Och-Ziff investors reach $136M proposed settlement in FCPA case

In a regulatory filing on July 24, Sculptor disclosed OZ Africa Management, the shareholders from Africo Resources, and the DOJ on July 23 “discussed a potential settlement framework with the Honorable Nicolas Garaufis of the U.S. District Court for the Eastern District of New York that would resolve the restitution dispute in U.S. v. OZ Africa Management.”

“The proposed settlement remains subject to (i) final negotiation and signing of a formal settlement agreement, which will only be entered into if the Court approves the settlement framework and (ii) the subsequent approval by the Court of the restitution amount,” Sculptor stated.

Case background

In September 2016, Och-Ziff Capital Management Group, a publicly traded alternative investment and hedge fund firm, and its wholly owned subsidiary, OZ Africa Management, agreed to pay a combined $412 million in criminal and regulatory penalties for a widespread bribery scheme involving officials in the Democratic Republic of the Congo (DRC). The case marked the first time a hedge fund was held to account for violating the FCPA.

According to the companies’ admissions, Och-Ziff employees in 2007 began discussions with a businessman operating in the DRC about entering into a partnership based on special access to lucrative investment opportunities in the DRC involving the country’s diamond and mining sectors. Och-Ziff employees learned the businessman gained access to these attractive investment opportunities by making corrupt payments to senior government officials in the DRC, the companies admitted. Shareholders sought restitution under the Mandatory Victims Restitution Act for losses allegedly incurred from Och-Ziff’s bribery of the DRC officials.