Fourteen face charges for racketeering, bribery
A 47-count U.S. federal court indictment issued Wednesday allege that FIFA Vice President and Cayman Islands resident Jeffrey Webb took part, along with at least eight other current or former FIFA officials, in a corruption and racketeering scheme that spanned 25 years.
The ultimate goal of the corrupt practices, according to federal prosecutors in the Eastern District of New York, was to ensure certain sports marketing and promotions companies received the commercial marketing and media rights to international football tournaments, including the World Cup. In exchange, millions of dollars in bribes and kickbacks were paid to FIFA officials, the indictment alleges.
“This really is the World Cup of fraud and today we are issuing FIFA a red card,” said Richard Weber, chief of criminal investigations for the U.S. Internal Revenue Service, one of a number of international agencies involved in the investigation.
Seven FIFA officials, including Webb, were arrested in Zurich, Switzerland, just before the organization’s annual meeting, federal prosecutors confirmed. At press time Wednesday, six of the seven defendants indicated they would oppose extradition to the U.S.
A total of 14 people have been charged in connection with the scheme, including nine current or former FIFA officials and five international businessmen. In addition, another 25 unnamed “co-conspirators” were listed in the charges, some of whom have already pleaded guilty in connection with the criminal racketeering scheme.
FIFA President Joseph “Sepp” Blatter was not one of those arrested and he was not named in U.S. federal court charges Wednesday.
FIFA, the Federation Internationale de Football Association, is world football’s governing body.
According to a statement by U.S. Attorney General Loretta Lynch: “Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks.
“All told, the soccer officials are charged with conspiring to solicit and receive well over US$150 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.”
An indictment in U.S. federal court is merely an accusation and all defendants are presumed innocent until proven guilty.
$110 million bribe offer
The largest single bribe offer – US$110 million – was allegedly made in connection with the Copa America football tournament, including a special 2016 version of the tournament – the Centenario – celebrating the 100th anniversary of the Copa America, according to U.S. federal court records.
Some US$40 million of that amount has been paid to date, federal prosecutors revealed.
A sports marketing company known as Datisa is alleged to have offered the bribes in exchange for the acquisition of media rights to the Copa America and the Centenario tournaments. The indictment states those bribes were offered to defendants Jeffrey Webb, Eugenio Figueredo, Rafael Esquivel, Jose Maria Marin and Nicolas Leoz, as well as other football officials.
“In connection with the negotiations between Datisa and CONCACAF [FIFA’s regional body governing the Caribbean, Central and North American regions]…Datisa also agreed to pay Webb a bribe in exchange for Webb’s agreement to cause CONCACAF to enter into the 2014 Centenario contract,” the criminal complaint attached to the 47-count indictment states.
The Centenario tournament is scheduled for June 2016 in the U.S.
2010 World Cup bribes
Back in 2004, when the bidding for the 2010 World Cup was heating up between three African nations, it is alleged that Caribbean football officials – including former CONCACAF president Jack Warner of Trinidad and Tobago – accepted monies through intermediaries and the Caribbean Football Union – from the competing nations.
It is alleged that, while in Morocco in 2004, a representative of the Moroccan bid committee offered to pay Warner US$1 million “in exchange for his agreement to cast his secret ballot on the FIFA executive committee for Morocco to host the 2010 World Cup.”
Meanwhile, it was alleged that arrangements were being made through various parties, including the South African government, to offer US$10 million to the Caribbean Football Union to “support the African diaspora.”
A man identified as “co-conspirator #1” in the criminal complaint “understood the offer to be in exchange for the agreement of Warner, co-conspirator #1 [the general secretary of CONCACAF at the time] and another person identified as “co-conspirator #17” to vote for South Africa instead of Morocco.
“Warner indicated that he had accepted the offer and told co-conspirator #1 that he would give a US$1 million portion of the US$10 million payment to co-conspirator #1,” the criminal complaint alleges.
The money, according to the indictment, was wired in three separate payments from a FIFA account in Switzerland to accounts held in the names of CONCACAF and the Caribbean Football Union. Both accounts were controlled by Warner and he diverted some of the funds to his personal accounts, federal prosecutors said.
The 2010 World Cup was held in South Africa.
Co-conspirator #1 never received the entire US$1 million bribe he had been promised, prosecutors said.
The election purchasing scheme
The indictment also alleges that an individual identified as “co-conspirator #7” was seeking support for his candidacy for FIFA president in the organization’s general elections during 2011.
The court records give details of a two-day meeting held in May 2011 at the Hyatt Regency hotel in Trinidad and Tobago involving various member associations of the Caribbean Football Association where co-conspirator #7 asked for the associations’ support during the June 1, 2011 FIFA presidential election.
After the address, Warner is alleged to have told Caribbean football association officials that they could “pick up a gift” that afternoon at a conference hotel room.
“The officials were instructed by [football union] staff members in the room to enter the room one at a time,” the criminal complaint alleges. “Inside the room, [staff] handed each official an envelope bearing the name of the member association he represented. Inside each envelope was US$40,000.”
One of the football union representatives who attended the meeting at the Trinidad Hyatt contacted the person who then served as general secretary of CONCACAF to inform him of the payments. This angered Warner, federal prosecutors said.
“Warner stated: ‘There are some people here who think they are more pious than thou. If you’re pious, open a church, friends. Our business is our business,’” according to the criminal complaint.
Warner resigned from CONCACAF in July 2011, after the incident became public.
After Warner’s departure, Webb was installed as new CONCACAF president in May 2012. In addition, the organization’s general secretary resigned and was replaced.
“The change in administration at CONCACAF….did not usher in an era of reform at [the] organization,” the criminal complaint stated. “Instead, the new leadership continued to engage in criminal schemes in violation of their fiduciary duties.”
During-mid 2012, We
bb and another unnamed person, “co-conspirator #4” participated in discussions to negotiate the media and marketing rights for the 2018 and 2022 World Cup qualifier matches. These rights were being sought by a U.S. subsidiary of the Brazilian-based Traffic Group – Traffic USA, which wanted to buy the rights from the Caribbean Football Association, federal court records state. Co-conspirator #4 was employed by the Traffic Group at the time, but later on in the year became the general secretary of CONCACAF.
Near the end of these talks, co-defendant #4 met with another now-indicted defendant, Costas Takkas, identified as a close associate of Webb’s. The meeting took place in Hungary.
“Takkas told co-conspirator #4 that Webb wanted a US$3 million bribe in exchange for the [football union] contract to be awarded to Traffic USA,” the court records state.
It is further alleged that the bribe was split among two companies, Traffic USA and another company named Sports Marketing Company C so that both would pay US$1.5 million to Webb. It is further alleged that Traffic USA’s payment was transmitted to Takkas through a Miami bank to an HSBC bank in Buffalo, New York, and eventually transferred to an HSBC bank in Hong Kong.
The indictment alleges that two wire transfers totaling US$1 million were sent from Hong Kong to a correspondent account in New York City for credit to an account in the name of Kosson Ventures – a company controlled by Takkas – at Fidelity Bank in the Cayman Islands.
The records state that the remaining US$500,000 owed by Traffic USA was paid into another account controlled by Takkas at Fidelity Bank in the Cayman Islands.
“Takkas subsequently transferred the funds to an account in the name of a swimming pool builder at United Community Bank in Blairsville, Georgia,” the criminal complaint reads. “[This was] for the benefit of the defendant Jeffrey Webb, who was having a pool built at his residence in Loganville, Georgia.
“Takkas transferred another portion of the funds directly from his Kosson Ventures account at Fidelity Bank in the Cayman Islands to SunTrust Bank in Georgia for Webb’s benefit in connection with Webb’s purchase of other real estate in Stone Mountain, Georgia,” court records further stated.
Federal prosecutors state that Takkas’s participation in the funds transfer was “more intermediary” in nature and was “designed to conceal the fact that Jeffrey Webb was the beneficiary of the payment.”
It was unclear from the indictment whether Webb ever received the other half of the alleged bribe money from ‘Sports Marketing Company C.’
Gold Cup scheme
Again in 2012, co-conspirator #4, now employed as CONCACAF general secretary, entered into talks to sell the rights associated with the upcoming Gold Cup and Champions League tournaments hosted by CONCACAF.
As part of those discussions, it is alleged by federal prosecutors that Webb “directed co-conspirator #4 to seek a bribe payment in connection with the negotiations.”
The bribe of US$1.1 million was in exchange for Webb’s agreement to award the 2012 Gold Cup and Champions League contract to Traffic USA. Aaron Davidson, the president of Traffic USA at the time, was said to have agreed to the bribe payment, according to federal court records.
It is alleged that Webb and co-conspirator #4 discussed the best way to effect the bribe payment in order to conceal it.
“Webb eventually instructed co-conspirator #4 to submit a false invoice to Traffic USA for US$1.1 million to be paid to Soccer Uniform Company A, which co-conspirator #4 did,” the criminal complaint states. The uniform company is not named in the indictment, but it is stated that a close Webb associate had a connection to the company.
After a number of wire transfers, the payment ended up in the uniform company’s account at Capital Bank in Panama City, Panama.
The federal indictment alleges further bribe payments were sought in exchange for exclusive sponsorship rights associated with 2015-2021 editions of the Gold Cup tournament and the 2015/16-2021/22 seasons of the CONCACAF Champions League.
Again, it is alleged that Webb directed co-conspirator #4 to solicit a bribe in exchange for Webb’s agreement to award the rights to Traffic USA.
“Though Webb wanted more, the parties eventually settled on US$2 million as the size of the bribe payment,” the criminal complaint states.
The indictment again does not state whether Webb actually received the payments in this instance.