Last week, a U.S. district court judge in Manhattan granted the U.S. government permission to seize $300 million in assets believed to be the profits of a massive global bribery scheme which involves two Russian telecommunications companies and a relative of the Uzbek President Islam Karimov.
While the relative was not named directly in the complaint–they were referred to as “Government Official A” and “a close relative of the President of Uzbekistan”–the most likely candidate is the president’s daughter, Gulnara Karimova, who hasn’t been seen in public since she was placed under house arrest in February 2014. Karimova, between 2004 and 2011, served in a number of high profile government positions, including ambassador to Spain and as Uzbekistan’s permanent representative to the United Nations in Geneva.
The U.S case claims that VimpelCom and Mobile TeleSystems (MTS) operated a web of shell companies and fake contracts to direct bribes to “Official A” in order to gain access to Uzbekistan’s telecommunications market. MTS is the largest mobile operator in the former Soviet Union and VimpelCom, s a joint venture between Russia’s Alfa Telecom and Telenor, a Norwegian telecommunications company. The U.S. claims seek funds held in accounts with the Bank of New York Mellon Corp. in Ireland, Luxembourg and Belgium, that it says are the profits of the international scheme.
Among the shell companies the U.S. says were owned by “Official A” and used to “conceal his/her involvement in corruption and to mask the true sources of his/her wealth” are Takilant and Expoline, owned by Gayane Avakyan and Rustam Madumarov, respectively. Incidentally, both Avakyan and Madumarov are currently in Uzbek prisons after being convicted of corruption charges in May 2014.
Takilant is best known, at this point, for being implicated in a Swedish corruption probe that precipitated Karimova’s fall from grace in 2012, when allegations surfaced on Swedish public television. According to prosecutors, Swedish telecom TeliaSonera paid $358 million to Takilant, which is registered in Gibraltar and has also done business with VimpelCom, in 2007 for a 3G license in Uzbekistan. The Swedish probe is linked to a Swiss money-laundering investigation.
In fall 2013, the Swiss expanded their investigation from Karimova’s associates to include Karimova herself, who had had diplomatic immunity until she was removed from her UN post in summer 2013. According to RFE/RL’s reports, Swiss prosecutors had seized over $900 million in suspected Uzbek assets by March 2014.
In March 2015, the Organized Crime and Corruption Reporting Project (OCCRP), reported that Karimova had received more than $1 billion in payments and shares from various telecommunications companies. Meanwhile, they wrote, “telecom users in her impoverished country pay among the highest rates in the world for mobile phone service.” The OCCRP’s impressive investigation of Karimova details the rise and fall of Uzbekistan’s “prodigal daughter,” a “virtual princess” who now faces corruption and extortion charges at home as her criminal empire abroad comes to light.
Once, Karimova was perceived as her father’s likely successor. She was a pop-star, fashion magnate, businesswoman and diplomat–an extravagant figure who seemed primed to step into her father’s place. But as far back as 2005, her image was tainted. According to leaked embassy cables, Uzbekistan was seeking to clean up Karimova’s reputation as many Uzbeks viewed her as “something of a robber baron.”
Karimova’s fall was swift–the repeated corruption scandals embarrassed Uzbekistan and Karimov, in particular. At 77, Karimov is the region’s oldest leader–and since Karimova’s fall, is without a clear heir. Karimov, who has engaged in his share of political corruption–manipulating the constitution to justify 25 consecutive years in power despite a two-term limit–has been merciless in reacting to his daughter’s exposed schemes. Karimova’s fate is uncertain, she hasn’t been heard from since photos, allegedly showing her being hassled by guards, were published in fall 2014.
While the U.S. claim neglects to name Karimova directly, it’s difficult to think of anyone else who fits the description and crime.