsidiary of 

Och-Ziff, has entered into a plea agreement with the United States Department of Justice relating 

to certain findings in the Order.  Specifically, OZ Africa Management has agreed to plead guilty 

to one count of conspiracy to commit offenses against the United States in violation of Title 18, 

United States Code, Section 371, that is for violating the anti-bribery provisions of the FCPA, 15 

U.S.C. § 78dd-1. 

109. Respondent Och-Ziff acknowledges that the Commission is foregoing a one-time 

$173,186,178 civil penalty for these charges based upon the imposition of a $213,055,689 

criminal penalty as part of Och-Ziff’s settlement with the United States Department of Justice. 

Legal Standard and Violations 

110. Section 30A of the Exchange Act prohibits any issuer with a class of securities 

registered pursuant to Section 12 of the Exchange Act, or any officer, director, employee, or agent 



 

 

 

 

31 

acting on behalf of such issuer, in order to obtain or retain business, from corruptly giving or 

authorizing the giving of, anything of value to any foreign official for the purposes of influencing 

the official or inducing the official to act in violation of his or her lawful duties, or to secure any 

improper advantage, or to induce a foreign official to use his influence with a foreign governmental 

instrumentality to influence any act or decision of such government or instrumentality.  15 U.S.C. 

§ 78dd-1. 

111. Under Section 13(b)(2)(A) of the Exchange Act, issuers with a class of securities 

registered pursuant to Section 12 of the Exchange Act are required to make and keep books, 

records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and 

disposition of the assets of the issuer.  15 U.S.C. § 78m(b)(2)(A). 

112. Under Section 13(b)(2)(B) of the Exchange Act, issuers with a class of securities 

registered pursuant to Section 12 of the Exchange Act are required to devise and maintain a system 

of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are 

executed in accordance with management’s general or specific authorization; (ii) transactions are 

recorded as necessary (I) to permit preparation of financial statements in conformity with generally 

accepted accounting principles or any other criteria applicable to such statements, and (II) to 

maintain accountability for assets; (iii) access to assets is permitted only in accordance with 

management’s general or specific authorization; and (iv) the recorded accountability for assets is 

compared with the existing assets at reasonable intervals and appropriate action is taken with 

respect to any differences.  15 U.S.C. § 78m(b)(2)(B). 

113. Section 206 of the Advisers Act makes it unlawful for any investment advisers, 

directly or indirectly, to (1) “employ any device, scheme, or artifice to defraud any client or 

prospective client” or (2) “engage in any transaction, practice, or course of business which operates 

as a fraud or deceit upon any client or prospective client.”     

114. Section 206(4) of the Advisers Act prohibits an investment adviser from, directly or 

indirectly, engaging in any act, practice or course of business which is fraudulent, deceptive, or 

manipulative.  Rule 206(4)-8(a)(1) thereunder prohibits an investment adviser to a pooled 

investment vehicle from making an untrue statement of material fact or omitting to state a material 

fact necessary to make the statements made not misleading to investors or prospective investors in 

those pools.  Rule 206(4)-8(a)(2) thereunder provides that it is a fraudulent practice for an 

investment adviser to a pooled investment vehicle to engage in “fraudulent, deceptive, or 

manipulative” conduct with respect to any investor or prospective investor in the pooled 

investment vehicle.  

115. As a result of the conduct described above, Och-Ziff willfully violated Sections 

30A, 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act by participating in bribe schemes to win or 

retain business for Och-Ziff, by falsely recording those bribe payments on its books and records, 

and by failing to devise and maintain a system of internal accounting controls sufficient to provide 



 

 

 

 

32 

reasonable assurances that its transactions comported with Generally Accepted Accounting 

Principles.2   

116. As a result of the conduct described above, OZ Management willfully violated 

Sections 206(1) and 206(2) of the Advisers Act by using managed investor funds in the payment of 

bribes and self-dealing in transactions involving AGC I and AGC II.  OZ Management violated 

Section 206(4) and Rule 206(4)-8 of the Advisers Act for by making material misrepresentations 

regarding certain AGC II transactions to the Investor. 

117. As a result of the conduct described above, Frank was a cause of violations of 

Section 13(b)(2)(A) of the Exchange Act by Och-Ziff, which requires an issuer to make and keep 

books and records that accurately and fairly reflect the dispositions of its assets, and violations of 

Section 13(b)(2)(B) of the Exchange Act by Och-Ziff, which requires an issuer to devise and 

maintain a system of internal accounting controls sufficient to provide reasonable assurances that 

its transactions comported with Generally Accepted Accounting Principles. 

118. As a result of the conduct described above in the two transactions with DRC 

Partner, Och was a cause of violations of Section 13(b)(2)(A) of the Exchange Act by Och-Ziff, 

which requires an issuer to make and keep books and records that accurately and fairly reflect the 

dispositions of its assets. 

IV. 

UNDERTAKINGS 

Respondents Och-Ziff and OZ Management undertake to: 

A. Implementation of Enhanced Internal Accounting Controls and Policies:  Within 

thirty (30) days of entry of this Order, Och-Ziff and OZ Management agree to the following: 

i. Implement enhanced internal controls over foreign private equity investments, 

including enhanced transactional and partner due diligence, increased monitoring 

over use of Och-Ziff funds in transactions involving corruption risk through audit 

rights of its business and transactions partners and other available means, 

individual representations and warranties for principals in foreign private equity 

transactions; limited use of offshore holding companies as recipients for funds in 

                                                 
2  A willful violation of the securities laws means merely “‘that the person charged with the duty knows what he is 

doing.’” Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. 

Cir. 1949)). There is no requirement that the actor “‘also be aware that he is violating one of the Rules or Acts.’” 

Id. (quoting Gearhart & Otis, Inc. v. SEC, 348 F.2d 798, 803 (D.C. Cir. 1965)). 

 



 

 

 

 

33 

foreign private equity transactions; and enhanced steps to identify the beneficial 

owner of offshore holding companies being paid in connection with foreign 

private equity transactions; 

ii. Institute policy forbidding use of third-party placement agents or middlemen in 

soliciting investors into Och-Ziff managed funds unless use of such agent is 

approved by the Business Risk Committee, and limited to regulated financial 

entities; 

iii. For foreign private equity transactions, institute a policy forbidding use of third-

party consultants, finders, agents, or other intermediaries unless consistent with 

local law and approved by the Chief Compliance Officer or the Business Risk 

Committee; 

iv. Provide veto power over all matters coming before the company’s Business Risk 

Committee, for General Counsel and, separately, for Chief Compliance Officer; 

v. Establish investment committee to review all private equity transactions, and 

include participation on investment committee for General Counsel and Chief 

Compliance Officer or their designees; and 

vi. Require all private equity transactions be approved by Och-Ziff’s investment 

committee.  

B. Separation of Chief Compliance Officer From Other Officer Positions:  Within 

thirty (30) days of the entry of this Order, Och-Ziff and OZ Management agree to designate a 

Chief Compliance Officer who, for a period of five (5) years from the entry of this Order, shall 

not simultaneously hold any other officer position at Och Ziff or OZ Management while serving 

as Chief Compliance Officer.   

Respondent Frank undertakes to: 

A. In connection with this action and any related judicial or administrative 

proceeding or investigation commenced by the Commission or to which the Commission is a 

party, Respondent Frank (i) agrees to appear and be interviewed by Commission staff at such 

times and places as the staff requests upon reasonable notice; (ii) will accept service by mail or 

facsimile transmission of notices or subpoenas issued by the Commission for documents or 

testimony at depositions, hearings, or trials, or in connection with any related investigation by 

Commission staff; (iii) appoint Respondent’s attorney as agent to receive service of such notices 

and subpoenas; (iv) with respect to such notices and subpoenas, waives the territorial limits on 

service contained in Rule 45 of the Federal Rules of Civil Procedure and any applicable local 

rules, provided that the party requesting the testimony reimburses Respondent’s travel, lodging, 

and subsistence expenses at the then-prevailing U.S. Government per diem rates; and (v) consent 

to personal jurisdiction over Respondent in any United States District Court for purposes of 

enforcing any such subpoena.  



 

 

 

 

34 

Respondent Och undertakes to: 

A. In connection with this action and any related judicial or administrative 

proceeding or investigation commenced by the Commission or to which the Commission is a 

party, Respondent Och (i) agrees to appear and be interviewed by Commission staff at such 

times and places as the staff requests upon reasonable notice; (ii) will accept service by mail or 

facsimile transmission of notices or subpoORDER enas issued by the Commission for 

documents or testimony at depositions, hearings, or trials, or in connection with any related 

investigation by Commission staff; (iii) appoint Respondent’s attorney as agent to receive service 

of such notices and subpoenas; (iv) with respect to such notices and subpoenas, waives the 

territorial limits on service contained in Rule 45 of the Federal Rules of Civil Procedure and any 

applicable local rules, provided that the party requesting the testimony reimburses Respondents’ 

travel, lodging, and subsistence expenses at the then-prevailing U.S. Government per diem rates; 

and (v) consents to personal jurisdiction over Respondent in any United States District Court for 

purposes of enforcing any such subpoena.  

 In determining whether to accept the Offers, the Commission has considered these 

Undertakings.  

V. 

 

Pursuant to this Order, without admitting or denying the allegations contained herein, 

Respondent Frank agrees to additional proceedings in this proceeding to determine what, if any, 

civil penalties pursuant to Section 21(B)(a) of the Exchange Act against Respondent Frank are in 

the public interest.  In connection with such additional proceedings: (a) Respondent Frank agrees 

that he will be precluded from arguing that he did not violate the federal securities laws as 

described in this Order; (b) Respondent Frank agrees that he may not challenge the validity of this 

Order; (c) solely for the purposes of such additional proceedings, the findings of this Order shall be 

accepted as and deemed true by the hearing officer; and (d) the hearing officer may determine the 

issues raised in the additional proceedings on the basis of affidavits, declarations, excerpts of 

sworn deposition or investigative testimony, and documentary evidence. 

 

VI. 

 

 In view of the foregoing, the Commission deems it appropriate and in the public interest to 

impose sanctions agreed to in Respondents’ Offers. 

 

 Accordingly, pursuant to Section 21C of the Exchange Act and Sections 203(e), 203(f) and 

203(k) of the Advisers Act, it is hereby ORDERED that: 

 

A. Respondent Och-Ziff shall cease and desist from committing or causing any 

violations and any future violations of Sections 30A, 13(b)(2)(A) and 13(b)(2)(B) of the Exchange 

Act. 



 

 

 

 

35 

B. Respondent OZ Management shall cease and desist from committing or causing 

any violations and any future violations of Sections 206(1), 206(2) and 206(4) of the Advisers Act 

and Rule 206(4)-8 promulgated thereunder. 

C. Respondent Frank shall cease and desist from committing or causing any violations 

and any future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. 

D. Respondent Och shall cease and desist from committing or causing any violations 

and any future violations of Section 13(b)(2)(A) of the Exchange Act 

E. Respondents Och-Ziff and OZ Management are censured. 

F. Respondents Och-Ziff and OZ Management, shall, within 14 days of the entry of 

this Order, pay, jointly and severally, disgorgement of $173,186,178, and prejudgment interest of 

$25,858,989, for a total payment of $199,045,167 to the Securities and Exchange Commission for 

transfer to the general fund of the United States Treasury, subject to Exchange Act Section 

21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to SEC Rule of 

Practice 600.   

G. Respondent Och shall, within 14 days of the entry of this Order, pay disgorgement 

of $1,900,000, reflecting his estimated share of gain to Och-Ziff resulting from the transactions 

with DRC Partner, and prejudgment interest of $273,718, for a total payment of $2,173,718 to the 

United States Treasury.  If timely payment is not made, additional interest shall accrue pursuant to 

SEC Rule of Practice 600. 

H. Respondents Och-Ziff, OZ Management, and Och must make payments in one of 

the following ways: 

 

(1) Respondents may transmit payment electronically to the Commission, which will 

provide detailed ACH transfer/Fedwire instructions upon request; 

 

(2) Respondents may make direct payment from a bank account via Pay.gov through 

the Commission Web site at:  http://www.sec.gov/about/offices/ofm.htm; or 

 

(3) Respondents may pay by certified check, bank cashier’s check, or United States 

postal money order, made payable to the Securities and Exchange Commission and 

hand-delivered or mailed to: 

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 



 

 

 

 

36 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying the 

party paying as a Respondent in these proceedings, and the file number of these proceedings; a 

copy of the cover letter and check or money order must be sent to Paul G. Block, Assistant 

Director, Division of Enforcement, Securities and Exchange Commission, Boston Regional Office, 

33 Arch Street, Boston, MA 02110. 

 

Amounts ordered to be paid as civil money penalties pursuant to this Order shall be treated 

as penalties paid to the government for all purposes, including all tax purposes.  To preserve the 

deterrent effect of the civil penalty, each Respondent agrees that in any Related Investor Action, 

they shall not argue that they are entitled to, nor shall they benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of each Respondent’s payment of a 

civil penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants 

such a Penalty Offset, each Respondent agrees that they shall, within 30 days after entry of a final 

order granting the Penalty Offset, notify the Commission's counsel in this action and pay the 

amount of the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall 

not be deemed an additional civil penalty and shall not be deemed to change the amount of the civil 

penalty imposed in this proceeding.  For purposes of this paragraph, a "Related Investor Action" 

means a private damages action brought against any of the Respondents by or on behalf of one or 

more investors based on substantially the same facts as alleged in the Order instituted by the 

Commission in this proceeding. 

I. Retention of Monitor:  Respondent Och-Ziff shall comply with the following 

undertakings: 

Term of Engagement 

1. To engage an independent monitor (“Monitor”) not unacceptable to the 

Commission staff within sixty (60) days of the entry of this Order.  Upon entry of the Order, the 

Company will propose to the staff a pool of three (3) qualified candidates to serve as the 

Monitor.  If the staff determines, in their sole discretion, that any of the candidates are not, in fact, 

qualified to serve as the Monitor, or if the staff, in their sole discretion, are not satisfied with the 

candidates proposed, the staff reserve the right to seek additional nominations from the Company.  

The Monitor shall have, at a minimum, the following qualifications:  (1) demonstrated expertise 

with respect to the FCPA and other applicable anti-corruption laws, including experience 

counseling on FCPA issues; (ii) demonstrated experience with respect to the Advisers Act and 

other applicable laws, including experience counseling on Advisers Act disclosure and 

compliance issues; (iii) experience designing and/or reviewing corporate compliance policies, 

procedures, and internal accounting controls, including FCPA and anti-corruption policies, 

procedures, and internal accounting controls, and Advisers Act disclosure policies, procedures, 

and controls; (iv) the ability to access and deploy resources as necessary to discharge the 



 

 

 

 

37 

Monitor’s duties as described in the Order; and (v) sufficient independence from Och-Ziff to 

ensure effective and impartial performance of the Monitor’s duties as described in the Order.   

2. The staff retain the right, in their sole discretion, to choose the Monitor from among 

the candidates proposed by the Company, though the Company may express its preference(s) 

among the candidates.  In the event the staff reject all proposed Monitors, the Company shall 

propose an additional three candidates within thirty (30) calendar days after receiving notice of the 

rejection.  This process shall continue until a Monitor acceptable to both parties is chosen.  The 

staff and the Company will use their best efforts to complete the selection process within sixty (60) 

calendar days of the filing of the Agreement and the accompanying Information.  If the Monitor 

resigns or is otherwise unable to fulfill his or her obligations as set out herein and in Attachment D, 

the Company shall within thirty (30) calendar days recommend a pool of three qualified Monitor 

candidates from which the Offices will choose a replacement. 

3. Och-Ziff shall retain the Monitor for a period of not less than thirty-six (36) 

months, unless the Commission staff finds, in its sole discretion, that there exists a change in 

circumstances sufficient to eliminate the need for the Monitor, in which case the monitorship 

may be terminated early (the “Monitorship”).  The term of the Monitorship can be extended for 

an additional twenty-four (24) months, to a total of sixty (60) months from the date the Monitor 

is retained.  The term of the Monitorship can be extended at the discretion of the staff and as set 

forth below. 

4. During the Monitorship and for a period of two years from conclusion of the 

Monitorship, neither Och-Ziff nor any of its then-current or former affiliates, subsidiaries, 

directors, officers, employees, or agents acting in their capacity as such shall enter into, or 

discuss the possibility of, any employment, consultant, attorney-client, auditing, or other 

professional relationship with the Monitor. 

Och-Ziff’s Obligations 

5. Och-Ziff shall cooperate fully with the Monitor, and provide the Monitor with 

access to all non-privileged information, documents, records, facilities, and employees as 

reasonably requested by the Monitor; such access shall be provided consistent with Och-Ziff’s 

and the Monitor’s obligations under applicable laws and regulations, including, but not limited 

to, applicable data privacy and national security laws and regulations.  Och-Ziff shall use its best 

efforts, to the extent reasonably requested, to provide the Monitor with access to Och-Ziff’s 

former employees, third-party vendors, agents, and consultants. 

6. Och-Ziff agrees that no attorney-client, auditor-client, or similar relationship shall 

be formed between Och-Ziff and the Monitor.  In the event that Och-Ziff seeks to withhold from 

the Monitor access to information, documents, records, facilities, and/or employees of Och-Ziff, 

its third-party vendors, agents, or consultants that may be subject to a claim of attorney-client 

privilege, the attorney work-product doctrine, or similar legal relationships, or where Och-Ziff 



 

 

 

 

38 

reasonably believes production would otherwise be inconsistent with applicable law, Och-Ziff 

shall work cooperatively with the Monitor to resolve the matter to the satisfaction of the Monitor. 

If during the Monitorship, the Monitor believes that Och-Ziff is unreasonably withholding access 

on the basis of a claim of attorney-client privilege, attorney work-product doctrine, or other 

asserted applicable law, the Monitor shall promptly notify the Commission staff.  If the matter 

cannot be resolved, at the request of the Monitor, the Company shall promptly provide written 

notice to the Monitor and the staff.  Such notice shall include a general description of the nature of 

the information, documents, records, facilities or current or former employees that are being 

withheld, as well as the legal basis for withholding access.  The staff may then consider whether to 

make a further request for access to such information, documents, records, facilities, or employees 

7. Any disclosure by Och-Ziff concerning potential corrupt payments, false books 

and records, and/or internal accounting control issues shall not relieve Och-Ziff of any otherwise 

applicable obligation to truthfully disclose such matters to the Commission staff. 

Monitor’s Mandate 

8. The Monitor shall evaluate the effectiveness of the internal accounting controls, 

recordkeeping, and financial reporting policies and procedures of Och-Ziff as they relate to Och-

Ziff’s current and ongoing compliance with the anti-bribery, books and records, and internal 

accounting controls provisions of the FCPA, other applicable anti-corruption laws (the “anti-

corruption laws”), and OZ Management’s related disclosure and compliance issues under the 

Advisers Act (“disclosure laws”), and make recommendations reasonably designed to improve 

the effectiveness of these policies and procedures (the “Mandate”).  This Mandate shall include 

an assessment of the Board of Directors; and senior managements’ commitment to, and effective 

implementation of, the corporate compliance program.  In carrying out the Mandate, to the extent 

appropriate under the circumstances, the Monitor may coordinate with Och-Ziff personnel, 

including in-house counsel, compliance personnel, and internal auditors.  The Monitor may rely 

on the product of Och-Ziff’s processes, such as the results of studies, reviews, sampling and 

testing methodologies, audits, and analyses conducted by or on behalf of Och-Ziff, as well as 

Och-Ziff’s internal resources (e.g., legal, compliance, and internal audit), which can assist the 

Monitor in carrying out the Mandate.  

9. During the Monitorship, the Monitor shall conduct an initial review and at least 

two (2) follow-up reviews and prepare an initial report and at least two (2) follow-up reports, and 

issue a Certification Report if appropriate, as described below. 

Initial Review and Report 

10. To carry out the Mandate, during the Term of the Monitorship, the Monitor shall 

conduct an initial review and prepare an initial report, followed by at least two follow-up reviews 

and reports as described below.  With respect to the initial report, after consultation with the 

Company and the Commission staff, the Monitor shall prepare the first written work plan within 



 

 

 

 

39 

thirty (30) calendar days of being retained, and the Company and the staff shall provide comments 

within thirty (30) calendar days after receipt of the written work plan.  With respect to each follow-

up report, after consultation with the Company and the Commission staff, the Monitor shall 

prepare a written work plan at least thirty (30) calendar days prior to commencing a review, and 

the Company and the Offices shall provide comments within twenty (20) calendar days after 

receipt of the written work plan.  Any disputes between the Company and the Monitor with respect 

to any written work plan shall be decided by the Commission staff in their sole discretion. 

11. In order to conduct an effective initial review and to understand fully any existing 

deficiencies in Och-Ziff’s internal accounting controls and corporate compliance program, or 

deficiencies in OZ Management’s Advisers Act compliance, the Monitor’s work plan shall 

include such steps as are reasonably necessary to understand Och-Ziff’s business and its global 

anti-corruption risks.  The steps shall include: 

a. Inspection of relevant documents, including the internal accounting controls, 

recordkeeping, and financial reporting policies and procedures as they relate 

to the Mandate; 

b. Inspection of relevant documents and policies and procedures as they relate to 

the Mandate; 

c. Onsite observation of selected systems and procedures comprising Och-Ziff’s 

corporate compliance program, including anti-corruption compliance 

procedures, internal accounting controls, recordkeeping, due diligence, and 

internal audit procedures, including at sample sites; 

d. Meetings with, and interviews of, as relevant, Och-Ziff employees, officers, 

directors, and, where appropriate and feasible, its third-party vendors, agents, 

or consultants and other persons at mutually convenient times and places; and 

e. Risk-based analyses, studies, and testing of Och-Ziff’s and OZ Management’s 

corporate compliance program. 

12. The Monitor may take steps as reasonably necessary to develop an understanding 

of the facts and circumstances surrounding prior violations of law that gave rise to this action, 

but shall not conduct his or her own inquiry into those historical events. 

13. After receiving the initial work plan, Och-Ziff shall provide any comments 

concerning the initial work plan within thirty (30) days to the Monitor and Commission staff.  

Any disputes between Och-Ziff and the Monitor with respect to the initial work plan shall be 

decided by the Commission staff in its sole discretion.  Following comments by Och-Ziff and 

Commission staff, the Monitor will have fifteen (15) days to make revisions to the initial work 

plan. 



 

 

 

 

40 

14. The initial review shall commence no later than one-hundred twenty (120) days 

from the date of the engagement of the Monitor (unless otherwise agreed by Och-Ziff, the Monitor, 

and the Commission staff).  The Monitor shall issue a written report within one hundred twenty 

(120) days of commencing the initial review, setting forth the Monitor's assessment and, if 

necessary, making recommendations reasonably designed to improve the effectiveness of Och-

Ziff’s internal accounting controls and corporate compliance program as they relate to Och-Ziff’s 

compliance with the anti-corruption laws.  The Monitor should consult with Och-Ziff concerning 

his or her findings and recommendations on an ongoing basis and should consider Och-Ziff’s 

comments and input to the extent the Monitor deems appropriate.  The Monitor should share a 

draft of his or her report with Och-Ziff and Commission staff prior to finalizing them.  The 

Monitor shall provide the report to the Board of Directors of Och-Ziff and contemporaneously 

transmit a copy to Commission staff. 

15. Within one-hundred twenty (120) days after receiving the Monitor's initial report, 

Och-Ziff shall adopt and implement all recommendations in the report, provided, however, that 

as to any recommendation that Och-Ziff considers unduly burdensome, impractical, or costly, or 

inconsistent with applicable law or regulation or otherwise inadvisable, Och-Ziff need not adopt 

that recommendation at that time, but may submit in writing to the Monitor and the Commission 

staff within sixty (60) days of receiving the report, an alternative policy, procedure, or system 

designed to achieve the same objective or purpose. 

16. As to any recommendation on which the Company and the Monitor do not agree, 

such parties shall attempt in good faith to reach an agreement within forty-five (45) calendar days 

after the Company serves the written notice.  In the event Och-Ziff and the Monitor are unable to 

agree on an acceptable alternative proposal, Och-Ziff shall promptly consult with the 

Commission staff.  Any disputes between Och-Ziff and the Monitor with respect to the 

recommendations shall be decided by the Commission staff in its sole discretion.  The 

Commission staff will consider the Monitor's recommendation and Och-Ziff’s reasons for not 

adopting the recommendation in determining whether Och-Ziff has fully complied with its 

obligations.  Pending such determination, Och-Ziff shall not be required to implement any 

contested recommendation(s). 

17. With respect to any recommendation that the Monitor determines cannot reasonably 

be implemented within one-hundred twenty (120) days after receiving the report, the Monitor may 

extend the time period for implementation with prior written approval of the Commission staff. 

First Follow-Up Review 

18. Within one hundred-twenty (120) days after the issuance of the initial report, the 

Monitor shall submit a written work plan for the follow-up review to Och-Ziff and Commission 

staff.  Och-Ziff and Commission staff shall provide any comments concerning the work plan 

within twenty (20) days in writing to the Monitor.  Any disputes between Och-Ziff and the 

Monitor with respect to the written work plan shall be decided by the Commission staff in its41 

sole discretion.  Following comments by Och-Ziff and Commission staff, the Monitor will have 

ninety (90) days to make revisions to the follow-up work plan. 

19. The follow-up review shall commence no later than one hundred-twenty (120) days 

after the issuance of the initial report (unless otherwise agreed by Och-Ziff, the Monitor, and the 

Commission staff).  The Monitor shall issue a written follow-up report within ninety (90) days of 

commencing the follow-up review.  The follow-up report shall set forth the Monitor's assessment 

of, and any additional recommendations regarding, the Mandate; the Monitor's assessment of the 

implementation by Och-Ziff of any recommendations made in the initial report; and the Monitor's 

assessment of the commitment of Och-Ziff’s Board of Directors and senior management to 

compliance with anti-corruption laws  

20. Within one hundred and twenty (120) calendar days after receiving the Monitor’s 

initial report, the Company shall adopt and implement all recommendations in the report, unless, 

within sixty (60) calendar days of receiving the report, the Company notifies in writing the Monitor 

and the Commission staff of any recommendations that the Company considers unduly 

burdensome, inconsistent with applicable law or regulation, impractical, excessively expensive, or 

otherwise inadvisable.  With respect to any such recommendation, the Company need not adopt 

that recommendation within the one hundred and twenty (120) days of receiving the report but 

shall propose in writing to the Monitor and the Commission staff an alternative policy, procedure 

or system designed to achieve the same objective or purpose.  As to any recommendation on which 

the Company and the Monitor do not agree, such parties shall attempt in good faith to reach an 

agreement within forty-five (45) calendar days after the Company serves the written notice. 

21. In the event Och-Ziff and the Monitor are unable to agree on an acceptable 

alternative proposal within thirty (30) days, Och-Ziff shall promptly consult with the Commission 

staff.  Any disputes between Och-Ziff and the Monitor with respect to the recommendations shall 

be decided by the Commission staff in its sole discretion.  The Commission staff shall consider the 

Monitor's recommendation and Och-Ziff’s reasons for not adopting the recommendation in 

determining whether Defendant has fully complied with its obligations.  Pending such 

determination, Defendant shall not be required to implement any contested recommendation(s). 

22. With respect to any recommendation that the Monitor determines cannot reasonably 

be implemented within one hundred and twenty (120) calendar days after receiving the report, the 

Monitor may extend the time period for implementation with prior written approval of the 

Commission staff. 

Second Follow-Up Review 

23. A follow-up review shall commence no later than one hundred-twenty (120) 

calendar days after the issuance of the initial report (unless otherwise agreed by the Company, the 

Monitor and the Commission staff).  The Monitor shall issue a written follow-up report within 

ninety (90) calendar days of commencing the follow-up review, setting forth the Monitor’s 



 

 

 

 

42 

assessment and, if necessary, making recommendations in the same fashion as set forth in 

Paragraph 14 with respect to the initial review.  After consultation with the Company, the Monitor 

may extend the time period for issuance of the follow-up report for a brief period of time with prior 

written approval of the Commission staff. 

24. The second follow-up review shall commence no later than one hundred eighty 

(180) days after the issuance of the follow-up report (unless otherwise agreed by Och-Ziff, the 

Monitor, and the Commission staff).  The Monitor shall issue a written follow-up report within 

ninety (90) days of commencing the second follow-up review.  The follow-up report shall set 

forth the Monitor's assessment of, and any additional recommendations regarding, the Mandate; 

the Monitor's assessment of the implementation by Och-Ziff of any recommendations made in 

the initial report; and the Monitor's assessment of the commitment of Och-Ziff’s Board of 

Directors and senior management to compliance with anti-corruption laws. 

25. Within ninety (90) calendar days after receiving the Monitor’s follow-up report, the 

Company shall adopt and implement all recommendations in the report, unless, within thirty (30) 

calendar days after receiving the report, the Company notifies in writing the Monitor and the 

Commission staff concerning any recommendations that the Company considers unduly 

burdensome, inconsistent with applicable law or regulation, impractical, excessively expensive, or 

otherwise inadvisable.  With respect to any such recommendation, the Company need not adopt 

that recommendation within the ninety (90) calendar days of receiving the report but shall propose 

in writing to the Monitor and the Commission staff an alternative policy, procedure, or system 

designed to achieve the same objective or purpose.  As to any recommendation on which the 

Company and the Monitor do not agree, such parties shall attempt in good faith to reach an 

agreement within thirty (30) calendar days after the Company serves the written notice. 

26. In the event Och-Ziff and the Monitor are unable to agree on an acceptable 

alternative proposal within fifteen (15) days, Och-Ziff shall promptly consult with the Commission 

staff.  Any disputes between Och-Ziff and the Monitor with respect to the recommendations shall 

be decided by the Commission staff in its sole discretion.  The Commission staff shall consider the 

Monitor's recommendation and Och-Ziff’s reasons for not adopting the recommendation in 

determining whether Och-Ziff has fully complied with its obligations.  Pending such 

determination, Och-Ziff shall not be required to implement any contested recommendation(s).  

With respect to any recommendation that the Monitor determines cannot reasonably be 

implemented within ninety (90) calendar days after receiving the report, the Monitor may extend 

the time period for implementation with prior written approval of the Offices. 

27. Throughout the Monitorship, the Monitor shall disclose to the Commission staff 

any credible evidence that corrupt or otherwise suspicious transactions occurred, or payments or 

things of value were offered, promised, made, or authorized by any entity or person within Och-

Ziff, or any entity or person working directly or indirectly for or on behalf of Och-Ziff, or that 

related false books and records may have been maintained by or on behalf of Och-Ziff or that 

relevant internal controls were circumvented or were not reasonably designed or implemented.  



 

 

 

 

43 

The Monitor shall contemporaneously notify Och-Ziff’s General Counsel, Chief Compliance 

Officer, and Audit Committee for further action unless at the Monitor's discretion he or she 

believes disclosure to Och-Ziff would be inappropriate under the circumstances.  The Monitor 

shall address in his or her reports the appropriateness of Och-Ziff’s response to all improper 

activities, whether previously disclosed to the Commission staff or not. 

Certification of Compliance  

28. Within ninety (90) days of the issuance of the second follow-up report, Och-Ziff 

shall certify in writing to the Commission staff with copy to the Monitor that Och-Ziff has adopted 

and has implemented, or is implementing on an agreed-to schedule, all of the Monitor's 

recommendations in the initial and follow-up report(s), or the agreed-upon alternatives. 

29. Within ninety (90) days of the issuance of the second follow-up report, if the 

Monitor believes that Och-Ziff’s corporate compliance program is reasonably designed and 

implemented to detect and prevent violations of the anti-corruption laws and disclosure laws and is 

functioning effectively, the Monitor shall submit to the Commission staff a written report 

("Certification Report") that certifies Och-Ziff’s compliance with its corporate compliance 

obligations under the Final Judgment.  The Certification Report shall set forth an assessment of the 

sustainability of Och-Ziff’s remediation efforts and may also recommend areas for further follow-

up in Och-Ziff’s future self-reporting.  The Monitor may extend the time period for issuance of the 

Certification Report by fifteen (15) days with prior written approval of the Commission staff.  

Fourteen (14) days prior to issuing the Certification report, the Monitor shall orally notify the 

Commission staff whether he or she expects to be able to certify as provided herein. 

Extension of Monitorship 

30. If, after completing the second follow-up review, the Commission staff concludes 

that Och-Ziff has not successfully satisfied its obligations under the Monitorship with respect to the 

Monitor's Mandate, the Monitorship shall be extended, and the Monitor shall commence a third 

follow-up review within sixty (60) days after the Commission staff concludes that Och-Ziff has not 

successfully satisfied its compliance obligations under the Monitorship (unless otherwise agreed by 

Och-Ziff, the Monitor, and the Commission staff).  The Monitor shall issue a written follow-up 

report within one hundred twenty (120) days of commencing the third follow-up review in the 

same fashion as set forth in Paragraphs 19 through 22 with respect to the follow-up reviews and in 

accordance with the procedures for follow-up reports set forth in Paragraphs 19 through 22. 

Extensions of Time 

31. Upon request by the Monitor or Och-Ziff, the Commission staff may extend any 

procedural time period set forth above for good cause shown. 



 

 

 

 

44 

Certification of Completion 

32. No later than sixty (60) days from date of the completion of the undertakings with 

respect to the Monitorship, Och-Ziff shall certify, in writing, compliance with the undertakings set 

forth above.  The certification shall identify the undertakings, provide written evidence of 

compliance in the form of a narrative, and be supported by exhibits sufficient to demonstrate 

compliance.  The Commission staff may make reasonable requests for further evidence of 

compliance, and Och-Ziff agrees to provide such evidence. 

Confidentiality of Reports 

33. The reports submitted by the Monitor and the periodic reviews and reports 

submitted by Och-Ziff will likely include confidential financial, proprietary, competitive business 

or commercial information.  Public disclosure of the reports could discourage cooperation, impede 

pending or potential government investigations or undermine the objective of the reporting 

requirement.  For these reasons, among others, the reports and the contents thereof are intended to 

remain and shall remain non-public, except (i) pursuant to court order, (ii) as agreed to by the 

parties in writing, (iii) to the extent the Commission determines in its sole discretion that disclosure 

would be in furtherance of the Commission's discharge of its duties and responsibilities, or (iv) as 

is otherwise required by law. 

Address for All Written Communications and Reports 

34. All reports or other written communications by the Monitor or Och-Ziff directed to 

the Commission staff shall be transmitted to Paul G. Block, Assistant Director, FCPA Unit, 

Division of Enforcement, Boston Regional Office, U.S. Securities and Exchange Commission, 33 

Arch Street, Boston, MA 02110.  A copy of the Certification of Completion and supporting 

materials shall also be transmitted to the Office of Chief Counsel of the Enforcement Division at 

Division of Enforcement, U.S. Securities and Exchange Commission, 100 F Street, N.E., 

Washington, D.C. 20549. 

J. Notice to Advisory Clients 

35. Within thirty (30) days of the entry of this Order, Och-Ziff and OZ Management 

shall provide a copy of the Order to each of OZ Management’s existing advisory clients as of the 

entry of this Order via mail, e-mail, or such other method as may be acceptable to the 

Commission staff.  For a period of one (1) year from the entry of this Order, Och-Ziff and OZ 

Management shall provide a copy of the Order to all of its prospective clients. 

IT IS FURTHER ORDERED pursuant to Rule 100(c) of the Commission’s Rules of 

Practice, 17 C.F.R. § 201.100(c), in the interest of justice and without prejudice to any party to the 

proceeding, that a public hearing for the purpose of taking evidence on the questions set forth in 



 

 

 

 

45 

Section V hereof shall be convened at a time and place to be fixed by, and before, an 

Administrative Law Judge to be designated by further order as provided by Rule 110 of the 

Commission’s Rules of Practice, 17 C.F.R. § 201.110, following the entry of a final judgment 

against the last remaining defendant(s) in in all actions related to the conduct described herein (the 

“Related Actions”).   

 

If Frank fails to appear at that hearing after being duly notified, Frank may be deemed in 

default and the proceedings may be determined against him upon consideration of this Order, the 

allegations of which may be deemed to be true as provided by Rules 155(a), 221(f), and 310 of the 

Commission’s Rules of Practice, 17 C.F.R. §§ 201.155(a), 201.221(f), and 201.310.  

 

IT IS FURTHER ORDERED pursuant to Rule 100(c) of the Commission’s Rules of 

Practice, 17 C.F.R. § 201.100(c), in the interest of justice and without prejudice to any party to the 

proceeding, that the Administrative Law Judge shall issue an initial decision no later than 120 days 

from the date of the entry of a final judgment in the Related Actions.   

 

In the absence of an appropriate waiver, no officer or employee of the Commission 

engaged in the performance of investigative or prosecuting functions in this or any factually related 

proceeding will be permitted to participate or advise in the decision of this matter, except as 

witness or counsel in proceedings held pursuant to notice.  Since this proceeding is not “rule 

making” within the meaning of Section 551 of the Administrative Procedure Act, it is not deemed 

subject to the provisions of Section 553 delaying the effective date of any final Commission action. 

 

36. Respondents Och-Ziff, OZ Management, Och and Frank shall comply with the 

undertakings enumerated in Section IV above. 

37. This Order shall be served forthwith upon Respondents personally or by certified 

mail. 



 

 

 

 

46 

VII. 

It is further Ordered that any debt for disgorgement, prejudgment interest, civil penalty or 

other amounts due by Respondents Och and Frank under this Order or any other judgment, order, 

consent order, decree or settlement agreement entered in connection with this proceeding, is a debt 

for the violation by Respondents Och and Frank of the federal securities laws or any regulation or 

order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. 

§523(a)(19), and, solely for purposes of exceptions to discharge set forth in Section 523 of the 

Bankruptcy Code, 11 U.S.C. §523, Respondents Och and Frank stipulate that the findings in the 

Order are true, and that such findings shall be accepted and deemed true, without further proof by 

any party, in any nondischargeability proceeding involving the Commission.  

 

 By the Commission. 

 

 

 

       Brent J. Fields 

       Secretary