VimpelCom FCPA resolution (2016)
- Resolution type
- DOJ deferred prosecution agreement (VimpelCom), guilty plea (Unitel LLC), SEC civil action in federal court, Dutch criminal resolution 1,2
- Agencies
- U.S. Department of Justice, U.S. Securities and Exchange Commission and the Dutch Public Prosecution Service (Openbaar Ministerie) 1,2
- Combined penalties (DOJ figure)
- US$795,326,398.40 in US and Dutch criminal and regulatory penalties 1
- DOJ criminal penalty
- US$230,326,398.40, including US$40 million in forfeiture 1
- SEC and Dutch amounts
- US$375 million in disgorgement and prejudgment interest divided between the SEC and the Dutch prosecutor, plus a US$230 million Dutch criminal penalty, per DOJ 1
- Statutes
- FCPA anti-bribery, books and records and internal controls provisions. SEC claims under Exchange Act sections 30A, 13(b)(2)(A) and 13(b)(2)(B) 1,2 3
- Admission
- DOJ: "According to the companies' admissions" 1. Unitel pleaded guilty 1. The SEC release does not state whether VimpelCom admitted or denied the SEC allegations 2
- Status
- Company statement of 31 October 2019: the DPA "has concluded" and DOJ moved to dismiss the deferred charges 4
What DOJ charged
DOJ filed a criminal information against VimpelCom charging conspiracy to violate the FCPA anti-bribery and books and records provisions, and a separate count of violating the FCPA internal controls provisions 1. VimpelCom resolved those charges through a deferred prosecution agreement 1. A deferred prosecution agreement is not a conviction. VEON, as VimpelCom was later named, said in 2019 that DOJ had moved to dismiss the deferred charges 4.
Unitel LLC, a wholly owned subsidiary in Uzbekistan, "pleaded guilty and was sentenced" on a one-count criminal information in the Southern District of New York 1. The count charged conspiracy to violate the FCPA anti-bribery provisions 1. The case was assigned to Judge Edgardo Ramos 1.
What the companies admitted
DOJ described the facts as "the companies' admissions" 1. According to DOJ, VimpelCom and Unitel executives and employees paid bribes to an Uzbek government official through a shell company that certain management knew was beneficially owned by that official 1. DOJ said the official was a close relative of a high-ranking Uzbek government official and had influence over the Uzbek body that regulated telecoms 1.
DOJ said the bribes totalled more than US$114 million between about 2006 and 2012 1. DOJ said VimpelCom falsified its books, recording payments as equity transactions, consulting and repudiation agreements and reseller transactions 1. DOJ said certain VimpelCom management withheld information from outside counsel conducting an FCPA review 1.
The SEC complaint alleged that VimpelCom "offered and paid bribes to an Uzbek government official" 2. The SEC said "At least $114 million in bribe payments were funneled through an entity affiliated with the Uzbek official" 2. The SEC release does not say whether VimpelCom admitted or denied these allegations 2.
Amounts and how they were split
DOJ and the SEC published the split in different ways. Both are shown below with their dates. Both releases give a combined figure of about US$795 million 1,2. DOJ gave "a total resolution amount of more than $835 million" before credits between agencies 1.
| Item | DOJ release (18 February 2016) | SEC release (18 February 2016) |
|---|---|---|
| Paid to DOJ | US$230,326,398.40 criminal penalty including US$40 million forfeiture 1 | US$230.1 million 2 |
| Paid to the SEC | Share of US$375 million disgorgement and prejudgment interest 1 | US$167.5 million 2 |
| Paid to Dutch authorities | US$230 million criminal penalty plus a share of the US$375 million 1 | US$397.5 million 2 |
| Combined | US$795,326,398.40 1 | More than US$795 million 2 |
Credit, monitor and forfeiture
DOJ said the criminal penalty reflects "a 45 percent reduction off of the bottom of the U.S. Sentencing" Guidelines fine range 1. DOJ said the companies did not get more credit as "the companies did not voluntarily self-disclose their misconduct to the department after an internal investigation" found it 1.
VimpelCom agreed to retain a compliance monitor for three years and to cooperate in the continuing investigation, including of individuals 1. The SEC said the monitor would serve for at least three years 2.
DOJ filed a civil forfeiture complaint on 18 February 2016 seeking more than US$550 million held in Swiss bank accounts 1. DOJ said an earlier complaint, filed on 29 June 2015, sought more than US$300 million in Belgian, Luxembourg and Irish accounts 1.
Status of the agreement
In a company statement of 31 October 2019, VEON, the company formerly called VimpelCom, said the DPA entered on 18 February 2016 "has concluded" 4. VEON said DOJ "filed a motion with the US District Court for the Southern District of New York to dismiss the charges" 4. VEON said this "marks the end of VEON's compliance monitorship" 4. This page has not found a court order ruling on that motion.
Common questions
Did VimpelCom plead guilty?
No. VimpelCom entered a deferred prosecution agreement. Its subsidiary Unitel LLC pleaded guilty to one count of conspiracy to violate the FCPA anti-bribery provisions 1.
Did VimpelCom admit wrongdoing?
DOJ said the facts rest on "the companies' admissions" 1. The SEC release does not say whether VimpelCom admitted or denied the SEC allegations 2.
How much did VimpelCom pay?
DOJ put combined US and Dutch criminal and regulatory penalties at US$795,326,398.40 1. The SEC gave US$167.5 million to the SEC, US$230.1 million to DOJ and US$397.5 million to Dutch regulators 2.
Is the VimpelCom DPA still in force?
VEON said in a company statement on 31 October 2019 that the DPA had concluded and DOJ had moved to dismiss the charges 4.
Rules and fees change. Check the official site linked above before you apply or pay. Spotted an error? Email [email protected] with the official link.
Sources
- U.S. Department of Justice, Office of Public Affairs: VimpelCom Limited and Unitel LLC Enter into Global Foreign Bribery Resolution of More Than $795 Million, press release 16-194 (18 February 2016)
- U.S. Securities and Exchange Commission: VimpelCom to Pay $795 Million in Global Settlement for FCPA Violations, press release 2016-34 (18 February 2016)
- U.S. Securities and Exchange Commission: Complaint, SEC v. VimpelCom Ltd, S.D.N.Y. (dated 18 February 2016)
- VEON Ltd. (company statement), Form 6-K: 2016 Deferred Prosecution Agreement concludes as monitor certifies VEON's compliance programme (31 October 2019)
Related
- Mobile TeleSystems (MTS) FCPA resolution (2019)
MTS and its Uzbek subsidiary KOLORIT resolved US bribery charges for US$850 million in March 2019. DPA, guilty plea, SEC order, monitor and extension.
- Telia deferred prosecution agreement and Coscom guilty plea over Uzbekistan bribery (2017)
Telia Company AB entered a DOJ deferred prosecution agreement and its Uzbek unit Coscom pleaded guilty on 21 September 2017 over bribes in Uzbekistan.
- Deferred and non-prosecution agreements explained
How U.S. deferred prosecution agreements and non-prosecution agreements work for companies, the Justice Manual factors, and what the company admits.
- FCPA resolutions explained
How U.S. Foreign Corrupt Practices Act cases end: declinations, NPAs, DPAs, guilty pleas and SEC actions, with the statute, penalties and DOJ policy.
- Corporate monitors explained
When DOJ and the SEC require an independent compliance monitor, how monitors are chosen and paid, how long they serve, with case examples.