Last week, the Justice Department announced the resolution of a massive FCPA enforcement action against the Dutch company VimpelCom Ltd.—one of the world’s largest integrated telecommunications providers—and its Uzbeki subsidiary, Unitel. As reported in the Justice Department press release, the total fines and penalties paid by VimpelCom were $795,326,398.40, consisting of a total criminal penalty of $230,163,199.20 to the U.S., with an additional $375 million in disgorgement of profits and prejudgment interest paid to the SEC and a criminal penalty paid to the Public Prosecution Service of the Netherlands (PPS) of $230,163,199.20.
The overall bribery scheme involved VimpelCom purchasing the Uzbeki company Unitel as an entrée into the Uzbekistan market. Contemporaneously with the acquisition of Unitel, which did have a legitimate business purpose, VimpelCom acquired another Uzbeki entity Barkie Uzbekistan Telecom (Butzel) which was at least partially owned by an Uzbeki government official who had control or or influence upon telecom regulation in the company. This foreign official hid their interest through a shell company which was known to VimpelCom. VimpelCom did not articulate a legitimate business reason for the Butzel deal.
