As highlighted in this prior post, in January 2017 former Och-Ziff executives Michael Cohen and Vanja Baros were civilly charged by the SEC with Foreign Corrupt Practices Act, and other, violations in connection with the same core conduct as the DOJ and SEC’s September 2016 enforcement action against Och-Ziff.
Recently, the DOJ unsealed criminal charges against Cohen. While some media sources have called the charges “bribery charges,” (see here for the Wall Street Journal article) this is false as Cohen was not charged with any FCPA offenses, but rather various fraud based offenses based on his role as an investment advisor. However, as detailed in this post, Cohen was also charged conspiracy to obstruct justice and making material false statements, charges at least indirectly related to the DOJ’s and SEC’s FCPA inquiry of Och-Ziff.
The bulk of the criminal indictment against Cohen alleges that he, along with others, made material misrepresentations and omissions to a U.K. based charitable organization and investor concerning conflicts of interest and self-dealing that existed with certain investment transactions.
However, the indictment also alleges that Cohen backdated several document in connection with the investment transaction when he learned in 2012 that Och-Ziff was under investigation by the SEC. Moreover, the indictment alleges that Cohen, through his attorney, produced the backdated document in response to an SEC subpoena served on him in his personal capacity. Finally, the indictment alleges that Cohen made false statements regarding the backdated document in 203 when he attended a meeting with the DOJ, FBI, SEC and IRS.
The Cohen indictment is a useful reminder that when a company or individual is under Foreign Corrupt Practices Act scrutiny, law enforcement is not going to have “blinders” on and focus just on FCPA conduct, but other potential improper conduct as well that may be unearthed during the investigation.
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