08 Mar 2019
The United States on Thursday levied an $850 million monetary penalty against a Russian telecommunications company and its Uzbek subsidiary, marking the largest-ever settlement of a U.S. anti-foreign bribery law.
As part of a deferred prosecution agreement (DPA) with the U.S. Justice Department, Moscow-based Mobile Telesystems PJSC (MTS) consented to the outlay to settle allegations that it had funneled more than $420 million to Gulnara Karimova, the daughter of former Uzbek President Islam Karimov, in order to win lucrative business opportunities.
MTS, Russia’s largest mobile operator, simultaneously settled charges with the U.S. Securities and Exchange Commission, which like the Justice Department accused the company of violating the Foreign Corrupt Practices Act (FCPA). The 1977 law prohibits entities that do business in the United States from paying bribes abroad.
The Justice Department also indicted Bekhzod Akhmedov, the former CEO of MTS subsidiary Uzdunrobita, for his part in arranging the payments.
Under the DPA, MTS must work with an independent compliance monitor for three years, bolster its internal controls and fully cooperate with U.S. federal prosecutors currently investigating Karimova and Akhmedov, both of whom face charges of conspiracy to commit money laundering related to the scheme.
“This is the third installment in a trilogy of cases arising from an almost $1 billion bribery scheme that reached the highest echelons of the Uzbekistan government,” said U.S. Attorney Geoffrey Berman, in a statement. “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.”
Advance your CPD minutes for reading this article, by signing up and using the CPD WalletFREE CPD Wallet