Enforcement Action

 

Docket or Case Number:    17-cr-00581

Court:    S.D. New York

Initiation Date:    09/21/2017  Information

Prosecuting Agency:    US Department of Justice

Name of Prosecuting Attorneys:   

  • Sandra L. Moser, Acting Chief, Fraud Section, Criminal Division
  • Joon H. Kim, Acting U.S. Attorney
  • Nicola J. Mrazek, Senior Litigation Counsel, FCPA Unit, Fraud Section, Criminal Division
  • Ephraim Wernick, Trial Attorney, Fraud Section, Criminal Division
  • Edward Imperatore, Assistant United States Attorney
  • Joan M. Loughnane, Deputy U.S. Attorney

Assisting Agencies:    Internal Revenue Service , U.S. Department of Homeland Security , Dutch Public Prosecution Service (Openbaar Ministrie)

Type of Action:    DOJ Criminal Proceeding

Origin of the Proceeding:    N/A

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

Telia Company AB was a corporation incorporated in Sweden, and it provided telecommunications services and operated through subsidiaries and affiliates in Europe and Asia. Prior to September 5, 2007, when its application to deregister its shares with the SEC became effective, Telia issued and maintained securities registered with the SEC and traded on the NASDAQ prior to 2005.

Coscom LLC was a majority-owned subsidiary of Telia. The company was part of Telia's Eurasia business unit and provided telecommunications services in Uzbekistan.

Between approximately 2007 and 20120, Telia and its subsidiaries, including Coscom, paid more than $331 million in bribes so that Telia could enter the Uzbek telecommunications market, gain valuable telecom assets, and continue operating in Uzbekistan. The bribes were paid to an Uzbek government official who was a high-ranking official in the Uzbek government and who exercised influence over Uzbek telecommunications industry regulators. The government official operated through a number of shell companies, including Takilant Ltd., which was also implicated in the FCPA enforcement actions against VimpelCom. In separate court filings two years ago, the DOJ identified Gulnara Karimova, the eldest daughter of the late Uzbek President Islam Karimov, as the government official.

On September 21, 2017, the DOJ filed one count informations against both Telia and Coscom in the Southern District of New York alleging conspiracy to violate the anti-bribery provisions of the FCPA. On the same date, Telia entered into a Deferred Prosecution Agreement with the DOJ, and Coscom pled guilty to conspiracy charge. Under the agreements, Telia agreed to pay total monetary penalties of $548,603,972 under the sentencing guidelines. Of that total, a criminal fine of $274,603,972 would be paid to the U.S., and $274 million of the total fine could be offset by criminal penalties to be paid to the Dutch authorities. Furthermore, of the amount earmarked for the U.S., Telia could further offset $40 million and a criminal fine of $500,000 it would be paying on behalf of Coscom in its plea deal. The company also agreed to continune to implement its enhanced compliance policies and procedures.

In a related administrative proceeding on September 21, 2017, the SEC ordered Telia to cease and desist violating the anti-bribery and internal controls provisions of the FCPA. The SEC further ordered Telia to disgorge $457 million, which represented profites Telia gained through the bribery scheme. Of the $457 million, $208.5 million would be paid directly to the SEC, and the company could offset $40 million in forfeiture payments to the DOJ and $208.5 million in payments to the Swedish and Dutch authorities. The cease and desist order was part of a global resolution between Telia and the SEC, DOJ, Dutch and Swedish authorities. In all, Telia agreed to pay combined sanctions of more than $965 million, with at least $483 million going to US authorities, to resolve the matter.

Press reports also indicate that at least three former Telia executives have been charged in Sweden in connection with this matter.

Country(ies) involved:    Uzbekistan

Sanction to Bribe Ratio:    $274,604,372 / $331,200,000 = 82.91 %

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    $274,604,372 / $457,000,000 = 60.09 %

Number of Related Enforcement Actions (Including This Enforcement Action):    2

Country(ies) involved:    Uzbekistan

Total $ Bribery Payments:    $331,200,000

Total $ Revenue Generated from Bribery:    $2,500,000,000

Total $ Profit Earned or Expenses Avoided from Bribery:    $457,000,000

Total $ Monetary Sanctions:    $483,104,372

Sanction to Bribe Ratio:    $483,104,372 / $331,200,000 = (145.86 %)

Sanction to Revenue Ratio:    $483,104,372 / $2,500,000,000 = (19.32 %)

Sanction to Profit Ratio:    $483,104,372 / $457,000,000 = (105.71 %)

Name:    Telia Company AB

Place of Incorporation:    Sweden

HQ Country(ies):    Sweden

Entity Type:    Public Company

FCPA Claims:    Anti-Bribery, Conspiracy (18 U.S.C. 371)

Related Claims:    Criminal Forfeiture (28 U.S.C. § 2461; 18 U.S.C. § 981) ; Criminal Forfeiture (21 U.S.C. § 853)

Statutory Basis for FCPA Jurisdiction:    Conspirator ; Issuer


Name:    COSCOM LLC

Place of Incorporation:    Uzbekistan

HQ Country(ies):    Uzbekistan

Entity Type:    Subsidiary

FCPA Claims:    Anti-Bribery, Conspiracy (18 U.S.C. 371)

Related Claims:    Criminal Forfeiture (28 U.S.C. § 2461; 18 U.S.C. § 981) ; Criminal Forfeiture (21 U.S.C. § 853)

Statutory Basis for FCPA Jurisdiction:    Conspirator

Period of Bribery:   2007 - 2012

Total Bribery Payments:    $331,200,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $457,000,000

Country(ies) involved:    Uzbekistan

Officials Potentially Influenced (Name; Title; Organization): 

  • Gulnara Karimova; High-Ranking Official; Uzbek government

Defendant-Related Entities Involved in the Misconduct:    COSCOM LLC - Subsidiary

Third-Party Intermediary:   

  • Company owned by the foreign official , Shell Company

Type of Bribe:   Money, Financial Instrument/Share/Stock/Other Security

Cash, Wire or Check:    No Available

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Payments in Uzbekistan

Period of Bribery:   2007 – 2012

Total Bribery Payments:    $331,200,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $457,000,000

Country(ies) involved:    Uzbekistan

Officials Potentially Influenced (Name; Title; Organization):  

  • Gulnara Karimova; High-Ranking Official; Uzbek government;

Defendant-Related Entities Involved in the Misconduct:    COSCOM LLC - Subsidiary

Third Party Intermediary:    Company owned by the foreign official - Shell Company

Type of Bribe:   Money, Financial Instrument/Share/Stock/Other Security

Cash, Wire or Check:    No Available

Purpose of Bribe:    Obtain/retain business

Misconduct by Subsidiary?  Yes


Parent(s):   Telia Company AB; TeliaSonera UTA Holding B.V.; TeliaSonera Uzbek Telecom Holding B.V.

Subsidiary:  COSCOM LLC

  • Percentage of Ownership:   
  • Direct or Indirect Ownership:    Indirect
  • Parent Had Knowledge of Sub’s Bribery?:    No
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    Yes

Subsidiary:  TeliaSonera UTA Holding B.V.

  • Percentage of Ownership:    100.00 %
  • Direct or Indirect Ownership:    Indirect
  • Parent Had Knowledge of Sub’s Bribery?:    No
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    No

Subsidiary:  TeliaSonera Uzbek Telecom Holding B.V.

  • Percentage of Ownership:   
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    No
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    No

Subsidiary:  COSCOM LLC

  • Percentage of Ownership:   
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    No
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    No

Subsidiary:  COSCOM LLC

  • Percentage of Ownership:   
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    No
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    No

M&A Negotiated or Completed During Misconduct, Investigation, or Resolution?     No

N/A

Mitigating Factors Referenced by the Government (Company Defendants):

Defendant Self-Report Cooperation Voluntary Remedial Measures Misconduct Limited to Low Level Individuals Other factors
COSCOM LLC      
Telia Company AB      

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
COSCOM LLC    
Telia Company AB    

Total Monetary Sanctions for the Action:    $274,604,372

Case Status:    Resolved


Disposition:    Deferred Prosecution Agreement

Date of Disposition:    09/21/2017

Telia Company AB

—  Total Monetary Sanctions for Defendant:    $274,603,972

—  Organizational Probation:    None

—  Compliance Obligation:    Yes

—  Reporting Obligation:    No reporting

—  Admission of Guilt/Acceptance of Responsibility:    Yes


Disposition:    Plea Agreement

Date of Disposition:    09/21/2017

COSCOM LLC

—  Total Monetary Sanctions for Defendant:    $40,500,400

—  Organizational Probation:    None

—  Compliance Obligation:    No

—  Reporting Obligation:    No Applicable

—  Admission of Guilt/Acceptance of Responsibility:    Yes

    Note: This sanction may have been imposed jointly and severally on multiple defendants, or it may resolve claims against more than one defendant in this proceeding or related proceedings. You should review the case summaries and resolution documents for all related cases to better understand how sanctions were levied against the defendants.

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