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In Connection With MTS Enforcement Action, DOJ Also Announces Individual FCPA Criminal Charges As Well As Money Laundering Charges Against Alleged “Foreign Official”

Karimova

In connection with the recent MTS Foreign Corrupt Practices Act enforcement action (see here for the prior post), the DOJ also announced FCPA and related criminal charges against Bekhzod Akhmedov (a citizen of Uzbekistan and former executive of an MTS entity) as well as money laundering charges against Gulnara Karimova (pictured – the former Uzbek official at the center of the telecom bribery scheme who allegedly had influence over the Uzbek governmental body that regulated the telecom industry).

This criminal indictment describes Akhmedov as a General Director of Uzdunrobita, an indirect subsidiary of MTS, from 2002 to 2012 who directly reported to MTS executives and acted on behalf of MTS. Karimovoa is described as an “Uzbek government official and the daughter of the-then President of Uzbekistan.”

According to the indictment:

“[Between 2001 and 2012 Karimova and Akhmedov] engaged in an extensive corrupt bribery scheme in which Karimova demanded, and Akhmedov and his co-conspirators agreed to pay, hundreds of millions of dollars in bribes to Karimova on behalf of three global telecommunications companies seeking to obtain and retain business in the Republic of Uzebekistan, in violation of the Foreign Corrupt Practices Act and other foreign bribery laws. Akhmedov, acting as both an executive of one of the telecommunications companies and as a personal representative of Karimova, solicited and facilitated the corrupt bribe payments from the three telecommunications companies and their subsidiaries to shell companies controlled by Karimova, who at the time was an Uzbek government official. In exchange for the bribes, Karimova corruptly used her influence over the Uzbek government to ensure that the three telecommunications companies and their subsidiaries acquired telecommunications licenses, which, under Uzbek law, could not be purchased or transferred by private entities, and also to allow the telecommunications companies to enter, and continue to operate in, the telecommunications market in Uzbekistan. In total, Akhmedov and others conspired to make approximately $866 million in corrupt bribe payments to Karimova. In furtherance of the corrupt bribery scheme, Akhmedov and Karimova conspired with others to launder the bribe funds to, from, and through bank accounts in the United States, in order to promote the ongoing bribery scheme and conceal the proceeds of that scheme.”

In terms of jurisdictional allegations, the indictment alleges that various payments in connection with the bribery scheme occurred “through transactions into and out of correspondent bank accounts at financial institutions in New York, New York” and that certain co-conspirators took action in the U.S. For instance, the indictment alleges that in 2007 a “Telia employee spoke to an agent of a U.S. based advisory firm about the agents’s $3 million fee for facilitating the partnership with Karimova” and that “while in the territory of the United States, the Telia employee sent an e-mail to that agent requesting that the agent’s original invoices for the work facilitating the partnership be mailed by the agent to the Telia employee.”

As highlighted in this post, the U.S. Supreme Court recently questioned whether dollar-denominated transactions or other financial transactions in the U.S. are sufficient to assert jurisdiction over foreign actors in relation to certain charges.

Based on the above allegations, Akhmedov was charged with one count of conspiracy to violate the FCPA, two counts of violating the FCPA, and one count of conspiracy to commit money laundering. Karimova was charged  with one count of conspiracy to commit money laundering.

In the DOJ’s release, Assistant Attorney General Brian Benczkowski stated:

“Gulnara Karimova stands accused of exploiting her official position to solicit and accept more than $865 million in bribes from three publicly traded telecom companies, and then laundering those bribes through the U.S. financial system. The indictment and corporate resolution announced today, together with two prior corporate resolutions involving bribes allegedly paid to Karimova, demonstrate the Department’s comprehensive approach to foreign corruption: we will aggressively pursue both corrupt foreign officials and the companies and individuals who bribe them in order to gain unfair business advantages, and we will do everything we can to keep the proceeds of that corruption out of the U.S. financial system.”

The DOJ’s release further states:

“In related actions, the Department 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 corrupt payments to Karimova.”

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