SEC v. MICHAEL L. COHEN; and VANJA BAROS, No. 1:17-cv-00430, Eastern District of New York (Jan. 26, 2017) — Complaint

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

________________________________________________
:
SECURITIES AND EXCHANGE COMMISSION, :
:
Plaintiff, :
:
v. :     Civil Action No.
:
MICHAEL L. COHEN and :      JURY TRIAL DEMANDED
VANJA BAROS, :
 :
Defendants. :
________________________________________________:

COMPLAINT
Plaintiff Securities and Exchange Commission (the “Commission” or “SEC”) alleges the
following against defendants Michael L. Cohen (“Cohen”) and Vanja Baros (“Baros”):
SUMMARY
1. Michael L. Cohen and Vanja Baros (collectively, the “Defendants”) violated the
Foreign Corrupt Practices Act (the “FCPA”), the Investment Advisers Act of 1940 (the
“Advisers Act”) and related statutory rules and provisions from 2007 through at least August
2012.  Cohen and Baros carried out their scheme while the two worked for Och-Ziff Capital
Management LLC (“Och-Ziff”), as well as for and with certain of its subsidiaries and affiliates.
Och-Ziff is an institutional alternative asset manager or “hedge fund” that provides asset
management services to its managed investment funds (“Och-Ziff Hedge Funds”).   In violation
of the FCPA, Cohen and Baros directed, caused and arranged for Och-Ziff to pay tens of millions
of dollars in bribes to government officials on the continent of Africa through agents,
intermediaries and business partners of Och-Ziff.  The bribes were paid to secure and attempt to

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secure special access, special opportunities and preferential treatment for Och-Ziff in its pursuit
of profitable business in Africa.  The Advisers Act violations by Cohen and Baros resulted from
material misrepresentations and omissions by Cohen, Baros, Och-Ziff and OZ Management LP
(“OZ Management”), to Och-Ziff investors regarding multiple transactions in Africa, as well as
failures by Och-Ziff and OZ Management to disclose conflicts of interest to investors, and
undisclosed, improper uses of investor funds by Och-Ziff and OZ Management.
2. Beginning in 2007 and continuing through at least August 2012, Cohen and Baros
executed a sprawling scheme involving serial corrupt transactions and bribes paid to high-
ranking government officials in African countries, including the State of Libya, the Republics of
Chad, Niger and Guinea, and the Democratic Republic of the Congo (the “DRC”).  Cohen
spearheaded and participated in all of the corrupt transactions.  Baros began working with Cohen
at Och-Ziff in 2007 and participated in multiple corrupt transactions that were part of the
scheme.  Cohen and Baros intended that the bribery scheme get Och-Ziff special access to
investment opportunities in African countries; obtain or retain business for Och-Ziff, its
subsidiaries and its business partners; and financially benefit Cohen and Baros, as well as the
agents, intermediaries and business partners of Och-Ziff who participated with them in the
corrupt transactions.
3. As part of the scheme, Cohen and Baros worked on behalf of Och-Ziff to explore
and obtain business opportunities in and to operate in African countries and industries known for
corrupt business dealings.  Cohen, Baros, and Och-Ziff specifically targeted, pursued, retained,
engaged   and worked with agents, intermediaries and business partners in those countries and
industries.  The agents, intermediaries and business partners promoted themselves, and were
known to Cohen, Baros, and Och-Ziff,  as having close relationships and connections with high-

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ranking foreign government officials and typically had reputations for engaging in unsavory
business practices that, among other things, exploited relationships and connections with
government officials.  Cohen and Baros structured, championed and arranged for Och-Ziff to enter
into a series of corrupt transactions and investments in which bribes were paid through agents,
intermediaries and business partners to various high-ranking government officials.  Cohen and
Baros identified, developed and carried out these corrupt transactions with the knowledge, the
firm belief, or under circumstances that made it substantially certain that all or a portion of the
money paid, loaned or otherwise provided to and through agents, intermediaries and business
partners would be forwarded and paid as bribes to high-ranking foreign government officials.
4. In most instances, bribes were paid with Och-Ziff Hedge Fund investors’ money
rather than Och-Ziff’s own capital.  Cohen and Baros arranged for and structured transactions for
Och-Ziff and OZ Management to authorize the use of money from Och-Ziff Hedge Funds in
transactions in which bribes were paid to high-ranking foreign government officials.  In doing so,
Cohen and Baros knew, held the firm belief, or operated under circumstances that made it
substantially certain that investor funds would be used to pay bribes.
5. The scheme also included the use of investor funds in self-dealing transactions to
benefit Cohen, Och-Ziff’s agents, intermediaries and business partners, and Och-Ziff itself.
6. Cohen and Baros crafted, developed and carried out the scheme, including the use
of funding from the Och-Ziff Hedge Funds in most of the corrupt transactions, with the
knowledge, the firm belief, or under circumstances that made it substantially certain that all or a
portion of the money paid or loaned to agents, intermediaries and business partners subsequently
would be paid as bribes to high-ranking government officials in order to secure special access
and opportunities and preferential treatment for Och-Ziff in its pursuit and retention of profitable

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business in Africa.  The corrupt transactions included:
• In or about 2007, Cohen engaged in a corrupt transaction to secure an investment
from the Libyan Investment Authority (“LIA”) of $300 million into the Och-Ziff
Hedge Funds.  To pursue the LIA investment, Cohen used the services of an agent
(“Agent 1”) to act on his and Och-Ziff’s behalf.  Cohen arranged for Och-Ziff to
retain Agent 1’s services knowing, holding the firm belief, or operating under
circumstances that made it substantially certain, that Agent 1 would bribe high-
ranking Libyan government officials to secure the investment.  In fact, Agent 1
paid more than $3 million in bribes to Libyan government officials in connection
with securing and retaining the LIA investment for Och-Ziff.
• In a second corrupt transaction that began in or about 2007, Cohen arranged for
an investment of approximately $40 million of Och-Ziff funds in a Libyan real
estate development project (the “Libya Real Estate Project”) in which Agent 1
was a main actor.  The Project had the blessing of the Libyan government’s ruling
family, secured and maintained through the payment and promise of bribes, which
positioned it to be highly profitable.  Cohen arranged for Och-Ziff to use investor
funds to pay a bogus $400,000 “deal fee” to an entity controlled by Agent 1 as
part of its investment.  Cohen knew, held the firm belief, or operated under
circumstances that made it substantially certain, that Agent 1 would use the deal
fee for the continuing payment of bribes to high-ranking government officials in
Libya, whose support was needed to maintain government support and protection
for the Project.

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• In a third corrupt transaction that also began in or about 2007, Cohen and Baros
arranged for a loan of more than $86 million and additional payments of more
than $10 million of Och-Ziff Hedge Funds investor money to one of Och-Ziff’s
South African partners in African Global Capital I (“AGC I”), an Africa mining-
focused fund formed by Och-Ziff.   A substantial amount of that money was
ultimately funneled through a consultant working with AGC I (“Agent 2”),  who
acquired assets on behalf of AGC I, primarily through the payment of bribes to
high-ranking government officials.  Of the Och-Ziff Hedge Funds investor money
Och-Ziff provided to its AGC I business partner, millions went towards a) bribes
to high-ranking government officials, b) illicit payments to middlemen, c) the
personal benefit of Och-Ziff’s business partners, and d) expenditures unrelated to
the investment.  Cohen and Baros knew, held the firm belief, or operated under
circumstances that made it substantially certain, that monies from the loan and
additional payments would be used in those manners.
• In a fourth corrupt transaction that began in or about December 2007 and
continued through at least October 2008, Och-Ziff Hedge Funds made a
convertible loan (the “Convertible Loan”) of approximately $124 million from
Och-Ziff investor funds through AGC I to an entity in the DRC, purportedly to
purchase mining assets.   During the same time frame, Och-Ziff invested $150
million in another DRC mining company using investor funds.  Both DRC entities
were controlled by a notorious Israeli businessman (“Agent 3”) who Och-Ziff
partnered with at the behest of Cohen and Baros.  Agent 3 purportedly would act
as agent for and on behalf of Och-Ziff to purchase mining assets in the DRC.

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Monies from the Convertible Loan were used to pay bribes to high-ranking
government officials related to the acquisition of such assets.  Cohen and Baros
knew, held the firm belief, or operated under circumstances that made it
substantially certain, that monies from the Convertible Loan would be used to
bribe high-ranking government officials in connection with the acquisition of
assets on behalf of Och-Ziff.
• In a fifth corrupt transaction, in or about November 2010 and February 2011,
Cohen and Baros arranged for a margin loan (the “Margin Loan”) of approximately
$130 million to be made from Och-Ziff Hedge Funds investor funds to a third entity
controlled by Agent 3.  Cohen and Baros arranged for and structured the transaction
so that approximately $84.1 million of the loan proceeds went to Agent 3 with no
restrictions or oversight by Och-Ziff as to how Agent 3 used the money.  Cohen
and Baros knew, held the firm belief, or operated under circumstances that made
it substantially certain, that money from the Margin Loan would be used to bribe
high-ranking government officials in connection with the acquisition of assets on
behalf of Och-Ziff.
• In a sixth corrupt transaction, in or about 2010 and 2011, and continuing to at
least April 2012, Cohen and Baros arranged for African Global Capital II (“AGC
II”), a second Africa-focused fund formed by Och-Ziff, to purchase shares in a
London-based oil exploration company.  Through the efforts of Cohen and Baros,
Och-Ziff caused AGC II to purchase the shares from a South African business
partner in order to provide him with capital to use for other purposes, including
the payment of bribes.  With the proceeds from the AGC II purchase, the South

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African business partner paid more than $25 million to an account under the
control of the government of Guinea and $1 million to Agent 2, who then used a
portion of those funds to bribe high-ranking government officials in Guinea.
Cohen and Baros knew, held the firm belief, or operated under circumstances that
made it substantially certain, that the South African business partner would use
proceeds from the purchase by AGC to bribe high-ranking government officials
related to the acquisition of assets on behalf of Och-Ziff.
7. As part of their corrupt scheme, Cohen and Baros failed to disclose all material
facts in communications with Och-Ziff and OZ Management investors and potential investors
and, in certain circumstances, purposely omitted facts to ensure that corrupt transactions would
proceed.  Cohen and Baros also aided and abetted OZ Management’s failures to disclose all
material facts to their investors in connection with several African transactions, and aided and
abetted failures by OZ Management to disclose conflicts of interest and to control the use of
investor funds.  Cohen, Baros, Och-Ziff and OZ Management made material misrepresentations
and omissions to investors and potential investors regarding the corrupt transactions detailed in
paragraph 5 above, as well as in additional AGC II transactions as follows:
• With respect to the AGC II purchase of shares in a London-based mining
company for $77 million in 2011, Cohen and Baros knew, and failed to disclose
to investors, that the $77 million transaction price would result in a $52 million
windfall for Och-Ziff’s business partners.  Nor did they disclose that the windfall
would be used to fund, among other things, a $2.1 million payment back to Och-
Ziff to satisfy an outstanding loan relating to AGC I, $25 million in payments to
the government of Guinea to try to gain access to other business opportunities, $1

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million to a consultant (Agent 2), in part to pay a $150,000 bribe to a high-
ranking government official in Guinea, and millions of dollars of personal benefit
to other agents, intermediaries and business partners of Och-Ziff.
• As to a 2010 investment by AGC II in oil rights in the Republic of the Congo
(“Congo-Brazzaville”) through an Africa-focused oil exploration company,
Cohen knew and failed to disclose to investors, among other things, details about
the origin of the transaction, the self-interest of AGC II business partners in the
transaction, and the bases for payments to intermediaries.
• As to a 2010 AGC II purchase of $20 million of shares in a privately held
London-based mining holding company, Cohen knew and failed to disclose to
investors, among other things, that of the $20 million purchase price, $4 million
would be diverted to Cohen’s personal benefit.  Further, Cohen and Baros knew
and failed to disclose to investors that an additional $4 million would be funneled
to an AGC II business partner for his personal benefit.
8. Cohen and Baros also aided and abetted and caused Och-Ziff’s violations of
Section 13(b)(2)(A) of the Exchange Act in which Och-Ziff failed to make and keep books,
records, and accounts, which, in reasonable detail, accurately and fairly reflected its transactions
and disposition of its assets.
9. In addition, Och-Ziff lacked sufficient internal accounting controls to prevent and
detect violations of the FCPA and to provide reasonable assurances that the transactions were
legitimate and recorded appropriately; that the transactions were executed in accordance with
management’s general or specific authorization; that transactions were recorded as necessary to
permit preparation of financial statements in conformity with generally accepted accounting

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principles or any other criteria applicable to such statements; and, to maintain accountability for
assets.  Despite being aware of and understanding the nature and extent of the corruption risk
posed by doing business in, among other places, Libya, Chad, Niger, Congo-Brazzaville, Guinea
and the DRC, Och-Ziff failed to implement an adequate system of internal accounting controls
and failed to enforce the accounting controls it did have in place.  As a result, the various
investments, payments and loans to agents, intermediaries and/or business partners detailed
above were not subject to meaningful review.  Substantially all of the corrupt payments detailed
above were made without adequate and appropriate due diligence inquiries and investigation,
which permitted the bribe payments to be made.
10. Cohen and Baros took steps to circumvent Och-Ziff’s internal controls so that
Och-Ziff would falsely record the bribes detailed above as legitimate investments and/or
operating expenses on Och-Ziff’s books and records, thereby violating Section 13(b)(5) of the
Exchange Act and Exchange Act Rule 13b2-1.
AUTHORITY, JURISDICTION AND VENUE
11. The Commission brings this action pursuant to enforcement authority conferred
by Section 21(d), 21(e) and 27 of the Exchange Act [15 U.S.C. §§78u(d), 78u(e) and 78aa] and
Section 209(d) of the Advisers Act [15 U.S.C. §80b-9(d)].  The Commission seeks imposition of
a civil penalty as to Cohen and Baros pursuant to Section 21(d)(3) of the Exchange Act [15
U.S.C. §78u(d)(3)], and Section 209(e) of the Advisers Act [15 U.S.C. §80b-9(e)].
12. This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e) and
27 of the Exchange Act [15 U.S.C. §§78u(d)  , 78u(e) and 78aa], and Sections 209(d), 209(e) and
214 of the Advisers Act [15 U.S.C. §§80b-9(d), 80b-9(e), 80b-14].
13. Venue is appropriate in this Court under Section 27 of the Exchange Act [15

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U.S.C. §§78aa], Section 214 of the Advisers Act [15 U.S.C. §80b-14] and 28 U.S.C. § 1391(d)
because, among other things, certain acts or transactions constituting the violations of the federal
securities laws detailed herein occurred in this district, including travel, wire transfers and the
transmission of telephonic and electronic messages in connection with those violations.
14. The Defendants, directly or indirectly, made use of the means and
instrumentalities of United States interstate commerce, or of the mail, in connection with the
acts, practices, and courses of business alleged herein, including travel, the mails, telephonic
communications and electronic messaging.  Cohen and Baros routinely communicated
telephonically and via email with officers and employees at Och-Ziff’s and OZ Management’s
New York headquarters,  from London and other locations outside the United States regarding a)
the corrupt transactions, and b) for each of the transactions involving AGC I and AGC II, as well
as all other Och-Ziff investments in Africa, in which Cohen and/or OZ Management, acting as
investment advisers, defrauded clients or prospective clients.
15. Electronic messages sent and received by Cohen and Baros relating to the
sprawling illegal schemes outlined herein were routed through this district and through servers at
Och-Ziff’s New York headquarters.  Wire transfers and electronic communications relating to
the sprawling illegal schemes outlined herein were routed through this district.  Cohen also
travelled to and from London and other international venues t hrough the district in furtherance of
the transactions detailed herein.
16. Cohen and Baros arranged for, perpetrated and participated in the transactions
detailed herein understanding that final documentation relating to the transactions would be sent
and communicated to senior officers and employees of Och-Ziff and OZ Management at their
New York headquarters, and further understood that money or funds paid, loaned or invested by

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Och-Ziff,  as well as the agents, intermediaries and business partners of Och-Ziff, related to the
transactions would originate in and/or be transferred through Och-Ziff and/or OZ Management
accounts in New York, including accounts in this district.
DEFENDANTS
17. Michael L. Cohen, age 45, is a former Och-Ziff partner who resides in London,
United Kingdom ( the “UK”).  During the period 2007 through 2012, Cohen was the head of Och-
Ziff’s European office (based in London), as well as a member of Och-Ziff’s management
committee.  He had primary responsibility in Och-Ziff’s European office for transactions and
investments in Europe, the Middle East, and Africa.  Cohen was also an owner and executive
officer of OZ Management.  Cohen was born in the United States, owned a residence in
Massachusetts during the relevant time period, and holds dual UK/US citizenship.
18. Vanja Baros, age 44, is a former analyst in the private investments group at Och-
Ziff’s European office, focusing on natural resources, mining and minerals deals.  Baros was an
employee of Och-Ziff Management Europe Limited, a wholly owned subsidiary of Och-Ziff and
an affiliated investment adviser to OZ Management.  Baros was as a member of Och-Ziff’s African
Special Investment Team from 2007 through at least 2013.  In that capacity, Baros reported to and
worked closely with Cohen on Africa-related deals, with significant oversight responsibilities for
investments involving natural resources in Africa.  He is an Australian citizen residing in the UK.
RELATED ENTITIES AND INDIVIDUALS
19. Och-Ziff Capital Management Group LLC (“Och-Ziff”) is    an institutional
alternative asset manager or “hedge fund” incorporated in Delaware with its principal place of
business in New York, New York, and offices in New York, London and Hong Kong.  Och-Ziff’s
common stock is registered with the Securities and Exchange Commission pursuant to Section

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12(b) of the Exchange Act.  The stock became listed on the New York Stock Exchange (ticker:
OZM) after an initial public offering on or about November 14, 2007.  Since then, Och-Ziff has
been an “issuer” and prior to that was a “domestic concern,” within the meaning of the FCPA.
Och-Ziff controls numerous consolidated subsidiaries and affiliates through which it operates and
provides investment advisory and management services to various hedge funds and alternative
investment vehicles, the Och-Ziff Hedge Funds, in return for management fees and incentive
income.  Och-Ziff is one of the largest hedge funds in the world.  In the 2007-2012 timeframe, it
had approximately $30 billion in assets under management.
20. OZ Management LP (“OZ Management”)    is    a registered investment adviser and a
wholly-owned subsidiary of Och-Ziff, with its primary place of business in New York, New York.
Since 1999, OZ Management has been registered with the Commission as an investment adviser.
OZ Management provides asset management services to the Och-Ziff Hedge Funds.  The financial
results of Och-Ziff’s wholly-owned subsidiaries, including OZ Management and its subsidiaries and
affiliates, are ultimately consolidated into the financial statements of Och-Ziff.  During 2007-2012,
OZ Management was a domestic concern and an “agent” of an issuer, as those terms are defined in
the FCPA.
21. OZ Africa Management GP, LLC (“OZ Africa”) is a Delaware-based wholly-
owned subsidiary of OZ Management.  OZ Africa held certain of Och-Ziff’s management and
advisory interests for private investments in Africa in approximately 2007-2012.
22. Africa Management Limited (“AML”) was a joint venture started in 2007 by Och-
Ziff, OZ Africa, and entities affiliated with various South African business partners of Och-Ziff
and its subsidiaries.  AML established investment funds, including AGC I and AGC II, through
which it pursued and held natural resource, mining and mineral assets and rights in various African

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countries from approximately 2007-2012.
23. “Och-Ziff Employee 1” is a United States citizen who is a high-ranking officer and
executive at Och-Ziff, based in the firm’s New York office.
24. “Och-Ziff Employee 2” is a United States citizen who was a high-ranking officer
and financial executive at Och-Ziff, based in the firm’s New York office.
25. “Agent 1” was a London-based businessman with a multi-national network of
companies, including a real estate development company doing business in Libya.  He had a
history of doing business with Och-Ziff that predated the transactions detailed here.  Agent 1 had
long-standing and extensive connections to high-ranking government officials in Libya.
26. “Agent 2” was a Gabonese national who worked as a consultant for AGC I in or
about 2007 through at least 2012.  Agent 2 was a close business associate of South African
Business Associate 3.  Agent 2’s job included, among other things, sourcing and attempting to
secure mining opportunities in Africa for AGC I and affiliated entities.
27. “Agent 3” was an Israeli businessman with significant interests in the diamond and
mining industries in the DRC.  Agent 3 had long-standing and extensive connections to high-
ranking government officials in the DRC.  Och-Ziff entered into business partnerships with Agent
3 both directly and through OZ Africa and various Och-Ziff subsidiary companies and affiliates,
including partnering with Agent 3 to pursue natural resource, mining and mineral opportunities in
the DRC.  Och-Ziff used Agent 3 as its agent in dealings with high-ranking government officials in
the DRC related to those opportunities.
28. “South African Business Associate 1” was a former South African government
official, a prominent figure within the ruling party in South Africa, the African National
Congress (“ANC”), and a businessman who operated through a South Africa-based business

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conglomerate (“SA Business Conglomerate”).  Cohen successfully advocated for Och-Ziff to
partner with him in the AGC joint ventures (AGC I and II).  Although Cohen and others at Och-
Ziff promoted South African Business Associate 1 to potential investors as a partner, he never
formally became part of any AGC joint venture.
29. “South African Business Associate 2” was the co-founder of the SA Business
Conglomerate with South African Business Associate 1, and functioned as its Chief Executive
Officer.  He became the Chief Executive Officer of AML.
30. “South African Business Associate 3” was a businessman with close connections
to South African Business Associate 1 and other members of the ANC.  He founded and
controlled a private investment company in the Turks & Caicos Islands ( the “Turks & Caicos
Entity”) that did business in the United Kingdom, South Africa and elsewhere.  The Turks &
Caicos Entity owned or controlled a number of natural resource, mining, energy and other assets,
and participated in the AGC joint business venture.
FOREIGN GOVERNMENT OFFICIALS
31. “Libyan Government Official 1” was the son of Colonel Muammar Gaddafi (who,
in 2007, was in his thirty-eighth year of absolute rule in Libya).   He was a Libyan government
official.  Libyan Government Official 1 was the driving force behind the creation of the LIA.  As
a government official and member of the de facto ruling family, he exercised significant control
over the LIA’s business, financial and investment decisions and wielded significant power in the
Libyan government.
32.  “Libyan Government Official 2” was a high-ranking executive officer in the LIA
who, with Libyan Government Official 1, had significant control over business, financial and
investment decisions made by the LIA.

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33.   “Libyan Government Official 3” was a high-ranking executive officer in
Libya’s state security services with significant influence over security and commercial matters in
Libya, including the granting of visas and landing permits for foreign visitors.
34. “DRC Government Official 1” was a high-ranking executive official in the DRC
who had the ability to take official executive action and exert official influence over mining
matters in the DRC.
35. “DRC Government Official 2,” was a high-ranking government official in the
DRC and close advisor to DRC Government Official 1.  During the relevant time period, DRC
Government Official 2 was an Ambassador-at-Large for the DRC government and, at certain
times, a national parliamentarian.
36. “Niger Government Official 1” was a high-ranking government official in Niger
who was married to Niger Official 2, and who had the ability to exert official influence over
mining matters in Niger
37.   “  Niger Government Official 2” was a high-ranking government official in Niger
who was married to Niger Official 1, and who had the ability to take official executive action and
exert official influence over mining matters in Niger.
38. “Chad Government Official 1” was a high-ranking government official in Chad
who had the ability to take official executive action and exert official influence over mining
matters in Chad.
39. “Guinea Government Official 1” was a high-ranking government official in
Guinea who had the ability to take official executive action and exert official influence over
mining matters in Guinea.
40. “Guinea Government Official 2” was a high-ranking government official in

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Guinea who had the ability to take official executive action and exert official influence over
mining matters in Guinea.
FACTUAL ALLEGATIONS
 A. Violations of the FCPA Relating to the Libyan Investment Authority
41. In 2003, Libya had emerged from a lengthy period of economic sanctions
imposed by the United Nations and was opening to global investment and business opportunities.
In 2006, the Libyan government created a sovereign wealth fund, the LIA, to manage the
country’s oil and other assets and to encourage foreign investment.  In or about 2007, Cohen
began attempts to obtain clients and investment opportunities in Libya for Och-Ziff.
42. Cohen enlisted Agent 1 to assist him and Och-Ziff in pursuing investment and
business opportunities in Libya and with the LIA.  Cohen knew that Agent 1 had contacts within
the highest levels of the Libyan government.  Through previous business dealings and
communications with Agent 1, Cohen knew that Agent 1’s close connections in Libya included
the country’s ruling family ( the Gaddafis) and senior officials in the Libyan security services.
Cohen and others at Och-Ziff knew that Agent 1 was not a financial consultant or advisor, but
rather a middleman whose primary c ontribution to transactions was his connections to high-
ranking foreign government officials.  Cohen also was aware that Agent 1 used an opaque
network of offshore entities in connection with financial transactions and understood that Agent
1’s purpose in doing so was to shield financial transactions from scrutiny.
43. In or about February 2007, Cohen requested that Agent 1 work as Och-Ziff’s
agent to secure a LIA investment in the Och-Ziff Hedge Funds.  Prior to engaging Agent 1, Och-
Ziff and Cohen did not conduct adequate or appropriate due diligence or investigation as to

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Agent 1, and specifically did not conduct adequate or appropriate due diligence or investigation
as to the nature of Agent 1’s relationship with Libyan government officials.
44. In or about February and March 2007, Agent 1 discussed with Cohen the structure
of the LIA and explained that it was largely controlled, directly and through proxies, by Libyan
Government Official 1.    Agent 1 described Libyan Government Official 1 to Cohen as the
driving force behind the creation of the LIA and a powerful government official in his own right.
45. Agent 1 arranged a meeting in Vienna, Austria, in or about March 2007, at which
he introduced Cohen to Libyan Government Official 1 and his main proxy, Libyan Government
Official 2, a senior official at the LIA.  Cohen travelled to Vienna from London, England, for the
meeting.  No one else from Och-Ziff attended the Vienna meeting.  Libyan Government Officials
1 and 2 had significant control over investment decisions made by the LIA.  In a later email,
Cohen described Libyan Government Official 2 to others at Och-Ziff as Libyan Government
Official 1’s “right hand man at the lia (sic).”  Subsequent due diligence conducted by Och-Ziff
stated that Libyan Government Official 2  “looks after” the interests of Libyan Government
Official 1, at the LIA and in a private commercial business.
46. At the Vienna meeting, Cohen and Libyan Government Official 1 discussed Och-
Ziff’s business, the LIA and the possibility of the LIA making an investment in the Och-Ziff
Hedge Funds.  Agent 1 also introduced Cohen to a Tunisian business associate of Agent 1 who
was a member of Libyan Government Official 1’s entourage (the “Tunisian Business
Associate”).  The Tunisian Business Associate would play a critical role in facilitating bribery
payments from Och-Ziff to Libyan Government Officials 1 and 2.  The bribes were paid in
exchange for the LIA investing money with Och-Ziff and the Och-Ziff Hedge Funds.

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47. In a subsequent email, Cohen told Och-Ziff Employee 1 that the “[m]eetings are
amazing.  They [the LIA] have 77 billion, half in cash and no idea who to give it to...I haven’t
been this excited in a while.”  Throughout 2007, Cohen continued to communicate with Och-Ziff
Employee 1 regarding the progress of his pursuit of the LIA investment and the role of Och-
Ziff’s “agent,”  Agent 1.
48. Shortly after the Vienna meeting, on or about March 8, 2007, Cohen sent an e-
mail to Libyan Government Official 2, stating: “It was very nice meeting you yesterday.  I think
there are many ways we can work together on the investment side.  I have attached an overview
of our main fund.  I would love to get you in as an investor in one of our funds so we can start a
dialogue and look at investments together.”
49. Cohen and Agent 1’s efforts to secure an LIA investment with Och-Ziff continued
through the summer of 2007.  Cohen updated Och-Ziff Employee 1 about those efforts, primarily
via emails sent between Cohen in Europe and Och-Ziff Employee 1 in New York.  On or about
May 29, 2007, Cohen emailed Och-Ziff Employee 1 stating, “[t]he agent wants to come in and
see me this week.  You OK with that?”  Och-Ziff Employee 1 responded, “I will be ok.  Will call
you.”  Then, on or about August 9, 2007, Cohen emailed Och-Ziff Employee 1, asking, “[i]s
Libya in for Sept 1?”  Och-Ziff Employee 1 replied, “I think so.  Will check.”
50. On or about September 11, 2007, an employee of a background investigation firm
sent Och-Ziff employees a report Och-Ziff had requested on Agent 1 and his business partner
which stated, in part:
 “These guys [Agent 1 and his partner] were hard to pin down because they have
 always acted as advisors and kept their money and interests offshore...[Agent 1’s
 company] uses special purpose vehicles [“SPV”] based offshore that have no
 subsidiaries, no employees and no operations other than relating to the transaction
 for which they were established.  This, and their activities as ‘fixers’, means that

19

 there is little documented evidence of the company’s activities either in the UK or
 internationally.”
51. On or about September 19 and 20, 2007, Agent 1 arranged a meeting for Cohen
and two other Och-Ziff representatives with the LIA’s investment management team in Tripoli,
Libya.  Agent 1 secured landing permits and visas for the trip through Libyan Government
Official 3.  Agent 1 told Cohen that other members of the LIA could not be told of his role as an
agent for Och-Ziff or the deal would be rejected.  As a result, Agent 1 did not attend the Tripoli
meeting and his involvement was shielded from the other Och-Ziff participants and from LIA
participants other than Libyan Government Officials 1 and 2.  Both before and after the meeting,
Agent 1 worked on Och-Ziff’s behalf to secure an LIA investment with Och-Ziff without
disclosing his role to members of the LIA other than Libyan Government Officials 1 and 2.
Agent 1 regularly updated Cohen about his efforts and his progress.
52. During his communications with Cohen, Agent 1 broached the issue of a fee that
needed to be paid if and when Och-Ziff received an investment from the LIA.  During these
discussions, Agent 1 told Cohen that he would have to confer with “others” to confirm whether
or not the proposed size of the fee was acceptable to its actual recipients.  In late 2007, when it
became clear that the LIA intended to make a $300 million investment with Och-Ziff, Cohen and
Agent 1 agreed on a “fee” payment of $3,750,000 to be paid in two installments.  Agent 1 agreed
to the amount after conferring with a representative of the Libyan government officials.  As a
result of these discussions, Cohen knew, held the firm belief, or operated under circumstances
that made it substantially certain, that all or most of the “fee” paid to Agent 1 would, in fact, go
to Libyan Government Officials 1 and 2 in return for the LIA’s $300 million investment.

20

53. On or about November 26, 2007, Cohen told Och-Ziff Employee 1 that the firm
needed to pay a fee of $3,750,000 to Agent 1 in connection with the LIA’s $300 million
investment.  The investment was set to be finalized on or about November 30, 2007.
54. On or about November 27, 2007, Och-Ziff Employee 1 forwarded an email to
Cohen that set out possible legal and compliance conditions that had to be met before the fee
could be paid, stating:
 ... There has to be a written agreement between OZ [Och-
Ziff] and the person who receives payment that ... requires the
solicitor, at the time of any solicitation, to provide the client with a
copy of the [investment adviser registration] and a separate written
disclosure document containing information relating to the
solicitation arrangemen [sic] (including the comp to be paid); and
the adviser receives from the client an executed acknowledgment
showing that the client received the separate written disclosure
document[.]

55. Cohen told Agent 1 about these legal and compliance conditions, including
disclosing Agent 1’s role as Och-Ziff’s agent and his compensation to the LIA.  Agent 1 refused
to accept the conditions or disclose his role to the LIA, and discussed with Cohen the negative
ramifications such disclosure would have on the potential LIA investment with Och-Ziff.  Cohen
and Agent 1 then discussed ways to evade the legal and compliance requirements, including
providing a false representation to Och-Ziff or simply having Agent 1 agree to deliver notice
understanding that he would, in fact, make no such disclosure to the LIA.
56. On or about November 30, 2007, Och-Ziff received signed subscription
documents and wire transfers from the LIA for the $300 million investment in the Och-Ziff
Hedge Funds.  The wire transfers flowed from the LIA’s custodial account in Luxembourg,
through an account in the United States, and were deposited in an Och-Ziff account in the
Cayman Islands.

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57. Och-Ziff did not enter into a written agreement with Agent 1 for the $3,750,000
payment.  Instead, at the urging and behest of Cohen, Och-Ziff, through OZ Management,
entered into two agreements, a Consultancy Agreement and an Anti-Corruption Side Letter, with
a separate legal entity, an SPV formed by Agent 1 and based in St. Peter Port, Guernsey (the
“Guernsey SPV”).  The Guernsey SPV was a shell company that Agent 1 intended to use to
contract for and receive the $3,750,000 LIA transaction fee.  Neither the Consultancy Agreement
nor the Anti-Corruption Side Letter was executed prior to Och-Ziff receiving the $300 million
investment from the LIA on or about November 30, 2007.
58. On or about December 4, 2007, an Och-Ziff employee sent an email to Cohen,
which attached the Consultancy Agreement and Side Letter between OZ Management and the
Guernsey SPV.  Cohen replied to the email stating: “looks good.”  The Consultancy Agreement
described the Guernsey SPV as follows: “[the Guernsey 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).”
The description was false, as Cohen knew based on his dealings and discussions with Agent 1.
The SPV had no employees, no expertise and had never acted as a consultant in Libya or
elsewhere to any company.
59. The Consultancy Agreement further stated that: “[the Guernsey SPV] has offered
to provide assistance to [OZ Management] with respect to introducing the Company to the
Libyan Investment Authority ... developing and coordinating strategy and tactics to promote and
encourage LIA to invest in [OZ Management] by cash injection into the account of [OZ
Management] or any of its funds[.]”  Under the terms of the Consultancy Agreement, the
Guernsey SPV undertook to “assist OZ Management LP in connection with the introduction of

22

[OZ Management] to and promoting its interests and reputation with LIA.”  Och-Ziff and the
Guernsey SPV entered into the two agreements on or about January 15, 2008, but backdated
them to December 5, 2007.  The agreements, which only referenced future actions, did not
disclose or otherwise reflect that Agent 1 had been working on Och-Ziff’s behalf since at least
February 2007.
60. The Anti-Corruption Side Letter stated that the LIA “has been informed in writing
of the Agreement and the consideration payable to ourselves thereunder.”  That statement was
false, as Cohen knew because of his dealings and discussions with Agent 1.  Cohen knew that
neither Agent 1 nor the Guernsey SPV had informed anyone at the LIA who was not involved in
the bribe scheme that Agent 1 had received payment of a fee from Och-Ziff relating to the
transaction.  As part of its agreements with the Guernsey SPV or otherwise, Och-Ziff did not
request a copy of the purported written notification and did not notify the LIA directly of the fee
payment.  In fact, Cohen and Agent 1 took great pains to ensure that officials and employees at
the LIA – other than the bribe recipients – did not learn of the fee payment or of Agent 1’s role
in the transaction between Och-Ziff and the LIA.
61. Och-Ziff paid the $3,750,000 fee to Agent 1 through his Guernsey SPV with
Cohen and other senior officers and employees at  the firm fully aware of the risks in dealing with
Agent 1 and with the LIA.  Cohen and Och-Ziff knew Agent 1 had connections at the highest
levels within the Libyan government, including with the Gaddafi family.  Cohen and Och-Ziff
also were aware that Agent 1 had a reputation for operating as a “fixer” in business transactions,
and knew of his opaque network of business interests run through offshore holding companies
that were, as reported to Och-Ziff, “hard to pin down.”

23

62. Och-Ziff paid Agent 1 the $3.75 million fee from funds originating in a New
York financial institution, via his offshore shell company, the Guernsey SPV.  Contrary to the
firm’s anti-corruption guidelines and internal financial controls, Och-Ziff failed to conduct
adequate or appropriate due diligence on the Guernsey SPV.  Och-Ziff nonetheless entered into
contractual obligations with the entity itself, rather than with Agent 1, and thus placed no
contractual restrictions on Agent 1’s conduct.  Throughout the decision-making process at Och-
Ziff, Cohen advocated strongly in favor of paying the fee to Agent 1 in this manner.
63. On or about January 16, 2008, Och-  Ziff transferred the first $2.25 million
installment of its payment to Agent 1 from a New York account to an account in Guernsey held
by the Guernsey SPV.  At about the same time, Agent 1 transferred ownership of 66% of the
Guernsey SPV to the Tunisian Business Associate who was a member of Libyan Government
Official 1’s entourage.  Agent 1 then directed a wire transfer of $1,507,659.61 from the
Guernsey SPV’s account, through an intermediary account held by the Tunisian Business
Associate, to an account in Switzerland held for the benefit of Libyan Government Official 1.
64. Agent 1 also used portions of the $2.25 million installment to direct payments to
Libyan Government Official 3.  On or about March 5, 2008, the Guernsey SPV transferred
$331,528 from its Guernsey account to an account of a British Virgin Islands SPV in the
Bailiwick of Jersey that Agent 1 controlled.  On or about March 6, 2008, Agent 1 transferred
approximately €500,045 (Euro) from an account in Jersey to an account in Malta in the name of
Libyan Government Official 3’s son, which he held for the benefit of his father, Libyan
Government Official 3.   That same day, Agent 1 transferred approximately $400,000 from a
Guerns  ey SPV account in London to the same account in Malta.

24

65. These payments to Libyan Government Official 3 constituted, at least in part,
bribes to influence the granting of visas and landing permits for the LIA trip to Tripoli by Cohen
and other Och-Ziff executives in September 2007 that helped facilitate the LIA investment.
From approximately March to June 2008, Agent 1 paid Libyan Government Official 3 more than
$3 million in bribes, which benefitted Agent 1’s and Och-Ziff’s continuing business ventures in
Libya and aided Agent 1’s ability to do business in Libya, including on behalf of Och-Ziff.
66. In addition to direct cash payments and transfers, Agent 1 regularly made in-kind
payments to Libyan Government Official 2 for the purpose of influencing acts or decisions of his
at the LIA.  The acts or decisions influenced by Agent 1’s payments included the LIA’s decision
to invest $300 million with Och-Ziff and general commercial business in Libya over which
Libyan Government Official 2 e xercised control.  These included payments for luxury travel,
luxury hotel accommodations and jewelry.  Agent 1 also paid living and medical expenses for
Libyan Government Official 2’s brother in London.
67. The second installment of the “ fee” Och-Ziff owed Agent 1 in connection with
the $300 million LIA investment was due on December 1, 2008.  On or about October 30, 2008,
Agent 1 asked Cohen if he could be paid early.  Cohen agreed to an early payment and directed
Och-Ziff personnel to pay an invoice sent by Agent 1.  The Guernsey SPV used by Agent 1
received payment of $1.5 million from Och-Ziff shortly thereafter.
68. On or about November 5, 2008, the Guernsey SPV transferred approximately
$1,005,000 from its account to an intermediary account in the United Kingdom, then on to an
account in Switzerland for the benefit of Libyan Government Official 1.  Agent 1 arranged this
payment to an account held for the benefit of Libyan Government Official 1 in return for his
support and influence of the LIA’s decision to invest $300 million with Och-Ziff.

25

69. Och-Ziff reaped substantial financial benefit from the bribes paid by Agent 1 on
its behalf.  Och-Ziff collected fees and incentive income from the LIA fund investment totaling
approximately $100 million.
70. Cohen arranged for Och-Ziff to retain the services of Agent 1, and for payments
to be made to him, with the knowledge, the firm belief, or under circumstances that made it
substantially certain, that all or a portion of the money paid to him, or to entities under his
control, would be forwarded and paid as bribes to high-ranking Libyan government officials in
connection with the LIA investment.
71. Och-Ziff recorded the $3.75 million paid to Agent 1 as “Professional Services –
Other.”  This designation was false.  The payment was for arranging introductions and meetings
with corrupt foreign government officials and for Agent 1 to pay bribes to those officials.  Och-
Ziff thereby violated Section 13(b)(2)(A) of the Exchange Act by failing to make and keep
books, records and accounts, which, in reasonable detail, accurately and fairly reflected its
transactions and disposition of its assets.  By his actions, Cohen aided and abetted Och-Ziff’s
violations.
B. Violations of the FCPA Relating to the Libya Real Estate Project
72. In or about October 2007, Och-Ziff invested in a real estate development venture
in Libya, the Libya Real Estate Project.  The venture included two hotels, an office tower and a
proposed hospital complex in Tripoli, and was founded and controlled by Agent 1.  Och-  Ziff
began its investment process for the Project at the same time it was using Agent 1 as an
intermediary in its efforts to solicit an investment from the LIA.  Cohen championed the
investment by Och-Ziff in the Project, noting to colleagues at Och-Ziff that by investing in the
Project the firm was “making a bet on Libya here and relationship [with Agent 1].”  Based on

26

discussions with Agent 1, Cohen knew that Agent 1 would make corrupt payments to Libyan
government officials relating to the Project as well as to secure an investment from the LIA.  The
“bet” Cohen and Och-Ziff made involved cementing a relationship with Agent 1 leading to those
corrupt payments and corresponding financial benefit for Och-Ziff and Cohen.
73. Prior to Och-Ziff’s investment, Agent 1 provided equity stakes in the Project’s
development company to Libyan Government Official 3 and to the daughter of Colonel Gaddafi
in exchange for valuable land leases on key properties on which the developments would be
built.  During its dealings with Agent 1, Och-Ziff and Cohen knew of the link between the
Gaddafi family and the Libya Real Estate Project.  In one review of the project, Cohen wrote
“Gathafi Hotels” to describe a subsidiary of Agent 1’s real estate development company.  Later,
at a time when Och-Ziff held a board seat on the Project’s development company, Och-Ziff’s
board representative received emails that described Colonel Gaddafi’s daughter as “our JV
partner” at the company.
74. At Cohen’s urging, in or about October 2007, Och-Ziff provided a convertible
loan of $40 million from Och-Ziff limited partner funds to Agent 1’s real estate development
company.  Och-Ziff later converted the loan to equity, giving them an ownership stake in the
company.  As payment for purportedly sourcing the transaction, Cohen also arranged for Och-
Ziff to pay a $400,000 “deal fee” to a special purpose vehicle (“SPV”).  Agent 1 controlled the
SPV having created it specifically for the transaction.  The SPV was nothing more than a shell
company.  Agent 1 told Cohen that, in reality, the deal fee was needed to compensate him for
certain expenses that he needed to keep “off the books.”  Agent 1 also told Cohen that the
ongoing payment of bribes was necessary for the real estate development company that Och-Ziff
now co-owned with Agent 1 to operate effectively in Libya.  Cohen arranged for the deal fee to

27

be paid knowing that ongoing bribes were necessary to operate and advance the Libya Real
Estate Project with the knowledge, the firm belief, or under circumstances that made it
substantially certain that a portion of the deal fee paid to Agent 1 would be used to bribe Libyan
government officials in connection with the Project.
75. Och-Ziff approved the payment of the $400,000 deal fee in November 2007.  Yet
it failed to conduct a dequate and appropriate due diligence on the SPV receiving the funds.  In
addition, Cohen concealed the corrupt nature of Agent 1’s role in the transaction and that a
substantial portion of the fee would be used by Agent 1 to pay bribes.  Cohen also arranged for
payment by Och-Ziff to Agent 1’s SPV without a contract between Och-Ziff and either Agent 1
or the SPV.  As a result, contrary to its anti-corruption policies, Och-Ziff paid the deal fee
without restricting the use of funds by Agent 1 and without taking adequate and appropriate steps
to ensure that investor funds were not used for an improper purpose.
76. Shortly after the SPV received the $400,000 “deal fee” payment, Agent 1
arranged for a portion of the funds to be transferred to Libyan Government Official 3.  The
payment was a bribe to secure the ongoing support of Libyan Government Official 3, who in his
senior position in Libya’s security services had the power to influence commercial matters in the
country.  The bribe ensured that Agent 1 could continue to operate under Libyan Government
Official 3’s protective cloak, and that the Libya Real Estate Project could go forward.
77. As a result of Cohen’s conduct and concealment, Och-Ziff recorded the $400,000
paid to Agent 1’s SPV as a “deal fee.”  This designation was false.  The payment was to pay
bribes, not for legitimate deal-related expenses.  Och-Ziff thereby violated Section 13(b)(2)(A)
of the Exchange Act by failing to make and keep books, records and accounts, which, in

28

reasonable detail, accurately and fairly reflected its transactions and disposition of its assets.  By
his actions, Cohen aided and abetted Och-Ziff’s violations.
 C. Violations of the FCPA, and the Misuse of Och-Ziff and AGC I Investor
  Funds in Violation of the Advisers Act, Relating to the AML Joint Venture in
  Niger and Chad

78. Beginning in or about 2007, Och-Ziff formed Africa Management Limited
(“AML”) as a joint venture that included Och-Ziff; its subsidiary, OZ Africa; and entities
affiliated with various South African business partners.  AML established two investment funds,
AGC I and AGC II, to invest in natural resource and mining assets in Africa.  Cohen led the
venture out of Och-Ziff’s office in London.  After joining Och-Ziff in late 2007, Baros’s primary
responsibilities at Och-Ziff related to AGC I and AGC II.  Och-Ziff provided capital, and
managed the funds using its own infrastructure, including the Och-Ziff compliance and legal
teams.  Och-Ziff also provided investment expertise and OZ Management played a significant
role in the investment management of the joint venture.
79. OZ Management held its advisory and management interest in AGC I through OZ
Africa, which initially was funded using existing Och-Ziff Hedge Fund investor funds.  As part
of its Africa investment strategy, Och-Ziff teamed with business partners with high-level
political connections in Africa, who in turn used   those connections to source deals for the fund
and navigate political issues in the various countries.  In pursuit of business, Och-Ziff and its
agents, intermediaries and business partners misused investor funds and bribed government
officials in several countries, including the Democratic Republic of the Congo, Chad and Niger.
80. At Cohen’s urging, Och-Ziff chose a prominent figure within South Africa’s
ruling party for a primary role with AGC I (South African Business Associate 1).  South African
Business Associate 1 was a former government official as well as a successful businessman who

29

operated through his SA Business Conglomerate.   Although Cohen and others at Och-Ziff
promoted South African Business Associate 1 to potential investors as a partner, he never
formally became part of AML, or directly involved in the AGC I fund, because of purported
regulatory issues in South Africa.   Instead, his partner and the co-founder of the SA Business
Conglomerate, South African Business Associate 2, became the Chief Executive Officer of
AML.  Another person with close connections to the two co-founders of the SA Business
Conglomerate, South African Business Associate 3, also later became a partner in AML.
81. A private investment company South African Business Associate 3 controlled, the
Turks & Caicos Entity, was designated to source and acquire assets for AGC I.  The Turks &
Caicos Entity became a useful tool in several corrupt transactions involving Och-Ziff, Cohen and
Baros.
82.  In or about May 2007, Och-Ziff entered into a series of loan agreements with the
Turks & Caicos Entity.  The loans totaled more than $86 million and ostensibly were made to
acquire natural resource and mining rights in Africa, which would then be contributed into AGC
I upon its formation.  Cohen advocated for Och-Ziff to work with the Turks & Caicos Entity to
acquire African mining rights and later oversaw AGC I’s efforts to carry out that strategy.  South
African Business Associate 3 used part of the funds loaned by Och-Ziff to the Turks & Caicos
Entity to acquire mining rights in Chad and Niger and to invest in an Africa-focused oil
company, (the “Oil Exploration Company”).  South African Business Associate 3 also used a
portion of the funds to pay bribes to facilitate the acquisitions.  In 2008, some of the assets
acquired by South African Business Associate 3 (via the Turks & Caicos Entity) were
contributed to AGC I.  Och-Ziff then converted its existing loans into an equity stake in AGC I.

30

83. In or about 2007, a consultant working with the Turks & Caicos Entity began
functioning as an agent for Och-Ziff and its partners (Agent 2), and began paying bribes to
facilitate AGC I’s acquisition of assets.  Agent 2 and South African Business Associate 3 worked
closely together in connection with the acquisition of mining rights and assets in both Niger and
Chad.   Between approximately April 2007 and June 2012, Agent 2 was paid approximately $3.5
million directly and indirectly by Och-Ziff and its business associates for purported consulting
services and for “delivering services” in Niger and Chad.  The services Agent 2 provided
included bribing government officials in Chad and Niger to advance the business and
commercial interests of AGC I.  For example, beginning in or about June 2007, Agent 2 acquired
the uranium mining rights for Och-Ziff by paying bribes to a high-ranking government official in
Niger (Niger Government Official 1), in order to obtain Niger Government Official 1’s influence
over another high-ranking government official (Niger Government Official 2), who had the
power to grant uranium mining licenses.
84. Agent 2 and South African Business Associate 3 paid bribes to the two Nigerian
government officials consisting of, among other things, payments for “nice cars;” a $100,000
payment to a charity run by Niger Government Official 1; payments made to and through the
nephew of the two Nigerian officials; payments made to and through the son of the Nigerian
officials; and, payments made to the two Nigerian government officials through an attorney a nd
other intermediaries.  Agent 2 made these payments to obtain mining assets for, among others,
AGC I.
85. On or about July 20, 2007, Agent 2 sent an email to South African Business
Associate 3 about a request for money made by Niger Government Official 1 to pay for an
upcoming conference she was planning.  Agent 2 stated that the real objective of the payment “is

31

to show [Niger Government Official 2] that we are making a strong contribution to [Niger
Government Official 1’s] Fondation [sic]...This must happen before they make a decision on the
Mining and Oil request we recently sent them.”  In response, South African Business Associate 3
had a business associate and executive at his holding company write a letter to Niger
Government Official 1 stating:
 We would like to thank you for giving our [Agent 2] an audience.  We are most
 pleased to be entering the mining business in Niger, and we are hopeful that our
 license will be issued in the coming month...[our company] would be pleased to
 contribute $100,000 to help finance your conference.
86. On or about August 8, 2007, the Turks & Caicos Entity transferred $50,000 from
a London account, through an   account in New York, to a company account set up in July 2007
by Niger Government Official 1.
87. On or about August 29, 2007, the Turks & Caicos Entity transferred more than
$1.3 million to the company account set up in July 2007 by Niger Government Official 1, again
through the account in New York.  On or about September 3, 2007, Agent 2 emailed the nephew
of the Niger officials a copy of the confirmation of the $1.3 million bank transfer.  The corporate
records of the Turks & Caicos Entity identified the $1.3 million transfer as purportedly for
“Services Rendered.”  In fact, this payment was a bribe to obtain mining assets for, among
others, AGC I.
88. On or about June 11, 2008, an attorney affiliated with Niger Government Officials
1 and 2 (the “Niger Attorney”) submitted an invoice to an affiliate of South African Business
Associate 2’s holding company.  The invoice billed $2.7 million for services that included,
“[s]taying by the Government of the Republic of NIGER.”  The attorney submitted the invoice
through a Panama-registered company he controlled.

32

89. On or about August 5, 2011, while Agent 2 was in the United States, he received
a telephone call asking him to travel to Niger to meet with Niger Government Official 2 and
propose a partnership between the Turks & Caicos Entity and a state-owned mining company in
Niger.
90. On or about September 22, 2011, Agent 2 traveled from Paris, France to John F.
Kennedy International Airport in Queens, New York, for a meeting to discuss Niger and Agent
2’s role in acquiring mineral rights and mining assets in Niger on behalf of, among others, AGC
I and Och-Ziff.
91. Between September 28, 2011, and April 23, 2012, Agent 2 received more than
$200,000 in wire transfers to a bank account in the United States, opened by and for the benefit
of Agent 2, related to his efforts on behalf of Och-Ziff and the agents, intermediaries and
business partners of Och-Ziff, to obtain mining assets in Niger and Guinea.
92. In addition, in or about January 2007 and June 2008, Agent 2 worked to obtain
uranium mining rights and other natural resource opportunities in Chad on behalf of Och-Ziff
and its business partners, specifically for inclusion in AGC I.  In connection with these efforts,
Agent 2 paid bribes to Chad Government Official 1 to obtain uranium mining rights, giving cash
and paying for travel expenses and shopping excursions for Chad Government Official 1 and the
official’s spouse in Paris, France.
93. Before loans were provided to South African Business Associate 3 and the Turks
& Caicos Entity, Cohen (and others at Och-Ziff) learned that South African Business Associate 3
had access to certain deals through bribes or corrupt schemes.  One deal in Niger presented to
Cohen by South African Business Associate 3 would, as described to Cohen in a March 22, 2007

33

email, have cost “$20-$25 million (includes $5 million for the ongoing Presidential
campaign...)”
94. On or about June 26, 2007, AGC I received and considered an investment
memorandum from the senior executive at South African Business Associate 3’s Turks & Caicos
Entity.  The memo recommended that AGC I invest $3 million in a subsidiary of the holding
company to acquire uranium concessions.  On or about July 1, 2008, the holding company
transferred $3 million to an account controlled by South African Business Associate 3, and on or
about July 3, 2008, $2.7 million was transferred from that account to an account in the name of
the Niger Attorney’s Panama-registered company.  These payments were bribes to obtain mining
assets for, among others, AGC I.
95. In or about 2007 and 2008 Cohen and Baros worked closely with both South
African Business Associates 2 and 3 on AGC I.  Baros began working at Och-Ziff and with
Cohen by late 2007.  Cohen and Baros arranged for Och-Ziff to make the loan and payments
related to Agent 2’s activities in Niger.  On or about November 18, 2007, an Och-Ziff employee
emailed Cohen, copying Baros.  The email forwarded an earlier email from Och-Ziff to South
African Business Associate 2 referencing a $2.5 million payment to Agent 2 that required
“confirmation/explanation.”  The “confirmation/explanation” sent to Cohen and Baros regarding
the payment stated that, “[t]hese are large consultancy fees paid may to November.”  Cohen and
Baros did not seek or obtain further explanation as to the $2.5 million payment because they
knew, held the firm belief, or were aware the payment to Agent 2 was made under circumstances
that made it substantially certain, that Agent 2 would use all or a portion of the loan proceeds to
pay bribes to high-ranking government officials in order obtain or retain business for Och-Ziff
and its business partners in connection with the AGC I loan.

34

96. Cohen and Baros were responsible for oversight of Och-Ziff’s business partners
in the AML joint venture, but failed to carry out those responsibilities properly.  Cohen
expressed his approach in a December 20, 2007 email to personnel involved with AML.  He
wrote that, as to Och-Ziff’s business partners, “you buy assets and sign contracts without our
approval, but that’s [sic] what you guys do best and we let you do it.”
97. Cohen, Baros and others at Och-Ziff, including the legal and compliance groups,
knew that South African Business Associate 3 had engaged in illegal activities in the past.  In
one regulatory filing in early 2008, Och-Ziff itself informed a foreign government regulator that
South African Business Associate 3 potentially had engaged in criminal activity in Angola
relating to an asset he sought to sell to AGC I.  In another, 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 Associate 3 was reported to be a front for
Zimbabwean government officials.  Despite this information, Cohen and Baros continued to
promote and orchestrate the payment of funds by Och-Ziff to South African Business Associate
3 and entities he controlled, through at least 2011, with no change in Och-Ziff’s lax oversight of
his use of investor funds.
98. Cohen and Baros also knew that South African Business Associate 3 was using
funds loaned to him by Och-Ziff to acquire mining rights either from foreign governments or
unknown third parties, buy out minority shareholders in various entities and pay substantial
amounts to “consultants” with little or no explanation for the work done to justify these
payments.  Cohen and Baros knew or held a firm belief that South African Business Associate 3
would use the loan proceeds to bribe government officials in Chad and Niger in order to win

35

mining deals or otherwise acquire assets that would inure to the benefit of Och-Ziff and Cohen,
or circumstances existed that made such a result substantially certain to occur.
99. South African Business Associate 3 used a significant portion of the “loans” to
pay bribes to high-ranking government officials (through proxies) in Chad and Niger in order to
secure assets for AGC I.   As a result, of the total amount contributed by Och-Ziff towards the
Chad and Niger mining assets, just a portion went towards mining-related costs and only
minimal mining activities ever took place at the assets, which remained in a “greenfield” state
through at least 2012.
100. Cohen and Baros were aware that these bribes would be, and were, falsely
classified by the Turks & Caicos Entity, as well as by AML and its subsidiaries, as consultant
payments, law firm payments, house rentals, and charitable contributions, among other
designations.  Cohen and Baros also were aware that Och-Ziff’s books and records setting out
the authorizations for the provision of payments relating to AGC I relied on these false
classifications and, as a result, were inaccurate and did not reflect the true purpose of the
transactions.
101. In fact, “bribe accounts” were created and maintained in Chad by employees of a
subsidiary of the Turks & Caicos Entity.  Money provided by Och-Ziff to the Turks & Caicos
Entity supposedly to fund mining operations actually went towards bribes to high-ranking
government officials, and also paid for “house repairs” and medical assistance for these officials.
Because Cohen and Baros were responsible for AGC I’s record keeping and for Och-Ziff’s
oversight of AGC I, they had access to the records of AGC I and related entities, including those
for the “bribe accounts.”   Cohen and Baros made sure that Och-Ziff failed to audit or review the
expenditure of its funds by South African Business Associate 3 or AGC I, and thus knew of Och-

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Ziff’s failure to comply with the firm’s financial and anti-corruption policies and internal
controls, and to maintain books and records that accurately and fairly reflected its transactions
and disposition of assets.
102. Cohen and Baros also knew or held a firm belief that Och-Ziff investor funds
went to personally enrich South African Business Associates 1, 2 and 3, or circumstances existed
that made such a result substantially certain to occur.  Each of the three received millions in Och-
Ziff investor funds with no accountability or legitimate benefit to Och-Ziff’s investors.  For
example, South African Business Associate 3 spent nearly $7 million of the Och-Ziff investor
funds he received to purchase and refurbish a private jet.  He used additional funds for yacht
rentals or deposited them in the accounts of the girlfriends of Och-Ziff’s business partners in
AML.  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.  Cohen,
Baros and Och-Ziff took no steps to review South African Business Associate 3’s expenditures,
prevent self-dealing by its partners, or disclose the substantial conflicts of interest and
misappropriation of investor funds.
103.   In 2008, with support and recommendation from Cohen and Baros, Och-Ziff
paid over $10 million to South African Business Associate 3, ostensibly relating to assets owned
by an African-based aircraft pilot who supposedly owned uranium claims in Niger and who Och-
Ziff was told had expended significant funds to acquire those rights for AGC I.  Och-Ziff agreed
to reimburse him for those assets.  In doing so, Och-Ziff failed to conduct a review of the
claimed expenses, failed to confirm that the funds had actually been expended by the pilot to
acquire the assets, and failed to investigate whether bribes were paid to acquire these assets.
After approval by Och-Ziff, AGC I transmitted the funds to South African Business Associate

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3’s entity, not to the pilot.  South African Business Associate 3 then used these funds to pay
bribes to government officials in Chad and Niger and to enrich himself and his business partners,
including South African Business Associate 1 and South African Business Associate 2.  South
African Business Associate 3 undertook a similar scheme related to Chad, and again used
approximately $10 million in funds from Och-Ziff to pay bribes and to enrich himself and his
business partners.  Cohen and Baros knew or held a firm belief that South African Business
Associates 1, 2 and 3 would use the more than $20 million in Och-Ziff Managed Funds
supposedly intended for the Niger and Chad uranium claims to pay bribes to government
officials in Chad and Niger, or circumstances existed that made such a result substantially certain
to occur.
D. Violations of the FCPA, and the Misuse of Och-Ziff and AGC I Investor
 Funds in Violation of the Advisers Act, Relating to the DRC: The $124
 Million Convertible Loan
 1.  Och-Ziff Partnered With Agent 3 to Pursue Mining Interests in the
      DRC
104. In or around December 2007, Cohen and Baros began discussions with Agent 3
and others about forming a joint venture for the purpose of acquiring and consolidating valuable
mining assets in the DRC into one large mining company.  At the time, Cohen knew that Agent 3
had personal connections with high-  ranking government officials in the DRC and that Agent 3
previously had used those connections to buy and sell mining assets in suspect transactions.  As
early as 2006, Cohen communicated to a third party that Agent 3 “has some skeletons” and that
he “has some suits outstanding regarding him bribing the drc gov.”  Baros also became aware
that Agent 3 had personal connections with high-  ranking government officials in the DRC and
that he had used those connections to buy and sell mining assets in suspect transactions as

38

recently as March 2008.  Nevertheless, Cohen and Baros urged and arranged for Och-Ziff to
enter into a partnership with Agent 3 that lasted from 2008 until at least 2012.
105. During face-to-face discussions with Cohen and Baros, Agent 3 communicated
that he would have to pay substantial sums of money as bribes to DRC government officials to
secure access to special opportunities in the DRC mining sector for himself and Och-Ziff.  Agent
3 communicated to Cohen and Baros that he planned to use a portion of the money he was asking
to “borrow” from Och-Ziff to pay bribes.  In meetings involving Agent 3, Cohen, and Baros, in
which bribes were discussed, Agent 3 told Baros and Cohen that he had powerful “friends” in the
DRC, and that those friendships were “expensive” to maintain but necessary for their business in
the DRC to succeed. Agent 3 and his associates kept records of their business operations that
tracked Agent 3’s bribe payments and related expenses.  Those records show that Agent 3
frequently paid significant cash bribes to DRC government officials.
106. Cohen and Baros were aware, including through direct conversations they had
with Agent 3, of his corrupt relationships with DRC government officials, secret deal terms with
third parties, ability to operate with impunity in the DRC, favorable treatment from the DRC
government, and access to deals not available to others.  Despite this information, Cohen and
Baros continued to champion Agent 3 within Och-Ziff for more than four years.  Cohen and
Baros concealed that Agent 3 paid bribes from Och-Ziff’s legal and compliance departments.  In
addition, Cohen and Baros were aware that their concealment of this information would cause
Och-Ziff to incorrectly, and improperly, record corrupt payments as legitimate transactions in its
books and records.  Cohen and Baros also understood that failing to communicate this extensive
information about Agent 3’s business practices ( particularly his practice of bribing government

39

officials to acquire mining and natural resource assets) would circumvent Och-Ziff’s internal
controls.
107. Others within Och-Ziff, including multiple senior officers and employees, were
aware of corruption accusations against Agent 3, as well as the high corruption risk when doing
business in the DRC.  Consistent with Och-Ziff’s anti-corruption policy concerning prospective
business partners, on February 14, 2008, an attorney responsible for compliance at Och-Ziff’s
European office contacted a firm that conducted due diligence and background investigations
requesting a report on Agent 3.  In his request, the attorney noted that Agent 3 “will be very easy
to find . . . perhaps the impetus behind the movie ‘Blood Diamonds.’”
108.   Approximately one week later, the Och-Ziff attorney received a report with
initial background and due diligence findings from the f irm.  He forwarded it to Cohen and other
senior officers and employees at Och-Ziff.   Baros also received the report.  The report detailed
Agent 3’s history of suspicious transactions, allegations of his i llegal conduct, and his close
connections at the highest levels in the DRC government, stating among other things that:
  a.  Agent 3 “is considered one of the most well-connected foreigners in
  the DRC... He is known to enjoy an extremely close relationship with [DRC
  Government Official 1]”;

  b.  Agent 3 was identified on several “compliance Watch Lists” as a
  “politically exposed individual as a result of his close ties to the DRC
  government;”

  c.  Agent 3 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.  Agent 3’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

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  was later alleged that Agent 3 secured his monopoly “in exchange for
  providing military training” to government forces in the DRC.

  e.  In a lawsuit against Agent 3, it was alleged that he had bribed DRC
  government officials and Angolan military officers in exchange for receiving an
  exclusive diamond export license.

  f.  Agent 3 was “happy” and “willing to use his significant political
  influence with [DRC Government Official 1] and his clique to facilitate
  acquisitions, settle disputes and frustrate competitors.”  In disputes with DRC
  mining rivals, Agent 3 was “rumoured to have used his influence with [DRC
  Government Official 2, DRC Government Official 1’s] closest aide,
  and former [DRC provincial]  governor in order to settle the dispute in his favour.”

  g.  Agent 3’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
  [Agent 3’s] involvement.”

109. Based upon the report and other publicly available information, the Och-Ziff
attorney expressed objections to the firm doing business with Agent 3.  Those objections, and
objections voiced by others at the firm, resulted in a meeting in or about February 2008
involving senior Och-Ziff officers and employees, including senior legal and compliance
officials, regarding the high risk of bribery and corruption that would exist in any relationship
with Agent 3.  Och-Ziff Employee 2 and a senior legal officer at Och-Ziff expressed their
opinion to Och-Ziff Employee 1 that Och-Ziff should not do business with Agent 3.  Their
concerns included the reputational and legal risks inherent in dealing with Agent 3, including the
risk of government investigations.
110. Cohen did not participate in the meeting but continued to lobby and advocate that
the firm do business with Agent 3.  Cohen succeeded.  Och-Ziff Employee 1 overruled the
concerns of his senior legal and compliance officers and instructed that the firm move forward
on transactions with Agent 3 unless new information was uncovered.

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111. Och-Ziff sought guidance from outside legal counsel on how to structure its
dealings with Agent 3.  An Och-Ziff attorney forwarded the background report regarding Agent
3 to an outside attorney representing Och-Ziff.  The Och-Ziff attorney was seeking advice
regarding business dealings with Agent 3, including the possibility of making a convertible loan
to Agent 3 rather than partnering with him directly through an equity investment.  Outside
counsel advised that providing a convertible loan to Agent 3 would be high-risk, but that, unlike
a direct equity investment, there would be “no [anti-money laundering] or anti-corruption issue”
as long as Agent 3 “has no discretion with regard to how to spend the proceeds of the loan.”
Notwithstanding this guidance, each of the subsequent loan agreements Och-Ziff entered into
with Agent 3 made significant amounts of discretionary funds available to him.
112. Och-Ziff entered into a series of corrupt transactions with Agent 3.  Och-Ziff
carefully crafted each of these transactions to hide its relationship with Agent 3 from investors,
potential investors, business partners, and the public, by making indirect payments to Agent 3
through SPVs in offshore jurisdictions.  Two of the transactions intersected and had significant
overlap: ( 1) an April 2008 purchase of approximately $150 million of shares in a publicly traded
DRC-focused mining company controlled by Agent 3 (the “DRC Mining Company”); and, (2) a
$124 million Convertible Loan through OZ Africa and AGC I to a shell company, an SPV
controlled by Agent 3 (the “DRC SPV”), funded between April and October 2008.  The third
involved a $130 million Margin Loan to Company C, an Agent 3-controlled shell entity, in
November 2010 and February 2011 to assist Agent 3 in consolidating his DRC assets for sale to
a third party and acquiring additional potential assets for Och-Ziff and AGC.  From conception
through the execution of these transactions, Cohen and Baros knew of the corrupt payments that
Agent 3 made to various DRC officials to obtain and retain mining interests in DRC.  Both the

42

Convertible Loan and the Margin Loan were funded in whole or in substantial part using Och-
Ziff Hedge Funds.
113. In or about March 2008, Och-Ziff embarked on an arrangement with Agent 3 to
invest in and consolidate DRC mining assets.  The stated purpose of the partnership was for Och-
Ziff to fund Agent 3’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.  Cohen, assisted by Baros, oversaw Och-Ziff’s efforts to acquire and
consolidate assets in the DRC into an entity controlled by Agent 3 that could then be sold to a
large publicly-traded mining company for a significant profit.  Based on statements made by
Agent 3 with Cohen present, Cohen and Baros knew that Agent 3 would use Och-Ziff funds 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.
 2.  The Purchase of a $150 Million Stake in the DRC Mining Company
114. On or about March 7, 2008, Agent 3 emailed Cohen about the plan for Och-Ziff
to structure and fund simultaneous deals involving the DRC Mining Company and the DRC
SPV, respectively, as part of a larger plan to acquire DRC assets and merge them into a single
company with a DRC copper and cobalt mine.  The first transaction involved the April 2008
purchase of approximately $150 million of shares in the DRC Mining Company.
115. On or about March 16, 2008, Agent 3 sent Cohen an email which stated in part:
“The DRC landscape is in the making and I am shaping it - like no one else.  I would love to
have you beside me as a long-term partner.  As a 40% [DRC Mining Company] shareholder, I
facilitated your entry at an attractive time / price knowing that you see the bigger picture in all of

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this.  What this 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.”
116. In March 2008, Baros traveled to Zimbabwe and the DRC.  He met with a senior
executive of the DRC Mining Company (the “DRC Mining Company Executive”), purportedly
to assess the assets and infrastructure of the DRC Mining Company, and as part of Och-Ziff’s
due diligence related to the proposed transaction.
117. After the trip, Cohen and Baros advocated within Och-Ziff for the firm to increase
its investment in the DRC Mining Company by essentially doubling an originally anticipated
investment to a total of $150 million. The plan called for Och-Ziff to invest through an offering
of new shares that supposedly would fund the company’s ongoing mining efforts in the DRC.
Cohen and Baros championed the investment notwithstanding a due diligence investigation
undertaken by Och-Ziff that revealed the DRC Mining Company’s  “troubled relationship with
the DRC government,”  including accusations of money laundering against the company made by
the DRC Minister of Mines, and the expulsion of one of the DRC Mining Company’s major
shareholders from the DRC.  The results of the investigation also noted that the company’s
mining license was “under review” in the DRC.  Cohen and Baros, as well as others at Och-Ziff,
were aware of this history before arranging for the investment.
118. Following Agent 3’s negotiations on behalf of Och-Ziff, and after Baros’s visit to
Zimbabwe and the DRC to meet DRC Mining Company executives, on or about March 27, 2008,
Och Ziff entered into a supplemental subscription agreement with the DRC Mining Company to
purchase a total of 150 million shares for a total of approximately $150 million.  That same day,
Agent 3 caused $11 million to be delivered to DRC Government Official 2.

44

119. Within days of finalizing the investment, Cohen, Baros,  and others at Och-Ziff,
learned that the DRC Mining Company had used the funds provided by Och-Ziff via the
subscription agreement and purchase of shares to acquire a platinum asset in Zimbabwe rather
than towards its existing DRC mining operations, as had been outlined by representatives of the
DRC Mining Company.  The Zimbabwean government had recently seized this platinum asset
from another mining entity and then resold it to an entity affiliated with the same DRC Mining
Company Executive who Baros had met with during his March trip.  That entity then “sold” the
platinum assets to the DRC Mining Company in exchange for additional shares in the mining
company.
120. Och-Ziff officials later learned of allegations that the DRC Mining Company had
used the funds invested in the company in April 2008, including funds from Och-Ziff, to make a
$100 million “loan” to an entity affiliated with the ruling political party of Zimbabwe, which was
embroiled in a contested presidential election at the time.
121. Only after the transaction had been funded did Och-Ziff conduct a due diligence
investigation focusing on the DRC Mining Company E xecutive who Baros had met on his trip to
Zimbabwe and the DRC.  The investigation revealed that in Zimbabwe the executive was
considered “an influential and dangerous man;” that he was wanted in South Africa for various
crimes including fraud, tax evasion, and bribery; and, that he had been linked to the illegal
acquisition of state assets, arms trafficking and bribery in the DRC.
122. Cohen and Baros were aware of this and other information about the DRC Mining
Company Executive before the due diligence investigation began and before the $150 million
stock purchase was completed, but did not convey the information to legal and compliance
personnel at Och-Ziff.  Subsequently, in 2008, the U.S. Department of the Treasury’s Office of

45

Foreign Assets Control (OFAC) designated the DRC Mining Company Executive as a “regime
cron[y]” of the Zimbabwean government.  OFAC froze his assets and placed him and several
entities affiliated with him on the sanctions list for “logistical support for large-scale mining
projects in Zimbabwe that benefit a small number of corrupt senior officials there.”
123. After learning of the Zimbabwe platinum investment, in June 2008 Cohen and
Baros were told by South African Business Associate 2 that a reporter had bank records
demonstrating that the mining company Och-Ziff had just invested in had “paid 4 arms into
zim[babwe], and rented boat from china.”  Neither Cohen nor Baros informed Och-Ziff’s legal
and compliance personnel about these accusations, took steps to uncover the truth of the
accusations, or limited Och-Ziff’s relationship with any of the individuals allegedly involved.  In
fact, Cohen and Baros continued to advocate and support Och-Ziff’s partnerships with Agent 3.
Even after the due diligence investigation had identified the serious corruption risk in the
transaction and with these business partners, Och-Ziff continued its partnership with Agent 3 and
kept its ownership interest in the DRC Mining Company.
 3.  The $124 Million Convertible Loan to the DRC SPV
124. Also during the April 2008 through June 2008 timeframe, Cohen and Baros
arranged for Och-Ziff to cause AGC I to enter into an approximately $124 million Convertible
Loan agreement with the DRC SPV, a holding company affiliated with Agent 3.  At the time, a
Canadian mining company (the “Canadian Mining Company”) was engaged in a public dispute
concerning its ownership interest in a DRC copper mine.  The dispute involved a Congolese
entity, which had obtained an ex parte default judgment against the Canadian Mining Company.
In reality, DRC Government Official 2 had orchestrated the taking of the Canadian Mining
Company’s legal interest in the DRC copper mine and had made it available to Agent 3.  The

46

Canadian Mining Company initiated legal proceedings in the DRC courts attempting to nullify
the seizure of its interest.  The dispute remained outstanding in June 2008.
125. Cohen and Baros successfully advocated for Och-Ziff to work with Agent 3
pursuing a multi-step plan to obtain the disputed mining interest by acquiring the Congolese
entity using Och-Ziff funds, and then resolving t he legal dispute over the DRC copper mine.  As
part of its arrangement with Agent 3, Och-Ziff (through AGC I) provided him and his SPV with
financing to carry out the resolution of the DRC legal dispute by purportedly buying the
Congolese entity, and then gaining control of the Canadian Mining Company by purchasing
shares in exchange for resolving its legal dispute.  This financing was provided through the
Convertible Loan agreement, funded in tranches of $15 million, $100 million, and $9 million, for
a total of $124 million.
126. The t hree stated uses of these funds were: (1) to provide Agent 3 with
approximately $15 million to purchase the Congolese entity that had acquired the rights to the
DRC copper mine; (2) to provide Agent 3 with approximately $100 million to buy a majority
stake in the Canadian Mining Company, in exchange for resolving its legal issues with the DRC
entity; and (3) to advance an additional $9 million to be used for future mining operations in the
DRC.  The unstated, but key, use of the funds loaned to the DRC SPV, which Cohen and Baros
knew about from discussions and interaction with Agent 3 and his associates, was to provide
Agent 3 with funds to pay bribes to DRC government officials so they would facilitate the
takeover of the Canadian Mining Company for the benefit of Och-Ziff and Agent 3.
127. Och-Ziff structured the transaction as a Convertible Loan to justify not
conducting additional due diligence as to Agent 3 or the assets he owned or controlled.  Cohen
was aware that a direct equity investment with an entity affiliated with Agent 3 would require

47

Och-Ziff to conduct an additional investigation.  Instead, with Cohen’s influence, Och-Ziff
characterized and treated the Convertible Loan transaction with Agent 3 as a standard
commercial loan, and conducted no additional due diligence on Agent 3, the DRC SPV, Agent
3’s assets in the DRC, or his use of the funds provided by Och-Ziff.
128.  But, Och-Ziff’s transaction with Agent 3 was not a standard commercial loan.
Cohen and Baros understood the transaction was part of a broader, ongoing partnership with
Agent 3, and not an arms-length lending arrangement.  The transaction gave Och-Ziff some
control over what assets could be bought or sold by the DRC SPV, the option to convert the loan
to an ownership interest in the DRC SPV, a secured interest in the shares of the Congolese
mining company, and a right to future deals with Agent 3 in the DRC.  Finally, the transaction
gave Agent 3 complete discretion over how to use approximately $24 million of the loan
proceeds, which Cohen and Baros knew he would then use to pay bribes to DRC government
officials.
129. Cohen and Baros had learned from Agent 3 that he was going to use a portion of
the loan proceeds to pay bribes to high-ranking government officials in order to further his
business interests and those of Och-Ziff.  They concealed this information from others within
Och-Ziff and from outside counsel.  As a result, Och-Ziff incorrectly and improperly recorded
corrupt payments as legitimate payments or transfers of funds in its books and records and failed
to maintain books and records that accurately and fairly reflected its transactions and disposition
of assets.  Cohen and Baros also understood that concealing that Agent 3 intended to pay bribes
with the loan proceeds would circumvent financial and anti-corruption policies and internal
controls at Och-Ziff.

48

130. On or about April 7, 2008, Agent 3 caused $2.2 million to be delivered to DRC
Government Official 2, and or about April 10, 2008, Agent 3 caused another $2.8 million to be
delivered to DRC Government Official 2.
131. On or about April 17, 2008, AGC I funded the first tranche of the Convertible
Loan agreement through wire transfers authorized in New York.  The first tranche of $15.75
million purportedly was funded to acquire the Congolese entity, to make a shareholder loan to
the Canadian Mining Company,  and to pay legal expenses of Agent 3’s SPV.  Och-Ziff, through
a subsidiary created specifically for this transaction, sent the funds through accounts located in
New York to the bank account of a law firm in Gibraltar affiliated with Agent 3.  From there,
Och-Ziff had no ability to control or limit Agent 3’s use of those funds or even to trace where the
funds went.  In addition to acquiring the Congolese mining company, Agent 3 used a portion of
the proceeds from the first tranche of the Convertible Loan to bribe high-ranking DRC
government officials.
132. On or about May 6, 2008, Agent 3 delivered $2.5 million to DRC Government
Official 2, and on or about on or about June 18, 2008, Agent 3 caused another $2.5 million to be
delivered to DRC Government Official 2.  Cohen and Baros knew or held a firm belief that
Agent 3 would use the loan proceeds in the above manner, or circumstances existed that made
such a result substantially certain to occur.
133. On or about June 4, 2008, Agent 3 and his associate arranged to pay $500,000 to
DRC government officials, including judges, who were involved in the court case involving the
Canadian Mining Company.  The payments were made to corruptly influence the outcome of
those proceedings to the benefit of Och-Ziff and Agent 3.  At about the time of the payments,
Agent 3’s associate sent a text message to Agent 3, which stated, “Hi [Agent 3], im with the

49

main lawyer... in the [Canadian Mining Company] story, he has to arrange with supreme court,
attorney genral and magistrates, he wants 500 to give to all the officials and 600 for 3 lawyers
cabinets that worked on the file in defense [lawyer] and batonnier [lawyer]. the converstaion is
vey tough.  (while talking i said to ask money to [one of the Congolese company’s shareholders],
[the Congolese company shareholder] said he cant because most of the money has to go to [DRC
Government Official 2]..i dont know if he wants to provoke me or it was something [the
Congolese company shareholder] invented...) but they are now at 1,1 in total...[.] [sic]”
134. On or about June 4, 2008, the associate sent another text message to Agent 3,
which stated, “he wants 500 for officials, 300 for them (3 lawyers office), 800 and in even in one
month an extra 100 to make 900, he is very categoric[.]”
135. On or about June 4, 2008, Agent 3 responded to the associate’s text message,
stating, “We can’t accept a mid result...[the Canadian Mining Company] must be screwd and
finished totally!!!! [sic]”
136. Through these efforts, Agent 3 and Och-Ziff achieved a beneficial result for the
Congolese company in the DRC courts.  They then commenced efforts to acquire a majority
stake in the Canadian Mining Company whose value had decreased because of the adverse action
in the DRC courts.
137. The Canadian Mining Company voted to approve the takeover by Agent 3 and
Och-Ziff in late June 2008.  Once approved, on or about June 24, 2008, Cohen arranged for Och-
Ziff (via AGC I) to fund a second tranche of the Convertible Loan totaling $98.275 million,
through which Agent 3 and Och-Ziff acquired a majority stake in the listed shares of the
Canadian Mining Company.
138. A third tranche of the Convertible Loan went through on or about October 9,

50

2008.  In total, Agent 3 received $9 million in the third tranche.  Och-Ziff funded its share of the
third tranche, $4.5 million, while the joint venture partner in AGC I contributed the remaining
$4.5 million.
139. Contrary to the original structure of the deal, which required Agent 3 to use the
funds on future mining expenses, Cohen successfully persuaded Och-Ziff management in
October 2008 to provide the $9 million to Agent 3 supposedly to compensate him for
“previously incurred” DRC expenses, thus giving him unfettered discretion over how he spent
the money.  As a result, Cohen ensured that Och-Ziff failed to conduct proper due diligence on
the transaction and failed to limit Agent 3’s discretion in his use of the funds.
140. Och-Ziff transferred money for the third tranche from accounts in New York to
the law firm account in Gibraltar.  Agent 3 then used the money to fund more bribes in the DRC
that supported his and Och-Ziff’s acquisition of mining assets in the country.  Cohen and Baros
supported the efforts of Agent 3 to obtain the loan and structure it so that he retained discretion
in his use of the loan proceeds.  When doing so, Cohen and Baros knew or held a firm belief that
Agent 3 would use the loan proceeds in the above manner, or circumstances existed that made
such a result substantially certain to occur.
141. Beginning in November 2008, after providing the $9 million to Agent 3, Och-Ziff
reviewed his past expenses to determine whether he had legitimately spent funds on DRC mining
operations, as had been agreed.  During the review, Baros l earned that records kept by Agent 3’s
entities disclosed payments for travel expenses, bribes, and “gratuities” for the benefit of high-
ranking DRC government officials.  An AML employee involved in the review noted in a draft
audit 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

51

‘political alignment’ and for ‘protocol’ with the authorities in the DRC – in other words with
senior Government officials.  This issue needs to be investigated at the highest level directly with
[Agent 3].  This issue should be flagged as a concern considering AGC’s compliance
requirements.”
142. Baros was responsible for reviewing the draft audit report.  After doing so, Baros
had a telephone conversation with one of the employees who drafted it and instructed him to
remove from the report the paragraph that referenced payments for “political alignment” to
senior government officials.  The employee did as Baros instructed.  On or about December 9,
2008, the employee sent an e-mail to Baros, which stated, in part: “[Baros,] As discussed please
find attached the revised report[.]”  The attached revised report did not contain the paragraph that
referenced payments to senior government officials.   At no time did Baros inform Och-Ziff’s
legal and compliance personnel of the payments to government officials uncovered during the
audit review.
143. On or about August 14, 2012, an Och-Ziff attorney who was responsible for
compliance matters relating to the Convertible Loan transaction requested information from
Baros regarding the transaction.  Baros forwarded the attorney the revised report that did not
contain the paragraph that referenced payments to senior government officials.  Baros did not
inform the attorney about the earlier version of the report, nor did he otherwise inform him about
the concerns in that report about payments to senior government officials.
E. Violations of the FCPA, and the Misuse of Och-Ziff Investor Funds in
 Violation of the Advisers Act, Relating to the DRC:  The $130 Million
 Margin Loan
144. Och-Ziff’s relationship with Agent 3 continued throughout 2009 and 2010.  After
the acquisition of the DRC copper mining asset, Cohen and Baros continued to work with Agent
3 to obtain additional assets to add to the DRC SPV or sell alongside it, including two highly

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valuable DRC mining assets (the “DRC Mining Asset K” and the “DRC Mining Asset S”)
obtained by Agent 3 using his contacts and influence with high-ranking officials in the DRC
government.  Cohen and Baros knew that DRC Mining Asset K had been stripped from a mining
company by the DRC government and then obtained by a group of companies controlled by
Agent 3 and the DRC government.  Cohen and Baros also knew that DRC Mining Asset S was
the subject of a back-to-  back sale that allowed Agent 3 to purchase the asset for $15 million from
a mining company owned and controlled by the DRC government, and immediately resell it for
$75 million.
145. Throughout the period of Agent 3’s acquisition of DRC Mining Assets K and S,
Agent 3 continued to make corrupt payments to DRC Government Official 2, including $1
million on or about December 23, 2009, and $2 million on or about January 5, 2010.
146. On or about August 20, 2010, a third-party mining company acquired 50.5% of
the DRC SPV, agreeing to pay up to $575 million over two years, including approximately $50
million in cash to Agent 3.  Cohen and Baros w ere informed by a close associate of Agent 3 that
the $50 million was for Agent 3 to “use on the ground” to corruptly acquire DRC Mining Asset
K.  As part of the deal, the third-party mining company guaranteed repayment of the Convertible
Loan, for which Och-Ziff ultimately received payment in full in 2012.  Cohen and Baros
remained Agent 3’s primary Och-Ziff contacts during this time.  In addition to the transactions
involving DRC Mining Asset K and DRC Mining Asset S, Cohen and Baros continued to work
on new transactions and funding ideas with Agent 3.
147. In or about November 2010, Agent 3 asked Cohen to provide him with another
loan to further his efforts to consolidate his DRC assets for potential resale.  On or about
November 11, 2010, Cohen sent an e-mail to an Och-Ziff employee, which stated: “[Agent 3]

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has asked for a margin loan on [a transaction] which want u to handle.”  At the time, Cohen and
Baros knew or held a firm belief that Agent 3 would use a portion of the Margin Loan proceeds
to pay bribes to facilitate the transaction, or circumstances existed that made such a result
substantially certain to occur.
148. Cohen and Baros did not disclose the purpose of the loan to others at Och-Ziff.
Cohen did not disclose what Agent 3 had told him about the intended use of the proceeds.  While
negotiating the terms of the loan, Agent 3’s representatives stressed that they would need to
make intercompany loans with the proceeds of the loan and that any “use of proceeds” provision
in the loan document would have to be generic.  Och-Ziff, at Cohen’s urging, agreed to the
terms.
149. Och-Ziff failed to conduct adequate and appropriate due diligence on the Agent 3-
related entity receiving the Margin Loan or on its intended use of the loan proceeds.  Och-Ziff
made this loan direct from Och-Ziff Hedge Funds held in New York.
150. To facilitate the Margin Loan, on or about November 18, 2010, Och-Ziff created a
shell company, incorporating a new Cayman Island-based partnership called CML Investments
Ltd. (“CML”), which Och-Ziff controlled.
151. On or about November 24, 2010, Och-Ziff, in two separate transfers through
CML, extended a $110 million Margin Loan to a British Virgin Islands shell company controlled
by Agent 3 (the “BVI Shell Company”).  The use of proceeds provision in the Margin Loan
allowed for “(a) funding existing activities of Affiliates of the Borrower and acquisitions of other
business interests by its Affiliates; and (b) other general purposes of the Borrower’s Affiliates.”
On or about February 17, 2011, CML and Agent 3 agreed to an amended and restated loan
agreement which increased the amount of funding available to the BVI Shell Company by an

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additional $20 million, for a total Margin Loan to Agent 3 of $130 million.
152. Cohen, Baros, and Och-Ziff understood that a portion of the loan would be and
was used by Agent 3 to pay down an outstanding third-party debt.  Och-Ziff provided the
remainder of the loan, more than $84 million, to Agent 3 with no restrictions or insight into the
use of loan proceeds.  Och-Ziff officials in New York authorized the transfer of money from its
investor funds to Agent 3 ’s law firm in Gibraltar, after which Och-Ziff had no insight or control
over how Agent 3 used the funds.  Agent 3 used a portion of the funds provided by Och-Ziff to
pay bribes in the DRC to high-ranking government officials.
153. Between in or about November 2010 and February 2011, using proceeds from the
Margin Loan, Agent 3 caused millions in corrupt payments to various DRC officials, including
the following payments made on or about the following dates:
Date Amount Recipient
December 1, 2010 $1 million DRC Government Official 1
December 3, 2010 $2 million DRC Government Official 1
December 7, 2010 $2 million DRC Government Official 1
February 9, 2011 $4 million DRC Government Official 1
February 9, 2011 $1 million DRC Government Official 2

154. Cohen and Baros knew or held a firm belief that Agent 3 would use the money
provided by Och-Ziff in the Margin Loan to pay bribes, or circumstances existed that made such
a result substantially certain to occur.  The bribes were part of Agent 3’s efforts to acquire
additional assets and consolidate his DRC holdings in order to sell those holdings to the third-
party mining company.  Cohen and Baros expected this consolidation to help Och-Ziff receive

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repayment and profit on its loans, which it ultimately did.  Och-Ziff received repayment on both
the Convertible Loan and the Margin Loan in 2012 and 2013, directly as a result of the asset
acquisitions and ongoing business activities by Agent 3, facilitated by bribing high-ranking DRC
government officials.
155. Between in or about August 2012 and January 2013, Och-Ziff received wire
transfers of $342,091,110 as satisfaction of the outstanding loan agreements.
156. In addition to the loan repayments, Cohen and Baros continued their work with
Agent 3, exploring additional corrupt transactions in the DRC.  On or about February 12, 2012,
DRC Government Official 2 died.  On or about February 13, 2012, Baros sent an e-mail message
to Cohen, which stated: “FYI, [DRC Government Official 2] dead, [Agent 3’s] key guy in
DRC.”  The e-mail from Baros included the text of a Financial Times article on the official’s
death, which stated, among other things: “[DRC Government Official 2], member of parliament
and a former governor of Congo’s copper heartlands province ... cut a shadowy figure.
Diplomats associate him with Congo’s entrenched corruption and a series of secret investments.
Congo is one of the world’s poorest countries despite its mineral wealth, and ranks among the
worst places to do business.”
157. On or about February 15, 2012, after an inquiry from Baros relating to the death
of DRC Government Official 2, Agent 3 sent a text message to Baros, which stated, “I’m
fine...sad but fine...I will have to help [DRC Government Official 1] much more
now...tomorrow the burial will take place.”

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F. Violations of the FCPA, and the Misuse of Och-Ziff and AGC II Investor
 Funds in Violation of the Advisers Act, Relating to the Republic of Guinea:
 The $52 Million Stock Windfall

 1.  The Formation of AGC II

158.  The second investment fund created as part of Och-Ziff’s Africa strategy, AGC
II, was formed in 2009.  Och-Ziff sought capital for AGC II from multiple investors, and
successfully marketed the fund to one existing investor in OZ Management, a United Kingdom-
based private institutional investor ( the “UK Investor”).  In addition, a separate fund made up of
the investments by individual Och-Ziff partners including Cohen (the “OZ Partners Fund”),
agreed to fund AGC II alongside the UK Investor.  The investment agreement between Och-Ziff
and the UK Investor provided that the Investor could review and reject any transaction involving
potential conflicts of interest.  As described below, at least three AGC II deals developed and
overseen by Cohen and Baros involved conflicts of interest.  The first also involved a corrupt
payment to high-ranking officials in the Republic of Guinea.  The disclosures by Och-  Ziff,
Cohen and Baros to the UK Investor in those deals either omitted or misrepresented material
information in order to hide self-dealing, improper use of investor funds, or undisclosed conflicts
of interest.
 2.  Och-Ziff, Cohen, and Baros Structure a $77 Million Stock Transaction
      to Provide Agent 3 with a $52 Million Windfall

159. In April 2011, Cohen arranged for Och-Ziff, via AGC II, to purchase shares in a
London-based mining company in which AGC I, South African Business Associate 3 and Och-
Ziff already held significant interests (the “London Mining Company”).  Cohen and Baros
structured the transaction to provide South African Business Associate 3 with $52 million in cash
to use for secret purposes, including self-dealing to benefit Och-Ziff.  Baros drafted the
transaction documents to be intentionally misleading, so that the transaction would be approved

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by Och-Ziff and the UK Investor.
160. The lead-up to the April 2011 transaction began in or about 2010.  Cohen, Baros
and other Och-Ziff officials and executives had become aware that South African Business
Associate 3 had a strong relationship with a high-ranking government official in the Republic of
Guinea and his family, and that such contacts provided access to potential mining deals in that
country.  The primary source of the contacts was Agent 2, the Gabonese consultant who had
worked with AGC I on the Chad and Niger transactions in 2007-08, who was under contract with
AGC, and who had worked directly with South African Business Associate 3.  Communications
involving Baros and others at AML with Agent 2 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...”  Agent 2 also told Baros that he had “access to Guinee Mining and
Ennergy [sic] classified informations” through his contact with the Guinean government official
and his family.  Agent 2 also told AML representatives and Baros that he was traveling to the
United States with the senior Guinean government official.
161. South African Business Associate 3 sought assistance from Och-Ziff, including
Cohen and Baros, to create a means for South African Business Associate 3 and Och-Ziff to
benefit financially from future Guinean government actions.  Their far-flung plan involved
helping Guinean government officials to revise the country’s mining code, create a state-owned
mining company in G uinea, and seize assets from other companies to put into the state entity.
Once those items were accomplished, South African Business Associate 3 and Och-Ziff were
lined up to benefit financially through the London Mining Company’s relationship with the state-

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owned mining company in Guinea.
162. The plan required a large infusion of cash to South African Business Associate 3
to fund his ongoing efforts in Guinea.  South African Business Associate 2 emailed Baros
asking, “[h]ow can we get agc to put 50m into guinea?”  The answer by Cohen and Baros was to
structure a corrupt transaction that relied on material misrepresentations and omissions to, among
others, the UK Investor.
163. Cohen and Baros, along with South African Business Associates 2 and 3, crafted
the corrupt transaction, a related-party transaction that would advance their plan without
disclosing to the UK Investor the full involvement of Och-Ziff and AGC II in South African
Business Associate 3’s efforts in Guinea.  Most importantly, it would result in a $52 million
windfall for South African Business Associate 3.  Initially they sought to sell shares in the
London Mining Company held by the SA Business Conglomerate to AGC II in order to raise
capital to fund their efforts in Guinea.  That e ffort stalled, however, because South African law
limited the ability of the SA Business Conglomerate to transfer the proceeds of the sale outside
of the country.
164. In response, Cohen, Baros and South African Business Associates 2 and 3 devised
a new scheme that would result in AGC II overpaying South African Business Associate 3 by
$52 million for London Mining Company shares he controlled, by inserting a third party between
AGC II and the Mining Company.   In describing the transaction, Baros stated “[T]here was to be
at least GBP 1/share difference to leave [the South African Business Associate 3] with $50m for
Guinea.”  The “50m” referred to by Baros was the difference between what South African
Business Associate 3 would pay for shares in the London Mining Company to SA Business
Conglomerate, and what AGC II would pay to South African Business Associate for a subset of

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those shares.
165. In the revised transaction, South African Business Associate 3 used his offshore
investment company (the Turks & Caicos Entity that had received an $87 million loan from Och-
Ziff in April 2007) to enter into an agreement with SA Business Conglomerate to purchase 31.5
million shares in the London Mining Company for $25 million.  He then agreed to immediately
resell 18.5 million shares in that same company to AGC II for $77 million.  The transactions
were virtually simultaneous, with South African Business Associate 3 using the $77 million paid
by AGC II to pay SA Business Conglomerate $25 million for the initial 31.5 million shares.  The
$77 million purchase price represented at least a $52 million mark-up to AGC II.  With the $52
million windfall, South African Business Associate 3 paid $2.1 million to Och-Ziff to satisfy an
outstanding loan relating to AGC I (in which the UK Investor had no interest), $25 million to the
government of Guinea to try to obtain valuable mining investments in the country, $1 million to
Agent 2, and the remainder to personally benefit South African Business Associate 3 and his
business partners, South African Business Associates 1 and 2.
166.  Agent 2 directly transferred $150,000 of the $1 million he received to a high-
ranking Guinean government official as a bribe payment in connection with the above scheme.
 3.  Violations of the Investment Advisers Act:  Material Misrepresentations
      and Omissions by Och-Ziff, Cohen and Baros Relating to the $77 Million
      Stock Transaction
167. The actual terms of the back-to-back stock transactions were not disclosed to the
UK Investor.  The UK Investor was told that the Turks & Caicos Entity already owned the shares
in the London Mining Company after a “recently completed” transaction.  The UK Investor was
not informed that the transactions would be back-to-back, or that funds from AGC II would be
used to purchase the shares from SA Business Conglomerate after AGC II funded the second

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transaction.  The UK Investor also understood that the Turks & Caicos Entity was to sell 18.5
million shares in the London Mining Company to AGC II for $77 million, but was not told that
the $77 million price represented at least a $52 million overpayment by AGC II over what the
Turks & Caicos Entity would pay the SA Business Conglomerate for fewer shares in the London
Mining Company.
168. Cohen and Baros knew that they also had omitted material terms about the
originating transaction.  South African Business Associate 3’s assistant described the undisclosed
terms of the deal to Baros who shared them with Cohen.  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 in South Africa.  Further, Cohen and Baros arranged to divert
approximately $2.1 million from the transaction for the direct benefit of Och-Ziff.  This also was
not disclosed to the UK Investor.  As Baros described to Cohen, they would “keep $3m for AGC
I.”  That approximately $3 million would give South African Business Associate 3 money to
repay a loan to Och-Ziff relating to AGC I expenses.  Cohen and Baros also knew that South
African Business Associate 3 would use at least $25 million from AGC II to fund his efforts in
Guinea.
169. Cohen and Baros knew that the description of the transaction that was given to the
UK Investor was a sham.  The UK Investor was not told that South African Business Associate 3
would reap a $52 million windfall from the transaction.  The UK Investor likewise was not
informed of the ulterior motives and secret terms of the transaction, or the link between the
transaction and South African Business Associate 3’s payment to Guinea.  The UK 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.  The UK Investor was

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not told that the initial transaction in which South African Business Associate 3 would buy 31.5
million shares of the London Mining Company through the Turks & Caicos Entity had not even
occurred at the time the $77 million purchase by AGC II was being discussed.
170.   The UK Investor was not told that South African Business Associate 3 would
use the $77 million he and his Turks & Caicos Entity received from AGC II to purchase the
shares in the London Mining Company for $25 million (not $77 million).  Och-Ziff, Cohen and
Baros offered the false explanation to the UK Investor—that AGC II was paying the same
amount for 18.5 million shares that had been paid by the Turks & Caicos Entity for 31.5 million
shares—by claiming that the original purchase by the Turks & Caicos Entity had been initiated
in 2009 and had been “recently completed.”  In fact, as Cohen and Baros knew, there was no
2009 purchase, and the transactions by which SA Business Conglomerate sold the 31.5 million
shares to the Turks & Caicos Entity would be virtually simultaneous with AGC II’s purchase of
18.5 million shares, and would be funded out of the purchase price paid by AGC II.
171. The investment agreement between Och-Ziff and the UK Investor provided that
the Investor could review and reject any transaction involving potential conflicts of interest.  The
UK Investor did not reject the $77 million stock purchase by AGC II, but Cohen, Baros and Och-
Ziff obtained the consent of the UK Investor by making material misrepresentations and
omissions about the nature of the transaction as described above.
172. Cohen and Baros also failed to communicate complete and accurate information
about the transaction internally at Och-Ziff.  Cohen and Baros knew that by failing to
communicate complete and accurate information about the above transaction to legal,
compliance and other personnel at Och-Ziff, the firm would fail to maintain books and records
that accurately and fairly reflected its transactions and disposition of assets.  Cohen and Baros

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also understood that concealing that, among other things, Agent 3 intended to use the loan
proceeds to pay bribes, would circumvent financial and anti-corruption policies and internal
controls at Och-Ziff.  Finally, Och-Ziff failed to conduct adequate and appropriate due diligence
investigation or impose adequate restrictions to prevent the secret aspects of the transaction from
occurring.
 G. Violations of the Investment Advisers Act:  Material Misrepresentations and
  Omissions, Self-Dealing and Misuse of Investor Funds By Och-Ziff, Cohen
  and Baros Relating to Two Additional AGC II Transactions

173. Cohen caused Och-Ziff to engage in two additional transactions in which he
fraudulently obtained consent from the UK Investor by making material misrepresentations and
omissions about the nature of the transactions.  Baros participated in the second of those
transactions.
 1.  The Congo-Brazzaville Oil Field Transaction
174. In May 2010, Cohen and other Och-Ziff officials learned that high-level
government officials from South Africa and Congo-Brazzaville had agreed to give an oil
exploration company affiliated with the AML joint venture (the “Oil Exploration Company”) the
opportunity to buy a 25% stake in an oil field off the coast of Congo-Brazzaville.  Cohen pushed
Och-Ziff to go forward with the deal.  According to a public statement by the Oil Exploration
Company’s CEO at the time, 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.”  Och-Ziff officials were told that the Oil
Exploration Company had purportedly been designated by a high-ranking South African
government official to participate in this transaction.
175. Cohen and other Och-Ziff officials later learned that a third-party South African

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entity was to be given a 25% interest in the Oil Exploration Company’s stake in the oil asset.
This interest was to be a “free carry” for the South African-designated entity, meaning the Oil
Exploration Company 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.  The Oil Exploration
Company described this partner in various communications as either “Partner X” or “the
government.”
176. After conducting a limited due diligence investigation, Och-Ziff and Cohen
learned that the owners of the proposed South African partner had histories of corruption, arms
dealing and ties to the ruling South African political party, but no oil exploration or production
experience.  One of the proposed owners of “Partner X” was described in a background report
received by Och-Ziff and Cohen as an “associate and benefactor” of a high-ranking South
African government official.  Apart from receiving the free equity interest, the South African-
designated entity was to have no overt role in the transaction or related matters.  As a result of
concerns expressed by Och-Ziff about the background of the proposed partners, and other
factors, the transaction stalled in late 2009.
177. In early 2010, Cohen and others at Och-Ziff and AML, in concert with the Oil
Exploration Company, made a second push to get the transaction approved.  They now claimed
that South African Business Associate 3, who 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 were awarded to another entity.
South African Business Associate 3 then purportedly designated the Oil Exploration Company
(in which he, Och-Ziff, and AGC I held interests) as his proxy for this opportunity.

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178. Under the new terms, South African Business Associate 3 would be paid $13
million by the Oil Exploration Company (funded by AGC II) as compensation for his prior
“losses.”  Another individual with close ties to a high-ranking government official in Congo-
Brazzaville (the “French Agent”) was inserted into the transaction and described as an additional
introducer.  The French Agent was to be compensated for his purported role in arranging the
transaction between South African Business Associate 3 and the high-ranking government
official in Congo-Brazzaville even though all indications were that he had little or nothing to do
with putting the deal together.  For his supposed efforts, the French Agent was to receive a $5
million payment as well as 25% of the Oil Exploration Company’s stake in the oil field project at
no cost.  The $5 million payment was to be funded by AGC II.
179. The change of circumstances, new intermediaries and overall conduct surrounding
the resurrected deal constituted a significant corruption risk, but Och-Ziff nonetheless began
work to complete the deal.  Cohen was a vocal advocate for the deal.  Och-Ziff directed the Oil
Exploration Company to conduct a due diligence investigation relating to the revived deal and its
new actors and supposed origin.  As part of that due diligence, South African Business Associate
3 and the French Agent submitted affidavits in which they confirmed the second origin story and
the involvement of the French Agent.  Neither affidavit referenced or explained the original
source for the transaction or the involvement of “Partner X” or the government in the transaction.
The Oil Exploration Company purportedly conducted due diligence on the deal and the
individuals receiving funds, which Och-Ziff directed and reviewed.
180. Others at Och-Ziff, including members of the legal and compliance team,
continued to have reservations about 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

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stop the deal from going forward.  However—at Cohen’s urging—Och-Ziff Employee 1
overruled the objections of legal and compliance officials and approved going forward with the
transaction.
181. Because the transaction involved payments to a related party (South African
Business Associate 3), the investment agreement between Och-Ziff and the UK Investor
mandated that Och-Ziff obtain the UK Investor’s consent to proceed.  Cohen was a primary
contact for Och-Ziff with the UK Investor.  In seeking and obtaining the consent, Och-Ziff and
Cohen did not inform the UK Investor of all of the material circumstances surrounding the
transaction or how the transaction came to the Oil Exploration Company.  For example, Och-Ziff
and Cohen failed to disclose the initial sourcing of the transaction or the initial presence of a
different proposed partner in the deal.  Och-Ziff and Cohen also failed to inform the UK Investor
that, under the original transaction terms, there were no payments to any intermediaries,
including South African Business Associate 3.  Further, Och-Ziff and Cohen failed to inform the
UK Investor that neither South African Business Associate 3 nor the French Agent had a role in
sourcing the transaction when it was initially described to Och-Ziff.
182. The omitted information was directly related to the corruption risk and the
validity of paying $18 million to two intermediaries in the transaction.  Cohen and Och-Ziff
assured the UK Investor that steps would be taken to ensure that the funds were used
appropriately, including paying the intermediaries via segregated accounts and monitoring future
transfers by both intermediaries in order to prevent corruption.  In reality, and contrary to those
representations, Och-Ziff did not take steps to ensure such controls were instituted or followed.
Nor did the Oil Exploration Company (using Och-Ziff funds) pay South African Business
Associate 3 via a segregated account.

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183. The UK Investor consented to the transaction based on this false and misleading
information and these significant omissions.  AGC II provided funds to the Oil Exploration
Company, which in turn were transferred to a non-segregated account controlled by South
African Business Associate 3.  Contrary to the description of the deal provided to the UK
Investor by Cohen and Och-Ziff, South African Business Associate 3 then transferred a
significant portion of the $13 million he received from the Oil Exploration Company
(approximately $10 million) to the French Agent’s account in Lebanon.  Och-Ziff, South African
Business Associate 3 and the Oil Exploration Company did not follow the restrictions conveyed
to the UK Investor.  Despite the extensive corruption and other risks, Och-Ziff failed to take
reasonable and appropriate steps to ensure that its investor funds were used for legitimate
purposes.
184. Cohen failed to communicate complete and accurate information about the
transaction in order to circumvent internal controls at Och-Ziff.  Cohen knew that by failing to
communicate complete and accurate information about the above transaction to legal,
compliance and other personnel at Och-Ziff, the firm would fail to maintain books and records
that accurately and fairly reflected its transactions and disposition of assets.  Finally, Och-Ziff
failed to conduct adequate and appropriate due diligence investigation or impose adequate
restrictions to prevent the secret aspects of the transaction from occurring, and to ensure
payments made to intermediaries were not made for improper purposes.  Failing to take these
steps was contrary to Och-Ziff’s anti-corruption guidelines and internal financial controls.
 2.  The Super Yacht Loan:  Cohen Schemes To Use AGC II Funds to Repay
      a Personal Loan
185. Cohen used his own funds to make an $18 million personal loan to Agent 1 in
2008.  Cohen did not disclose the loan to Och-Ziff, in violation of Och-Ziff’s Code of Ethics.

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The loan was intended to fund Agent 1’s construction of a “super yacht.”  Cohen took security
interest in several assets held by Agent 1 to secure his loan, but by 2010 Agent 1 had not repaid
the loan.  In order to provide Agent 1 with funds to repay the loan, Cohen arranged for AGC II to
purchase shares in a London-based mining holding company from Agent 1 (the “London
Holding Company”).  South African Business Associate 3 also owned shares in the London
Holding Company, as did a third party with whom Cohen had a separate, outstanding $1 million
loan arrangement.
186. In December 2010, Cohen caused AGC II to purchase approximately $20 million
in shares in the London Holding Company, which owned two mining assets in Africa.  The
sellers of the shares were Agent 1, to whom Cohen had loaned $1 million, and South African
Business Associate 3.  Och-Ziff,  acting primarily through Cohen and with information provided
by Cohen, falsely represented the transaction to the UK Investor as a legitimate investment for
AGC II.  The only sellers disclosed to the UK Investor by Cohen and Och-Ziff were Agent 1 and
the third individual (who repaid his $1 million loan to Cohen in the days before the transaction
was finalized).  South African Business Associate 3, who was a participant in the AML joint
business venture through his Turks & Caicos Entity, was not disclosed as a seller.
187. Cohen knew that the funds paid by AGC II to Agent 1 would be used to satisfy
Agent 1’s outstanding loan to Cohen and arranged the transaction to accomplish the repayment.
Cohen had to approve the sale of shares in the London Holding Company by Agent 1 because he
held security in those shares through his personal loan to Agent 1.  Cohen gave his approval in
November 2010 to effectuate the AGC II purchase.  The transaction also was arranged so that
Cohen would receive a $4 million partial repayment on his outstanding loan to Agent 1 soon
after the AGC II purchase was completed, and he did so the day after AGC II funds were

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transferred to Agent 1.  Cohen did not inform Och-Ziff of his interest in the transaction or of his
control over the shares, nor was this information conveyed to the UK Investor.
188. Baros assisted Cohen in finalizing the transaction, and did so fully aware of the
self-dealing involving South African Business Associate 3.  Baros received regular
communications from a colleague of South African Business Associate 3, who also worked for
AML, discussing the secret terms of the transaction, including the involvement of South African
Business Associate 3.
189. Cohen and Baros hid the sale of South African Business Associate 3’s shares in
the London Holding Company because they understood that the UK Investor could reject the
deal due to the conflict of interest.  Cohen and Baros worked to ensure that South African
Business Associate 3 was able to sell his shares in secret using Agent 1 as his proxy.
190. The UK Investor was not told of the self-dealing and personal interests of Cohen
and South African Business Associate 3 in the transaction.  The UK Investor had been told by
Och-Ziff that South African Business Associate 3 owned shares in the London Holding
Company, but not that he was indirectly selling shares in the company to AGC II.  The UK
Investor also was not told that Cohen previously had an interest in the shares being sold by
Agent 1.  Cohen and Och-Ziff did not disclose to the UK Investor that money from AGC II’s
purchase of shares from the London Holding Company would be used to repay a significant
portion of Cohen’s loan to Agent 1.  The UK Investor gave its approval of the transaction
without the benefit of that material information.
191. AGC II transferred more than $9 million from accounts in New York to Agent 1’s
account in late 2010.  Agent 1 then transferred $4 million to Cohen’s personal account in partial
repayment of the loan.  In addition, Cohen directed that Agent 1 transfer another $4 million to

69

accounts for the benefit of South African Business Associate 3.
192. In 2012, Cohen and Agent 1 created a false document regarding the sale of shares
in Agent 1’s London Holding Company in order to hinder and obstruct an ongoing investigation
by the Enforcement Division of the SEC into conduct by, among others, Cohen and Och-Ziff.
Cohen and Agent 1 created a backdated letter to make it appear that Cohen had no financial
interest in the transaction.  The letter, which was addressed to Cohen, signed by Agent 1 and
backdated to October 2010, 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 Cohen in
December 2010 came directly from the proceeds of the AGC II purchase of shares from Agent 1.
In response to a Commission subpoena issued as part of the Enforcement investigation, Cohen
produced the false, backdated letter to the Commission during its investigation of his conduct
relating to Och-Ziff’s transactions in Africa.
193. Cohen and Baros failed to communicate complete and accurate information about
AGC II’s $20 million purchase of shares in the London Holding Company in order to circumvent
internal controls at Och-Ziff.  Cohen and Baros knew that by failing to communicate complete
and accurate information about the above transaction to legal, compliance and other personnel at
Och-Ziff, the firm would fail to maintain books and records that accurately and fairly reflected
its transactions and disposition of assets.  Finally, Och-Ziff failed to conduct adequate and
appropriate due diligence investigation or impose adequate restrictions to prevent the secret
aspects of the transaction from occurring.  Failing to take these steps was contrary to Och-Ziff’s
anti-corruption guidelines and internal financial controls.

70

H.  Tolling Agreements
194. Cohen signed and entered into two tolling agreements with the Commission, for
the periods November 26, 2012, through November 25, 2013, and from December 23, 2013,
through June 23, 2014.  Collectively these agreements tolled the running of any limitations
period or any other time-related defenses alleged in this Complaint for a period of 547 days.
195. Baros signed and entered into one tolling agreement with the Commission, for the
period February 17, 2016, through May 17, 2016.  This agreement tolled the running of any
limitations period or any other time-related defenses alleged in this Complaint for a period of 90
days.

FIRST CLAIM
Cohen and Baros Violated the Anti-Bribery Provisions of the
Foreign Corrupt Practices Act, Section 30A of the Exchange Act

196. The Commission realleges and incorporates by reference each and every
allegation contained in paragraphs 1 through 195 above as if set forth fully herein.
197. By engaging in the following corrupt transactions, Cohen and Baros, who were
officers, directors, employees, or agents of Och-Ziff, a United States issuer, made use of the
mails or other means or instrumentalities of interstate commerce corruptly in furtherance of an
offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift,
promise to give, or authorization of the giving of anything of value to foreign officials for the
purpose of influencing their acts or decisions in their official capacity, inducing them to do or
omit to do any action in violation of their lawful duties, securing an improper advantage, or
inducing such foreign officials to use their influence with foreign governments or
instrumentalities thereof to affect or influence any act or decision of such government or

71

instrumentality, in order to assist Och-Ziff in obtaining or retaining business. The corrupt
transactions included:
• The 2007 investment of $300 million by the LIA into Och-Ziff Hedge Funds.
• The transaction that began as a convertible loan in or about October 2007, through
which Och-Ziff invested approximately $40 million into the Libya Real Estate
Project.
• The loan of approximately $86 million, or more, to South African Business
Associate 3’s Turks & Caicos Entity and additional payments of more than $10
million to South African Business Associate 3.
• Och-Ziff’s $124 million Convertible Loan to Agent 3 through the DRC SPV.
• Och-Ziff’s $130 million in Margin Loans to Agent 3 through his BVI Shell
Company.
• The transaction in or about 2010 and 2011, in which AGC II overpaid South
African Business Associate 3 by at least $52 million for shares in the London
Mining Company.
198. By reason of the foregoing, Cohen and Baros violated Section 30A of the
Exchange Act [15 U.S.C. §78dd-1].
SECOND CLAIM
Cohen and Baros Aided and Abetted Och-Ziff’s Violations of the Anti-Bribery Provisions
of the Foreign Corrupt Practices Act, Section 30A of the Exchange Act

199. The Commission repeats and incorporates by reference the allegations in
paragraphs 1 through 195 above as if set forth fully herein.
200. Och-Ziff violated Section 30A of the Exchange Act when it made use of the mails
or other means or instrumentalities of interstate commerce corruptly in furtherance of offers,

72

payments, promises to pay, or authorizations of the payments of any money, or offer, gift,
promise to give, or authorizations of the giving of anything of value to foreign officials for the
purposes of influencing their acts or decisions in their official capacity, inducing them to do or
omit to do any action in violation of their lawful duties, securing an improper advantage, or
inducing such foreign officials to use their influence with foreign governments or
instrumentalities thereof to affect or influence any act or decision of such government or
instrumentality in order to assist Och-Ziff in obtaining or retaining business.
201. The corrupt transactions engaged in by Och-Ziff included:
• The 2007 investment of $300 million by the LIA into Och-Ziff Hedge Funds.  In
order to obtain the investment Och-Ziff retained and used the services of Agent 1
to act on its behalf.  Och-Ziff retained Agent 1’s services knowing that he would
need to, and intended to, make corrupt payments to Libyan government officials
to secure that investment.  Agent 1 paid more than $3 million in bribes to Libyan
government officials in connection with securing the LIA investment for Och-
Ziff.
• The transaction that began as a convertible loan in or about October 2007, through
which Och-Ziff invested approximately $40 million into the Libya Real Estate
Project.   In or about 2007, Och-Ziff invested approximately $40 million of Och-
Ziff investor funds into the Libya Real Estate Project in which Agent 1 was a
main actor.  In furtherance of that arrangement, Och-Ziff used investor funds to
pay a bogus $400,000 “deal fee” to an entity controlled by Agent 1 as part of its
investment.  A portion of the “deal fee” paid to Agent 1 was used to bribe Libyan
government officials in connection with the Libya Real Estate Project.

73

• The loan of approximately $86 million, or more, to South African Business
Associate 3’s Turks & Caicos Entity and additional payments of more than $10
million to South African Business Associate 3.  Beginning in or about 2007, Och-
Ziff loaned more than $86 million and made payments of more than $10 million
using Och-Ziff investor funds to South African Business Associate 3.  Of the
investor funds provided to South African Business Associate 3, Och-Ziff’s AGC I
business partner, millions went towards a) bribes to high-ranking government
officials, b) illicit payments to middlemen, c) the personal benefit of its business
partners, and d) expenditures unrelated to the investment.
• Och-Ziff’s $124 million Convertible Loan to the DRC SPV.  Beginning in or
about December 2007 and continuing through at least March 2008, Och-Ziff
made a Convertible Loan of approximately $124 million from Och-Ziff investor
funds through AGC I to the DRC SPV purportedly to purchase mining assets in
the DRC.  Monies from the Convertible Loan were used to pay bribes to high-
ranking government officials related to the acquisition of assets on behalf of Och-
Ziff.
• Och-Ziff’s $130 million in Margin Loans to Agent 3 through his BVI Shell
Company.  In or about 2010 and 2011, Och-Ziff made a Margin Loan for
approximately $130 million from Och-Ziff investor funds to Agent 3’s BVI Shell
Company.  Approximately $84.1 million of the loaned amount went to Agent 3
with no restrictions or oversight by Och-Ziff.  Monies from the Margin Loan were
used to pay bribes to high-ranking government officials related to the acquisition
of assets on behalf of Och-Ziff.

74

• The transaction in or about 2010 and 2011, in which AGC II overpaid South
African Business Associate 3 by at least $52 million for shares in the London
Mining Company.  In or about 2010 and 2011, Och-Ziff arranged for the purchase
of shares in the London Mining Company by AGC II.  Och-Ziff caused AGC II to
purchase the shares from South African Business Associate 3 in order to provide
him with capital to use for other purposes.  With the proceeds from the AGC II
purchase, South African Business Associate 3 paid more than $25 million directly
to the government of Guinea as a bribe, and $1 million to Agent 2, who then used
$150,000 of those funds to bribe high-ranking government officials in Guinea.
202. Cohen and Baros knowingly or recklessly provided substantial assistance to Och-
Ziff in its violations of Section 30A of the Exchange Act.
203. By reason of the foregoing, Cohen and Baros violated Section 20(e) of the
Exchange Act [15 U.S.C. §78t(e)] and Section 30A of the Exchange Act [15 U.S.C. §78dd-1] by
aiding and abetting Och-Ziff’s violations of Section 30A of the Exchange Act [15 U.S.C. §78dd-
1].
THIRD CLAIM
Cohen and Baros Aided and Abetted Och-Ziff’s Violations
of Exchange Act Section 13(b)(2)(A)

204. The Commission repeats and incorporates by reference the allegations in
paragraphs 1 through 195 above as if set forth fully herein.
205. Section 13(b)(2)(A) of the Exchange Act requires issuers to make and keep
books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of their assets.
206. Och-Ziff violated Section 13(b)(2)(A) of the Exchange Act by failing to make and

75

keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflected its
transactions and disposition of its assets.
207. By engaging in the conduct described above, Cohen and Baros knowingly or
recklessly provided substantial assistance to Och-Ziff in its violations of Exchange Act Section
13(b)(2)(A).
208. By reason of the foregoing, Cohen and Baros violated Section 20(e) of the
Exchange Act [15 U.S.C. §78t(e)] and Sections 13(b)(2)(A) of the Exchange Act [15 U.S.C.
§78m(b)(2)(A)], by aiding and abetting Och-Ziff’s violations of Sections 13(b)(2)(A) of the
Exchange Act [15 U.S.C. §78m(b)(2)(A)].
FOURTH CLAIM
Cohen and Baros Violated Section 13(b)(5) of the Exchange Act
and Exchange Act Rule 13b2-1

209. The Commission repeats and incorporates by reference the allegations in
paragraphs 1 through 195 above as if set forth fully herein.
210. By engaging in the conduct described above, Cohen and Baros knowingly or
recklessly circumvented Och-Ziff’s internal accounting controls.
211. By reason of the foregoing, Cohen and Baros violated Section 13(b)(5) of the
Exchange Act [15 U.S.C. §78m(b)(5)] and Exchange Act Rule 13b2-1 [17 C.F.R. §240.13b2-1].
FIFTH CLAIM
Cohen Violated Section 206(1) and 206(2) of the Advisers Act

212. The Commission realleges and incorporates by reference each and every
allegation contained in paragraphs 1 through 195 above as if set forth fully herein.
213. Cohen was an “investment adviser” within the meaning of Section 202(a)(11) of
the Investment Advisers Act (“Advisers Act”) [15 U.S.C. §80b-2(a)(11)] for each of the

76

transactions detailed above involving AGC I and AGC II, as well as all other Och-Ziff
investments in Africa.
214. By engaging in the conduct described above, Cohen, by use of the mails or any
means or instrumentality of interstate commerce, directly or indirectly, acting intentionally,
knowingly or recklessly:  (a) employed or is employing devices, schemes, or artifices to defraud;
or (b) engaged or is engaging in transactions, practices, or courses of business which operate as a
fraud or deceit upon a client or prospective client in violation of Sections 206(1) and 206(2) of
the Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)].
215. As a result, Cohen violated Sections 206(1) and 206(2) of the Advisers Act [15
U.S.C. §§ 80b-6(1) and (2)].
SIXTH CLAIM
Cohen and Baros Aided and Abetted OZ Management’s Violations
of Section 206(1) and 206(2) of the Advisers Act

216. The Commission realleges and incorporates by reference each and every
allegation contained in paragraphs 1 through 195 above as if set forth fully herein.
217. OZ Management, a subsidiary of Och-Ziff, was an “investment adviser” within
the meaning of Section 202(a)(11) of the Investment Advisers Act (“Advisers Act”) [15 U.S.C.
§80b-2(a)(11)].  OZ Management was an investment adviser to both AGC I and AGC II, as well
as to the existing OZ Management funds that invested in AGC I and otherwise, within the
meaning of Section 202(a)(11) of the Investment Advisers Act [15 U.S.C. §80b-2(a)(11)].
218. By engaging in the conduct described above, OZ Management, by use of the
mails or any means or instrumentality of interstate commerce, directly or indirectly, acting
intentionally, knowingly or recklessly:  (a) employed or are employing devices, schemes, or
artifices to defraud; or (b) engaged or are engaging in transactions, practices, or courses of

77

business which operate as a fraud or deceit upon a client or prospective client in violation of
Sections 206(1) and 206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)].
219. By engaging in the conduct described above, Cohen and Baros knowingly or
recklessly provided substantial assistance to OZ Management in its violations of Sections 206(1)
and 206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)].
220. As a result, Cohen and Baros violated Section 209(f) of the Advisers Act [15
U.S.C. §§ 80b-9(f)] and Sections 206(1) and 206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1)
and (2)], by aiding and abetting OZ Management’s violations of Sections 206(1) and 206(2) of
the Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)].
SEVENTH CLAIM
Cohen and Baros Aided and Abetted OZ Management’s Violations
of Section 206(4) of the Advisers Act and Advisers Act Rule 206(4)-8

221. The Commission repeats and incorporates by reference each and every allegation
contained in paragraphs 1 through 195 above as if fully set forth herein.
222. Both AGC I and AGC II constituted “pooled investment vehicles,” as defined by
Investment Advisers Act Rule 206(4)-8(b) [17 C.F.R. § 275.206(4)-8(b)].  The AGC I
transactions were funded from existing OZ Management funds, including OZ Master Fund, Ltd.,
OZ Europe Master Fund, Ltd. and OZ Global Special Investment Master Fund, LP all of which
are pooled investment funds comprised of numerous institutional investors.  AGC II, which
involved the UK Investor as an institutional investor, was a partnership that pooled funds from
multiple investors which were aggregated for the purpose of investments.
223. OZ Management was an “investment adviser” to both AGC I and AGC II, as well
as to the existing OZ Management funds that invested in AGC I, within the meaning of Section
202(a)(11) of the Investment Advisers Act [15 U.S.C. §80b-2(a)(11)].

78

224. By engaging in the conduct described above, OZ Management, acting as a
registered investment adviser to a pooled investment vehicle, knowingly or recklessly a) made
untrue statements of a material fact, or omitted to state a material fact necessary to make the
statements made, in light of the circumstances under which they were made, not misleading, to
any investor or prospective investor in the pooled investment vehicle, or b) otherwise engaged in
acts, practices, or courses of business that were fraudulent, deceptive, or manipulative with
respect to investors or prospective investors in the pooled investment vehicles.
225. By engaging in the conduct described above, OZ Management, by use of the
mails or any means or instrumentality of interstate commerce, directly or indirectly, acting
intentionally, knowingly or recklessly violated Section 206(4) of the Advisers Act [15 U.S.C.
§80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8].
226. By engaging in the conduct described above, Cohen and Baros knowingly or
recklessly provided substantial assistance to Och-Ziff and OZ Management in their violations of
Section 206(4) of the Advisers Act [15 U.S.C.  §80b-6(4)] and Rule 206(4)-8 thereunder [17
C.F.R. § 275.206(4)-8].
227. As a result, Cohen and Baros violated Section 209(f) of the Advisers Act [15
U.S.C. §§ 80b-9(f)], Section 206(4) of the Advisers Act [15 U.S.C.  §80b-6(4)] and Rule 206(4)-
8 thereunder [17 C.F.R. § 275.206(4)-8] by aiding and abetting OZ Management’s violations of
Section 206(4) of the Advisers Act [15 U.S.C.  §80b-6(4)] and Rule 206(4)-8 thereunder [17
C.F.R. § 275.206(4)-8].
PRAYER FOR RELIEF
 WHEREFORE, the Commission respectfully requests a Final Judgment that:
I.

79

 Permanently restrains and enjoins Cohen, Baros and each of their agents, servants,
employees and attorneys and those persons in active concert or participation with them who
receive actual notice of the injunction by personal service or otherwise, including facsimile
transmission or overnight delivery service, from directly or indirectly engaging in the conduct
described above, or in conduct of similar purport and effect, in violation of from violating:
 a) Exchange Act Section 30A [15 U.S.C. §78dd-1]
 b) Exchange Act Section 13(b)(2)(A) [15 U.S.C. §§78m(b)(2)(A)];
 c) Exchange Act Section 13(b)(5) and Rule 13b2-1 thereunder, [15 U.S.C.
  §78m(b)(5), and 17 C.F.R. 17 C.F.R. §240.13b2-1]  ;
 d) Sections 206(1) and 206(2) of the Advisers [15 U.S.C. §§ 80b-6(1) and (2)]; and
 e) Section 206(4) of the Advisers Act and Rule 206(4)-8 thereunder [15 U.S.C. §§
80b-6(4) and17 C.F.R. § 275.206(4)-8];
II.
 Requires Cohen and Baros to disgorge their ill-gotten gains, plus pre-judgment interest;
III.
 Orders Cohen and Baros to pay appropriate civil penalties pursuant to Section 21(d)(3) of
the Exchange Act [15 U.S.C. §78u(d)(3)], and Section 209(e) of the Advisers Act [15 U.S.C.
§80b-9(e)];
IV.
Retains jurisdiction over this action to implement and carry out the terms of all orders and
decrees that may be entered; and,
V.
 Grants such other and further relief as the Court may deem just and proper.

80

JURY DEMAND
The Commission hereby demands a trial by jury on all claims so triable.

Dated:   January 26, 2017   On behalf of the Commission,
 Boston, Massachusetts

          //s//  Alicia M. Reed
 Alicia M. Reed (NY Bar No. 4913596)
 Neil T. Smith (MA Bar No. 651157)*
 Marc J. Jones (MA Bar No. 645910)*
 Paul Block (MA Bar No. 551158)*
 Martin F. Healey (MA Bar No. 227550)*

 Attorneys for Plaintiff
 SECURITIES AND EXCHANGE COMMISSION
 Boston Regional Office
 33 Arch Street, 23
rd
 Floor
 Boston, Massachusetts  02110
 (617) 573-8952 (Healey direct)
 (617) 573-4590 (fax)
 [email protected]
 (Healey email)

*Not admitted in E.D.N.Y.

AO 440 (Rev. 06/12)  Summons in a Civil Action
UNITEDSTATESDISTRICTCOURT
for the
__________ District of __________
)
)
)
)
)
)
)
)
)
)
)
)
Plaintiff(s)
v.Civil Action No.
Defendant(s)
SUMMONS IN A CIVIL ACTION
To:
(Defendant’s name and address)
A lawsuit has been filed against you.
Within 21 days after service of this summons on you (not counting the day you received it) — or 60 days if you
are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
P. 12 (a)(2) or (3) — you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of
the Federal Rules of Civil Procedure.  The answer or motion must be served on the plaintiff or plaintiff’s attorney,
whose name and address are:
If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.
You also must file your answer or motion with the court.
CLERK OF COURT
Date:
Signature of Clerk or Deputy Clerk
%06(-"4
$
1"-.&3
Eastern District of New York
Securities and Exchange Commmission
Michael L. Cohen and Vanja Baros
Michael Cohen
c/o Ron White
Morrison & Foerster
250 West 55th Street
New York, NY 10019
Martin Healey
Securities and Exchange Commission
33 Arch Street #2400
Boston, MA 02110

AO 440 (Rev. 06/12)  Summons in a Civil Action (Page 2)
Civil Action No.
PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))
This summons for
(name of individual and title, if any)
was received by me on(date).
uI personally served the summons on the individual at
 (place)
on(date); or
uI left the summons at the individual’s residence or usual place of abode with
(name)
, a person of suitable age and discretion who resides there,
on
(date), and mailed a copy to the individual’s last known address; or
uI served the summons on
(name of individual), who is
 designated by law to accept service of process on behalf of
(name of organization)
on(date); or
uI returned the summons unexecuted because; or
uOther
(specify):
.
My fees are $for travel and $for services, for a total of $.
I declare under penalty of perjury that this information is true.
Date:
Server’s signature
Printed name and title
Server’s address
Additional information regarding attempted service, etc:
0.00

AO 440 (Rev. 06/12)  Summons in a Civil Action
UNITEDSTATESDISTRICTCOURT
for the
__________ District of __________
)
)
)
)
)
)
)
)
)
)
)
)
Plaintiff(s)
v.Civil Action No.
Defendant(s)
SUMMONS IN A CIVIL ACTION
To:
(Defendant’s name and address)
A lawsuit has been filed against you.
Within 21 days after service of this summons on you (not counting the day you received it) — or 60 days if you
are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
P. 12 (a)(2) or (3) — you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of
the Federal Rules of Civil Procedure.  The answer or motion must be served on the plaintiff or plaintiff’s attorney,
whose name and address are:
If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint.
You also must file your answer or motion with the court.
CLERK OF COURT
Date:
Signature of Clerk or Deputy Clerk
%06(-"4
$
1"-.&3
Eastern District of New York
Securities and Exchange Commmission
Michael L. Cohen and Vanja Baros
Vanja Baros
c/o Mark Cohen, Esq.
Cohen & Gresser
800 Third Avenue
New York, New York 10022
Martin Healey
Securities and Exchange Commission
33 Arch Street #2400
Boston, MA 02110

AO 440 (Rev. 06/12)  Summons in a Civil Action (Page 2)
Civil Action No.
PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))
This summons for
(name of individual and title, if any)
was received by me on(date).
uI personally served the summons on the individual at
 (place)
on(date); or
uI left the summons at the individual’s residence or usual place of abode with
(name)
, a person of suitable age and discretion who resides there,
on
(date), and mailed a copy to the individual’s last known address; or
uI served the summons on
(name of individual), who is
 designated by law to accept service of process on behalf of
(name of organization)
on(date); or
uI returned the summons unexecuted because; or
uOther
(specify):
.
My fees are $for travel and $for services, for a total of $.
I declare under penalty of perjury that this information is true.
Date:
Server’s signature
Printed name and title
Server’s address
Additional information regarding attempted service, etc:
0.00

UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 

 
________________________________________________ 

:  
SECURITIES AND EXCHANGE COMMISSION, : 

: 
Plaintiff, :  

: 
v. :     Civil Action No. 

:  
MICHAEL L. COHEN and :      JURY TRIAL DEMANDED  
VANJA BAROS, :        
 : 

Defendants. :  
________________________________________________: 
 
 

COMPLAINT 

Plaintiff Securities and Exchange Commission (the “Commission” or “SEC”) alleges the 

following against defendants Michael L. Cohen (“Cohen”) and Vanja Baros (“Baros”): 

SUMMARY 

1. Michael L. Cohen and Vanja Baros (collectively, the “Defendants”) violated the 

Foreign Corrupt Practices Act (the “FCPA”), the Investment Advisers Act of 1940 (the 

“Advisers Act”) and related statutory rules and provisions from 2007 through at least August 

2012.  Cohen and Baros carried out their scheme while the two worked for Och-Ziff Capital 

Management LLC (“Och-Ziff”), as well as for and with certain of its subsidiaries and affiliates.  

Och-Ziff is an institutional alternative asset manager or “hedge fund” that provides asset 

management services to its managed investment funds (“Och-Ziff Hedge Funds”).  In violation 

of the FCPA, Cohen and Baros directed, caused and arranged for Och-Ziff to pay tens of millions 

of dollars in bribes to government officials on the continent of Africa through agents, 

intermediaries and business partners of Och-Ziff.  The bribes were paid to secure and attempt to 

Case 1:17-cv-00430-PKC-LB   Document 1   Filed 01/26/17   Page 1 of 80 PageID #: 87



2 
 

secure special access, special opportunities and preferential treatment for Och-Ziff in its pursuit 

of profitable business in Africa.  The Advisers Act violations by Cohen and Baros resulted from 

material misrepresentations and omissions by Cohen, Baros, Och-Ziff and OZ Management LP 

(“OZ Management”), to Och-Ziff investors regarding multiple transactions in Africa, as well as 

failures by Och-Ziff and OZ Management to disclose conflicts of interest to investors, and 

undisclosed, improper uses of investor funds by Och-Ziff and OZ Management. 

2. Beginning in 2007 and continuing through at least August 2012, Cohen and Baros 

executed a sprawling scheme involving serial corrupt transactions and bribes paid to high-

ranking government officials in African countries, including the State of Libya, the Republics of 

Chad, Niger and Guinea, and the Democratic Republic of the Congo (the “DRC”).  Cohen 

spearheaded and participated in all of the corrupt transactions.  Baros began working with Cohen 

at Och-Ziff in 2007 and participated in multiple corrupt transactions that were part of the 

scheme.  Cohen and Baros intended that the bribery scheme get Och-Ziff special access to 

investment opportunities in African countries; obtain or retain business for Och-Ziff, its 

subsidiaries and its business partners; and financially benefit Cohen and Baros, as well as the 

agents, intermediaries and business partners of Och-Ziff who participated with them in the 

corrupt transactions.   

3. As part of the scheme, Cohen and Baros worked on behalf of Och-Ziff to explore 

and obtain business opportunities in and to operate in African countries and industries known for 

corrupt business dealings.  Cohen, Baros, and Och-Ziff specifically targeted, pursued, retained, 

engaged and worked with agents, intermediaries and business partners in those countries and 

industries.  The agents, intermediaries and business partners promoted themselves, and were 

known to Cohen, Baros, and Och-Ziff, as having close relationships and connections with high-

Case 1:17-cv-00430-PKC-LB   Document 1   Filed 01/26/17   Page 2 of 80 PageID #: 88



3 
 

ranking foreign government officials and typically had reputations for engaging in unsavory 

business practices that, among other things, exploited relationships and connections with 

government officials.  Cohen and Baros structured, championed and arranged for Och-Ziff to enter 

into a series of corrupt transactions and investments in which bribes were paid through agents, 

intermediaries and business partners to various high-ranking government officials.  Cohen and 

Baros identified, developed and carried out these corrupt transactions with the knowledge, the 

firm belief, or under circumstances that made it substantially certain that all or a portion of the 

money paid, loaned or otherwise provided to and through agents, intermediaries and business 

partners would be forwarded and paid as bribes to high-ranking foreign government officials.   

4. In most instances, bribes were paid with Och-Ziff Hedge Fund investors’ money 

rather than Och-Ziff’s own capital.  Cohen and Baros arranged for and structured transactions for 

Och-Ziff and OZ Management to authorize the use of money from Och-Ziff Hedge Funds in 

transactions in which bribes were paid to high-ranking foreign government officials.  In doing so, 

Cohen and Baros knew, held the firm belief, or operated under circumstances that made it 

substantially certain that investor funds would be used to pay bribes.    

5. The scheme also included the use of investor funds in self-dealing transactions to 

benefit Cohen, Och-Ziff’s agents, intermediaries and business partners, and Och-Ziff itself.   

6. Cohen and Baros crafted, developed and carried out the scheme, including the use 

of funding from the Och-Ziff Hedge Funds in most of the corrupt transactions, with the 

knowledge, the firm belief, or under circumstances that made it substantially certain that all or a 

portion of the money paid or loaned to agents, intermediaries and business partners subsequently 

would be paid as bribes to high-ranking government officials in order to secure special access 

and opportunities and preferential treatment for Och-Ziff in its pursuit and retention of profitable 

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business in Africa.  The corrupt transactions included:    

• In or about 2007, Cohen engaged in a corrupt transaction to secure an investment 

from the Libyan Investment Authority (“LIA”) of $300 million into the Och-Ziff 

Hedge Funds.  To pursue the LIA investment, Cohen used the services of an agent 

(“Agent 1”) to act on his and Och-Ziff’s behalf.  Cohen arranged for Och-Ziff to 

retain Agent 1’s services knowing, holding the firm belief, or operating under 

circumstances that made it substantially certain, that Agent 1 would bribe high-

ranking Libyan government officials to secure the investment.  In fact, Agent 1 

paid more than $3 million in bribes to Libyan government officials in connection 

with securing and retaining the LIA investment for Och-Ziff.    

• In a second corrupt transaction that began in or about 2007, Cohen arranged for 

an investment of approximately $40 million of Och-Ziff funds in a Libyan real 

estate development project (the “Libya Real Estate Project”) in which Agent 1 

was a main actor.  The Project had the blessing of the Libyan government’s ruling 

family, secured and maintained through the payment and promise of bribes, which 

positioned it to be highly profitable.  Cohen arranged for Och-Ziff to use investor 

funds to pay a bogus $400,000 “deal fee” to an entity controlled by Agent 1 as 

part of its investment.  Cohen knew, held the firm belief, or operated under 

circumstances that made it substantially certain, that Agent 1 would use the deal 

fee for the continuing payment of bribes to high-ranking government officials in 

Libya, whose support was needed to maintain government support and protection 

for the Project. 

 

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• In a third corrupt transaction that also began in or about 2007, Cohen and Baros 

arranged for a loan of more than $86 million and additional payments of more 

than $10 million of Och-Ziff Hedge Funds investor money to one of Och-Ziff’s 

South African partners in African Global Capital I (“AGC I”), an Africa mining-

focused fund formed by Och-Ziff.  A substantial amount of that money was 

ultimately funneled through a consultant working with AGC I (“Agent 2”), who 

acquired assets on behalf of AGC I, primarily through the payment of bribes to 

high-ranking government officials.  Of the Och-Ziff Hedge Funds investor money 

Och-Ziff provided to its AGC I business partner, millions went towards a) bribes 

to high-ranking government officials, b) illicit payments to middlemen, c) the 

personal benefit of Och-Ziff’s business partners, and d) expenditures unrelated to 

the investment.  Cohen and Baros knew, held the firm belief, or operated under 

circumstances that made it substantially certain, that monies from the loan and 

additional payments would be used in those manners. 

• In a fourth corrupt transaction that began in or about December 2007 and 

continued through at least October 2008, Och-Ziff Hedge Funds made a 

convertible loan (the “Convertible Loan”) of approximately $124 million from 

Och-Ziff investor funds through AGC I to an entity in the DRC, purportedly to 

purchase mining assets.  During the same time frame, Och-Ziff invested $150 

million in another DRC mining company using investor funds.  Both DRC entities 

were controlled by a notorious Israeli businessman (“Agent 3”) who Och-Ziff 

partnered with at the behest of Cohen and Baros.  Agent 3 purportedly would act 

as agent for and on behalf of Och-Ziff to purchase mining assets in the DRC.  

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Monies from the Convertible Loan were used to pay bribes to high-ranking 

government officials related to the acquisition of such assets.  Cohen and Baros 

knew, held the firm belief, or operated under circumstances that made it 

substantially certain, that monies from the Convertible Loan would be used to 

bribe high-ranking government officials in connection with the acquisition of 

assets on behalf of Och-Ziff.     

• In a fifth corrupt transaction, in or about November 2010 and February 2011, 

Cohen and Baros arranged for a margin loan (the “Margin Loan”) of approximately 

$130 million to be made from Och-Ziff Hedge Funds investor funds to a third entity 

controlled by Agent 3.  Cohen and Baros arranged for and structured the transaction 

so that approximately $84.1 million of the loan proceeds went to Agent 3 with no 

restrictions or oversight by Och-Ziff as to how Agent 3 used the money.  Cohen 

and Baros knew, held the firm belief, or operated under circumstances that made 

it substantially certain, that money from the Margin Loan would be used to bribe 

high-ranking government officials in connection with the acquisition of assets on 

behalf of Och-Ziff.        

• In a sixth corrupt transaction, in or about 2010 and 2011, and continuing to at 

least April 2012, Cohen and Baros arranged for African Global Capital II (“AGC 

II”), a second Africa-focused fund formed by Och-Ziff, to purchase shares in a 

London-based oil exploration company.  Through the efforts of Cohen and Baros, 

Och-Ziff caused AGC II to purchase the shares from a South African business 

partner in order to provide him with capital to use for other purposes, including 

the payment of bribes.  With the proceeds from the AGC II purchase, the South 

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African business partner paid more than $25 million to an account under the 

control of the government of Guinea and $1 million to Agent 2, who then used a 

portion of those funds to bribe high-ranking government officials in Guinea.  

Cohen and Baros knew, held the firm belief, or operated under circumstances that 

made it substantially certain, that the South African business partner would use 

proceeds from the purchase by AGC to bribe high-ranking government officials 

related to the acquisition of assets on behalf of Och-Ziff.       

7. As part of their corrupt scheme, Cohen and Baros failed to disclose all material 

facts in communications with Och-Ziff and OZ Management investors and potential investors 

and, in certain circumstances, purposely omitted facts to ensure that corrupt transactions would 

proceed.  Cohen and Baros also aided and abetted OZ Management’s failures to disclose all 

material facts to their investors in connection with several African transactions, and aided and 

abetted failures by OZ Management to disclose conflicts of interest and to control the use of 

investor funds.  Cohen, Baros, Och-Ziff and OZ Management made material misrepresentations 

and omissions to investors and potential investors regarding the corrupt transactions detailed in 

paragraph 5 above, as well as in additional AGC II transactions as follows:   

• With respect to the AGC II purchase of shares in a London-based mining 

company for $77 million in 2011, Cohen and Baros knew, and failed to disclose 

to investors, that the $77 million transaction price would result in a $52 million 

windfall for Och-Ziff’s business partners.  Nor did they disclose that the windfall 

would be used to fund, among other things, a $2.1 million payment back to Och-

Ziff to satisfy an outstanding loan relating to AGC I, $25 million in payments to 

the government of Guinea to try to gain access to other business opportunities, $1 

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million to a consultant (Agent 2), in part to pay a $150,000 bribe to a high-

ranking government official in Guinea, and millions of dollars of personal benefit 

to other agents, intermediaries and business partners of Och-Ziff. 

• As to a 2010 investment by AGC II in oil rights in the Republic of the Congo 

(“Congo-Brazzaville”) through an Africa-focused oil exploration company, 

Cohen knew and failed to disclose to investors, among other things, details about 

the origin of the transaction, the self-interest of AGC II business partners in the 

transaction, and the bases for payments to intermediaries.  

• As to a 2010 AGC II purchase of $20 million of shares in a privately held 

London-based mining holding company, Cohen knew and failed to disclose to 

investors, among other things, that of the $20 million purchase price, $4 million 

would be diverted to Cohen’s personal benefit.  Further, Cohen and Baros knew 

and failed to disclose to investors that an additional $4 million would be funneled 

to an AGC II business partner for his personal benefit.    

8. Cohen and Baros also aided and abetted and caused Och-Ziff’s violations of 

Section 13(b)(2)(A) of the Exchange Act in which Och-Ziff failed to make and keep books, 

records, and accounts, which, in reasonable detail, accurately and fairly reflected its transactions 

and disposition of its assets.  

9. In addition, Och-Ziff lacked sufficient internal accounting controls to prevent and 

detect violations of the FCPA and to provide reasonable assurances that the transactions were 

legitimate and recorded appropriately; that the transactions were executed in accordance with 

management’s general or specific authorization; that transactions were recorded as necessary to 

permit preparation of financial statements in conformity with generally accepted accounting 

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principles or any other criteria applicable to such statements; and, to maintain accountability for 

assets.  Despite being aware of and understanding the nature and extent of the corruption risk 

posed by doing business in, among other places, Libya, Chad, Niger, Congo-Brazzaville, Guinea 

and the DRC, Och-Ziff failed to implement an adequate system of internal accounting controls 

and failed to enforce the accounting controls it did have in place.  As a result, the various 

investments, payments and loans to agents, intermediaries and/or business partners detailed 

above were not subject to meaningful review.  Substantially all of the corrupt payments detailed 

above were made without adequate and appropriate due diligence inquiries and investigation, 

which permitted the bribe payments to be made.   

10. Cohen and Baros took steps to circumvent Och-Ziff’s internal controls so that 

Och-Ziff would falsely record the bribes detailed above as legitimate investments and/or 

operating expenses on Och-Ziff’s books and records, thereby violating Section 13(b)(5) of the 

Exchange Act and Exchange Act Rule 13b2-1.   

AUTHORITY, JURISDICTION AND VENUE 

11. The Commission brings this action pursuant to enforcement authority conferred 

by Section 21(d), 21(e) and 27 of the Exchange Act [15 U.S.C. §§78u(d), 78u(e) and 78aa] and 

Section 209(d) of the Advisers Act [15 U.S.C. §80b-9(d)].  The Commission seeks imposition of 

a civil penalty as to Cohen and Baros pursuant to Section 21(d)(3) of the Exchange Act [15 

U.S.C. §78u(d)(3)], and Section 209(e) of the Advisers Act [15 U.S.C. §80b-9(e)].   

12. This Court has jurisdiction over this action pursuant to Sections 21(d), 21(e) and 

27 of the Exchange Act [15 U.S.C. §§78u(d), 78u(e) and 78aa], and Sections 209(d), 209(e) and 

214 of the Advisers Act [15 U.S.C. §§80b-9(d), 80b-9(e), 80b-14].   

13. Venue is appropriate in this Court under Section 27 of the Exchange Act [15 

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U.S.C. §§78aa], Section 214 of the Advisers Act [15 U.S.C. §80b-14] and 28 U.S.C. § 1391(d) 

because, among other things, certain acts or transactions constituting the violations of the federal 

securities laws detailed herein occurred in this district, including travel, wire transfers and the 

transmission of telephonic and electronic messages in connection with those violations.  

14. The Defendants, directly or indirectly, made use of the means and 

instrumentalities of United States interstate commerce, or of the mail, in connection with the 

acts, practices, and courses of business alleged herein, including travel, the mails, telephonic 

communications and electronic messaging.  Cohen and Baros routinely communicated 

telephonically and via email with officers and employees at Och-Ziff’s and OZ Management’s 

New York headquarters, from London and other locations outside the United States regarding a) 

the corrupt transactions, and b) for each of the transactions involving AGC I and AGC II, as well 

as all other Och-Ziff investments in Africa, in which Cohen and/or OZ Management, acting as 

investment advisers, defrauded clients or prospective clients.  

15. Electronic messages sent and received by Cohen and Baros relating to the 

sprawling illegal schemes outlined herein were routed through this district and through servers at 

Och-Ziff’s New York headquarters.  Wire transfers and electronic communications relating to 

the sprawling illegal schemes outlined herein were routed through this district.  Cohen also 

travelled to and from London and other international venues through the district in furtherance of 

the transactions detailed herein.    

16. Cohen and Baros arranged for, perpetrated and participated in the transactions 

detailed herein understanding that final documentation relating to the transactions would be sent 

and communicated to senior officers and employees of Och-Ziff and OZ Management at their 

New York headquarters, and further understood that money or funds paid, loaned or invested by 

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Och-Ziff, as well as the agents, intermediaries and business partners of Och-Ziff, related to the 

transactions would originate in and/or be transferred through Och-Ziff and/or OZ Management 

accounts in New York, including accounts in this district.   

DEFENDANTS  

17. Michael L. Cohen, age 45, is a former Och-Ziff partner who resides in London, 

United Kingdom (the “UK”).  During the period 2007 through 2012, Cohen was the head of Och-

Ziff’s European office (based in London), as well as a member of Och-Ziff’s management 

committee.  He had primary responsibility in Och-Ziff’s European office for transactions and 

investments in Europe, the Middle East, and Africa.  Cohen was also an owner and executive 

officer of OZ Management.  Cohen was born in the United States, owned a residence in 

Massachusetts during the relevant time period, and holds dual UK/US citizenship.   

18. Vanja Baros, age 44, is a former analyst in the private investments group at Och-

Ziff’s European office, focusing on natural resources, mining and minerals deals.  Baros was an 

employee of Och-Ziff Management Europe Limited, a wholly owned subsidiary of Och-Ziff and 

an affiliated investment adviser to OZ Management.  Baros was as a member of Och-Ziff’s African 

Special Investment Team from 2007 through at least 2013.  In that capacity, Baros reported to and 

worked closely with Cohen on Africa-related deals, with significant oversight responsibilities for 

investments involving natural resources in Africa.  He is an Australian citizen residing in the UK.    

RELATED ENTITIES AND INDIVIDUALS 

19. Och-Ziff Capital Management Group LLC (“Och-Ziff”) is an institutional 

alternative asset manager or “hedge fund” incorporated in Delaware with its principal place of 

business in New York, New York, and offices in New York, London and Hong Kong.  Och-Ziff’s 

common stock is registered with the Securities and Exchange Commission pursuant to Section 

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12(b) of the Exchange Act.  The stock became listed on the New York Stock Exchange (ticker: 

OZM) after an initial public offering on or about November 14, 2007.  Since then, Och-Ziff has 

been an “issuer” and prior to that was a “domestic concern,” within the meaning of the FCPA.  

Och-Ziff controls numerous consolidated subsidiaries and affiliates through which it operates and 

provides investment advisory and management services to various hedge funds and alternative 

investment vehicles, the Och-Ziff Hedge Funds, in return for management fees and incentive 

income.  Och-Ziff is one of the largest hedge funds in the world.  In the 2007-2012 timeframe, it 

had approximately $30 billion in assets under management. 

20. OZ Management LP (“OZ Management”) is a registered investment adviser and a 

wholly-owned subsidiary of Och-Ziff, with its primary place of business in New York, New York.  

Since 1999, OZ Management has been registered with the Commission as an investment adviser.  

OZ Management provides asset management services to the Och-Ziff Hedge Funds.  The financial 

results of Och-Ziff’s wholly-owned subsidiaries, including OZ Management and its subsidiaries and 

affiliates, are ultimately consolidated into the financial statements of Och-Ziff.  During 2007-2012, 

OZ Management was a domestic concern and an “agent” of an issuer, as those terms are defined in 

the FCPA. 

21. OZ Africa Management GP, LLC (“OZ Africa”) is a Delaware-based wholly-

owned subsidiary of OZ Management.  OZ Africa held certain of Och-Ziff’s management and 

advisory interests for private investments in Africa in approximately 2007-2012. 

22. Africa Management Limited (“AML”) was a joint venture started in 2007 by Och-

Ziff, OZ Africa, and entities affiliated with various South African business partners of Och-Ziff 

and its subsidiaries.  AML established investment funds, including AGC I and AGC II, through 

which it pursued and held natural resource, mining and mineral assets and rights in various African 

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countries from approximately 2007-2012.   

23. “Och-Ziff Employee 1” is a United States citizen who is a high-ranking officer and 

executive at Och-Ziff, based in the firm’s New York office.   

24. “Och-Ziff Employee 2” is a United States citizen who was a high-ranking officer 

and financial executive at Och-Ziff, based in the firm’s New York office. 

25. “Agent 1” was a London-based businessman with a multi-national network of 

companies, including a real estate development company doing business in Libya.  He had a 

history of doing business with Och-Ziff that predated the transactions detailed here.  Agent 1 had 

long-standing and extensive connections to high-ranking government officials in Libya.   

26. “Agent 2” was a Gabonese national who worked as a consultant for AGC I in or 

about 2007 through at least 2012.  Agent 2 was a close business associate of South African 

Business Associate 3.  Agent 2’s job included, among other things, sourcing and attempting to 

secure mining opportunities in Africa for AGC I and affiliated entities. 

27. “Agent 3” was an Israeli businessman with significant interests in the diamond and 

mining industries in the DRC.  Agent 3 had long-standing and extensive connections to high-

ranking government officials in the DRC.  Och-Ziff entered into business partnerships with Agent 

3 both directly and through OZ Africa and various Och-Ziff subsidiary companies and affiliates, 

including partnering with Agent 3 to pursue natural resource, mining and mineral opportunities in 

the DRC.  Och-Ziff used Agent 3 as its agent in dealings with high-ranking government officials in 

the DRC related to those opportunities. 

28. “South African Business Associate 1” was a former South African government 

official, a prominent figure within the ruling party in South Africa, the African National 

Congress (“ANC”), and a businessman who operated through a South Africa-based business 

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conglomerate (“SA Business Conglomerate”).  Cohen successfully advocated for Och-Ziff to 

partner with him in the AGC joint ventures (AGC I and II).  Although Cohen and others at Och-

Ziff promoted South African Business Associate 1 to potential investors as a partner, he never 

formally became part of any AGC joint venture.  

29. “South African Business Associate 2” was the co-founder of the SA Business 

Conglomerate with South African Business Associate 1, and functioned as its Chief Executive 

Officer.  He became the Chief Executive Officer of AML.  

30. “South African Business Associate 3” was a businessman with close connections 

to South African Business Associate 1 and other members of the ANC.  He founded and 

controlled a private investment company in the Turks & Caicos Islands (the “Turks & Caicos 

Entity”) that did business in the United Kingdom, South Africa and elsewhere.  The Turks & 

Caicos Entity owned or controlled a number of natural resource, mining, energy and other assets, 

and participated in the AGC joint business venture.  

FOREIGN GOVERNMENT OFFICIALS 

31. “Libyan Government Official 1” was the son of Colonel Muammar Gaddafi (who, 

in 2007, was in his thirty-eighth year of absolute rule in Libya).   He was a Libyan government 

official.  Libyan Government Official 1 was the driving force behind the creation of the LIA.  As 

a government official and member of the de facto ruling family, he exercised significant control 

over the LIA’s business, financial and investment decisions and wielded significant power in the 

Libyan government.  

32.  “Libyan Government Official 2” was a high-ranking executive officer in the LIA 

who, with Libyan Government Official 1, had significant control over business, financial and 

investment decisions made by the LIA.   

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33.   “Libyan Government Official 3” was a high-ranking executive officer in  

Libya’s state security services with significant influence over security and commercial matters in 

Libya, including the granting of visas and landing permits for foreign visitors.   

34. “DRC Government Official 1” was a high-ranking executive official in the DRC 

who had the ability to take official executive action and exert official influence over mining 

matters in the DRC. 

35. “DRC Government Official 2,” was a high-ranking government official in the 

DRC and close advisor to DRC Government Official 1.  During the relevant time period, DRC 

Government Official 2 was an Ambassador-at-Large for the DRC government and, at certain 

times, a national parliamentarian.  

36. “Niger Government Official 1” was a high-ranking government official in Niger 

who was married to Niger Official 2, and who had the ability to exert official influence over 

mining matters in Niger   

37.   “Niger Government Official 2” was a high-ranking government official in Niger 

who was married to Niger Official 1, and who had the ability to take official executive action and 

exert official influence over mining matters in Niger.   

38. “Chad Government Official 1” was a high-ranking government official in Chad 

who had the ability to take official executive action and exert official influence over mining 

matters in Chad.     

39. “Guinea Government Official 1” was a high-ranking government official in 

Guinea who had the ability to take official executive action and exert official influence over 

mining matters in Guinea. 

40. “Guinea Government Official 2” was a high-ranking government official in 

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Guinea who had the ability to take official executive action and exert official influence over 

mining matters in Guinea. 

FACTUAL ALLEGATIONS 

 A. Violations of the FCPA Relating to the Libyan Investment Authority    

41. In 2003, Libya had emerged from a lengthy period of economic sanctions 

imposed by the United Nations and was opening to global investment and business opportunities.  

In 2006, the Libyan government created a sovereign wealth fund, the LIA, to manage the 

country’s oil and other assets and to encourage foreign investment.  In or about 2007, Cohen 

began attempts to obtain clients and investment opportunities in Libya for Och-Ziff.  

42. Cohen enlisted Agent 1 to assist him and Och-Ziff in pursuing investment and 

business opportunities in Libya and with the LIA.  Cohen knew that Agent 1 had contacts within 

the highest levels of the Libyan government.  Through previous business dealings and 

communications with Agent 1, Cohen knew that Agent 1’s close connections in Libya included 

the country’s ruling family (the Gaddafis) and senior officials in the Libyan security services.  

Cohen and others at Och-Ziff knew that Agent 1 was not a financial consultant or advisor, but 

rather a middleman whose primary contribution to transactions was his connections to high-

ranking foreign government officials.  Cohen also was aware that Agent 1 used an opaque 

network of offshore entities in connection with financial transactions and understood that Agent 

1’s purpose in doing so was to shield financial transactions from scrutiny. 

43. In or about February 2007, Cohen requested that Agent 1 work as Och-Ziff’s 

agent to secure a LIA investment in the Och-Ziff Hedge Funds.  Prior to engaging Agent 1, Och-

Ziff and Cohen did not conduct adequate or appropriate due diligence or investigation as to 

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Agent 1, and specifically did not conduct adequate or appropriate due diligence or investigation 

as to the nature of Agent 1’s relationship with Libyan government officials. 

44. In or about February and March 2007, Agent 1 discussed with Cohen the structure 

of the LIA and explained that it was largely controlled, directly and through proxies, by Libyan 

Government Official 1.  Agent 1 described Libyan Government Official 1 to Cohen as the 

driving force behind the creation of the LIA and a powerful government official in his own right.     

45. Agent 1 arranged a meeting in Vienna, Austria, in or about March 2007, at which 

he introduced Cohen to Libyan Government Official 1 and his main proxy, Libyan Government 

Official 2, a senior official at the LIA.  Cohen travelled to Vienna from London, England, for the 

meeting.  No one else from Och-Ziff attended the Vienna meeting.  Libyan Government Officials 

1 and 2 had significant control over investment decisions made by the LIA.  In a later email, 

Cohen described Libyan Government Official 2 to others at Och-Ziff as Libyan Government 

Official 1’s “right hand man at the lia (sic).”  Subsequent due diligence conducted by Och-Ziff 

stated that Libyan Government Official 2  “looks after” the interests of Libyan Government 

Official 1, at the LIA and in a private commercial business.   

46. At the Vienna meeting, Cohen and Libyan Government Official 1 discussed Och-

Ziff’s business, the LIA and the possibility of the LIA making an investment in the Och-Ziff 

Hedge Funds.  Agent 1 also introduced Cohen to a Tunisian business associate of Agent 1 who 

was a member of Libyan Government Official 1’s entourage (the “Tunisian Business 

Associate”). The Tunisian Business Associate would play a critical role in facilitating bribery 

payments from Och-Ziff to Libyan Government Officials 1 and 2.  The bribes were paid in 

exchange for the LIA investing money with Och-Ziff and the Och-Ziff Hedge Funds.  

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47. In a subsequent email, Cohen told Och-Ziff Employee 1 that the “[m]eetings are 

amazing.  They [the LIA] have 77 billion, half in cash and no idea who to give it to...I haven’t 

been this excited in a while.”  Throughout 2007, Cohen continued to communicate with Och-Ziff 

Employee 1 regarding the progress of his pursuit of the LIA investment and the role of Och-

Ziff’s “agent,” Agent 1.   

48. Shortly after the Vienna meeting, on or about March 8, 2007, Cohen sent an e-

mail to Libyan Government Official 2, stating: “It was very nice meeting you yesterday.  I think 

there are many ways we can work together on the investment side.  I have attached an overview 

of our main fund.  I would love to get you in as an investor in one of our funds so we can start a 

dialogue and look at investments together.”   

49. Cohen and Agent 1’s efforts to secure an LIA investment with Och-Ziff continued 

through the summer of 2007.  Cohen updated Och-Ziff Employee 1 about those efforts, primarily 

via emails sent between Cohen in Europe and Och-Ziff Employee 1 in New York.  On or about 

May 29, 2007, Cohen emailed Och-Ziff Employee 1 stating, “[t]he agent wants to come in and 

see me this week.  You OK with that?”  Och-Ziff Employee 1 responded, “I will be ok.  Will call 

you.”  Then, on or about August 9, 2007, Cohen emailed Och-Ziff Employee 1, asking, “[i]s 

Libya in for Sept 1?”  Och-Ziff Employee 1 replied, “I think so.  Will check.”  

50. On or about September 11, 2007, an employee of a background investigation firm 

sent Och-Ziff employees a report Och-Ziff had requested on Agent 1 and his business partner 

which stated, in part:  

 “These guys [Agent 1 and his partner] were hard to pin down because they have 
 always acted as advisors and kept their money and interests offshore...[Agent 1’s 
 company] uses special purpose vehicles [“SPV”] based offshore that have no 
 subsidiaries, no employees and no operations other than relating to the transaction 
 for which they were established.  This, and their activities as ‘fixers’, means that 

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 there is little documented evidence of the company’s activities either in the UK or 
 internationally.” 

51. On or about September 19 and 20, 2007, Agent 1 arranged a meeting for Cohen 

and two other Och-Ziff representatives with the LIA’s investment management team in Tripoli, 

Libya.  Agent 1 secured landing permits and visas for the trip through Libyan Government 

Official 3.  Agent 1 told Cohen that other members of the LIA could not be told of his role as an 

agent for Och-Ziff or the deal would be rejected.  As a result, Agent 1 did not attend the Tripoli 

meeting and his involvement was shielded from the other Och-Ziff participants and from LIA 

participants other than Libyan Government Officials 1 and 2.  Both before and after the meeting, 

Agent 1 worked on Och-Ziff’s behalf to secure an LIA investment with Och-Ziff without 

disclosing his role to members of the LIA other than Libyan Government Officials 1 and 2.  

Agent 1 regularly updated Cohen about his efforts and his progress.  

52. During his communications with Cohen, Agent 1 broached the issue of a fee that 

needed to be paid if and when Och-Ziff received an investment from the LIA.  During these 

discussions, Agent 1 told Cohen that he would have to confer with “others” to confirm whether 

or not the proposed size of the fee was acceptable to its actual recipients.  In late 2007, when it 

became clear that the LIA intended to make a $300 million investment with Och-Ziff, Cohen and 

Agent 1 agreed on a “fee” payment of $3,750,000 to be paid in two installments.  Agent 1 agreed 

to the amount after conferring with a representative of the Libyan government officials.  As a 

result of these discussions, Cohen knew, held the firm belief, or operated under circumstances 

that made it substantially certain, that all or most of the “fee” paid to Agent 1 would, in fact, go 

to Libyan Government Officials 1 and 2 in return for the LIA’s $300 million investment.    

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53. On or about November 26, 2007, Cohen told Och-Ziff Employee 1 that the firm 

needed to pay a fee of $3,750,000 to Agent 1 in connection with the LIA’s $300 million 

investment.  The investment was set to be finalized on or about November 30, 2007.   

54. On or about November 27, 2007, Och-Ziff Employee 1 forwarded an email to 

Cohen that set out possible legal and compliance conditions that had to be met before the fee 

could be paid, stating: 

 … There has to be a written agreement between OZ [Och-
Ziff] and the person who receives payment that … requires the 
solicitor, at the time of any solicitation, to provide the client with a 
copy of the [investment adviser registration] and a separate written 
disclosure document containing information relating to the 
solicitation arrangemen [sic] (including the comp to be paid); and 
the adviser receives from the client an executed acknowledgment 
showing that the client received the separate written disclosure 
document[.]   
  

55. Cohen told Agent 1 about these legal and compliance conditions, including 

disclosing Agent 1’s role as Och-Ziff’s agent and his compensation to the LIA.  Agent 1 refused 

to accept the conditions or disclose his role to the LIA, and discussed with Cohen the negative 

ramifications such disclosure would have on the potential LIA investment with Och-Ziff.  Cohen 

and Agent 1 then discussed ways to evade the legal and compliance requirements, including 

providing a false representation to Och-Ziff or simply having Agent 1 agree to deliver notice 

understanding that he would, in fact, make no such disclosure to the LIA.  

56. On or about November 30, 2007, Och-Ziff received signed subscription 

documents and wire transfers from the LIA for the $300 million investment in the Och-Ziff 

Hedge Funds.  The wire transfers flowed from the LIA’s custodial account in Luxembourg, 

through an account in the United States, and were deposited in an Och-Ziff account in the 

Cayman Islands. 

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57. Och-Ziff did not enter into a written agreement with Agent 1 for the $3,750,000 

payment.  Instead, at the urging and behest of Cohen, Och-Ziff, through OZ Management, 

entered into two agreements, a Consultancy Agreement and an Anti-Corruption Side Letter, with 

a separate legal entity, an SPV formed by Agent 1 and based in St. Peter Port, Guernsey (the 

“Guernsey SPV”).  The Guernsey SPV was a shell company that Agent 1 intended to use to 

contract for and receive the $3,750,000 LIA transaction fee.  Neither the Consultancy Agreement 

nor the Anti-Corruption Side Letter was executed prior to Och-Ziff receiving the $300 million 

investment from the LIA on or about November 30, 2007.   

58. On or about December 4, 2007, an Och-Ziff employee sent an email to Cohen, 

which attached the Consultancy Agreement and Side Letter between OZ Management and the 

Guernsey SPV.  Cohen replied to the email stating: “looks good.”  The Consultancy Agreement 

described the Guernsey SPV as follows: “[the Guernsey 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).”  

The description was false, as Cohen knew based on his dealings and discussions with Agent 1.  

The SPV had no employees, no expertise and had never acted as a consultant in Libya or 

elsewhere to any company.    

59. The Consultancy Agreement further stated that: “[the Guernsey SPV] has offered 

to provide assistance to [OZ Management] with respect to introducing the Company to the 

Libyan Investment Authority ... developing and coordinating strategy and tactics to promote and 

encourage LIA to invest in [OZ Management] by cash injection into the account of [OZ 

Management] or any of its funds[.]”  Under the terms of the Consultancy Agreement, the 

Guernsey SPV undertook to “assist OZ Management LP in connection with the introduction of 

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[OZ Management] to and promoting its interests and reputation with LIA.”  Och-Ziff and the 

Guernsey SPV entered into the two agreements on or about January 15, 2008, but backdated 

them to December 5, 2007.  The agreements, which only referenced future actions, did not 

disclose or otherwise reflect that Agent 1 had been working on Och-Ziff’s behalf since at least 

February 2007.   

60. The Anti-Corruption Side Letter stated that the LIA “has been informed in writing 

of the Agreement and the consideration payable to ourselves thereunder.”  That statement was 

false, as Cohen knew because of his dealings and discussions with Agent 1.  Cohen knew that 

neither Agent 1 nor the Guernsey SPV had informed anyone at the LIA who was not involved in 

the bribe scheme that Agent 1 had received payment of a fee from Och-Ziff relating to the 

transaction.  As part of its agreements with the Guernsey SPV or otherwise, Och-Ziff did not 

request a copy of the purported written notification and did not notify the LIA directly of the fee 

payment.  In fact, Cohen and Agent 1 took great pains to ensure that officials and employees at 

the LIA – other than the bribe recipients – did not learn of the fee payment or of Agent 1’s role 

in the transaction between Och-Ziff and the LIA.  

61. Och-Ziff paid the $3,750,000 fee to Agent 1 through his Guernsey SPV with 

Cohen and other senior officers and employees at the firm fully aware of the risks in dealing with 

Agent 1 and with the LIA.  Cohen and Och-Ziff knew Agent 1 had connections at the highest 

levels within the Libyan government, including with the Gaddafi family.  Cohen and Och-Ziff 

also were aware that Agent 1 had a reputation for operating as a “fixer” in business transactions, 

and knew of his opaque network of business interests run through offshore holding companies 

that were, as reported to Och-Ziff, “hard to pin down.”    

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62. Och-Ziff paid Agent 1 the $3.75 million fee from funds originating in a New 

York financial institution, via his offshore shell company, the Guernsey SPV.  Contrary to the 

firm’s anti-corruption guidelines and internal financial controls, Och-Ziff failed to conduct 

adequate or appropriate due diligence on the Guernsey SPV.  Och-Ziff nonetheless entered into 

contractual obligations with the entity itself, rather than with Agent 1, and thus placed no 

contractual restrictions on Agent 1’s conduct.  Throughout the decision-making process at Och-

Ziff, Cohen advocated strongly in favor of paying the fee to Agent 1 in this manner.   

63. On or about January 16, 2008, Och-Ziff transferred the first $2.25 million 

installment of its payment to Agent 1 from a New York account to an account in Guernsey held 

by the Guernsey SPV.  At about the same time, Agent 1 transferred ownership of 66% of the 

Guernsey SPV to the Tunisian Business Associate who was a member of Libyan Government 

Official 1’s entourage.  Agent 1 then directed a wire transfer of $1,507,659.61 from the 

Guernsey SPV’s account, through an intermediary account held by the Tunisian Business 

Associate, to an account in Switzerland held for the benefit of Libyan Government Official 1.   

64. Agent 1 also used portions of the $2.25 million installment to direct payments to 

Libyan Government Official 3.  On or about March 5, 2008, the Guernsey SPV transferred 

$331,528 from its Guernsey account to an account of a British Virgin Islands SPV in the 

Bailiwick of Jersey that Agent 1 controlled.  On or about March 6, 2008, Agent 1 transferred 

approximately €500,045 (Euro) from an account in Jersey to an account in Malta in the name of 

Libyan Government Official 3’s son, which he held for the benefit of his father, Libyan 

Government Official 3.  That same day, Agent 1 transferred approximately $400,000 from a 

Guernsey SPV account in London to the same account in Malta.   

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65. These payments to Libyan Government Official 3 constituted, at least in part, 

bribes to influence the granting of visas and landing permits for the LIA trip to Tripoli by Cohen 

and other Och-Ziff executives in September 2007 that helped facilitate the LIA investment.  

From approximately March to June 2008, Agent 1 paid Libyan Government Official 3 more than 

$3 million in bribes, which benefitted Agent 1’s and Och-Ziff’s continuing business ventures in 

Libya and aided Agent 1’s ability to do business in Libya, including on behalf of Och-Ziff.     

66. In addition to direct cash payments and transfers, Agent 1 regularly made in-kind 

payments to Libyan Government Official 2 for the purpose of influencing acts or decisions of his 

at the LIA.  The acts or decisions influenced by Agent 1’s payments included the LIA’s decision 

to invest $300 million with Och-Ziff and general commercial business in Libya over which 

Libyan Government Official 2 exercised control.  These included payments for luxury travel, 

luxury hotel accommodations and jewelry.  Agent 1 also paid living and medical expenses for 

Libyan Government Official 2’s brother in London.    

67. The second installment of the “fee” Och-Ziff owed Agent 1 in connection with 

the $300 million LIA investment was due on December 1, 2008.  On or about October 30, 2008, 

Agent 1 asked Cohen if he could be paid early.  Cohen agreed to an early payment and directed 

Och-Ziff personnel to pay an invoice sent by Agent 1.  The Guernsey SPV used by Agent 1 

received payment of $1.5 million from Och-Ziff shortly thereafter. 

68. On or about November 5, 2008, the Guernsey SPV transferred approximately 

$1,005,000 from its account to an intermediary account in the United Kingdom, then on to an 

account in Switzerland for the benefit of Libyan Government Official 1.  Agent 1 arranged this 

payment to an account held for the benefit of Libyan Government Official 1 in return for his 

support and influence of the LIA’s decision to invest $300 million with Och-Ziff.  

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69. Och-Ziff reaped substantial financial benefit from the bribes paid by Agent 1 on 

its behalf.  Och-Ziff collected fees and incentive income from the LIA fund investment totaling 

approximately $100 million. 

70. Cohen arranged for Och-Ziff to retain the services of Agent 1, and for payments 

to be made to him, with the knowledge, the firm belief, or under circumstances that made it 

substantially certain, that all or a portion of the money paid to him, or to entities under his 

control, would be forwarded and paid as bribes to high-ranking Libyan government officials in 

connection with the LIA investment.    

71. Och-Ziff recorded the $3.75 million paid to Agent 1 as “Professional Services – 

Other.”  This designation was false.  The payment was for arranging introductions and meetings 

with corrupt foreign government officials and for Agent 1 to pay bribes to those officials.  Och-

Ziff thereby violated Section 13(b)(2)(A) of the Exchange Act by failing to make and keep 

books, records and accounts, which, in reasonable detail, accurately and fairly reflected its 

transactions and disposition of its assets.  By his actions, Cohen aided and abetted Och-Ziff’s 

violations. 

B. Violations of the FCPA Relating to the Libya Real Estate Project  

72. In or about October 2007, Och-Ziff invested in a real estate development venture 

in Libya, the Libya Real Estate Project.  The venture included two hotels, an office tower and a 

proposed hospital complex in Tripoli, and was founded and controlled by Agent 1.  Och-Ziff 

began its investment process for the Project at the same time it was using Agent 1 as an 

intermediary in its efforts to solicit an investment from the LIA.  Cohen championed the 

investment by Och-Ziff in the Project, noting to colleagues at Och-Ziff that by investing in the 

Project the firm was “making a bet on Libya here and relationship [with Agent 1].”  Based on 

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26 
 

discussions with Agent 1, Cohen knew that Agent 1 would make corrupt payments to Libyan 

government officials relating to the Project as well as to secure an investment from the LIA.  The 

“bet” Cohen and Och-Ziff made involved cementing a relationship with Agent 1 leading to those 

corrupt payments and corresponding financial benefit for Och-Ziff and Cohen. 

73. Prior to Och-Ziff’s investment, Agent 1 provided equity stakes in the Project’s 

development company to Libyan Government Official 3 and to the daughter of Colonel Gaddafi 

in exchange for valuable land leases on key properties on which the developments would be 

built.  During its dealings with Agent 1, Och-Ziff and Cohen knew of the link between the 

Gaddafi family and the Libya Real Estate Project.  In one review of the project, Cohen wrote 

“Gathafi Hotels” to describe a subsidiary of Agent 1’s real estate development company.  Later, 

at a time when Och-Ziff held a board seat on the Project’s development company, Och-Ziff’s 

board representative received emails that described Colonel Gaddafi’s daughter as “our JV 

partner” at the company.   

74. At Cohen’s urging, in or about October 2007, Och-Ziff provided a convertible 

loan of $40 million from Och-Ziff limited partner funds to Agent 1’s real estate development 

company.  Och-Ziff later converted the loan to equity, giving them an ownership stake in the 

company.  As payment for purportedly sourcing the transaction, Cohen also arranged for Och-

Ziff to pay a $400,000 “deal fee” to a special purpose vehicle (“SPV”).  Agent 1 controlled the 

SPV having created it specifically for the transaction.  The SPV was nothing more than a shell 

company.  Agent 1 told Cohen that, in reality, the deal fee was needed to compensate him for 

certain expenses that he needed to keep “off the books.”  Agent 1 also told Cohen that the 

ongoing payment of bribes was necessary for the real estate development company that Och-Ziff 

now co-owned with Agent 1 to operate effectively in Libya.  Cohen arranged for the deal fee to 

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be paid knowing that ongoing bribes were necessary to operate and advance the Libya Real 

Estate Project with the knowledge, the firm belief, or under circumstances that made it 

substantially certain that a portion of the deal fee paid to Agent 1 would be used to bribe Libyan 

government officials in connection with the Project.   

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

it failed to conduct adequate and appropriate due diligence on the SPV receiving the funds.  In 

addition, Cohen concealed the corrupt nature of Agent 1’s role in the transaction and that a 

substantial portion of the fee would be used by Agent 1 to pay bribes.  Cohen also arranged for 

payment by Och-Ziff to Agent 1’s SPV without a contract between Och-Ziff and either Agent 1 

or the SPV.  As a result, contrary to its anti-corruption policies, Och-Ziff paid the deal fee 

without restricting the use of funds by Agent 1 and without taking adequate and appropriate steps 

to ensure that investor funds were not used for an improper purpose.   

76. Shortly after the SPV received the $400,000 “deal fee” payment, Agent 1 

arranged for a portion of the funds to be transferred to Libyan Government Official 3.  The 

payment was a bribe to secure the ongoing support of Libyan Government Official 3, who in his 

senior position in Libya’s security services had the power to influence commercial matters in the 

country.  The bribe ensured that Agent 1 could continue to operate under Libyan Government 

Official 3’s protective cloak, and that the Libya Real Estate Project could go forward. 

77. As a result of Cohen’s conduct and concealment, Och-Ziff recorded the $400,000 

paid to Agent 1’s SPV as a “deal fee.”  This designation was false.  The payment was to pay 

bribes, not for legitimate deal-related expenses.  Och-Ziff thereby violated Section 13(b)(2)(A) 

of the Exchange Act by failing to make and keep books, records and accounts, which, in 

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reasonable detail, accurately and fairly reflected its transactions and disposition of its assets.  By 

his actions, Cohen aided and abetted Och-Ziff’s violations. 

 C. Violations of the FCPA, and the Misuse of Och-Ziff and AGC I Investor  
  Funds in Violation of the Advisers Act, Relating to the AML Joint Venture in 
  Niger and Chad 
 

78. Beginning in or about 2007, Och-Ziff formed Africa Management Limited 

(“AML”) as a joint venture that included Och-Ziff; its subsidiary, OZ Africa; and entities 

affiliated with various South African business partners.  AML established two investment funds, 

AGC I and AGC II, to invest in natural resource and mining assets in Africa.  Cohen led the 

venture out of Och-Ziff’s office in London.  After joining Och-Ziff in late 2007, Baros’s primary 

responsibilities at Och-Ziff related to AGC I and AGC II.  Och-Ziff provided capital, and 

managed the funds using its own infrastructure, including the Och-Ziff compliance and legal 

teams.  Och-Ziff also provided investment expertise and OZ Management played a significant 

role in the investment management of the joint venture.    

79. OZ Management held its advisory and management interest in AGC I through OZ 

Africa, which initially was funded using existing Och-Ziff Hedge Fund investor funds.  As part 

of its Africa investment strategy, Och-Ziff teamed with business partners with high-level 

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

and navigate political issues in the various countries.  In pursuit of business, Och-Ziff and its 

agents, intermediaries and business partners misused investor funds and bribed government 

officials in several countries, including the Democratic Republic of the Congo, Chad and Niger. 

80. At Cohen’s urging, Och-Ziff chose a prominent figure within South Africa’s 

ruling party for a primary role with AGC I (South African Business Associate 1).  South African 

Business Associate 1 was a former government official as well as a successful businessman who 

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operated through his SA Business Conglomerate.  Although Cohen and others at Och-Ziff 

promoted South African Business Associate 1 to potential investors as a partner, he never 

formally became part of AML, or directly involved in the AGC I fund, because of purported 

regulatory issues in South Africa.  Instead, his partner and the co-founder of the SA Business 

Conglomerate, South African Business Associate 2, became the Chief Executive Officer of 

AML.  Another person with close connections to the two co-founders of the SA Business 

Conglomerate, South African Business Associate 3, also later became a partner in AML.   

81. A private investment company South African Business Associate 3 controlled, the 

Turks & Caicos Entity, was designated to source and acquire assets for AGC I.  The Turks & 

Caicos Entity became a useful tool in several corrupt transactions involving Och-Ziff, Cohen and 

Baros.   

82.  In or about May 2007, Och-Ziff entered into a series of loan agreements with the 

Turks & Caicos Entity.  The loans totaled more than $86 million and ostensibly were made to 

acquire natural resource and mining rights in Africa, which would then be contributed into AGC 

I upon its formation.  Cohen advocated for Och-Ziff to work with the Turks & Caicos Entity to 

acquire African mining rights and later oversaw AGC I’s efforts to carry out that strategy.  South 

African Business Associate 3 used part of the funds loaned by Och-Ziff to the Turks & Caicos 

Entity to acquire mining rights in Chad and Niger and to invest in an Africa-focused oil 

company, (the “Oil Exploration Company”).  South African Business Associate 3 also used a 

portion of the funds to pay bribes to facilitate the acquisitions.  In 2008, some of the assets 

acquired by South African Business Associate 3 (via the Turks & Caicos Entity) were 

contributed to AGC I.  Och-Ziff then converted its existing loans into an equity stake in AGC I.   

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83. In or about 2007, a consultant working with the Turks & Caicos Entity began 

functioning as an agent for Och-Ziff and its partners (Agent 2), and began paying bribes to 

facilitate AGC I’s acquisition of assets.  Agent 2 and South African Business Associate 3 worked 

closely together in connection with the acquisition of mining rights and assets in both Niger and 

Chad.   Between approximately April 2007 and June 2012, Agent 2 was paid approximately $3.5 

million directly and indirectly by Och-Ziff and its business associates for purported consulting 

services and for “delivering services” in Niger and Chad.  The services Agent 2 provided 

included bribing government officials in Chad and Niger to advance the business and 

commercial interests of AGC I.  For example, beginning in or about June 2007, Agent 2 acquired 

the uranium mining rights for Och-Ziff by paying bribes to a high-ranking government official in 

Niger (Niger Government Official 1), in order to obtain Niger Government Official 1’s influence 

over another high-ranking government official (Niger Government Official 2), who had the 

power to grant uranium mining licenses.   

84. Agent 2 and South African Business Associate 3 paid bribes to the two Nigerian 

government officials consisting of, among other things, payments for “nice cars;” a $100,000 

payment to a charity run by Niger Government Official 1; payments made to and through the 

nephew of the two Nigerian officials; payments made to and through the son of the Nigerian 

officials; and, payments made to the two Nigerian government officials through an attorney and 

other intermediaries.  Agent 2 made these payments to obtain mining assets for, among others, 

AGC I. 

85. On or about July 20, 2007, Agent 2 sent an email to South African Business 

Associate 3 about a request for money made by Niger Government Official 1 to pay for an 

upcoming conference she was planning.  Agent 2 stated that the real objective of the payment “is 

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to show [Niger Government Official 2] that we are making a strong contribution to [Niger 

Government Official 1’s] Fondation [sic]...This must happen before they make a decision on the 

Mining and Oil request we recently sent them.”  In response, South African Business Associate 3 

had a business associate and executive at his holding company write a letter to Niger 

Government Official 1 stating: 

 We would like to thank you for giving our [Agent 2] an audience.  We are most 
 pleased to be entering the mining business in Niger, and we are hopeful that our 
 license will be issued in the coming month...[our company] would be pleased to 
 contribute $100,000 to help finance your conference. 

86. On or about August 8, 2007, the Turks & Caicos Entity transferred $50,000 from 

a London account, through an account in New York, to a company account set up in July 2007 

by Niger Government Official 1. 

87. On or about August 29, 2007, the Turks & Caicos Entity transferred more than 

$1.3 million to the company account set up in July 2007 by Niger Government Official 1, again 

through the account in New York.  On or about September 3, 2007, Agent 2 emailed the nephew 

of the Niger officials a copy of the confirmation of the $1.3 million bank transfer.  The corporate 

records of the Turks & Caicos Entity identified the $1.3 million transfer as purportedly for 

“Services Rendered.”  In fact, this payment was a bribe to obtain mining assets for, among 

others, AGC I. 

88. On or about June 11, 2008, an attorney affiliated with Niger Government Officials 

1 and 2 (the “Niger Attorney”) submitted an invoice to an affiliate of South African Business 

Associate 2’s holding company.  The invoice billed $2.7 million for services that included, 

“[s]taying by the Government of the Republic of NIGER.”  The attorney submitted the invoice 

through a Panama-registered company he controlled. 

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89. On or about August 5, 2011, while Agent 2 was in the United States, he received 

a telephone call asking him to travel to Niger to meet with Niger Government Official 2 and 

propose a partnership between the Turks & Caicos Entity and a state-owned mining company in 

Niger. 

90. On or about September 22, 2011, Agent 2 traveled from Paris, France to John F. 

Kennedy International Airport in Queens, New York, for a meeting to discuss Niger and Agent 

2’s role in acquiring mineral rights and mining assets in Niger on behalf of, among others, AGC 

I and Och-Ziff. 

91. Between September 28, 2011, and April 23, 2012, Agent 2 received more than 

$200,000 in wire transfers to a bank account in the United States, opened by and for the benefit 

of Agent 2, related to his efforts on behalf of Och-Ziff and the agents, intermediaries and 

business partners of Och-Ziff, to obtain mining assets in Niger and Guinea. 

92. In addition, in or about January 2007 and June 2008, Agent 2 worked to obtain 

uranium mining rights and other natural resource opportunities in Chad on behalf of Och-Ziff 

and its business partners, specifically for inclusion in AGC I.  In connection with these efforts, 

Agent 2 paid bribes to Chad Government Official 1 to obtain uranium mining rights, giving cash 

and paying for travel expenses and shopping excursions for Chad Government Official 1 and the 

official’s spouse in Paris, France. 

93. Before loans were provided to South African Business Associate 3 and the Turks 

& Caicos Entity, Cohen (and others at Och-Ziff) learned that South African Business Associate 3 

had access to certain deals through bribes or corrupt schemes.  One deal in Niger presented to 

Cohen by South African Business Associate 3 would, as described to Cohen in a March 22, 2007 

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email, have cost “$20-$25 million (includes $5 million for the ongoing Presidential 

campaign…)”    

94. On or about June 26, 2007, AGC I received and considered an investment 

memorandum from the senior executive at South African Business Associate 3’s Turks & Caicos 

Entity.  The memo recommended that AGC I invest $3 million in a subsidiary of the holding 

company to acquire uranium concessions.  On or about July 1, 2008, the holding company 

transferred $3 million to an account controlled by South African Business Associate 3, and on or 

about July 3, 2008, $2.7 million was transferred from that account to an account in the name of 

the Niger Attorney’s Panama-registered company.  These payments were bribes to obtain mining 

assets for, among others, AGC I. 

95. In or about 2007 and 2008 Cohen and Baros worked closely with both South 

African Business Associates 2 and 3 on AGC I.  Baros began working at Och-Ziff and with 

Cohen by late 2007.  Cohen and Baros arranged for Och-Ziff to make the loan and payments 

related to Agent 2’s activities in Niger.  On or about November 18, 2007, an Och-Ziff employee 

emailed Cohen, copying Baros.  The email forwarded an earlier email from Och-Ziff to South 

African Business Associate 2 referencing a $2.5 million payment to Agent 2 that required 

“confirmation/explanation.”  The “confirmation/explanation” sent to Cohen and Baros regarding 

the payment stated that, “[t]hese are large consultancy fees paid may to November.”  Cohen and 

Baros did not seek or obtain further explanation as to the $2.5 million payment because they 

knew, held the firm belief, or were aware the payment to Agent 2 was made under circumstances 

that made it substantially certain, that Agent 2 would use all or a portion of the loan proceeds to 

pay bribes to high-ranking government officials in order obtain or retain business for Och-Ziff 

and its business partners in connection with the AGC I loan.   

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96. Cohen and Baros were responsible for oversight of Och-Ziff’s business partners 

in the AML joint venture, but failed to carry out those responsibilities properly.  Cohen 

expressed his approach in a December 20, 2007 email to personnel involved with AML.  He 

wrote that, as to Och-Ziff’s business partners, “you buy assets and sign contracts without our 

approval, but that’s [sic] what you guys do best and we let you do it.” 

97. Cohen, Baros and others at Och-Ziff, including the legal and compliance groups, 

knew that South African Business Associate 3 had engaged in illegal activities in the past.  In 

one regulatory filing in early 2008, Och-Ziff itself informed a foreign government regulator that 

South African Business Associate 3 potentially had engaged in criminal activity in Angola 

relating to an asset he sought to sell to AGC I.  In another, 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 Associate 3 was reported to be a front for 

Zimbabwean government officials.  Despite this information, Cohen and Baros continued to 

promote and orchestrate the payment of funds by Och-Ziff to South African Business Associate 

3 and entities he controlled, through at least 2011, with no change in Och-Ziff’s lax oversight of 

his use of investor funds. 

98. Cohen and Baros also knew that South African Business Associate 3 was using 

funds loaned to him by Och-Ziff to acquire mining rights either from foreign governments or 

unknown third parties, buy out minority shareholders in various entities and pay substantial 

amounts to “consultants” with little or no explanation for the work done to justify these 

payments.  Cohen and Baros knew or held a firm belief that South African Business Associate 3 

would use the loan proceeds to bribe government officials in Chad and Niger in order to win 

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mining deals or otherwise acquire assets that would inure to the benefit of Och-Ziff and Cohen, 

or circumstances existed that made such a result substantially certain to occur.   

99. South African Business Associate 3 used a significant portion of the “loans” to 

pay bribes to high-ranking government officials (through proxies) in Chad and Niger in order to 

secure assets for AGC I.  As a result, of the total amount contributed by Och-Ziff towards the 

Chad and Niger mining assets, just a portion went towards mining-related costs and only 

minimal mining activities ever took place at the assets, which remained in a “greenfield” state 

through at least 2012.   

100. Cohen and Baros were aware that these bribes would be, and were, falsely 

classified by the Turks & Caicos Entity, as well as by AML and its subsidiaries, as consultant 

payments, law firm payments, house rentals, and charitable contributions, among other 

designations.  Cohen and Baros also were aware that Och-Ziff’s books and records setting out 

the authorizations for the provision of payments relating to AGC I relied on these false 

classifications and, as a result, were inaccurate and did not reflect the true purpose of the 

transactions. 

101. In fact, “bribe accounts” were created and maintained in Chad by employees of a 

subsidiary of the Turks & Caicos Entity.  Money provided by Och-Ziff to the Turks & Caicos 

Entity supposedly to fund mining operations actually went towards bribes to high-ranking 

government officials, and also paid for “house repairs” and medical assistance for these officials.  

Because Cohen and Baros were responsible for AGC I’s record keeping and for Och-Ziff’s 

oversight of AGC I, they had access to the records of AGC I and related entities, including those 

for the “bribe accounts.”  Cohen and Baros made sure that Och-Ziff failed to audit or review the 

expenditure of its funds by South African Business Associate 3 or AGC I, and thus knew of Och-

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Ziff’s failure to comply with the firm’s financial and anti-corruption policies and internal 

controls, and to maintain books and records that accurately and fairly reflected its transactions 

and disposition of assets. 

102. Cohen and Baros also knew or held a firm belief that Och-Ziff investor funds 

went to personally enrich South African Business Associates 1, 2 and 3, or circumstances existed 

that made such a result substantially certain to occur.  Each of the three received millions in Och-

Ziff investor funds with no accountability or legitimate benefit to Och-Ziff’s investors.  For 

example, South African Business Associate 3 spent nearly $7 million of the Och-Ziff investor 

funds he received to purchase and refurbish a private jet.  He used additional funds for yacht 

rentals or deposited them in the accounts of the girlfriends of Och-Ziff’s business partners in 

AML.  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.  Cohen, 

Baros and Och-Ziff took no steps to review South African Business Associate 3’s expenditures, 

prevent self-dealing by its partners, or disclose the substantial conflicts of interest and 

misappropriation of investor funds. 

103.   In 2008, with support and recommendation from Cohen and Baros, Och-Ziff 

paid over $10 million to South African Business Associate 3, ostensibly relating to assets owned 

by an African-based aircraft pilot who supposedly owned uranium claims in Niger and who Och-

Ziff was told had expended significant funds to acquire those rights for AGC I.  Och-Ziff agreed 

to reimburse him for those assets.  In doing so, Och-Ziff failed to conduct a review of the 

claimed expenses, failed to confirm that the funds had actually been expended by the pilot to 

acquire the assets, and failed to investigate whether bribes were paid to acquire these assets.  

After approval by Och-Ziff, AGC I transmitted the funds to South African Business Associate 

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3’s entity, not to the pilot.  South African Business Associate 3 then used these funds to pay 

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

including South African Business Associate 1 and South African Business Associate 2.  South 

African Business Associate 3 undertook a similar scheme related to Chad, and again used 

approximately $10 million in funds from Och-Ziff to pay bribes and to enrich himself and his 

business partners.  Cohen and Baros knew or held a firm belief that South African Business 

Associates 1, 2 and 3 would use the more than $20 million in Och-Ziff Managed Funds 

supposedly intended for the Niger and Chad uranium claims to pay bribes to government 

officials in Chad and Niger, or circumstances existed that made such a result substantially certain 

to occur.    

D. Violations of the FCPA, and the Misuse of Och-Ziff and AGC I Investor 
 Funds in Violation of the Advisers Act, Relating to the DRC: The $124 
 Million Convertible Loan 

 1.  Och-Ziff Partnered With Agent 3 to Pursue Mining Interests in the       
      DRC  

104. In or around December 2007, Cohen and Baros began discussions with Agent 3 

and others about forming a joint venture for the purpose of acquiring and consolidating valuable 

mining assets in the DRC into one large mining company.  At the time, Cohen knew that Agent 3 

had personal connections with high-ranking government officials in the DRC and that Agent 3 

previously had used those connections to buy and sell mining assets in suspect transactions.  As 

early as 2006, Cohen communicated to a third party that Agent 3 “has some skeletons” and that 

he “has some suits outstanding regarding him bribing the drc gov.”  Baros also became aware 

that Agent 3 had personal connections with high-ranking government officials in the DRC and 

that he had used those connections to buy and sell mining assets in suspect transactions as 

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recently as March 2008.  Nevertheless, Cohen and Baros urged and arranged for Och-Ziff to 

enter into a partnership with Agent 3 that lasted from 2008 until at least 2012. 

105. During face-to-face discussions with Cohen and Baros, Agent 3 communicated 

that he would have to pay substantial sums of money as bribes to DRC government officials to 

secure access to special opportunities in the DRC mining sector for himself and Och-Ziff.  Agent 

3 communicated to Cohen and Baros that he planned to use a portion of the money he was asking 

to “borrow” from Och-Ziff to pay bribes.  In meetings involving Agent 3, Cohen, and Baros, in 

which bribes were discussed, Agent 3 told Baros and Cohen that he had powerful “friends” in the 

DRC, and that those friendships were “expensive” to maintain but necessary for their business in 

the DRC to succeed. Agent 3 and his associates kept records of their business operations that 

tracked Agent 3’s bribe payments and related expenses.  Those records show that Agent 3 

frequently paid significant cash bribes to DRC government officials.   

106. Cohen and Baros were aware, including through direct conversations they had 

with Agent 3, of his corrupt relationships with DRC government officials, secret deal terms with 

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

government, and access to deals not available to others.  Despite this information, Cohen and 

Baros continued to champion Agent 3 within Och-Ziff for more than four years.  Cohen and 

Baros concealed that Agent 3 paid bribes from Och-Ziff’s legal and compliance departments.  In 

addition, Cohen and Baros were aware that their concealment of this information would cause 

Och-Ziff to incorrectly, and improperly, record corrupt payments as legitimate transactions in its 

books and records.  Cohen and Baros also understood that failing to communicate this extensive 

information about Agent 3’s business practices (particularly his practice of bribing government 

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officials to acquire mining and natural resource assets) would circumvent Och-Ziff’s internal 

controls.    

107. Others within Och-Ziff, including multiple senior officers and employees, were 

aware of corruption accusations against Agent 3, as well as the high corruption risk when doing 

business in the DRC.  Consistent with Och-Ziff’s anti-corruption policy concerning prospective 

business partners, on February 14, 2008, an attorney responsible for compliance at Och-Ziff’s 

European office contacted a firm that conducted due diligence and background investigations 

requesting a report on Agent 3.  In his request, the attorney noted that Agent 3 “will be very easy 

to find . . . perhaps the impetus behind the movie ‘Blood Diamonds.’”  

108.   Approximately one week later, the Och-Ziff attorney received a report with 

initial background and due diligence findings from the firm.  He forwarded it to Cohen and other 

senior officers and employees at Och-Ziff.  Baros also received the report.  The report detailed 

Agent 3’s history of suspicious transactions, allegations of his illegal conduct, and his close 

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

  a.  Agent 3 “is considered one of the most well-connected foreigners in   
  the DRC… He is known to enjoy an extremely close relationship with [DRC  
  Government Official 1]”; 
 
  b.  Agent 3 was identified on several “compliance Watch Lists” as a   
  “politically exposed individual as a result of his close ties to the DRC   
  government;” 
 
  c.  Agent 3 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.  Agent 3’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  

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  was later alleged that Agent 3 secured his monopoly “in exchange for   
  providing military training” to government forces in the DRC. 
 
  e.  In a lawsuit against Agent 3, it was alleged that he had bribed DRC   
  government officials and Angolan military officers in exchange for receiving an  
  exclusive diamond export license. 
 
  f.  Agent 3 was “happy” and “willing to use his significant political   
  influence with [DRC Government Official 1] and his clique to facilitate   
  acquisitions, settle disputes and frustrate competitors.”  In disputes with DRC  
  mining rivals, Agent 3 was “rumoured to have used his influence with [DRC  
  Government Official 2, DRC Government Official 1’s] closest aide,   
  and former [DRC provincial]  governor in order to settle the dispute in his favour.” 
 
  g.  Agent 3’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  
  [Agent 3’s] involvement.” 
 

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

attorney expressed objections to the firm doing business with Agent 3.  Those objections, and 

objections voiced by others at the firm, resulted in a meeting in or about February 2008 

involving senior Och-Ziff officers and employees, including senior legal and compliance 

officials, regarding the high risk of bribery and corruption that would exist in any relationship 

with Agent 3.  Och-Ziff Employee 2 and a senior legal officer at Och-Ziff expressed their 

opinion to Och-Ziff Employee 1 that Och-Ziff should not do business with Agent 3.  Their 

concerns included the reputational and legal risks inherent in dealing with Agent 3, including the 

risk of government investigations.   

110. Cohen did not participate in the meeting but continued to lobby and advocate that 

the firm do business with Agent 3.  Cohen succeeded.  Och-Ziff Employee 1 overruled the 

concerns of his senior legal and compliance officers and instructed that the firm move forward 

on transactions with Agent 3 unless new information was uncovered.   

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111. Och-Ziff sought guidance from outside legal counsel on how to structure its 

dealings with Agent 3.  An Och-Ziff attorney forwarded the background report regarding Agent 

3 to an outside attorney representing Och-Ziff.  The Och-Ziff attorney was seeking advice 

regarding business dealings with Agent 3, including the possibility of making a convertible loan 

to Agent 3 rather than partnering with him directly through an equity investment.  Outside 

counsel advised that providing a convertible loan to Agent 3 would be high-risk, but that, unlike 

a direct equity investment, there would be “no [anti-money laundering] or anti-corruption issue” 

as long as Agent 3 “has no discretion with regard to how to spend the proceeds of the loan.”  

Notwithstanding this guidance, each of the subsequent loan agreements Och-Ziff entered into 

with Agent 3 made significant amounts of discretionary funds available to him. 

112. Och-Ziff entered into a series of corrupt transactions with Agent 3.  Och-Ziff 

carefully crafted each of these transactions to hide its relationship with Agent 3 from investors, 

potential investors, business partners, and the public, by making indirect payments to Agent 3 

through SPVs in offshore jurisdictions.  Two of the transactions intersected and had significant 

overlap: (1) an April 2008 purchase of approximately $150 million of shares in a publicly traded 

DRC-focused mining company controlled by Agent 3 (the “DRC Mining Company”); and, (2) a 

$124 million Convertible Loan through OZ Africa and AGC I to a shell company, an SPV 

controlled by Agent 3 (the “DRC SPV”), funded between April and October 2008.  The third 

involved a $130 million Margin Loan to Company C, an Agent 3-controlled shell entity, in 

November 2010 and February 2011 to assist Agent 3 in consolidating his DRC assets for sale to 

a third party and acquiring additional potential assets for Och-Ziff and AGC.  From conception 

through the execution of these transactions, Cohen and Baros knew of the corrupt payments that 

Agent 3 made to various DRC officials to obtain and retain mining interests in DRC.  Both the 

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Convertible Loan and the Margin Loan were funded in whole or in substantial part using Och-

Ziff Hedge Funds.     

113. In or about March 2008, Och-Ziff embarked on an arrangement with Agent 3 to 

invest in and consolidate DRC mining assets.  The stated purpose of the partnership was for Och-

Ziff to fund Agent 3’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.  Cohen, assisted by Baros, oversaw Och-Ziff’s efforts to acquire and 

consolidate assets in the DRC into an entity controlled by Agent 3 that could then be sold to a 

large publicly-traded mining company for a significant profit.  Based on statements made by 

Agent 3 with Cohen present, Cohen and Baros knew that Agent 3 would use Och-Ziff funds 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.   

 2.  The Purchase of a $150 Million Stake in the DRC Mining Company 

114. On or about March 7, 2008, Agent 3 emailed Cohen about the plan for Och-Ziff 

to structure and fund simultaneous deals involving the DRC Mining Company and the DRC 

SPV, respectively, as part of a larger plan to acquire DRC assets and merge them into a single 

company with a DRC copper and cobalt mine.  The first transaction involved the April 2008 

purchase of approximately $150 million of shares in the DRC Mining Company.    

115. On or about March 16, 2008, Agent 3 sent Cohen an email which stated in part: 

“The DRC landscape is in the making and I am shaping it - like no one else.  I would love to 

have you beside me as a long-term partner.  As a 40% [DRC Mining Company] shareholder, I 

facilitated your entry at an attractive time / price knowing that you see the bigger picture in all of 

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this.  What this 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.”   

116. In March 2008, Baros traveled to Zimbabwe and the DRC.  He met with a senior 

executive of the DRC Mining Company (the “DRC Mining Company Executive”), purportedly 

to assess the assets and infrastructure of the DRC Mining Company, and as part of Och-Ziff’s 

due diligence related to the proposed transaction.    

117. After the trip, Cohen and Baros advocated within Och-Ziff for the firm to increase 

its investment in the DRC Mining Company by essentially doubling an originally anticipated 

investment to a total of $150 million. The plan called for Och-Ziff to invest through an offering 

of new shares that supposedly would fund the company’s ongoing mining efforts in the DRC.  

Cohen and Baros championed the investment notwithstanding a due diligence investigation 

undertaken by Och-Ziff that revealed the DRC Mining Company’s  “troubled relationship with 

the DRC government,” including accusations of money laundering against the company made by 

the DRC Minister of Mines, and the expulsion of one of the DRC Mining Company’s major 

shareholders from the DRC.  The results of the investigation also noted that the company’s 

mining license was “under review” in the DRC.  Cohen and Baros, as well as others at Och-Ziff, 

were aware of this history before arranging for the investment.   

118. Following Agent 3’s negotiations on behalf of Och-Ziff, and after Baros’s visit to 

Zimbabwe and the DRC to meet DRC Mining Company executives, on or about March 27, 2008, 

Och Ziff entered into a supplemental subscription agreement with the DRC Mining Company to 

purchase a total of 150 million shares for a total of approximately $150 million.  That same day, 

Agent 3 caused $11 million to be delivered to DRC Government Official 2.    

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119. Within days of finalizing the investment, Cohen, Baros, and others at Och-Ziff, 

learned that the DRC Mining Company had used the funds provided by Och-Ziff via the 

subscription agreement and purchase of shares to acquire a platinum asset in Zimbabwe rather 

than towards its existing DRC mining operations, as had been outlined by representatives of the 

DRC Mining Company.  The Zimbabwean government had recently seized this platinum asset 

from another mining entity and then resold it to an entity affiliated with the same DRC Mining 

Company Executive who Baros had met with during his March trip.  That entity then “sold” the 

platinum assets to the DRC Mining Company in exchange for additional shares in the mining 

company.   

120. Och-Ziff officials later learned of allegations that the DRC Mining Company had 

used the funds invested in the company in April 2008, including funds from Och-Ziff, to make a 

$100 million “loan” to an entity affiliated with the ruling political party of Zimbabwe, which was 

embroiled in a contested presidential election at the time.   

121. Only after the transaction had been funded did Och-Ziff conduct a due diligence 

investigation focusing on the DRC Mining Company Executive who Baros had met on his trip to 

Zimbabwe and the DRC.  The investigation revealed that in Zimbabwe the executive was 

considered “an influential and dangerous man;” that he was wanted in South Africa for various 

crimes including fraud, tax evasion, and bribery; and, that he had been linked to the illegal 

acquisition of state assets, arms trafficking and bribery in the DRC.   

122. Cohen and Baros were aware of this and other information about the DRC Mining 

Company Executive before the due diligence investigation began and before the $150 million 

stock purchase was completed, but did not convey the information to legal and compliance 

personnel at Och-Ziff.  Subsequently, in 2008, the U.S. Department of the Treasury’s Office of 

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Foreign Assets Control (OFAC) designated the DRC Mining Company Executive as a “regime 

cron[y]” of the Zimbabwean government.  OFAC froze his assets and placed him and several 

entities affiliated with him on the sanctions list for “logistical support for large-scale mining 

projects in Zimbabwe that benefit a small number of corrupt senior officials there.”   

123. After learning of the Zimbabwe platinum investment, in June 2008 Cohen and 

Baros were told by South African Business Associate 2 that a reporter had bank records 

demonstrating that the mining company Och-Ziff had just invested in had “paid 4 arms into 

zim[babwe], and rented boat from china.”  Neither Cohen nor Baros informed Och-Ziff’s legal 

and compliance personnel about these accusations, took steps to uncover the truth of the 

accusations, or limited Och-Ziff’s relationship with any of the individuals allegedly involved.  In 

fact, Cohen and Baros continued to advocate and support Och-Ziff’s partnerships with Agent 3.  

Even after the due diligence investigation had identified the serious corruption risk in the 

transaction and with these business partners, Och-Ziff continued its partnership with Agent 3 and 

kept its ownership interest in the DRC Mining Company. 

 3.  The $124 Million Convertible Loan to the DRC SPV 

124. Also during the April 2008 through June 2008 timeframe, Cohen and Baros 

arranged for Och-Ziff to cause AGC I to enter into an approximately $124 million Convertible 

Loan agreement with the DRC SPV, a holding company affiliated with Agent 3.  At the time, a 

Canadian mining company (the “Canadian Mining Company”) was engaged in a public dispute 

concerning its ownership interest in a DRC copper mine.  The dispute involved a Congolese 

entity, which had obtained an ex parte default judgment against the Canadian Mining Company.  

In reality, DRC Government Official 2 had orchestrated the taking of the Canadian Mining 

Company’s legal interest in the DRC copper mine and had made it available to Agent 3.  The 

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Canadian Mining Company initiated legal proceedings in the DRC courts attempting to nullify 

the seizure of its interest.  The dispute remained outstanding in June 2008.  

125. Cohen and Baros successfully advocated for Och-Ziff to work with Agent 3 

pursuing a multi-step plan to obtain the disputed mining interest by acquiring the Congolese 

entity using Och-Ziff funds, and then resolving the legal dispute over the DRC copper mine.  As 

part of its arrangement with Agent 3, Och-Ziff (through AGC I) provided him and his SPV with 

financing to carry out the resolution of the DRC legal dispute by purportedly buying the 

Congolese entity, and then gaining control of the Canadian Mining Company by purchasing 

shares in exchange for resolving its legal dispute.  This financing was provided through the 

Convertible Loan agreement, funded in tranches of $15 million, $100 million, and $9 million, for 

a total of $124 million.     

126. The three stated uses of these funds were: (1) to provide Agent 3 with 

approximately $15 million to purchase the Congolese entity that had acquired the rights to the 

DRC copper mine; (2) to provide Agent 3 with approximately $100 million to buy a majority 

stake in the Canadian Mining Company, in exchange for resolving its legal issues with the DRC 

entity; and (3) to advance an additional $9 million to be used for future mining operations in the 

DRC.  The unstated, but key, use of the funds loaned to the DRC SPV, which Cohen and Baros 

knew about from discussions and interaction with Agent 3 and his associates, was to provide 

Agent 3 with funds to pay bribes to DRC government officials so they would facilitate the 

takeover of the Canadian Mining Company for the benefit of Och-Ziff and Agent 3.   

127. Och-Ziff structured the transaction as a Convertible Loan to justify not 

conducting additional due diligence as to Agent 3 or the assets he owned or controlled.  Cohen 

was aware that a direct equity investment with an entity affiliated with Agent 3 would require 

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Och-Ziff to conduct an additional investigation.  Instead, with Cohen’s influence, Och-Ziff 

characterized and treated the Convertible Loan transaction with Agent 3 as a standard 

commercial loan, and conducted no additional due diligence on Agent 3, the DRC SPV, Agent 

3’s assets in the DRC, or his use of the funds provided by Och-Ziff.   

128.  But, Och-Ziff’s transaction with Agent 3 was not a standard commercial loan.  

Cohen and Baros understood the transaction was part of a broader, ongoing partnership with 

Agent 3, and not an arms-length lending arrangement.  The transaction gave Och-Ziff some 

control over what assets could be bought or sold by the DRC SPV, the option to convert the loan 

to an ownership interest in the DRC SPV, a secured interest in the shares of the Congolese 

mining company, and a right to future deals with Agent 3 in the DRC.  Finally, the transaction 

gave Agent 3 complete discretion over how to use approximately $24 million of the loan 

proceeds, which Cohen and Baros knew he would then use to pay bribes to DRC government 

officials.   

129. Cohen and Baros had learned from Agent 3 that he was going to use a portion of 

the loan proceeds to pay bribes to high-ranking government officials in order to further his 

business interests and those of Och-Ziff.  They concealed this information from others within 

Och-Ziff and from outside counsel.  As a result, Och-Ziff incorrectly and improperly recorded 

corrupt payments as legitimate payments or transfers of funds in its books and records and failed 

to maintain books and records that accurately and fairly reflected its transactions and disposition 

of assets.  Cohen and Baros also understood that concealing that Agent 3 intended to pay bribes 

with the loan proceeds would circumvent financial and anti-corruption policies and internal 

controls at Och-Ziff.  

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130. On or about April 7, 2008, Agent 3 caused $2.2 million to be delivered to DRC 

Government Official 2, and or about April 10, 2008, Agent 3 caused another $2.8 million to be 

delivered to DRC Government Official 2.   

131. On or about April 17, 2008, AGC I funded the first tranche of the Convertible 

Loan agreement through wire transfers authorized in New York.  The first tranche of $15.75 

million purportedly was funded to acquire the Congolese entity, to make a shareholder loan to 

the Canadian Mining Company, and to pay legal expenses of Agent 3’s SPV.  Och-Ziff, through 

a subsidiary created specifically for this transaction, sent the funds through accounts located in 

New York to the bank account of a law firm in Gibraltar affiliated with Agent 3.  From there, 

Och-Ziff had no ability to control or limit Agent 3’s use of those funds or even to trace where the 

funds went.  In addition to acquiring the Congolese mining company, Agent 3 used a portion of 

the proceeds from the first tranche of the Convertible Loan to bribe high-ranking DRC 

government officials.      

132. On or about May 6, 2008, Agent 3 delivered $2.5 million to DRC Government 

Official 2, and on or about on or about June 18, 2008, Agent 3 caused another $2.5 million to be 

delivered to DRC Government Official 2.  Cohen and Baros knew or held a firm belief that 

Agent 3 would use the loan proceeds in the above manner, or circumstances existed that made 

such a result substantially certain to occur.     

133. On or about June 4, 2008, Agent 3 and his associate arranged to pay $500,000 to 

DRC government officials, including judges, who were involved in the court case involving the 

Canadian Mining Company.  The payments were made to corruptly influence the outcome of 

those proceedings to the benefit of Och-Ziff and Agent 3.  At about the time of the payments, 

Agent 3’s associate sent a text message to Agent 3, which stated, “Hi [Agent 3], im with the 

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main lawyer… in the [Canadian Mining Company] story, he has to arrange with supreme court, 

attorney genral and magistrates, he wants 500 to give to all the officials and 600 for 3 lawyers 

cabinets that worked on the file in defense [lawyer] and batonnier [lawyer]. the converstaion is 

vey tough.  (while talking i said to ask money to [one of the Congolese company’s shareholders], 

[the Congolese company shareholder] said he cant because most of the money has to go to [DRC 

Government Official 2]..i dont know if he wants to provoke me or it was something [the 

Congolese company shareholder] invented...) but they are now at 1,1 in total…[.] [sic]”  

134. On or about June 4, 2008, the associate sent another text message to Agent 3, 

which stated, “he wants 500 for officials, 300 for them (3 lawyers office), 800 and in even in one 

month an extra 100 to make 900, he is very categoric[.]” 

135. On or about June 4, 2008, Agent 3 responded to the associate’s text message, 

stating, “We can’t accept a mid result...[the Canadian Mining Company] must be screwd and 

finished totally!!!! [sic]” 

136. Through these efforts, Agent 3 and Och-Ziff achieved a beneficial result for the 

Congolese company in the DRC courts.  They then commenced efforts to acquire a majority 

stake in the Canadian Mining Company whose value had decreased because of the adverse action 

in the DRC courts.   

137. The Canadian Mining Company voted to approve the takeover by Agent 3 and 

Och-Ziff in late June 2008.  Once approved, on or about June 24, 2008, Cohen arranged for Och-

Ziff (via AGC I) to fund a second tranche of the Convertible Loan totaling $98.275 million, 

through which Agent 3 and Och-Ziff acquired a majority stake in the listed shares of the 

Canadian Mining Company.   

138. A third tranche of the Convertible Loan went through on or about October 9, 

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2008.  In total, Agent 3 received $9 million in the third tranche.  Och-Ziff funded its share of the 

third tranche, $4.5 million, while the joint venture partner in AGC I contributed the remaining 

$4.5 million.   

139. Contrary to the original structure of the deal, which required Agent 3 to use the 

funds on future mining expenses, Cohen successfully persuaded Och-Ziff management in 

October 2008 to provide the $9 million to Agent 3 supposedly to compensate him for 

“previously incurred” DRC expenses, thus giving him unfettered discretion over how he spent 

the money.  As a result, Cohen ensured that Och-Ziff failed to conduct proper due diligence on 

the transaction and failed to limit Agent 3’s discretion in his use of the funds.    

140. Och-Ziff transferred money for the third tranche from accounts in New York to 

the law firm account in Gibraltar.  Agent 3 then used the money to fund more bribes in the DRC 

that supported his and Och-Ziff’s acquisition of mining assets in the country.  Cohen and Baros 

supported the efforts of Agent 3 to obtain the loan and structure it so that he retained discretion 

in his use of the loan proceeds.  When doing so, Cohen and Baros knew or held a firm belief that 

Agent 3 would use the loan proceeds in the above manner, or circumstances existed that made 

such a result substantially certain to occur. 

141. Beginning in November 2008, after providing the $9 million to Agent 3, Och-Ziff 

reviewed his past expenses to determine whether he had legitimately spent funds on DRC mining 

operations, as had been agreed.  During the review, Baros learned that records kept by Agent 3’s 

entities disclosed payments for travel expenses, bribes, and “gratuities” for the benefit of high-

ranking DRC government officials.  An AML employee involved in the review noted in a draft 

audit 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 

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‘political alignment’ and for ‘protocol’ with the authorities in the DRC – in other words with 

senior Government officials.  This issue needs to be investigated at the highest level directly with 

[Agent 3].  This issue should be flagged as a concern considering AGC’s compliance 

requirements.”   

142. Baros was responsible for reviewing the draft audit report.  After doing so, Baros 

had a telephone conversation with one of the employees who drafted it and instructed him to 

remove from the report the paragraph that referenced payments for “political alignment” to 

senior government officials.  The employee did as Baros instructed.  On or about December 9, 

2008, the employee sent an e-mail to Baros, which stated, in part: “[Baros,] As discussed please 

find attached the revised report[.]”  The attached revised report did not contain the paragraph that 

referenced payments to senior government officials.   At no time did Baros inform Och-Ziff’s 

legal and compliance personnel of the payments to government officials uncovered during the 

audit review. 

143. On or about August 14, 2012, an Och-Ziff attorney who was responsible for 

compliance matters relating to the Convertible Loan transaction requested information from 

Baros regarding the transaction.  Baros forwarded the attorney the revised report that did not 

contain the paragraph that referenced payments to senior government officials.  Baros did not 

inform the attorney about the earlier version of the report, nor did he otherwise inform him about 

the concerns in that report about payments to senior government officials. 

E. Violations of the FCPA, and the Misuse of Och-Ziff Investor Funds in 
 Violation of the Advisers Act, Relating to the DRC:  The $130 Million 
 Margin Loan 

144. Och-Ziff’s relationship with Agent 3 continued throughout 2009 and 2010.  After 

the acquisition of the DRC copper mining asset, Cohen and Baros continued to work with Agent 

3 to obtain additional assets to add to the DRC SPV or sell alongside it, including two highly 

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valuable DRC mining assets (the “DRC Mining Asset K” and the “DRC Mining Asset S”) 

obtained by Agent 3 using his contacts and influence with high-ranking officials in the DRC 

government.  Cohen and Baros knew that DRC Mining Asset K had been stripped from a mining 

company by the DRC government and then obtained by a group of companies controlled by 

Agent 3 and the DRC government.  Cohen and Baros also knew that DRC Mining Asset S was 

the subject of a back-to-back sale that allowed Agent 3 to purchase the asset for $15 million from 

a mining company owned and controlled by the DRC government, and immediately resell it for 

$75 million. 

145. Throughout the period of Agent 3’s acquisition of DRC Mining Assets K and S, 

Agent 3 continued to make corrupt payments to DRC Government Official 2, including $1 

million on or about December 23, 2009, and $2 million on or about January 5, 2010. 

146. On or about August 20, 2010, a third-party mining company acquired 50.5% of 

the DRC SPV, agreeing to pay up to $575 million over two years, including approximately $50 

million in cash to Agent 3.  Cohen and Baros were informed by a close associate of Agent 3 that 

the $50 million was for Agent 3 to “use on the ground” to corruptly acquire DRC Mining Asset 

K.  As part of the deal, the third-party mining company guaranteed repayment of the Convertible 

Loan, for which Och-Ziff ultimately received payment in full in 2012.  Cohen and Baros 

remained Agent 3’s primary Och-Ziff contacts during this time.  In addition to the transactions 

involving DRC Mining Asset K and DRC Mining Asset S, Cohen and Baros continued to work 

on new transactions and funding ideas with Agent 3.    

147. In or about November 2010, Agent 3 asked Cohen to provide him with another 

loan to further his efforts to consolidate his DRC assets for potential resale.  On or about 

November 11, 2010, Cohen sent an e-mail to an Och-Ziff employee, which stated: “[Agent 3] 

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has asked for a margin loan on [a transaction] which want u to handle.”  At the time, Cohen and 

Baros knew or held a firm belief that Agent 3 would use a portion of the Margin Loan proceeds 

to pay bribes to facilitate the transaction, or circumstances existed that made such a result 

substantially certain to occur.  

148. Cohen and Baros did not disclose the purpose of the loan to others at Och-Ziff.  

Cohen did not disclose what Agent 3 had told him about the intended use of the proceeds.  While 

negotiating the terms of the loan, Agent 3’s representatives stressed that they would need to 

make intercompany loans with the proceeds of the loan and that any “use of proceeds” provision 

in the loan document would have to be generic.  Och-Ziff, at Cohen’s urging, agreed to the 

terms. 

149. Och-Ziff failed to conduct adequate and appropriate due diligence on the Agent 3-

related entity receiving the Margin Loan or on its intended use of the loan proceeds.  Och-Ziff 

made this loan direct from Och-Ziff Hedge Funds held in New York.   

150. To facilitate the Margin Loan, on or about November 18, 2010, Och-Ziff created a 

shell company, incorporating a new Cayman Island-based partnership called CML Investments 

Ltd. (“CML”), which Och-Ziff controlled. 

151. On or about November 24, 2010, Och-Ziff, in two separate transfers through 

CML, extended a $110 million Margin Loan to a British Virgin Islands shell company controlled 

by Agent 3 (the “BVI Shell Company”).  The use of proceeds provision in the Margin Loan 

allowed for “(a) funding existing activities of Affiliates of the Borrower and acquisitions of other 

business interests by its Affiliates; and (b) other general purposes of the Borrower’s Affiliates.”  

On or about February 17, 2011, CML and Agent 3 agreed to an amended and restated loan 

agreement which increased the amount of funding available to the BVI Shell Company by an 

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additional $20 million, for a total Margin Loan to Agent 3 of $130 million.  

152. Cohen, Baros, and Och-Ziff understood that a portion of the loan would be and 

was used by Agent 3 to pay down an outstanding third-party debt.  Och-Ziff provided the 

remainder of the loan, more than $84 million, to Agent 3 with no restrictions or insight into the 

use of loan proceeds.  Och-Ziff officials in New York authorized the transfer of money from its 

investor funds to Agent 3’s law firm in Gibraltar, after which Och-Ziff had no insight or control 

over how Agent 3 used the funds.  Agent 3 used a portion of the funds provided by Och-Ziff to 

pay bribes in the DRC to high-ranking government officials.   

153. Between in or about November 2010 and February 2011, using proceeds from the 

Margin Loan, Agent 3 caused millions in corrupt payments to various DRC officials, including 

the following payments made on or about the following dates: 

Date Amount Recipient 

December 1, 2010 $1 million DRC Government Official 1 

December 3, 2010 $2 million DRC Government Official 1 

December 7, 2010 $2 million DRC Government Official 1 

February 9, 2011 $4 million DRC Government Official 1 

February 9, 2011 $1 million DRC Government Official 2 

 

154. Cohen and Baros knew or held a firm belief that Agent 3 would use the money 

provided by Och-Ziff in the Margin Loan to pay bribes, or circumstances existed that made such 

a result substantially certain to occur.  The bribes were part of Agent 3’s efforts to acquire 

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

party mining company.  Cohen and Baros expected this consolidation to help Och-Ziff receive 

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repayment and profit on its loans, which it ultimately did.  Och-Ziff received repayment on both 

the Convertible Loan and the Margin Loan in 2012 and 2013, directly as a result of the asset 

acquisitions and ongoing business activities by Agent 3, facilitated by bribing high-ranking DRC 

government officials.  

155. Between in or about August 2012 and January 2013, Och-Ziff received wire 

transfers of $342,091,110 as satisfaction of the outstanding loan agreements.   

156. In addition to the loan repayments, Cohen and Baros continued their work with 

Agent 3, exploring additional corrupt transactions in the DRC.  On or about February 12, 2012, 

DRC Government Official 2 died.  On or about February 13, 2012, Baros sent an e-mail message 

to Cohen, which stated: “FYI, [DRC Government Official 2] dead, [Agent 3’s] key guy in 

DRC.”  The e-mail from Baros included the text of a Financial Times article on the official’s 

death, which stated, among other things: “[DRC Government Official 2], member of parliament 

and a former governor of Congo’s copper heartlands province ... cut a shadowy figure.  

Diplomats associate him with Congo’s entrenched corruption and a series of secret investments.  

Congo is one of the world’s poorest countries despite its mineral wealth, and ranks among the 

worst places to do business.”     

157. On or about February 15, 2012, after an inquiry from Baros relating to the death 

of DRC Government Official 2, Agent 3 sent a text message to Baros, which stated, “I’m 

fine…sad but fine…I will have to help [DRC Government Official 1] much more 

now…tomorrow the burial will take place.”  

 

 

 

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F. Violations of the FCPA, and the Misuse of Och-Ziff and AGC II Investor 
 Funds in Violation of the Advisers Act, Relating to the Republic of Guinea:  
 The $52 Million Stock Windfall 
 
 1.  The Formation of AGC II 
 
158.  The second investment fund created as part of Och-Ziff’s Africa strategy, AGC 

II, was formed in 2009.  Och-Ziff sought capital for AGC II from multiple investors, and 

successfully marketed the fund to one existing investor in OZ Management, a United Kingdom-

based private institutional investor (the “UK Investor”).  In addition, a separate fund made up of 

the investments by individual Och-Ziff partners including Cohen (the “OZ Partners Fund”), 

agreed to fund AGC II alongside the UK Investor.  The investment agreement between Och-Ziff 

and the UK Investor provided that the Investor could review and reject any transaction involving 

potential conflicts of interest.  As described below, at least three AGC II deals developed and 

overseen by Cohen and Baros involved conflicts of interest.  The first also involved a corrupt 

payment to high-ranking officials in the Republic of Guinea.  The disclosures by Och-Ziff,  

Cohen and Baros to the UK Investor in those deals either omitted or misrepresented material 

information in order to hide self-dealing, improper use of investor funds, or undisclosed conflicts 

of interest.   

 2.  Och-Ziff, Cohen, and Baros Structure a $77 Million Stock Transaction      
      to Provide Agent 3 with a $52 Million Windfall 
 
159. In April 2011, Cohen arranged for Och-Ziff, via AGC II, to purchase shares in a 

London-based mining company in which AGC I, South African Business Associate 3 and Och-

Ziff already held significant interests (the “London Mining Company”).  Cohen and Baros 

structured the transaction to provide South African Business Associate 3 with $52 million in cash 

to use for secret purposes, including self-dealing to benefit Och-Ziff.  Baros drafted the 

transaction documents to be intentionally misleading, so that the transaction would be approved 

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by Och-Ziff and the UK Investor. 

160. The lead-up to the April 2011 transaction began in or about 2010.  Cohen, Baros 

and other Och-Ziff officials and executives had become aware that South African Business 

Associate 3 had a strong relationship with a high-ranking government official in the Republic of 

Guinea and his family, and that such contacts provided access to potential mining deals in that 

country.  The primary source of the contacts was Agent 2, the Gabonese consultant who had 

worked with AGC I on the Chad and Niger transactions in 2007-08, who was under contract with 

AGC, and who had worked directly with South African Business Associate 3.  Communications 

involving Baros and others at AML with Agent 2 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…”  Agent 2 also told Baros that he had “access to Guinee Mining and 

Ennergy [sic] classified informations” through his contact with the Guinean government official 

and his family.  Agent 2 also told AML representatives and Baros that he was traveling to the 

United States with the senior Guinean government official. 

161. South African Business Associate 3 sought assistance from Och-Ziff, including 

Cohen and Baros, to create a means for South African Business Associate 3 and Och-Ziff to 

benefit financially from future Guinean government actions.  Their far-flung plan involved 

helping Guinean government officials to revise the country’s mining code, create a state-owned 

mining company in Guinea, and seize assets from other companies to put into the state entity.  

Once those items were accomplished, South African Business Associate 3 and Och-Ziff were 

lined up to benefit financially through the London Mining Company’s relationship with the state-

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owned mining company in Guinea.   

162. The plan required a large infusion of cash to South African Business Associate 3 

to fund his ongoing efforts in Guinea.  South African Business Associate 2 emailed Baros 

asking, “[h]ow can we get agc to put 50m into guinea?”  The answer by Cohen and Baros was to 

structure a corrupt transaction that relied on material misrepresentations and omissions to, among 

others, the UK Investor.   

163. Cohen and Baros, along with South African Business Associates 2 and 3, crafted 

the corrupt transaction, a related-party transaction that would advance their plan without 

disclosing to the UK Investor the full involvement of Och-Ziff and AGC II in South African 

Business Associate 3’s efforts in Guinea.  Most importantly, it would result in a $52 million 

windfall for South African Business Associate 3.  Initially they sought to sell shares in the 

London Mining Company held by the SA Business Conglomerate to AGC II in order to raise 

capital to fund their efforts in Guinea.  That effort stalled, however, because South African law 

limited the ability of the SA Business Conglomerate to transfer the proceeds of the sale outside 

of the country. 

164. In response, Cohen, Baros and South African Business Associates 2 and 3 devised 

a new scheme that would result in AGC II overpaying South African Business Associate 3 by 

$52 million for London Mining Company shares he controlled, by inserting a third party between 

AGC II and the Mining Company.  In describing the transaction, Baros stated “[T]here was to be 

at least GBP 1/share difference to leave [the South African Business Associate 3] with $50m for 

Guinea.”  The “50m” referred to by Baros was the difference between what South African 

Business Associate 3 would pay for shares in the London Mining Company to SA Business 

Conglomerate, and what AGC II would pay to South African Business Associate for a subset of 

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those shares. 

165. In the revised transaction, South African Business Associate 3 used his offshore 

investment company (the Turks & Caicos Entity that had received an $87 million loan from Och-

Ziff in April 2007) to enter into an agreement with SA Business Conglomerate to purchase 31.5 

million shares in the London Mining Company for $25 million.  He then agreed to immediately 

resell 18.5 million shares in that same company to AGC II for $77 million.  The transactions 

were virtually simultaneous, with South African Business Associate 3 using the $77 million paid 

by AGC II to pay SA Business Conglomerate $25 million for the initial 31.5 million shares.  The 

$77 million purchase price represented at least a $52 million mark-up to AGC II.  With the $52 

million windfall, South African Business Associate 3 paid $2.1 million to Och-Ziff to satisfy an 

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

government of Guinea to try to obtain valuable mining investments in the country, $1 million to 

Agent 2, and the remainder to personally benefit South African Business Associate 3 and his 

business partners, South African Business Associates 1 and 2.   

166.  Agent 2 directly transferred $150,000 of the $1 million he received to a high-

ranking Guinean government official as a bribe payment in connection with the above scheme. 

 3.  Violations of the Investment Advisers Act:  Material Misrepresentations  
      and Omissions by Och-Ziff, Cohen and Baros Relating to the $77 Million    
      Stock Transaction  

167. The actual terms of the back-to-back stock transactions were not disclosed to the 

UK Investor.  The UK Investor was told that the Turks & Caicos Entity already owned the shares 

in the London Mining Company after a “recently completed” transaction.  The UK Investor was 

not informed that the transactions would be back-to-back, or that funds from AGC II would be 

used to purchase the shares from SA Business Conglomerate after AGC II funded the second 

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transaction.  The UK Investor also understood that the Turks & Caicos Entity was to sell 18.5 

million shares in the London Mining Company to AGC II for $77 million, but was not told that 

the $77 million price represented at least a $52 million overpayment by AGC II over what the 

Turks & Caicos Entity would pay the SA Business Conglomerate for fewer shares in the London 

Mining Company.   

168. Cohen and Baros knew that they also had omitted material terms about the 

originating transaction.  South African Business Associate 3’s assistant described the undisclosed 

terms of the deal to Baros who shared them with Cohen.  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 in South Africa.  Further, Cohen and Baros arranged to divert 

approximately $2.1 million from the transaction for the direct benefit of Och-Ziff.  This also was 

not disclosed to the UK Investor.  As Baros described to Cohen, they would “keep $3m for AGC 

I.”  That approximately $3 million would give South African Business Associate 3 money to 

repay a loan to Och-Ziff relating to AGC I expenses.  Cohen and Baros also knew that South 

African Business Associate 3 would use at least $25 million from AGC II to fund his efforts in 

Guinea. 

169. Cohen and Baros knew that the description of the transaction that was given to the 

UK Investor was a sham.  The UK Investor was not told that South African Business Associate 3 

would reap a $52 million windfall from the transaction.  The UK Investor likewise was not 

informed of the ulterior motives and secret terms of the transaction, or the link between the 

transaction and South African Business Associate 3’s payment to Guinea.  The UK 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.  The UK Investor was 

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not told that the initial transaction in which South African Business Associate 3 would buy 31.5 

million shares of the London Mining Company through the Turks & Caicos Entity had not even 

occurred at the time the $77 million purchase by AGC II was being discussed. 

170.   The UK Investor was not told that South African Business Associate 3 would 

use the $77 million he and his Turks & Caicos Entity received from AGC II to purchase the 

shares in the London Mining Company for $25 million (not $77 million).  Och-Ziff, Cohen and 

Baros offered the false explanation to the UK Investor—that AGC II was paying the same 

amount for 18.5 million shares that had been paid by the Turks & Caicos Entity for 31.5 million 

shares—by claiming that the original purchase by the Turks & Caicos Entity had been initiated 

in 2009 and had been “recently completed.”  In fact, as Cohen and Baros knew, there was no 

2009 purchase, and the transactions by which SA Business Conglomerate sold the 31.5 million 

shares to the Turks & Caicos Entity would be virtually simultaneous with AGC II’s purchase of 

18.5 million shares, and would be funded out of the purchase price paid by AGC II.   

171. The investment agreement between Och-Ziff and the UK Investor provided that 

the Investor could review and reject any transaction involving potential conflicts of interest.  The 

UK Investor did not reject the $77 million stock purchase by AGC II, but Cohen, Baros and Och-

Ziff obtained the consent of the UK Investor by making material misrepresentations and 

omissions about the nature of the transaction as described above. 

172. Cohen and Baros also failed to communicate complete and accurate information 

about the transaction internally at Och-Ziff.  Cohen and Baros knew that by failing to 

communicate complete and accurate information about the above transaction to legal, 

compliance and other personnel at Och-Ziff, the firm would fail to maintain books and records 

that accurately and fairly reflected its transactions and disposition of assets.  Cohen and Baros 

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also understood that concealing that, among other things, Agent 3 intended to use the loan 

proceeds to pay bribes, would circumvent financial and anti-corruption policies and internal 

controls at Och-Ziff.  Finally, Och-Ziff failed to conduct adequate and appropriate due diligence 

investigation or impose adequate restrictions to prevent the secret aspects of the transaction from 

occurring. 

 G. Violations of the Investment Advisers Act:  Material Misrepresentations and  
  Omissions, Self-Dealing and Misuse of Investor Funds By Och-Ziff, Cohen  
  and Baros Relating to Two Additional AGC II Transactions  
 

173. Cohen caused Och-Ziff to engage in two additional transactions in which he 

fraudulently obtained consent from the UK Investor by making material misrepresentations and 

omissions about the nature of the transactions.  Baros participated in the second of those 

transactions. 

 1.  The Congo-Brazzaville Oil Field Transaction 

174. In May 2010, Cohen and other Och-Ziff officials learned that high-level 

government officials from South Africa and Congo-Brazzaville had agreed to give an oil 

exploration company affiliated with the AML joint venture (the “Oil Exploration Company”) the 

opportunity to buy a 25% stake in an oil field off the coast of Congo-Brazzaville.  Cohen pushed 

Och-Ziff to go forward with the deal.  According to a public statement by the Oil Exploration 

Company’s CEO at the time, 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.”  Och-Ziff officials were told that the Oil 

Exploration Company had purportedly been designated by a high-ranking South African 

government official to participate in this transaction.   

175. Cohen and other Och-Ziff officials later learned that a third-party South African 

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entity was to be given a 25% interest in the Oil Exploration Company’s stake in the oil asset.  

This interest was to be a “free carry” for the South African-designated entity, meaning the Oil 

Exploration Company 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.  The Oil Exploration 

Company described this partner in various communications as either “Partner X” or “the 

government.”   

176. After conducting a limited due diligence investigation, Och-Ziff and Cohen 

learned that the owners of the proposed South African partner had histories of corruption, arms 

dealing and ties to the ruling South African political party, but no oil exploration or production 

experience.  One of the proposed owners of “Partner X” was described in a background report 

received by Och-Ziff and Cohen as an “associate and benefactor” of a high-ranking South 

African government official.  Apart from receiving the free equity interest, the South African-

designated entity was to have no overt role in the transaction or related matters.  As a result of 

concerns expressed by Och-Ziff about the background of the proposed partners, and other 

factors, the transaction stalled in late 2009.   

177. In early 2010, Cohen and others at Och-Ziff and AML, in concert with the Oil 

Exploration Company, made a second push to get the transaction approved.  They now claimed 

that South African Business Associate 3, who 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 were awarded to another entity.  

South African Business Associate 3 then purportedly designated the Oil Exploration Company 

(in which he, Och-Ziff, and AGC I held interests) as his proxy for this opportunity.   

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178. Under the new terms, South African Business Associate 3 would be paid $13 

million by the Oil Exploration Company (funded by AGC II) as compensation for his prior 

“losses.”  Another individual with close ties to a high-ranking government official in Congo-

Brazzaville (the “French Agent”) was inserted into the transaction and described as an additional 

introducer.  The French Agent was to be compensated for his purported role in arranging the 

transaction between South African Business Associate 3 and the high-ranking government 

official in Congo-Brazzaville even though all indications were that he had little or nothing to do 

with putting the deal together.  For his supposed efforts, the French Agent was to receive a $5 

million payment as well as 25% of the Oil Exploration Company’s stake in the oil field project at 

no cost.  The $5 million payment was to be funded by AGC II.   

179. The change of circumstances, new intermediaries and overall conduct surrounding 

the resurrected deal constituted a significant corruption risk, but Och-Ziff nonetheless began 

work to complete the deal.  Cohen was a vocal advocate for the deal.  Och-Ziff directed the Oil 

Exploration Company to conduct a due diligence investigation relating to the revived deal and its 

new actors and supposed origin.  As part of that due diligence, South African Business Associate 

3 and the French Agent submitted affidavits in which they confirmed the second origin story and 

the involvement of the French Agent.  Neither affidavit referenced or explained the original 

source for the transaction or the involvement of “Partner X” or the government in the transaction.  

The Oil Exploration Company purportedly conducted due diligence on the deal and the 

individuals receiving funds, which Och-Ziff directed and reviewed.   

180. Others at Och-Ziff, including members of the legal and compliance team, 

continued to have reservations about 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 

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stop the deal from going forward.  However—at Cohen’s urging—Och-Ziff Employee 1 

overruled the objections of legal and compliance officials and approved going forward with the 

transaction.   

181. Because the transaction involved payments to a related party (South African 

Business Associate 3), the investment agreement between Och-Ziff and the UK Investor 

mandated that Och-Ziff obtain the UK Investor’s consent to proceed.  Cohen was a primary 

contact for Och-Ziff with the UK Investor.  In seeking and obtaining the consent, Och-Ziff and 

Cohen did not inform the UK Investor of all of the material circumstances surrounding the 

transaction or how the transaction came to the Oil Exploration Company.  For example, Och-Ziff 

and Cohen failed to disclose the initial sourcing of the transaction or the initial presence of a 

different proposed partner in the deal.  Och-Ziff and Cohen also failed to inform the UK Investor 

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

including South African Business Associate 3.  Further, Och-Ziff and Cohen failed to inform the 

UK Investor that neither South African Business Associate 3 nor the French Agent had a role in 

sourcing the transaction when it was initially described to Och-Ziff.   

182. The omitted information was directly related to the corruption risk and the 

validity of paying $18 million to two intermediaries in the transaction.  Cohen and Och-Ziff 

assured the UK Investor that steps would be taken to ensure that the funds were used 

appropriately, including paying the intermediaries via segregated accounts and monitoring future 

transfers by both intermediaries in order to prevent corruption.  In reality, and contrary to those 

representations, Och-Ziff did not take steps to ensure such controls were instituted or followed.  

Nor did the Oil Exploration Company (using Och-Ziff funds) pay South African Business 

Associate 3 via a segregated account.  

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183. The UK Investor consented to the transaction based on this false and misleading 

information and these significant omissions.  AGC II provided funds to the Oil Exploration 

Company, which in turn were transferred to a non-segregated account controlled by South 

African Business Associate 3.  Contrary to the description of the deal provided to the UK 

Investor by Cohen and Och-Ziff, South African Business Associate 3 then transferred a 

significant portion of the $13 million he received from the Oil Exploration Company 

(approximately $10 million) to the French Agent’s account in Lebanon.  Och-Ziff, South African 

Business Associate 3 and the Oil Exploration Company did not follow the restrictions conveyed 

to the UK Investor.  Despite the extensive corruption and other risks, Och-Ziff failed to take 

reasonable and appropriate steps to ensure that its investor funds were used for legitimate 

purposes.  

184. Cohen failed to communicate complete and accurate information about the 

transaction in order to circumvent internal controls at Och-Ziff.  Cohen knew that by failing to 

communicate complete and accurate information about the above transaction to legal, 

compliance and other personnel at Och-Ziff, the firm would fail to maintain books and records 

that accurately and fairly reflected its transactions and disposition of assets.  Finally, Och-Ziff 

failed to conduct adequate and appropriate due diligence investigation or impose adequate 

restrictions to prevent the secret aspects of the transaction from occurring, and to ensure 

payments made to intermediaries were not made for improper purposes.  Failing to take these 

steps was contrary to Och-Ziff’s anti-corruption guidelines and internal financial controls. 

 2.  The Super Yacht Loan:  Cohen Schemes To Use AGC II Funds to Repay     
      a Personal Loan 

185. Cohen used his own funds to make an $18 million personal loan to Agent 1 in 

2008.  Cohen did not disclose the loan to Och-Ziff, in violation of Och-Ziff’s Code of Ethics.  

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The loan was intended to fund Agent 1’s construction of a “super yacht.”  Cohen took security 

interest in several assets held by Agent 1 to secure his loan, but by 2010 Agent 1 had not repaid 

the loan.  In order to provide Agent 1 with funds to repay the loan, Cohen arranged for AGC II to 

purchase shares in a London-based mining holding company from Agent 1 (the “London 

Holding Company”).  South African Business Associate 3 also owned shares in the London 

Holding Company, as did a third party with whom Cohen had a separate, outstanding $1 million 

loan arrangement. 

186. In December 2010, Cohen caused AGC II to purchase approximately $20 million 

in shares in the London Holding Company, which owned two mining assets in Africa.  The 

sellers of the shares were Agent 1, to whom Cohen had loaned $1 million, and South African 

Business Associate 3.  Och-Ziff, acting primarily through Cohen and with information provided 

by Cohen, falsely represented the transaction to the UK Investor as a legitimate investment for 

AGC II.  The only sellers disclosed to the UK Investor by Cohen and Och-Ziff were Agent 1 and 

the third individual (who repaid his $1 million loan to Cohen in the days before the transaction 

was finalized).  South African Business Associate 3, who was a participant in the AML joint 

business venture through his Turks & Caicos Entity, was not disclosed as a seller.   

187. Cohen knew that the funds paid by AGC II to Agent 1 would be used to satisfy 

Agent 1’s outstanding loan to Cohen and arranged the transaction to accomplish the repayment.  

Cohen had to approve the sale of shares in the London Holding Company by Agent 1 because he 

held security in those shares through his personal loan to Agent 1.  Cohen gave his approval in 

November 2010 to effectuate the AGC II purchase.  The transaction also was arranged so that 

Cohen would receive a $4 million partial repayment on his outstanding loan to Agent 1 soon 

after the AGC II purchase was completed, and he did so the day after AGC II funds were 

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transferred to Agent 1.  Cohen did not inform Och-Ziff of his interest in the transaction or of his 

control over the shares, nor was this information conveyed to the UK Investor.  

188. Baros assisted Cohen in finalizing the transaction, and did so fully aware of the 

self-dealing involving South African Business Associate 3.  Baros received regular 

communications from a colleague of South African Business Associate 3, who also worked for 

AML, discussing the secret terms of the transaction, including the involvement of South African 

Business Associate 3.  

189. Cohen and Baros hid the sale of South African Business Associate 3’s shares in 

the London Holding Company because they understood that the UK Investor could reject the 

deal due to the conflict of interest.  Cohen and Baros worked to ensure that South African 

Business Associate 3 was able to sell his shares in secret using Agent 1 as his proxy.   

190. The UK Investor was not told of the self-dealing and personal interests of Cohen 

and South African Business Associate 3 in the transaction.  The UK Investor had been told by 

Och-Ziff that South African Business Associate 3 owned shares in the London Holding 

Company, but not that he was indirectly selling shares in the company to AGC II.  The UK 

Investor also was not told that Cohen previously had an interest in the shares being sold by 

Agent 1.  Cohen and Och-Ziff did not disclose to the UK Investor that money from AGC II’s 

purchase of shares from the London Holding Company would be used to repay a significant 

portion of Cohen’s loan to Agent 1.  The UK Investor gave its approval of the transaction 

without the benefit of that material information.   

191. AGC II transferred more than $9 million from accounts in New York to Agent 1’s 

account in late 2010.  Agent 1 then transferred $4 million to Cohen’s personal account in partial 

repayment of the loan.  In addition, Cohen directed that Agent 1 transfer another $4 million to 

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accounts for the benefit of South African Business Associate 3. 

192. In 2012, Cohen and Agent 1 created a false document regarding the sale of shares 

in Agent 1’s London Holding Company in order to hinder and obstruct an ongoing investigation 

by the Enforcement Division of the SEC into conduct by, among others, Cohen and Och-Ziff.  

Cohen and Agent 1 created a backdated letter to make it appear that Cohen had no financial 

interest in the transaction.  The letter, which was addressed to Cohen, signed by Agent 1 and 

backdated to October 2010, 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 Cohen in 

December 2010 came directly from the proceeds of the AGC II purchase of shares from Agent 1.  

In response to a Commission subpoena issued as part of the Enforcement investigation, Cohen 

produced the false, backdated letter to the Commission during its investigation of his conduct 

relating to Och-Ziff’s transactions in Africa.   

193. Cohen and Baros failed to communicate complete and accurate information about 

AGC II’s $20 million purchase of shares in the London Holding Company in order to circumvent 

internal controls at Och-Ziff.  Cohen and Baros knew that by failing to communicate complete 

and accurate information about the above transaction to legal, compliance and other personnel at 

Och-Ziff, the firm would fail to maintain books and records that accurately and fairly reflected 

its transactions and disposition of assets.  Finally, Och-Ziff failed to conduct adequate and 

appropriate due diligence investigation or impose adequate restrictions to prevent the secret 

aspects of the transaction from occurring.  Failing to take these steps was contrary to Och-Ziff’s 

anti-corruption guidelines and internal financial controls. 

 

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H.  Tolling Agreements 

194. Cohen signed and entered into two tolling agreements with the Commission, for 

the periods November 26, 2012, through November 25, 2013, and from December 23, 2013, 

through June 23, 2014.  Collectively these agreements tolled the running of any limitations 

period or any other time-related defenses alleged in this Complaint for a period of 547 days. 

195. Baros signed and entered into one tolling agreement with the Commission, for the 

period February 17, 2016, through May 17, 2016.  This agreement tolled the running of any 

limitations period or any other time-related defenses alleged in this Complaint for a period of 90 

days. 

 
FIRST CLAIM  

Cohen and Baros Violated the Anti-Bribery Provisions of the  
Foreign Corrupt Practices Act, Section 30A of the Exchange Act  

 
196. The Commission realleges and incorporates by reference each and every 

allegation contained in paragraphs 1 through 195 above as if set forth fully herein. 

197. By engaging in the following corrupt transactions, Cohen and Baros, who were 

officers, directors, employees, or agents of Och-Ziff, a United States issuer, made use of the 

mails or other means or instrumentalities of interstate commerce corruptly in furtherance of an 

offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, 

promise to give, or authorization of the giving of anything of value to foreign officials for the 

purpose of influencing their acts or decisions in their official capacity, inducing them to do or 

omit to do any action in violation of their lawful duties, securing an improper advantage, or 

inducing such foreign officials to use their influence with foreign governments or 

instrumentalities thereof to affect or influence any act or decision of such government or 

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instrumentality, in order to assist Och-Ziff in obtaining or retaining business. The corrupt 

transactions included: 

• The 2007 investment of $300 million by the LIA into Och-Ziff Hedge Funds.    

• The transaction that began as a convertible loan in or about October 2007, through 

which Och-Ziff invested approximately $40 million into the Libya Real Estate 

Project. 

• The loan of approximately $86 million, or more, to South African Business 

Associate 3’s Turks & Caicos Entity and additional payments of more than $10 

million to South African Business Associate 3. 

• Och-Ziff’s $124 million Convertible Loan to Agent 3 through the DRC SPV. 

• Och-Ziff’s $130 million in Margin Loans to Agent 3 through his BVI Shell 

Company.  

• The transaction in or about 2010 and 2011, in which AGC II overpaid South 

African Business Associate 3 by at least $52 million for shares in the London 

Mining Company.  

198. By reason of the foregoing, Cohen and Baros violated Section 30A of the 

Exchange Act [15 U.S.C. §78dd-1]. 

SECOND CLAIM 

Cohen and Baros Aided and Abetted Och-Ziff’s Violations of the Anti-Bribery Provisions 
of the Foreign Corrupt Practices Act, Section 30A of the Exchange Act  

 
199. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1 through 195 above as if set forth fully herein. 

200. Och-Ziff violated Section 30A of the Exchange Act when it made use of the mails 

or other means or instrumentalities of interstate commerce corruptly in furtherance of offers, 

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72 
 

payments, promises to pay, or authorizations of the payments of any money, or offer, gift, 

promise to give, or authorizations of the giving of anything of value to foreign officials for the 

purposes of influencing their acts or decisions in their official capacity, inducing them to do or 

omit to do any action in violation of their lawful duties, securing an improper advantage, or 

inducing such foreign officials to use their influence with foreign governments or 

instrumentalities thereof to affect or influence any act or decision of such government or 

instrumentality in order to assist Och-Ziff in obtaining or retaining business. 

201. The corrupt transactions engaged in by Och-Ziff included: 

• The 2007 investment of $300 million by the LIA into Och-Ziff Hedge Funds.  In 

order to obtain the investment Och-Ziff retained and used the services of Agent 1 

to act on its behalf.  Och-Ziff retained Agent 1’s services knowing that he would 

need to, and intended to, make corrupt payments to Libyan government officials 

to secure that investment.  Agent 1 paid more than $3 million in bribes to Libyan 

government officials in connection with securing the LIA investment for Och-

Ziff.    

• The transaction that began as a convertible loan in or about October 2007, through 

which Och-Ziff invested approximately $40 million into the Libya Real Estate 

Project.  In or about 2007, Och-Ziff invested approximately $40 million of Och-

Ziff investor funds into the Libya Real Estate Project in which Agent 1 was a 

main actor.  In furtherance of that arrangement, Och-Ziff used investor funds to 

pay a bogus $400,000 “deal fee” to an entity controlled by Agent 1 as part of its 

investment.  A portion of the “deal fee” paid to Agent 1 was used to bribe Libyan 

government officials in connection with the Libya Real Estate Project.   

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• The loan of approximately $86 million, or more, to South African Business 

Associate 3’s Turks & Caicos Entity and additional payments of more than $10 

million to South African Business Associate 3.  Beginning in or about 2007, Och-

Ziff loaned more than $86 million and made payments of more than $10 million 

using Och-Ziff investor funds to South African Business Associate 3.  Of the 

investor funds provided to South African Business Associate 3, Och-Ziff’s AGC I 

business partner, millions went towards a) bribes to high-ranking government 

officials, b) illicit payments to middlemen, c) the personal benefit of its business 

partners, and d) expenditures unrelated to the investment.   

• Och-Ziff’s $124 million Convertible Loan to the DRC SPV.  Beginning in or 

about December 2007 and continuing through at least March 2008, Och-Ziff 

made a Convertible Loan of approximately $124 million from Och-Ziff investor 

funds through AGC I to the DRC SPV purportedly to purchase mining assets in 

the DRC.  Monies from the Convertible Loan were used to pay bribes to high-

ranking government officials related to the acquisition of assets on behalf of Och-

Ziff.        

• Och-Ziff’s $130 million in Margin Loans to Agent 3 through his BVI Shell 

Company.  In or about 2010 and 2011, Och-Ziff made a Margin Loan for 

approximately $130 million from Och-Ziff investor funds to Agent 3’s BVI Shell 

Company.  Approximately $84.1 million of the loaned amount went to Agent 3 

with no restrictions or oversight by Och-Ziff.  Monies from the Margin Loan were 

used to pay bribes to high-ranking government officials related to the acquisition 

of assets on behalf of Och-Ziff.          

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• The transaction in or about 2010 and 2011, in which AGC II overpaid South 

African Business Associate 3 by at least $52 million for shares in the London 

Mining Company.  In or about 2010 and 2011, Och-Ziff arranged for the purchase 

of shares in the London Mining Company by AGC II.  Och-Ziff caused AGC II to 

purchase the shares from South African Business Associate 3 in order to provide 

him with capital to use for other purposes.  With the proceeds from the AGC II 

purchase, South African Business Associate 3 paid more than $25 million directly 

to the government of Guinea as a bribe, and $1 million to Agent 2, who then used 

$150,000 of those funds to bribe high-ranking government officials in Guinea.   

202. Cohen and Baros knowingly or recklessly provided substantial assistance to Och-

Ziff in its violations of Section 30A of the Exchange Act. 

203. By reason of the foregoing, Cohen and Baros violated Section 20(e) of the 

Exchange Act [15 U.S.C. §78t(e)] and Section 30A of the Exchange Act [15 U.S.C. §78dd-1] by 

aiding and abetting Och-Ziff’s violations of Section 30A of the Exchange Act [15 U.S.C. §78dd-

1]. 

THIRD CLAIM  

Cohen and Baros Aided and Abetted Och-Ziff’s Violations  
of Exchange Act Section 13(b)(2)(A) 

 
204. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1 through 195 above as if set forth fully herein.   

205. Section 13(b)(2)(A) of the Exchange Act requires issuers to make and keep 

books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the 

transactions and dispositions of their assets. 

206. Och-Ziff violated Section 13(b)(2)(A) of the Exchange Act by failing to make and 

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keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflected its 

transactions and disposition of its assets. 

207. By engaging in the conduct described above, Cohen and Baros knowingly or 

recklessly provided substantial assistance to Och-Ziff in its violations of Exchange Act Section 

13(b)(2)(A). 

208. By reason of the foregoing, Cohen and Baros violated Section 20(e) of the 

Exchange Act [15 U.S.C. §78t(e)] and Sections 13(b)(2)(A) of the Exchange Act [15 U.S.C. 

§78m(b)(2)(A)], by aiding and abetting Och-Ziff’s violations of Sections 13(b)(2)(A) of the 

Exchange Act [15 U.S.C. §78m(b)(2)(A)]. 

FOURTH CLAIM  

Cohen and Baros Violated Section 13(b)(5) of the Exchange Act  
and Exchange Act Rule 13b2-1 

 
209. The Commission repeats and incorporates by reference the allegations in 

paragraphs 1 through 195 above as if set forth fully herein.   

210. By engaging in the conduct described above, Cohen and Baros knowingly or 

recklessly circumvented Och-Ziff’s internal accounting controls. 

211. By reason of the foregoing, Cohen and Baros violated Section 13(b)(5) of the 

Exchange Act [15 U.S.C. §78m(b)(5)] and Exchange Act Rule 13b2-1 [17 C.F.R. §240.13b2-1]. 

FIFTH CLAIM  

Cohen Violated Section 206(1) and 206(2) of the Advisers Act 
 

212. The Commission realleges and incorporates by reference each and every 

allegation contained in paragraphs 1 through 195 above as if set forth fully herein. 

213. Cohen was an “investment adviser” within the meaning of Section 202(a)(11) of 

the Investment Advisers Act (“Advisers Act”) [15 U.S.C. §80b-2(a)(11)] for each of the 

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transactions detailed above involving AGC I and AGC II, as well as all other Och-Ziff 

investments in Africa.   

214. By engaging in the conduct described above, Cohen, by use of the mails or any 

means or instrumentality of interstate commerce, directly or indirectly, acting intentionally, 

knowingly or recklessly:  (a) employed or is employing devices, schemes, or artifices to defraud; 

or (b) engaged or is engaging in transactions, practices, or courses of business which operate as a 

fraud or deceit upon a client or prospective client in violation of Sections 206(1) and 206(2) of 

the Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)]. 

215. As a result, Cohen violated Sections 206(1) and 206(2) of the Advisers Act [15 

U.S.C. §§ 80b-6(1) and (2)]. 

SIXTH CLAIM 

Cohen and Baros Aided and Abetted OZ Management’s Violations  
of Section 206(1) and 206(2) of the Advisers Act 

 
216. The Commission realleges and incorporates by reference each and every 

allegation contained in paragraphs 1 through 195 above as if set forth fully herein. 

217. OZ Management, a subsidiary of Och-Ziff, was an “investment adviser” within 

the meaning of Section 202(a)(11) of the Investment Advisers Act (“Advisers Act”) [15 U.S.C. 

§80b-2(a)(11)].  OZ Management was an investment adviser to both AGC I and AGC II, as well 

as to the existing OZ Management funds that invested in AGC I and otherwise, within the 

meaning of Section 202(a)(11) of the Investment Advisers Act [15 U.S.C. §80b-2(a)(11)]. 

218. By engaging in the conduct described above, OZ Management, by use of the 

mails or any means or instrumentality of interstate commerce, directly or indirectly, acting 

intentionally, knowingly or recklessly:  (a) employed or are employing devices, schemes, or 

artifices to defraud; or (b) engaged or are engaging in transactions, practices, or courses of 

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business which operate as a fraud or deceit upon a client or prospective client in violation of 

Sections 206(1) and 206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)]. 

219. By engaging in the conduct described above, Cohen and Baros knowingly or 

recklessly provided substantial assistance to OZ Management in its violations of Sections 206(1) 

and 206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)]. 

220. As a result, Cohen and Baros violated Section 209(f) of the Advisers Act [15 

U.S.C. §§ 80b-9(f)] and Sections 206(1) and 206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1) 

and (2)], by aiding and abetting OZ Management’s violations of Sections 206(1) and 206(2) of 

the Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)]. 

SEVENTH CLAIM  

Cohen and Baros Aided and Abetted OZ Management’s Violations  
of Section 206(4) of the Advisers Act and Advisers Act Rule 206(4)-8 

 
221. The Commission repeats and incorporates by reference each and every allegation 

contained in paragraphs 1 through 195 above as if fully set forth herein. 

222. Both AGC I and AGC II constituted “pooled investment vehicles,” as defined by 

Investment Advisers Act Rule 206(4)-8(b) [17 C.F.R. § 275.206(4)-8(b)].  The AGC I 

transactions were funded from existing OZ Management funds, including OZ Master Fund, Ltd., 

OZ Europe Master Fund, Ltd. and OZ Global Special Investment Master Fund, LP all of which 

are pooled investment funds comprised of numerous institutional investors.  AGC II, which 

involved the UK Investor as an institutional investor, was a partnership that pooled funds from 

multiple investors which were aggregated for the purpose of investments.  

223. OZ Management was an “investment adviser” to both AGC I and AGC II, as well 

as to the existing OZ Management funds that invested in AGC I, within the meaning of Section 

202(a)(11) of the Investment Advisers Act [15 U.S.C. §80b-2(a)(11)]. 

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224. By engaging in the conduct described above, OZ Management, acting as a 

registered investment adviser to a pooled investment vehicle, knowingly or recklessly a) made  

untrue statements of a material fact, or omitted to state a material fact necessary to make the 

statements made, in light of the circumstances under which they were made, not misleading, to 

any investor or prospective investor in the pooled investment vehicle, or b) otherwise engaged in 

acts, practices, or courses of business that were fraudulent, deceptive, or manipulative with 

respect to investors or prospective investors in the pooled investment vehicles. 

225. By engaging in the conduct described above, OZ Management, by use of the 

mails or any means or instrumentality of interstate commerce, directly or indirectly, acting 

intentionally, knowingly or recklessly violated Section 206(4) of the Advisers Act [15 U.S.C.  

§80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8].   

226. By engaging in the conduct described above, Cohen and Baros knowingly or 

recklessly provided substantial assistance to Och-Ziff and OZ Management in their violations of 

Section 206(4) of the Advisers Act [15 U.S.C.  §80b-6(4)] and Rule 206(4)-8 thereunder [17 

C.F.R. § 275.206(4)-8]. 

227. As a result, Cohen and Baros violated Section 209(f) of the Advisers Act [15 

U.S.C. §§ 80b-9(f)], Section 206(4) of the Advisers Act [15 U.S.C.  §80b-6(4)] and Rule 206(4)-

8 thereunder [17 C.F.R. § 275.206(4)-8] by aiding and abetting OZ Management’s violations of 

Section 206(4) of the Advisers Act [15 U.S.C.  §80b-6(4)] and Rule 206(4)-8 thereunder [17 

C.F.R. § 275.206(4)-8].  

PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully requests a Final Judgment that: 

I. 

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79 
 

 Permanently restrains and enjoins Cohen, Baros and each of their agents, servants, 

employees and attorneys and those persons in active concert or participation with them who 

receive actual notice of the injunction by personal service or otherwise, including facsimile 

transmission or overnight delivery service, from directly or indirectly engaging in the conduct 

described above, or in conduct of similar purport and effect, in violation of from violating: 

 a) Exchange Act Section 30A [15 U.S.C. §78dd-1]  

 b) Exchange Act Section 13(b)(2)(A) [15 U.S.C. §§78m(b)(2)(A)]; 

 c) Exchange Act Section 13(b)(5) and Rule 13b2-1 thereunder, [15 U.S.C.  

  §78m(b)(5), and 17 C.F.R. 17 C.F.R. §240.13b2-1];  

 d) Sections 206(1) and 206(2) of the Advisers [15 U.S.C. §§ 80b-6(1) and (2)]; and 

 e) Section 206(4) of the Advisers Act and Rule 206(4)-8 thereunder [15 U.S.C. §§ 

80b-6(4) and17 C.F.R. § 275.206(4)-8]; 

II. 

 Requires Cohen and Baros to disgorge their ill-gotten gains, plus pre-judgment interest; 

III. 

 Orders Cohen and Baros to pay appropriate civil penalties pursuant to Section 21(d)(3) of 

the Exchange Act [15 U.S.C. §78u(d)(3)], and Section 209(e) of the Advisers Act [15 U.S.C. 

§80b-9(e)]; 

IV. 

Retains jurisdiction over this action to implement and carry out the terms of all orders and 

decrees that may be entered; and, 

V. 

 Grants such other and further relief as the Court may deem just and proper. 

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JURY DEMAND 

The Commission hereby demands a trial by jury on all claims so triable. 

 
Dated: January 26, 2017   On behalf of the Commission,  
 Boston, Massachusetts 
  
 
  
          //s//  Alicia M. Reed  
 Alicia M. Reed (NY Bar No. 4913596) 
 Neil T. Smith (MA Bar No. 651157)* 
 Marc J. Jones (MA Bar No. 645910)* 
 Paul Block (MA Bar No. 551158)*  
 Martin F. Healey (MA Bar No. 227550)* 
 
 Attorneys for Plaintiff 
 SECURITIES AND EXCHANGE COMMISSION 
 Boston Regional Office 
 33 Arch Street, 23rd Floor 
 Boston, Massachusetts  02110 
 (617) 573-8952 (Healey direct) 
 (617) 573-4590 (fax) 
 [email protected] (Healey email) 
 
 
 
 
 
 
 
 
 
 
*Not admitted in E.D.N.Y. 
  
  

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AO 440 (Rev. 06/12)  Summons in a Civil Action

UNITED STATES DISTRICT COURT
for the

__________ District of __________ 

)
)
)
)
)
)
)
)
)
)
)
)

Plaintiff(s)

v. Civil Action No.

Defendant(s)

SUMMONS IN A CIVIL ACTION

To: (Defendant’s name and address)

A lawsuit has been filed against you.

Within 21 days after service of this summons on you (not counting the day you received it) — or 60 days if you
are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
P. 12 (a)(2) or (3) — you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of
the Federal Rules of Civil Procedure.  The answer or motion must be served on the plaintiff or plaintiff’s attorney,
whose name and address are:

If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint. 
You also must file your answer or motion with the court.

CLERK OF COURT

Date:
Signature of Clerk or Deputy Clerk

Eastern District of New York

Securities and Exchange Commmission

Michael L. Cohen and Vanja Baros

Michael Cohen
c/o Ron White
Morrison & Foerster
250 West 55th Street
New York, NY 10019

Martin Healey
Securities and Exchange Commission
33 Arch Street #2400
Boston, MA 02110

Case 1:17-cv-00430-PKC-LB   Document 1-2   Filed 01/26/17   Page 1 of 2 PageID #: 167



AO 440 (Rev. 06/12)  Summons in a Civil Action (Page 2)

Civil Action No.

PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))

This summons for (name of individual and title, if any)

was received by me on (date) .

I personally served the summons on the individual at (place)

on (date) ; or

I left the summons at the individual’s residence or usual place of abode with (name)

, a person of suitable age and discretion who resides there,

on (date) , and mailed a copy to the individual’s last known address; or

I served the summons on (name of individual) , who is

 designated by law to accept service of process on behalf of (name of organization)

on (date) ; or

I returned the summons unexecuted because ; or

Other (specify):

.

My fees are $ for travel and $ for services, for a total of $ .

I declare under penalty of perjury that this information is true.

Date:
Server’s signature

Printed name and title

Server’s address

Additional information regarding attempted service, etc:

0.00

Case 1:17-cv-00430-PKC-LB   Document 1-2   Filed 01/26/17   Page 2 of 2 PageID #: 168



AO 440 (Rev. 06/12)  Summons in a Civil Action

UNITED STATES DISTRICT COURT
for the

__________ District of __________ 

)
)
)
)
)
)
)
)
)
)
)
)

Plaintiff(s)

v. Civil Action No.

Defendant(s)

SUMMONS IN A CIVIL ACTION

To: (Defendant’s name and address)

A lawsuit has been filed against you.

Within 21 days after service of this summons on you (not counting the day you received it) — or 60 days if you
are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
P. 12 (a)(2) or (3) — you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of
the Federal Rules of Civil Procedure.  The answer or motion must be served on the plaintiff or plaintiff’s attorney,
whose name and address are:

If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint. 
You also must file your answer or motion with the court.

CLERK OF COURT

Date:
Signature of Clerk or Deputy Clerk

Eastern District of New York

Securities and Exchange Commmission

Michael L. Cohen and Vanja Baros

Vanja Baros
c/o Mark Cohen, Esq.
Cohen & Gresser
800 Third Avenue
New York, New York 10022

Martin Healey
Securities and Exchange Commission
33 Arch Street #2400
Boston, MA 02110

Case 1:17-cv-00430-PKC-LB   Document 1-3   Filed 01/26/17   Page 1 of 2 PageID #: 169



AO 440 (Rev. 06/12)  Summons in a Civil Action (Page 2)

Civil Action No.

PROOF OF SERVICE
(This section should not be filed with the court unless required by Fed. R. Civ. P. 4 (l))

This summons for (name of individual and title, if any)

was received by me on (date) .

I personally served the summons on the individual at (place)

on (date) ; or

I left the summons at the individual’s residence or usual place of abode with (name)

, a person of suitable age and discretion who resides there,

on (date) , and mailed a copy to the individual’s last known address; or

I served the summons on (name of individual) , who is

 designated by law to accept service of process on behalf of (name of organization)

on (date) ; or

I returned the summons unexecuted because ; or

Other (specify):

.

My fees are $ for travel and $ for services, for a total of $ .

I declare under penalty of perjury that this information is true.

Date:
Server’s signature

Printed name and title

Server’s address

Additional information regarding attempted service, etc:

0.00

Case 1:17-cv-00430-PKC-LB   Document 1-3   Filed 01/26/17   Page 2 of 2 PageID #: 170