A miner works in a mine in Mbuji Mayi, Congo in 2006. Photo: Schalk van Zuydam/AP

Months after a Brooklyn federal judge found that the former shareholders of a Canadian mining company are owed restitution after losing money in a bribery scheme in the Democratic Republic of the Congo, federal prosecutors agreed that the lost mining rights may be worth up to $190 million.

The estimate represents progress toward being made whole for the clients of Wilson Sonsini Goodrich & Rosati, though a mining valuation expert estimated that their company's share of the mine could have been worth as much as $1.8 billion if it had been developed.

Whether the shareholders would get any restitution at all was the subject of intense debate after OZ Africa Management GP, a subsidiary of the hedge fund known until recently as Och-Ziff Capital Management Group (now Sculptor Capital Management), pleaded guilty in 2016 to conspiracy to bribe foreign officials in violation of the Foreign Corrupt Practices Act.

The companies agreed to pay a penalty of more than $200 million, and in early 2018, the court found that the shareholders were not entitled to restitution. Along with OZ Africa, federal prosecutors had argued that the shareholders weren't victims.

In August, U.S. Senior District Judge Nicholas Garaufis reversed the 2018 decision, finding that the Mandatory Victims Restitution Act defines "victim" broadly and that the shareholders may be compensated for their lost opportunity to mine the property. He asked for further briefing on the appropriate amount for restitution.

In a letter filed Friday, Assistant U.S. Attorney David Pitluck wrote that the value of the mining rights was between $150 million and $188.7 million. Attempting to assess the mine's value as if it had been developed would be "highly speculative," he wrote, noting that Garaufis had asked for a mining rights valuation instead.

"At the time that the defendant committed the crime to which it pled guilty, the defendant valued the Kalukundi mining rights no lower than $150 million," Pitluck wrote. "Having used this valuation to harm the victims, the defendant surely must accept it now, when the time has come for the defendant to compensate the victims for the defendant's crime."

In a brief filed the same day, Wilson Sonsini partner Moe Fodeman wrote that Garaufis should not worry about any delay caused by the restitution process. No individual defendants are waiting on a decision about their freedom, he wrote, because no individuals were prosecuted.

"The Defendant is part of a corporation — a large hedge fund," Fodeman wrote. "It has the funds to make its victims whole. Its victims have persistently fought for that right. Any 'burden' here on the sentencing process cannot outweigh that right."

Charles Gilman, a partner at Cahill Gordon & Reindel, which is representing OZ Africa, did not respond to a request for comment Wednesday. In late September, he filed a memo asking Garaufis to reconsider his order, arguing that the shareholders' group did not directly own any mining rights and cannot claim restitution for injury to the company.

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