UNITED STATES OF AMERICA– MARCH 2022

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Telecommunications Corruption Scandal

There have been several US proceedings taken out against Gulnara Karimova, her associates, and their assets. These cases centre around the 'telecommunications corruption scandal'. This scandal centred on a major criminal racket run by Gulnara Karimova wherein she and her associates solicited almost one billion USD in bribes in return for granting market access to foreign companies in Uzbekistan under favourable conditions.

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In the US, criminal proceedings were taken against three multinational corporations: VimpelCom, a Dutch based telecommunications company, Swedish telecommunications firm TeliaSonera AB (or Telia Company AB), and MTS (Mobile TeleSystems) a major Russian telecommunications provider. There were also two proceedings against assets In Rem [against an action, or a thing]. Finally, Karimova and her accomplice Bekhzod Ahkmedov, were also indicted by the United States of America on 7 March 2019.

VimpelCom

There were four separate proceedings taken out against VimpelCom between 2015-16. Notably, the United States of America v. VimpelCom (case no. 16-CRM-137), as well as proceedings taken out against their subsidiary United States of America V. Unitel LLC (case no. 16-CRM-137), allege that US $114 million in bribes were paid to Karimova through various transactions taking place between 2005 and 2012. In the plea agreement signed between the United States of America and Unitel LLC (subsidiary of VimpelCom Ltd.) VimpelCom agrees to pay a total criminal penalty of US $230,326,398.40 to the United States, including US $40 million in criminal forfeiture. A press release from the US Department of Justice also states that VimpelCom has agreed to pay US $167.5 million to the Security Exchange Commission, US $230.1 million to the US Department of Justice, and US $397.5 million to Dutch regulators.

Telia Company AB (TeliaSonera)

Telia Company AB (more widely known as TeliaSonera), a Swedish telecommunications company, was accused, in information filed with the US District Court (case no. 1:17-cr-00581-GBD, 21 September 2017) of paying US $331 million in corrupt payments to a "Foreign Official" [Karimova]. In exchange, the Foreign Official agreed to help expand Coscom LLC’s [a subsidiary of TeliaSonera] share of Uzbekistan’s telecommunications market through favourable treatment. In a Deferred Prosecution Agreement signed 21 September 2017, TeliaSonera agrees to pay penalties totalling US $548,603,972 including a criminal fine of US $500,000, and US $40 million in criminal forfeiture. Of that total, a criminal fine of approx. US $274 million  is paid to the USA, and approx. US $274 million is paid to the Dutch authorities. 

MTS (Mobile TeleSystems)

On 6 March 2019, information documents (case no. 1:19-cr-00167-JPO), were filed with the US District Court (Southern District of New York) by the Department of Justice against Mobile TeleSystems PJSC (MTS) and Kolorit Dizayn Ink LLC accusing the companies of entering into a corrupt bribery scheme totalling at least US $420,825,848, which was paid to a “Foreign Official” [Karimova] in exchange for market access to the telecommunications sector in Uzbekistan. MTS conducted their operations in Uzbekistan through subsidiary Uzdunrobita LLC, and also acquired Kolorit Dizayn Ink LLC in 2009 for an inflated price of US $39.6 million, for which Karimova was the ultimate beneficiary. In a Deferred Prosecution Agreement, signed on 22 February 2019 (United States v. Mobile TeleSystems PJSC), MTS agrees to pay US $850 million in penalties as a punishment for the large-scale bribery of Karimova and her associates, including a US $500,000 criminal fine, and US $40 million in criminal forfeiture on behalf of Kolorit.

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The US $120,000,000 in assets that were forfeited by VimpelCom, TeliaSonera and MTS went to the US Department of Justice's Asset Forfeiture Fund where they fund the activities of the Asset Forfeiture Program, as well as the investigation of terrorist activities and a "diverse array of [other] joint law enforcement operations".

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Laundering the proceeds

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The proceeds of the telecommunications scandal are known to have been laundered and then stored in two principal financial warehouses. They are detailed in two asset forfeiture actions “In Rem” that were taken out against the funds and properties involved in “an international conspiracy to launder corrupt payments made to government official A [Karimova]”.

United States of America v. Any and all assets held in account numbers 102162418400, 102162418260, and 102162419780 at Bank of New York Mellon SA/NV, Brussels, Belgium, on behalf of First Global Investments SPC Limiteds AAA Rate et al.

This action was filed by the United States of America with the United States, Southern District Court of New York (case no. 1:15-cv-05063) on 29 June 2015. This action was brought against funds and properties held by First Global Investments SPC Ltd. (Cayman Islands) in accounts in Belgium, Ireland and Luxembourg. First Global Investments was an investment portfolio through which was Karimova’s corrupt proceeds were laundered, which she had gained using a complicated web of shell companies, including Takilant Ltd., Swisdorn Ltd. and Expoline Ltd.

On 26 January 2016, the Republic of Uzbekistan submitted a verified claim, in light of a ruling by the Tashkent Regional Criminal Court, stating that they are the rightful owners of the assets and property stipulated in the complaint. Since then, as of 5 October 2021, as stated in the Joint Status Report of the USA and the Republic of Uzbekistan, the US “has arrested approximately $5.83 million USD … The remaining assets at issue in the above-captioned actions are currently frozen overseas. Final disposition of the overseas assets, however, is complicated by the fact that, in some instances, they are subject to separate foreign proceedings”.

High-level discussions are ongoing.

United States v. All Funds Held in Account Number CH1408760000050335300 at Lombard Odier Darier Hentsch & Cie Bank, Switzerland, on Behalf of Takilant Limited, and Any Property Traceable Thereto (1:16-cv-01257)

The action was filed by the United States of America with the United States Southern District Court of New York (case no. 1:15-cv-05063) on 18 February 2016. This action was brought against funds held in accounts in Lombard Odier (Geneva) and Union Bancaire Privee (Geneva) which were owned by Takiland Ltd. (known to be owned and controlled by Karimova) and Tozian Ltd. (a British Virgin Islands subsidiary of Takilant Ltd.) On 27 April 2016, the Republic of Uzbekistan filed another verified claim. Since then, as of 5 October 2021, as stated in the Joint Status Report of the USA and the Republic of Uzbekistan, the US “has arrested approximately $5.83 million USD … The remaining assets at issue in the above-captioned actions are currently frozen overseas. Final disposition of the overseas assets, however, is complicated by the fact that, in some instances, they are subject to separate foreign proceedings”. High-level discussions are seemingly ongoing.

Indictment of Karimova and Akhmedov

In 2017, President Donald Trump issued a presidential document blocking the property of Karimova. He states: “I, DONALD J. TRUMP, President of the United States of America, find that the prevalence and severity of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, such as those committed or directed by persons listed in the Annex to this order, have reached such scope and gravity that they threaten the stability of international political and economic systems”.

Karimova and Bekhzod Ahkmedov were also indicted on 7 March 2019 for conspiracy to commit money laundering from the three telecommunications companies (case no. 1:19-cr-00165-KMW). A sealed document was filed with the court on 20 June 2019. There have been no further updates.