It’s been a while since we heard from Michael Cohen, late head of Och-Ziff Capital Management’s European and—crucially—African operations. Specifically, it’s been about a year, since the SEC sued him and the other guy Och-Ziff blamed for its semi-disastrous foray onto the latter-mentioned continent. At the time, his alleged nefariousness was limited—if you could call a bribery scheme spanning the length and breadth of Africa and beyond “limited”—to just paying off officials for mandates and mining rights.
But while the last year has been pretty good for Och-Ziff, all things considered, it has been the opposite for its former employee. You see, the thing about getting accused of running a massive corruption scheme is that regulators and prosecutors aren’t likely to just hit you with an enforcement action and leave it at that. They’re gonna keep digging. And then they just might find that part of your alleged bribery scheme involved personally loaning one of your allegedly corrupt cohorts a big chunk of money to build a really big boat. And when—surprise, surprise!—he couldn’t pay you back, instead of just swallowing that loss as the cost of doing allegedly illegal business, you just allegedly gave an Och-Ziff client—a charity, no less—an opportunity to “co-invest” in a mining company owned by the broke boating bribe, with the proceeds covering the maritime loan.
In 2008, Cohen loaned $18 million to a London-based businessman with ties to top Libyan officials, who used the funds to build a “super yacht,” according to U.S. filings. The U.S. says the businessman, who isn’t identified, bribed Libyan officials so the hedge fund could win a deal to manage the country’s investments…. When the businessman couldn’t pay up in 2010, prosecutors say, Cohen brokered a deal for the charity to buy a stake in the mining company, without disclosing that $4 million in proceeds from the sale would be used to repay some of the debt owed to him.