Ex-Uzbek Leader’s Daughter Charged in $865 Million Bribery Scheme

(Bloomberg) -- The daughter of Uzbekistan’s former president and a former official of a Russian telecommunications company were indicted in what prosecutors called one of the largest bribery schemes ever prosecuted under the Foreign Corrupt Practices Act.

Federal prosecutors in New York announced criminal charges against Gulnara Karimova, 46, and Bekhzod Akhmedov, 44, alleging a decade-long operation in which $865 million in bribes were paid to Karimova, who is a former Uzbek official and the daughter of Islam Karimov, leader of Uzbekistan from 1989 until his death in 2016.

Prosecutors allege that Akhmedov, the former general director of Uzdunrobita, a unit of Moscow-based Mobile TeleSystems PJSC, helped orchestrate the bribery scheme on behalf of MTS, the biggest mobile-telecom company in Russia, Veon Ltd. and Telia Co. AB. He is charged with two counts of violating the Foreign Corrupt Practices Act, a major U.S. anti-corruption law, one count of conspiracy to violate the FCPA and one count of money-laundering conspiracy.

Karimova, a former pop singer and diplomat, is charged with a single count of money-laundering conspiracy.

According to prosecutors, the companies paid the bribes to do business in the Central Asian nation, a former Soviet republic. The two defendants conspired to launder the payments using U.S. bank accounts, prosecutors alleged. Both are citizens of Uzbekistan and are not in U.S. custody.

Akhmedov is currently living in Russia, according to a statement Thursday by U.S. Attorney Geoffrey Berman in Manhattan. Karimova, who was serving a five-year sentence of house arrest for fraud and money laundering, was jailed in Uzbekistan Tuesday for allegedly violating the terms of the sentence, according to a report by BBC News.

The U.S. doesn’t have an extradition treaty with Russia or Uzbekistan.

MTS has agreed to pay $850 million in a settlement with the Justice Department and the Securities and Exchange Commission, according to a statement. Veon, based in Amsterdam, and Sweden’s Telia -- which had securities registered under the U.S. Securities and Exchange Act, according to the indictment -- have settled similar U.S. allegations, agreeing to pay fines of $795 million and $965 million respectively.

The settlements grew out of a wider investigation by the Justice Department and other authorities into hundreds of millions of dollars allegedly funneled to Karimova. The investigation has produced more than $2.6 billion in fines and disgorgement worldwide, about half of which has been paid to the U.S., according to Berman’s statement.

The case is U.S. v. Karimova, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Jeffrey, Steve Stroth

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