Banks under scrutiny
Prosecutors looking into the FIFA corruption probe are asking more potential victims or witnesses to come forward if they have information related to the international bribery and racketeering scandal that has rocked football’s governing body since late May.
The case of the USA v. Jeffrey Webb et. al, against nine current and former FIFA officials and five executives of international sports marketing companies, has been placed at the top of the “victims/witness pending cases” list on the U.S. Attorney’s Office website for the Eastern District of New York state.
Potential victims or witnesses are asked to fill out a form on the U.S. Department of Justice website, www.justice.gov, listing various contact information and asking what additional information they may have in the case. Prosecutors said the site would be updated from time to time with information from the court that is hearing charges against Webb, Traffic USA executive Aaron Davidson and others accused in the probe.
There has been evidence in the past week that federal prosecutors are not stopping with the arrest of the 14 defendants currently charged in the case. The Wall Street Journal reported Friday that the U.S. Attorney’s Office and New York state’s top financial regulator have interviewed officials at a number of U.S. banks in connection with the bribery probe.
The names of several of those banks appear prominently in a 161-page U.S. district court indictment made public on May 27, although none of the entities either in the U.S. or abroad are accused of wrongdoing.
The U.S. Attorney General’s Office, while investigating criminal allegations against a number of FIFA officials, has flagged “the centrality of the U.S. financial system” in the numerous bribes and kickbacks described in the scheme.
Those bribe payments, federal prosecutors allege, were made by sports marketing companies to ranking members of FIFA in exchange for receiving the commercial rights to various football tournaments, including World Cup qualifying matches.
The indictment filed in the U.S. District Court, Eastern District of New York acknowledges the “use of shell companies, nominees and numbered bank accounts in tax havens in other secretive banking jurisdictions,” but it focuses on the American financial structures used in the racketeering scheme.
“The defendants and their co-conspirators relied heavily on the U.S. financial system in connection with their activities,” the indictment states. “This reliance was significant and sustained and was one of the central methods and means through which they promoted and concealed their schemes.”
For example, in one of the bribe schemes described in the indictment, it is alleged that in 2012 Webb solicited a US$3 million bribe from Traffic USA for his agreement to sell the company the rights to 2018 and 2022 World Cup qualifying matches, held at the time by the Caribbean Football Union.
Federal prosecutors allege that a portion of the payment was wired from Traffic International’s bank account in Miami to an HSBC bank in Buffalo, New York. About US$1 million was then bounced – via a front company – to a Hong Kong HSBC account, then to an account at Standard Chartered Bank in New York City and on to credit an account at Fidelity Bank in the Cayman Islands, according to the indictment.
The account in Cayman was held by Webb associate Costas Takkas, who is also charged in the case, according to the indictment. It is alleged that Takkas, after keeping a portion of the bribe money for himself, transferred funds back to the U.S., where the money was used for a swimming pool at a Loganville, Georgia residence owned by Webb, and other real estate he owned in Stone Mountain, Georgia.
Both HSBC and Standard Chartered Bank were contacted in the continuing U.S. Attorney’s probe, The Wall Street Journal reported on July 24.
Former Cayman Islands Monetary Authority Chairman George McCarthy said in June that the agency would commission an internal committee following Webb’s arrest in Switzerland on U.S.-based charges of racketeering and money laundering. Caymanian businessman Webb is a former FIFA vice president and ex-CONCACAF president. At least one current and one former Cayman Islands bank, Fidelity and Barclays, were named in connection with the probe, although neither bank was accused of wrongdoing in records filed with the U.S. court.
The CIMA board met in early June to discuss a number of issues related to the FIFA investigation and how it could potentially affect Cayman’s financial services industry.
Mr. McCarthy said at the time that members were “very much concerned about the events that are occurring,” but agreed that it was too early for direct board involvement in these matters.
Mr. McCarthy said the three-person internal review committee will include newly appointed CIMA head of banking Charles Ilako, head of compliance R.J. Berry and deputy general counsel Andre Mon Desir. After the review committee completes its work, it will present a report to CIMA’s management committee, and the management committee will report to the board, Mr. McCarthy said.
On July 21, the Cayman Islands government replaced three members of the CIMA board of directors, including Mr. McCarthy, whose tenures had expired.
New CIMA chairman Grant Stein was contacted Monday for comment about the new board. He indicated he was not yet ready to discuss the changes on the board, though he may do so later this week.