How we laundered $36 million through FIFA officials, bank tells court

Juan Ángel Napout, ex-FIFA VP linked to corrupt scheme

 

 

Admin l Thursday, May 27, 2021

 

NEW YORK, United States  – A Swiss bank with international operations(Bank Julius Baer & Co. Ltd. (BJB or the Bank) today told a federal court in Brooklyn that it conspired to launder over $36 million in bribes through the United States to soccer officials with the Fédération Internationale de Football Association (FIFA) and other soccer federations.

The money was laundered in furtherance of a scheme in which sports marketing companies bribed soccer officials in exchange for broadcasting rights to soccer matches, BJB confessed during hearing  by U.S. District Judge Pamela K. Chen.

The Bank made these admissions and entered into a three-year deferred prosecution agreement with the department in connection with a criminal information filed today in the Eastern District of New York charging the Bank with conspiring to commit money laundering.

As part of this agreement, the Bank has agreed to pay more than $79 million in penalties (including a fine of $43,320,000 and forfeiture of $36,368,400) to resolve the investigation into its involvement in a money laundering conspiracy that fueled this international soccer bribery scheme.

Jorge Luis Arzuaga, a former BJB relationship manager who worked in the Bank’s Montevideo, Uruguay, and Zurich, Switzerland, offices pleaded guilty in June 2017 for his role in this conspiracy and was sentenced in November 2020. That case was assigned to U.S. District Judge Pamela K. Chen of the Eastern District of New York, as is this case.

“Today’s resolution sends a strong message to all banks and other financial institutions that if they knowingly misuse our financial system to hide their clients’ criminal proceeds or to promote a corrupt scheme, they will be held to account,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division.

“From the time of the first FIFA-related indictment, the department has promised to hold accountable the financial institutions involved in this global criminal scheme. We are delivering on that promise.”

“BJB and its employees facilitated bribes and its compliance department turned a blind eye to glaring red flags of money laundering,” said Acting U.S. Attorney Mark J. Lesko for the Eastern District of New York.

“This office will hold accountable those corporations or individuals that use the American banking system for corrupt ends. As today’s resolution makes clear, financial institutions that become complicit in their clients’ efforts to launder illicit funds face significant penalties.”

“Bank Julius Baer pursued the profit it could make laundering corrupt funds derived from a criminal scheme run by powerful FIFA officials,” said Assistant Director-in-Charge William F. Sweeney Jr. of the FBI’s New York Field Office.

“Their behavior has earned them the equivalent of a red card, and the money the bank now owes the U.S. government is more than double what it admits to laundering. The FBI operates globally with our international partners, and our message to those who may be looking to profit from similar schemes – the penalties for this type of play are steep. Stay within the rules.”

“Bank Julius Baer aided corrupt FIFA officials in laundering over $36 million,” said Special Agent in Charge Ryan L. Korner of the IRS-Criminal Investigation. “Banking officials that are a conduit for criminal activity undermine their own profession and the health of our financial system. The Bank’s admissions show that IRS-Criminal Investigation will relentlessly pursue corruption across borders, including financial institutions that facilitate or conceal criminal activity. This should put other banks on notice that aiding in corruption will cost you millions.”

According to admissions in the publicly-filed statement of facts, from approximately February 2013 to May 2015, BJB, through Arzuaga, conspired with sports marketing executives — including Alejandro Burzaco, the controlling executive of Torneos y Competencias S.A. (Torneos), a sports media and marketing company headquartered in Argentina — to launder through the United States at least $36 million in bribes to soccer officials in exchange for broadcasting rights to soccer matches. BJB conspired to execute these illegal transactions through accounts at the Bank to conceal the true nature of the payments and promote the fraud. Burzaco pleaded guilty to racketeering conspiracy and other offenses in November 2015 in connection with his involvement in paying bribes to soccer officials.

For example, Burzaco and co-conspirators agreed to pay approximately $30 million to the senior vice president of FIFA, who was also the president of the Asociación del Fútbol Argentina, for his support in the award of regional broadcasting rights to the 2018, 2022, 2026 and 2030 editions of the World Cup. As part of the conspiracy, BJB, through Arzuaga, transferred approximately $25 million of this money into a sub-account at the Bank and held it there for this senior FIFA official.

Torneos and its co-conspirators also agreed to pay tens of millions of dollars in bribes to several officials of the Confederación Sudamericana de Fútbol (CONMEBOL) — all of whom were also FIFA officials — for the rights to the Copa América tournament (including the 2015, 2019 and 2023 editions of the tournament and the 2016 Copa América Centenario, a commemorative centennial edition of the tournament played at stadiums across the United States). The officials who were to receive bribes included, among others, Eugenio Figueredo, a member of FIFA’s executive committee and former president of both CONMEBOL and the Asociación Uruguaya de Fútbol, the Uruguayan soccer federation; Marco Polo Del Nero, another member of FIFA’s executive committee and a former president of the Confederação Brasileira de Futebol (CBF), the Brazilian soccer federation; and José Maria Marin, a member of multiple FIFA standing committees and another former president of the CBF.

 

Burzaco and Torneos also paid bribes through BJB to numerous CONMEBOL officials in furtherance of a scheme to obtain the broadcasting rights to the Copa Libertadores tournament.

In addition to the aforementioned soccer officials, bribes were also paid to, among others, Juan Ángel Napout, who served as a FIFA Vice President, a member of FIFA’s Executive Committee, and president of CONMEBOL and Romer Osuna, a member of the FIFA audit and compliance committee and former treasurer of CONMEBOL.

At the time of the conduct, BJB’s Anti-Money Laundering (AML) controls failed to detect or prevent money laundering transactions related to the bribery schemes. Had Arzuaga’s supervisors or compliance personnel meaningfully reviewed Arzuaga’s due diligence on Torneos and his responses to transaction alerts, they would have known there were multiple, significant red flags, including facially false contracts, payments to third parties at the direction of a FIFA official, and services purportedly rendered by shell corporations — all of which would have alerted the Bank to the bribery, money laundering or other illegal activity.

According to BJB’s admissions, the Bank knew that Arzuaga’s clients’ accounts were associated with international soccer, which was generally understood to involve high corruption risks. Nevertheless, a BJB executive directed the opening of these accounts be fast tracked in the hope that these clients would provide lucrative business.