Tag: MTS

Categories
The Corruption Files

The Bribery Trilogy in Telecom with Tom Fox and Michael DeBernardis

Tom Fox and Michael DeBernardis go in-depth about the bribery scandals of three big names in telecom, MTS, VimpelCom, and Telia; Ericsson’s shady deals in multiple countries, how knowing high-risk countries and the beneficiaries of companies can save you from trouble, and the importance of visibility for compliance professionals.

▶️ The Bribery Trilogy in Telecom with Tom Fox and Michael DeBernardis

Key points discussed in the episode:

✔️ Tom Fox gives a brief background on the VimpelCom case. He points out how the company, including MTS and Telia, were all tied up with the schemes of Gulnara Karimova, the daughter of a former president in Uzbekistan.

✔️ The DOJ and the SEC are confident in tackling companies taking advantage of “shell companies” and getting involved with corrupt government officials. There was malicious intent on the companies’ sides regardless of the rank of the person involved.

✔️ Tom Fox describes the Telia case. Michael DeBernardis points out that the difference between the outcomes of Telia, MTS, and VimpelCom’s cases was the penalties. Cooperation from Telia and Vimpelcom garnered significant reductions.

✔️ Tom Fox lays out the MTS case. Even when violations were found in Kolorit’s purchase, MTS higher-ups presented excuses that the compliance team failed to argue. The control environment for transparency has since improved post-prosecution.

✔️ Michael DeBernardis emphasizes the risk behind unidentified beneficial owners. VimpelCom, Telia, and MTS had full knowledge of their schemes. But the story is a lot more muddied and complex to the ears of the board and compliance professionals.

✔️ Tom Fox retells the Ericsson case, illustrating it as not just a corrupt third-party, paid-for entertainment, or donations. The imagination only limits the depths where companies explore in weaving the most intricate schemes. Michael DeBernardis attributes this to enterprise-wide failure.

✔️ Knowing the high-risk countries can save your company from trouble. Once you start paying bribes, you’re stuck. The receiving party already has claws on you and will threaten to report to US authorities if you attempt to exit. Michael DeBernardis adds that despite these cases being beyond US soil, companies won’t be able to challenge them.

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Do you have a podcast (or do you want to)? Join the only network dedicated to compliance, risk management, and business ethics, the Compliance Podcast Network. For more information, contact Tom Fox at tfox@tfoxlaw.com.

Categories
This Week in FCPA

Episode 294 – the Remember the Alamo edition


Jay returns from the assignment with some observations on the ABA White Collar Conference and looks at some of the week’s top compliance and ethics stories in the Remember the Alamo edition.
Stories

  1. Should lawyers represent all stakeholders before the SEC? Matt Kelly in Radical Compliance. Tom and Matt in Compliance into the Weeds. 
  2. Lessons learned from a corrupt Olympics: Andy Spalding and Danny Hales in the FCPA Blog.
  3. How does a corporate culture become corrupt? Tom Bussen and Nitish Singh in CCI.
  4. Corruption in the Russian military. Matthew Stephenson in GAB. 
  5. MTS agrees to extend monitorship for one year. Dylan Tokar in WSJ Risk and Compliance Journal. 
  6. Why is data minimization so critical? Debevoise lawyers in Compliance and Enforcement. 
  7. Elon Musk wants out of his Consent Decree with the SEC. Dean Seal in Law360 (sub req’d)
  8. A stark warning on corporate cooperation. Wachtel Lipton lawyers in Harvard Law School Forum on Corporate Governance.  
  9. Mike Volkov on the force multiplier of ethics and sustainability. Crime Corruption and Compliance.
  10. NFTs and the SEC. Francine McKenna in The Dig (sub req’d) 

Podcasts and More

  1. In March on The Compliance Life, I visited with Audrey Harris, Managing Director at AMI, formerly CCO at BHP. In Part 1, she discusses her academic background and early professional career. In Episode 2, Audrey moves to the CCO chair at BHP.
  2. Tom and Megan Dougherty are back with 2 more episodes of the MCU series. The Winter Soldier and Guardians of the Galaxy Part 1.  
  3. David Simon returns for another session of his journey through the Oxford MBA Program on A Yank at Oxford. 
  4. Tom visits with Hill Country lawyer Craig Wolcott on The Hill Country Podcast.
  5. Highlights from the ABA White Collar Conference. 

Tom Fox is the Voice of Compliance and can be reached at tfox@tfoxlaw.com. Jay Rosen is Mr. Monitor and can be reached at jrosen@affiliatedmonitors.com. 

Categories
Daily Compliance News

March 9, 2022 the Guilty Edition


In today’s edition of Daily Compliance News:

  • Capital insurrectionist found guilty on all counts. (NYT)
  • Kuwaiti ex-premier acquitted of corruption .  (WaPo)
  • MTS agrees to extend monitorship. (WSJ)
  • Musk tries to get out of Consent Decree. (Reuters)
Categories
FCPA Compliance Report

MTS Foreign Corrupt Practices Act Enforcement Action: Part V – Lessons Learned

We are on Episode V of a five-part exploration of the recent the Department of Justice and Securities Exchange Commission resolution of a Foreign Corrupt Practices Act enforcement action against the Russian telecom company, MTS. In this episode,  I conclude with the lessons learned for the compliance professional. Today we focus on four key lessons: (1) due diligence, (2) business justification, (3) business valuation and (4) the long road of bribery.
The documents which are the subject of this series are:
  1. MTS Deferred Prosecution Agreement (DPA);
  2. MTS Criminal Information (MTS Information);
  3. SEC Cease and Desist Order (Order);
  4. Karimova and Akhmedov Indictment (Indictment);
  5. Kolorit Dizayn Ink LLC Plea Agreement (Plea Agreement); and
  6. Kolorit Dizayn Ink Information (Kolorit Information);
  7. DOJ Press Release and
  8. SEC Press Release.
For additional reading see the blog post, “MTS FCPA Settlement and Karimova Indictment: Part V – Lessons Learned”
Categories
FCPA Compliance Report

MTS Foreign Corrupt Practices Act Enforcement Action: Part IV – the Individual Indictments

We are on Episode IV of a five-part exploration of the recent the Department of Justice and Securities Exchange Commission resolution of a Foreign Corrupt Practices Act enforcement action against the Russian telecom company, Mobile TeleSystems PJSC (MTS). In this episode,  I look at the individual indictments, which charged Gulnara Karimova, daughter of the former President of Uzbekistan, with one count of conspiracy to commit money laundering and Bekhzod Akhmedov, a former MTS executive based in Uzbekistan with FCPA violations of one count of conspiracy to violate the FCPA, two counts of violating the FCPA, and one count of conspiracy to commit money laundering.
The indictment discussed the three companies who paid bribes to Karimova, who then laundered the money on the international stage. They were VimpelCom Ltd. (now VEON Ltd.), Telia Company AB (formerly TeliaSonera AB) (Telia) and MTS. The schemes Karimova used were so similar as to be almost identical. The only thing that changed was the name of the company she was shaking down money from in her march towards receiving over $1 billion in ill-gotten payments.
The documents which are the subject of this series are:
  1. MTS Deferred Prosecution Agreement (DPA);
  2. MTS Criminal Information (MTS Information);
  3. SEC Cease and Desist Order (Order);
  4. Karimova and Akhmedov Indictment (Indictment);
  5. Kolorit Dizayn Ink LLC Plea Agreement (Plea Agreement); and
  6. Kolorit Dizayn Ink Information (Kolorit Information);
  7. DOJ Press Release and
  8. SEC Press Release.
For additional reading see the blog post, “MTS FCPA Settlement and Karimova Indictment: Part IV – the Individual Indictments“
Categories
FCPA Compliance Report

MTS Foreign Corrupt Practices Act Enforcement Action: Part III – Missed Red Flags and Overridden Controls

In a stunning resolution to one of the longest running bribery, corruption and money-laundering sagas on the international stage, the Department of Justice and Securities Exchange Commission both announced settlement of a Foreign Corrupt Practices Act (FCPA) enforcement action against the Russian telecom company, Mobile TeleSystems PJSC (MTS). This podcast continues a five-part series will examine the background facts of the case, provide a detailed review of the bribery schemes involved, the compliance failures of MTS and its actions during the investigation which contributed to the size of the penalty, the individual criminal prosecutions brought by the Department of Justice as a part of this action and the key lessons learned by the compliance practitioner. In this Part 3, I discuss the failures in the MTS compliance regime, the override of internal controls and local business unit management actions which facilitated the bribery schemes.
The schemes involved:
a. Purchase of entities controlled by or through Karimova;
b. Purchase of telecom licenses at inflated prices; and
c. Fraudulent charitable donations.
The documents which are the subject of this series are:
  1. MTS Deferred Prosecution Agreement (DPA);
  2. MTS Criminal Information (MTS Information);
  3. SEC Cease and Desist Order (Order);
  4. Karimova and Akhmedov Indictment (Indictment);
  5. Kolorit Dizayn Ink LLC Plea Agreement (Plea Agreement); and
  6. Kolorit Dizayn Ink Information (Kolorit Information);
  7. DOJ Press Release and
  8. SEC Press Release.
Categories
FCPA Compliance Report

MTS Foreign Corrupt Practices Act Enforcement Action: Part II-the Bribery Schemes

In a stunning resolution to one of the longest running bribery, corruption and money-laundering sagas on the international stage, the Department of Justice and Securities Exchange Commission both announced settlement of a Foreign Corrupt Practices Act (FCPA) enforcement action against the Russian telecom company, Mobile TeleSystems PJSC (MTS). This podcast continues a five-part series will examine the background facts of the case, provide a detailed review of the bribery schemes involved, the compliance failures of MTS and its actions during the investigation which contributed to the size of the penalty, the individual criminal prosecutions brought by the Department of Justice as a part of this action and the key lessons learned by the compliance practitioner. In this Part 2, I consider the bribery schemes used by MTS to pay the bribes and Karimova to receive the bribe payments.
The documents which are the subject of this series are:
  1. MTS Deferred Prosecution Agreement (DPA);
  2. MTS Criminal Information (MTS Information);
  3. SEC Cease and Desist Order (Order);
  4. Karimova and Akhmedov Indictment (Indictment);
  5. Kolorit Dizayn Ink LLC Plea Agreement (Plea Agreement); and
  6. Kolorit Dizayn Ink Information (Kolorit Information);
  7. DOJ Press Release and
  8. SEC Press Release.
For additional reading see the blog post, “MTS FCPA Settlement and Karimova Indictment: Part II – The Bribery Schemes“
Categories
FCPA Compliance Report

MTS Foreign Corrupt Practices Act Enforcement Action: Part I-Introduction


In a stunning resolution to one of the longest running bribery, corruption and money-laundering sagas on the international stage, the Department of Justice and Securities Exchange Commission both announced settlement of a Foreign Corrupt Practices Act (FCPA) enforcement action against the Russian telecom company, Mobile TeleSystems PJSC (MTS). The FCPA enforcement action came in at $850 million which makes it Number 3 in the Top 10 of all-time FCPA settlements. This podcast opens a multi-part series will examine the background facts of the case, provide a detailed review of the bribery schemes involved, the compliance failures of MTS and its actions during the investigation which contributed to the size of the penalty, the individual criminal prosecutions brought by the Department of Justice as a part of this action and the key lessons learned by the compliance practitioner. In this Part 1, I begin with a review of the background facts, the parties and players and the fine and penalty of the MTS Foreign Corrupt Practices Act enforcement action.
The enforcement action was the third involving the same individual from the same country. That individual was Gulnara Karimova, the daughter of the former President of Uzbekistan. If that name sounds familiar to compliance professionals it is because she was also involved in the receipt of bribes paid in two other Top 10 FCPA enforcement actions; VimpelCom (now VEON Ltd.) and Telia Company AB. Contemporaneously with FCPA enforcement action involving MTS, there was a criminal indictment filed against Karimova and Bekhzod Akhmedov, a former MTS executive based in Uzbekistan. Akhmedov was charged with violating the FCPA for paying bribes to or for the benefit of Karimova and Karimova was charged she with laundering the money received as bribes.
The documents which are the subject of this series are:

  1. MTS Deferred Prosecution Agreement (DPA);
  2. MTS Criminal Information (MTS Information);
  3. SEC Cease and Desist Order (Order);
  4. Karimova and Akhmedov Indictment (Indictment);
  5. Kolorit Dizayn Ink LLC Plea Agreement (Plea Agreement); and
  6. Kolorit Dizayn Ink Information (Kolorit Information);
  7. DOJ Press Release and
  8. SEC Press Release.

For additional reading see the blog post, “MTS FCPA Settlement and Karimova Indictment: Part I-Introduction“.