DOJ Catch of the Week -- Telia

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “Catch of the Week” goes to Stockholm-based Telia Company AB and its Uzbek subsidiary Coscom LLC.  Yesterday, the international telecommunications company agreed to pay $965 million to resolve charges of violating the Foreign Corrupt Practices Act (FCPA) arising out of a scheme to pay bribes in Uzbekistan.  According to the government, it is “one of the largest criminal corporate bribery and corruption resolutions ever.”  See DOJ Press Release.

According to company admissions, Telia and Coscom paid roughly $331 million in bribes to an Uzbek government official, who was a close relative of a high-ranking government official with influence over the Uzbek agency that regulated the telecom industry.  The bribes were paid so Telia could enter the Uzbek market and Coscom could gain valuable telecom assets and continue operating in Uzbekistan.  The bribes were concealed through a shell company beneficially owned by the foreign official.

The settlement follows the February 2016 FCPA settlement by Amsterdam-based telecommunications provider VimpelCom, also for bribery in Uzbekistan.  The Securities and Exchange Commission, the Public Prosecution Service of the Netherlands and the Swedish Prosecution Authority all announced separate settlements with Telia.  The combined total amount of criminal and regulatory penalties to the U.S., Dutch, and Swedish authorities is $965,773,949.

In announcing the settlement, the government stressed its commitment to a “robust” enforcement of the foreign bribery laws.  DOJ Criminal Chief Kenneth Blanco did not mince words in this regard:

This resolution underscores the Department’s continued and unwavering commitment to robust FCPA and white-collar criminal enforcement, said DOJ Criminal Chief Kenneth Blanco.  . . .  Foreign and domestic companies that pay bribes put honest companies at a disadvantage and distort the free and fair market and the rule of law.  Today’s resolution reflects the significant efforts of law enforcement . . . to bring such companies to justice, and to maintain a competitive and level playing field for companies to do business, create jobs and thrive.

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