Bribery Investigation Settled for Almost $1 Billion
The United States has concluded its third-largest FCPA enforcement action with a settlement of $965 million in total penalties (including Dutch and Swedish penalties) by Telia Company AB and its subsidiary, Coscom. The Acting U.S. Attorney of the Southern District of New York called it “one of the largest criminal corporate bribery and corruption resolutions ever.”
This enforcement action involved allegations of bribery by Telia paid to the daughter of a government official through a shell company in order to gain entry into the Uzbek telecommunications market. Telecommunications provider VimpelCom previously entered into a global resolution of allegations that it also bribed the government official. In total, the investigation of this corruption has now resulted in over $1.76 billion in fines and disgorgement worldwide.
The Telia investigation resulted in a criminal fine by the DOJ of more than $508 million and SEC disgorgement of $457 million. Telia will get credit in the amount to the SEC for $40 million paid to the DOJ and up to $208.5 million paid to the Telia entered into a deferred prosecution agreement in response to charges of conspiracy to violate the FCPA. It must implement internal controls and cooperate fully with the Justice Department investigation as part of the terms of the deferred prosecution.
Telia received a 25 percent reduction from the bottom of the U.S. Sentencing Guideline fine range for cooperation with the DOJ and significant remedial measures undertaken. Telia did not receive additional credit because it did not voluntarily self-disclose the misconduct to the United States.
The SEC Order outlines several U.S. connections to establish jurisdiction under the FCPA. Although Telia is a corporation organized in Sweden, Telia was an issuer with shares traded on the NASDAQ from 2002 until September 5, 2007. Communications with the Government Official were conducted using U.S. based email servers, and transactions occurred in U.S. dollars.
Fiscal year 2017 ended for the United States on September 30, 2017, so that will certainly pad the statistics for FCPA enforcement this year despite the slow start during President Trump’s administration.
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