Foreign Corrupt Practices Act: Enforcement Action Dataset

Initiation Date: 12/29/2011

Prosecuting Agency: U.S. Department of Justice

Type of Action: DOJ Criminal Proceeding

Docket or Case Number: 11-cr-00597

Court: E.D. Virginia

Name of Prosecuting Attorneys:

Denis J. McInerney, Chief, Fraud Section, Criminal Division
Liam B. Brennan, Trial Attorney, Fraud Section, Criminal Division
Neil H. MacBride, United States Attorney
Robert W. Wiechering, Assistant United States Attorney
Charles F. Connolly, Assistant United States Attorney

US Assisting Agencies:

U.S. Securities and Exchange Commission
Federal Bureau of Investigation
Department of Justice - Criminal Division's Office of International Affairs

Foreign Enforcement Action/Investigation: Unknown

Foreign Assistance:

German Law Enforcement Agency (DE)
Swiss Law Enforcement Agency (CH)
Greek Law Enforcement Agency (GR)
Hungarian Law Enforcement Agency (HU)
Macedonian Government Agency (MK)

Origin of the Proceeding: Voluntary disclosure

Whistleblower: Unknown

Case Status: Resolved

Summary

Magyar Telekom, Plc. was the largest telecommunications company in Hungary. Magyar Telekom operated subsidiaries in Macedonia, Montenegro, and other countries. Magyar Telekom's securities were publicly traded through American Depositary Receipts ("ADRs") listed on the New York Stock Exchange ("NYSE").

In 2005 and 2006, senior executives then employed at Magyar Telekom, including its Chairman and Chief Executive Officer, authorized and executed a plan to bribe government officials in the Republic of Macedonia to delay or prevent the introduction of a new competitor to Magyar Telekom's subsidiaries operating in Macedonia and to obtain certain regulatory benefits. In all, Magyar Telekom made payments of €4.875 million during 2005 and 2006.

In 2005, the same senior executives at Magyar Telekom executed a second corrupt scheme in which they authorized Magyar Telekom to make payments to government officials in the Republic of Montenegro to facilitate Magyar Telekom's acquisition on favorable terms of Telekom Crne Gore A.D. ("TCG"), which was the former state-owned public telecommunications services provider in Montenegro. In all, Magyar Telekom made payments of €7.35 million that were intended for Montenegran government officials.

On December 29, 2011, the DOJ filed a three count Information in the Eastern District of Virginia against Magyar Telekon alleging violations of the anti-bribery provisions of the FCPA and knowing violations of the books & records provisions of the FCPA. On the same date, Magyar Telekom entered into a two year Deferred Prosecution Agreement with the DOJ. Under the terms of the DPA, Magyar Telekom acknowledged and admitted responsibility for the conduct alleged in the Information and agreed to pay a $59.6 million penalty for its illegal activity, implement an enhanced compliance program, and submit annual reports to the DOJ regarding its efforts in implementing the enhanced compliance measures and remediating past problems.

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| Enforcement Action Dataset

Enforcement Action Dataset

Case Information

United States of America v. Magyar Telekom, Plc.

Case Information

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