According to the DOJ, between 2006 and 2012 VimpelCom and Unitel conspired to pay an Uzbek government official over $114 million in exchange for (i) access to the Uzbek telecommunications market, (ii) the acquisition of important Uzbek licenses and frequencies, and (iii) general support to allow the company to operate in the Uzbek market. The company allegedly concealed bribes by making payments to a shell company (“Shell Company”) that VimpleCom knew to be beneficially owned by the official. As explained by the DOJ, the alleged schemed occurred in various stages described below.
First, beginning in 2006, VimpelCom allegedly paid $60 million to acquire a local Uzbek company which VimpelCom knew was partially owned by Shell Company, and therefore, indirectly owned by the foreign official. VimpelCom management knew that the acquisition of this local Uzbek company would facilitate VimpelCom’s entry into the Uzbek market.
Second, in 2006, VimpelCom and Unitel entered into an agreement that allowed Shell Company to obtain a minority interest in Unitel which VimpelCom would later repurchase for a guaranteed profit of at least $37.5 million. The purpose of the transaction was to allegedly pay a bribe to the foreign official in exchange for permitting VimpelCom and Unitel to conduct operations in Uzbekistan.
Third, in 2007, VimpelCom management allegedly caused a $25 million bribe to be paid to the foreign official via Shell Company to enable VimpleCom to obtain valuable 3G frequencies in Uzbekistan that the Shell Company previously owned. Specifically, VimpelCom bribed the foreign official to ensure that the Shell Company waived its right to certain 3G frequencies and that the Uzbek telecommunications authorities reissued the frequencies to Unitel.
Fourth, VimpelCom allegedly entered into fake consulting contracts with Shell Company for $2 million in 2008 and $30 million in 2011. According to the DOJ, in both cases, Shell Company did no real work to justify the consulting fees. Instead, the DOJ claimed that the true purpose was to provide the foreign official with approximately $32 million in exchange for additional valuable telecommunications assets and to allow Unitel to continue to operate in Uzbekistan.
Fifth, VimpelCom allegedly conducted complex sham “reseller” transactions to transfer an additional $20 million in bribes to the government official through Shell Company.
According to the DOJ, throughout the relevant time period VimpelCom failed to implement a system of adequate internal controls and misreported the $114 million in bribe payments on its books and records as legitimate transactions.
