MANHATTAN (CN) – Entering into what prosecutors call the “second-largest global anti-corruption resolution,” the Amsterdam-based telecommunications giant VimpelCom and its subsidiary agreed to pay $795 million for bribing a close relative of Uzbekistan’s strongman Islam Karimov.
Nearly three years ago, Swedish investigative journalists reported that international telecommunications companies funneled $300 million to Uzbekistan’s first daughter, Gulnara Karimova.
That is precisely the amount of money that federal prosecutors moved to seize last June from Russian and Dutch telecoms that allegedly paid bribes to “the close relative of the president of Uzbekistan.”
New York prosecutors still refused to name that relative on Thursday, despite reports of Karimova’s house arrest in her country.
Their federal forfeiture complaint previously revealed that “at least two international telecommunications companies, Mobile Telesystems OJSC (MTS) and VimpelCom LTD, made more than $500 million in corrupt payments to shell companies beneficially owned” by the unnamed Uzbek official between 2004 and 2011.
“The corruption proceeds were laundered in a complicated series of transactions, including the purchase of investment portfolios and assets in Ireland, Luxembourg, and Belgium,” the complaint states.
The case reached the jurisdiction of New York prosecutors via money transfers through Bank of New York Mellon and First Global Investments accounts here.
On Wednesday, VimpelCom announced plans for “prospective settlements” with the U.S. Securities and Exchange Commission, Department of Justice and the Dutch prosecution service in their final quarterly report for 2015.
Under the settlement, VimpelCom and “certain subsidiaries would, among other things, acknowledge certain violations of the U.S. Foreign Corrupt Practices Act [FCPA] and relevant Dutch laws and pay fines and disgorgements” plus financial penalties, the company’s financial report revealed.
On Thursday, lawyers for VimpelCom and its Uzbek subsidiary Unitel LLC came to court for the first guilty pleas of what prosecutors call a “coordinated global resolution.”
In accepting the resolution, U.S. District Judge Edgardo Ramos remarked that the scale of the FCPA conspiracy was literally “off the charts” in terms of the federal sentencing guidelines.
The penalty, stemming from at least $114 million in bribes, is split between the Department of Justice, the SEC and Dutch regulators.
A corporate monitor will also oversee VimpelCom for at least three years under the agreement.
Justice Department lawyer Nicola Mrazek told the court that investigations into individuals affiliated with the case remain ongoing.
VimpelCom’s president Jo Lunder was arrested in Norway on Nov. 5, hours before shareholders sued the company in New York.
Meanwhile, Uzbekistan’s first daughter Karimova remains under house arrest, the New York Times reported earlier this week.
The case casts future attention to the abysmal record of corruption in Uzbekistan, an oil-rich U.S. military ally that borders Afghanistan.
Transparency International, a non-governmental organization based in Germany, ranked Uzbekistan toward the bottom of its annual list – 153rd out of 168 countries ranked – measuring outside perceptions of corruption.
The former Soviet republic consistently placed among the worst throughout the 20-year tenure of autocrat Islam Karimov, who first rose to power four years after Uzbekistan became independent in 1991.
Since that time, news outlets from Foreign Policy to Parade have ranked him among the world’s worst dictators for torturing scores of political prisoners and massacring hundreds of peaceful demonstrators.
His daughter is no more loved internationally or within her country.
Leaked U.S. cables published in WikiLeaks show that a former ambassador called Karimova “something of a robber baron” and the “single most hated person in the country.”
In between stints as a United Nations representative, ambassador and politician, Karimova tried to burnish her reputation as a pop star with the stage name Googoosha, but she failed to endear herself to the Uzbek public in her bid to become her father’s successor, according to the cable.
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