Officials from the US Attorney’s Office for the Southern District of New York, Department of Justice (DOJ), IRS and Homeland Security announced the filing of a four-count criminal indictment against Gulnara Karimova, daughter of the former president of Uzbekistan, and others on Thursday.
Karimova, a former government official and telecommunications executive, in connection to a bribery and money laundering scheme involving the payment of nearly $1 billion in bribes.
The indictment also names Bekhzod Akhmedov, former general director of Uzdunrobita, an Uzbek subsidiary of Moscow based Mobile Telesystems PJSC (MTS), and accuses Akhmedov of having conspired in a decade-long corrupt scheme to pay Karimova more than $865 million in bribes, in violation of the Foreign Corrupt Practices Act (FCPA).
The indictment alleges that Akhmedov orchestrated the scheme on behalf of MTS and two other telecommunications companies, VimpelCom Ltd. and Telia Company AB, and their Uzbek subsidiaries, in an effort to obtain and retain telecommunication business in Uzbekistan.
MTS was charged alongside one of its Uzbek subsidiaries on Thursday for conspiring to violate the FCPA by paying more than $420 million in bribes through Akhmedov to Karimova. The subsidiary pleaded guilty in Manhattan federal court to violating the FCPA and entered into a deferred prosecution agreement, which stipulates them to pay a penalty of $850 million to the US, including a $500,00 criminal fine, and $40 million in forfeiture. MTS agreed to cooperate fully with the ongoing investigation into Akhmedov and Karimova, and the appointment of an independent compliance monitor for three years, and to implementation of rigorous internal controls.
In related proceedings, MTS reached a $100 million civil settlement with the Securities and Exchange Commission on Wednesday. Under the terms of the agreement, MTS agreed to pay the $100 million civil penalty, which will be credited toward the financial penalties imposed as part of their agreement with the DOJ. Thus, the combined total amount of criminal and regulatory penalties paid by MTS to US authorities in connection with the FCPA bribery scheme will be $850 million.
This is the third in a trilogy of cases arising out of the almost $1 billion bribery scheme. “By funneling multimillion-dollar bribe payments through the U.S. financial system, the companies and individual defendants corruptly tried to tip the global economy in their favor and line their own pockets,” said US Attorney Geoffrey Berman.
On February 18, 2016, Amsterdam-based VimpelCom and its Uzbek subsidiary, Unitel LLC, agreed to a settlement and admitted to conspiring to pay more than $114 million in bribes to Karimova between 2005 and 2012. Then, on September 21, 2017, Stockholm-based Telia and its Uzbek subsidiary, Coscom LLC, entered into a settlement where they admitted to conspiring to pay more than $331 million in bribes to Karimova between 2007 and 2010.
According to a press release, the investigation has thus far yielded a combined total of more than $2.6 billion in global fines and disgorgement, including more than $1.3 billion in criminal penalties paid to the United States. In related actions, the DOJ has also filed civil complaints seeking the forfeiture of more than $850 million held in bank accounts in Switzerland, Belgium, Luxembourg, and Ireland, which constitute bribe payments made by MTS, VimpelCom, and Telia, or funds involved in the laundering of those bribes, to Karimova.
Both Karimova and Akhmedov are currently at large.