VimpelCom Ltd., a Bermuda corporation headquartered in Moscow, Russia until 2010, then Amsterdam, the Netherlands afterward, was a global provider of telecommunications services. VimpelCom operated through subsidiaries and affiliates in Europe, Asia, and Africa. VimpelCom managed its operations through separate regional business units, which were each overseen by an officer of VimpelCom and member of the senior management group. VimpelCom issued a class of publicly traded securities registered with the SEC, which were traded on the New York Stock Exchange prior to September 2013 and traded on the NASDAQ thereafter.
Unitel LLC was VimpelCom's wholly-owned subsidiary that provided mobile telecommunications services in Uzbekistan. Unitel was formed in Uzbekistan, and it was purchased by VimpelCom in 2006, along with Bakrie Uzbekistan Telecom ("Buztel"), when VimpelCom wanted to enter the Uzbek telecommunications market. Pre-acquisition Unitel and Buztel were merged into a single wholly-owned subsidiary called Unitel.
From about 2005 to 2012, VimpelCom and Unitel conspired with others to provide over $114 million in bribes to an Uzbek government official, who was a close relative of another high-ranking Uzbek government official, in exchange for the official's influence over decisions made by the Uzbek Agency for Communications and Information ("UzACI") concerning Uzbekistan's telecommunications market. VimpelCom and Unitel understood that they had to regularly pay the Uzbek official millions of dollars in order to continue to obtain necessary UzACI approvals and be allowed to obtain and retain Uzbek telecommunications business.
On February 18, 2016, the DOJ filed a two count Information in the Southern District of New York against VimpelCom alleging (1) conspiracy to violate the anti-bribery and books & records provisions of the FCPA and (2) violations of the internal controls provisions of the FCPA. On the same date, the DOJ filed a separate 1 count Information in the Southern District of New York against Unitel alleging conspiracy to violate the anti-bribery provisions of the FCPA.
On February 22, 2016, the DOJ and VimpelCom entered into a Deferred Prosecution Agreement with a term of three years, and Unitel agreed to plead guilty to the charge against it. Under the terms of the DPA, VimpelCom accepted responsibility for the misconduct and agreed to pay a total criminal fine of over $460 million and hire an independent monitor for three years to report to the DOJ on the company's implementation of enhanced anti-corruption compliance policies and procedures. The total fine imposed by the DOJ represented an approximately 45% downward departure from the bottom of the sentencing guidelines range, which the DOJ deems appropriate because of VimpelCom's cooperation and prompt acknowledgment of wrongdoing. Of the total fine, $40 million was a forfeiture payment to the DOJ, slightly more than $190 million was to be paid in connection with a guilty plea by Unitel, and slightly more than $230 million would be offset by the criminal penalties VimpelCom would pay to the Organization of the Public Prosecution Service of the Netherlands. In light of the fine agreed to in the DPA, the DOJ imposed no fine against Unitel directly.
The DOJ separately filed two civil forfeiture actions against the Swiss bank account of the foreign official involved in the scheme.
In a separate action, VimpelCom entered into a consent agreement with the SEC. Under the terms of that agreement, VimpelCom was enjoined from future violations of the FCPA and agreed to pay disgorgement of $375 million and to hire an independent monitor for a term of three years to report on the implementation of the company's anti-corruption compliance polices and procedures. Part of the $375 million disgorgement was deemed to be satisfied by the forfeiture payment of $167.5 million to the Public Prosecutor of the Netherlands and the forfeiture payment of $40 million to the DOJ.
