NEW YORK: US AUTHORITIES are asking their European counterparts to seize about $1bn in assets related to a wide-ranging criminal probe of alleged corruption by three global telecom companies and intermediaries close to the daughter of Uzbekistan’s president, according to court documents and people with direct knowledge of the criminal investigation.
The effort is one of the biggest recent moves by US authorities targeting what prosecutors believe are the spoils of alleged corrupt activities overseas. The US Justice Department and Securities and Exchange Commission probes were disclosed last year, and related investigations by European counterparts have been under way for several years. But the recent move by the US to seize assets sheds new light on the magnitude of the corruption American prosecutors believe took place.
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US prosecutors believe Amsterdam-based Vimpelcom, Mobile TeleSystems PJSC of Russia and Sweden’s TeliaSonera funneled hundreds of millions of dollars to businesses controlled by Gulnara Karimova, the elder daughter of Uzbek President Islam Karimov, in an effort to secure wireless frequencies and other deals in that country, according to court documents and people with direct knowledge of the probe.
No individual or company has been charged as part of the US and European investigations. The three companies disclosed last year they were the focus of investigations by the Justice Department and the SEC in connection to their operations in Uzbekistan. They declined to comment on the corruption accusations, saying only that they were co-operating with US and European judicial authorities. Ms Karimova couldn’t be reached for comment.
In recent years, American law-enforcement officials have been expanding their reach — targeting alleged corruption not just by US companies operating overseas, but by foreign companies and individuals.
The US Justice Department also has been aggressively targeting US-based assets it believes are the spoils of overseas corruption. At the same time, it has worked with foreign counterparts to freeze funds held overseas, and it is increasingly spearheading large, complex international corruption probes. In May, for example, US prosecutors charged nine current and former officials at Fifa, the Switzerland-based world soccer governing body, on broad corruption charges.
As for the agencies having jurisdiction in the Uzbekistan probe, Vimpelcom and MTS securities trade in the US TeliaSenora, which delisted its securities about 10 years ago, could be subject to US oversight if its deals involved the US financial system, experts say.
As part of the far-reaching telecom probe, the US Justice Department filed a complaint in June with a New York court as a step toward asking Irish, Belgian and Luxembourg authorities to restrain about $300m held in bank accounts in those countries.
In March, US authorities asked Sweden for assistance in seizing another $30m, deposited at a Swedish bank, a sum they say is also related to the alleged corrupt activity. US officials have taken similar steps in Switzerland to freeze about $640m, including a lake-side villa, according to the documents and the people familiar with the matter.
The US investigation “has revealed that Vimpelcom, MTS and TeliaSonera paid bribes to Uzbek officials to obtain mobile telecommunications business in Uzbekistan,” the Justice Department wrote to Swedish prosecutors in a March 20 letter reviewed by The Wall Street Journal.
A Justice Department official confirmed US authorities aimed to seize the $300m in Ireland, Belgium and Luxembourg. The official declined to comment on US actions related to the investigation in Sweden and Switzerland. The SEC declined to comment.
At the heart of the case, US prosecutors believe, is Ms Karimova. Prosecutors believe she is the beneficial owner of the roughly $1bn fortune scattered across the continent, according to the court documents and people familiar with the matter.
The bribery accusations first surfaced in 2012, when Swiss authorities detained associates of Ms Karimova, and Swedish reporters broadcast an investigative report about TeliaSonera’s activities in Uzbekistan. Since then, Swedish, Swiss and Dutch authorities have been looking into some of the ties between Ms Karimova and certain telecommunication companies.
