by Andrew Emett
May 29, 2015
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The defendants face maximum terms of 20 years in prison for the RICO conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering, and obstruction of justice charges. Did they get what they deserved?
Fourteen people, including nine FIFA officials and five corporate executives, were indicted this week on corruption charges involving the World Cup and multiple bribery scandals spanning over two decades. On Wednesday, Swiss law enforcement officers arrested seven top FIFA officials staying at a five-star hotel in Zurich. Although the Justice Department has not filed charges against FIFA President Sepp Blatter, the FBI and IRS continue to investigate the myriad allegations leveled against him.
Top officials within the Fédération Internationale de Football Association (FIFA) have been charged with soliciting and accepting bribes from countries petitioning to host the World Cup in 1998 and 2010. Through the systematic payment of bribes and kickbacks, FIFA executives allegedly forged alliances with sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves. Included in the conspiracy are the current and former presidents CONCACAF, the continental confederation under FIFA headquartered in the United States.
“The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States,” stated Attorney General Loretta Lynch. “It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust.”
At 6 a.m. on Wednesday morning, over a dozen Swiss law enforcement officers entered an extravagant five-star hotel called the Baur au Lac in downtown Zurich and arrested seven top FIFA officials. Gathered at the hotel for their annual meeting, the incarcerated FIFA officials included Vice President Jeffrey Webb; Julio Rocha, the organization’s development officer; Eduardo Li, an executive committee member-elect; Eugenia Figueredo, a vice president and executive committee member; José Maria Marin, a member of the organizing committee for the Olympic soccer tournaments; Rafael Esquivel, an executive committee member; and Costas Takkas, an attaché to the CONCACAF president.
In cooperation with the U.S. Department of Justice, the Swiss government agreed to extradite the seven FIFA officials on federal corruption charges including racketeering, wire fraud, and money laundering conspiracies over a 24-year period. Former FIFA vice president and executive committee member, Jack Warner surrendered to authorities with his bail set at roughly $400,000, according to Trinidad and Tobago Attorney General Garvin Nicholas. And former FIFA executive committee member, Nicolás Leoz has not yet been arrested because he remains hospitalized, according to Paraguay’s Ministry of Foreign Affairs.
“The defendants fostered a culture of corruption and greed that created an uneven playing field for the biggest sport in the world,” noted FBI Director James Comey. “Undisclosed and illegal payments, kickbacks, and bribes became a way of doing business at FIFA.”
According to the 47-count indictment, Morocco offered Jack Warner $1 million in exchange for his vote to host the 2010 World Cup in their country. But South Africa ended up hosting the World Cup that year after bribing Warner and two of his co-conspirators with $10 million.
For 20 years, Nicolás Leoz allegedly received bribes and kickbacks in exchange for awarding companies marketing and media rights associated with soccer tournaments including the World Cup. Four sports marketing executives who reportedly participated in the conspiracy included Alejandro Burzaco, controlling principal of Torneos y Competencias S.A.; Aaron Davidson, president of Traffic Sports USA; and Hugo and Mariano Jinkis, controlling principals of Full Play Group S.A. As the controlling principal of Valente Corp. and Somerton Ltd., José Margulies allegedly served as an intermediary to facilitate illicit payments between sports marketing executives and soccer officials.
After Warner’s sons, Daryll and Daryan, pled guilty to fraud charges in 2013, the Justice Department began building its case with cooperation from former FIFA executive Chuck Blazer. On November 25, 2013, Blazer pleaded guilty to wire fraud conspiracy, racketeering conspiracy, money laundering conspiracy, income tax evasion, and failure to file a Report of Foreign Bank and Financial Accounts (FBAR). Blazer forfeited over $1.9 million at the time of his plea and agreed to pay a second amount to be determined at his sentencing.
The defendants face maximum terms of 20 years in prison for the RICO conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering, and obstruction of justice charges. Daryan and Daryll Warner face maximum terms of incarceration of 10 years for structuring financial transactions to evade currency reporting requirements. Each defendant also faces mandatory restitution, forfeiture, and a fine.
Amid accusations of corruption, Qatar is scheduled to host the 2022 World Cup even though summer temperatures reach over 120˚F. This year four BBC journalists were arrested in Qatar and detained for several days while investigating allegations of the poor working conditions endured by migrant workers building stadiums for the 2022 World Cup. Earlier this month, a German television crew was also arrested in Qatar for interviewing migrant workers without a filming permit. After seizing electronic data and documents from FIFA’s headquarters in Zurich, Swiss authorities have launched their own investigation into the votes that awarded the 2018 World Cup to Russia and the 2022 World Cup to Qatar.
Although FIFA President Sepp Blatter has been accused on several occasions of soliciting and accepting bribes through intermediaries, he currently does not face any charges. When asked if Blatter could be involved in the conspiracy, Attorney General Lynch responded, “I can say this investigation is ongoing. It is continuing.”