Oh Dear - Bank Julius Baer Admits Laundering Over $36 Million in Bribes in FIFA Case
Swiss Bank Agrees to Pay More than $79 Million in Penalties in Deferred Prosecution Agreement - the FIFA gift that just keeps on giving nearly 5.5 years later. HERE WE ARE👇🏻
Shittlestix wasn’t I recently accused of “money laundering” …working “for FIFA” and being a “North Korean Spy while working for the Russian government” and that “I failed to register [pursuant] to FARA”…sheesh I must have found a way to clone myself and I’m an evil genius (maybe evil but certainly not a genius) - I digress, yet again…
Nearly five and a half years later FIFA is the gift that just keeps on giving…at some point let me know when we can talk about Isle of Man, ING and Chubbs…
The Bank has entered into a three-year deferred prosecution agreement with the government 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 $43,320,000.00 and forfeiture of $36,368,400.00) 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 by Judge Chen to three years’ probation in November 2020.
According to the recently filed Criminal Information/Facts - it’s important to remember in the context of these impermissible bribes - there was a significant push by both the OCC (Treasury) FINCEN, FDIC, and DOJ required financial institutions adhere to the following legal framework, which largely seek to protect our financial system123
Procedures for Monitoring BSA Compliance - 12 CFR 21.21 a mandatory requirement that every national bank and savings association to have a written, board approved program that is reasonably designed to assure and monitor compliance with the BSA. The program must, at a minimum:
provide for a system of internal controls to assure ongoing compliance;
provide for independent testing for compliance;
designate an individual responsible for coordinating and monitoring day-to-day compliance; and
provide training for appropriate banking/financial institution personnel. Furthermore, the implementation of regulation for section 326 of the PATRIOT Act requires that every bank adopt a customer identification program as part of its BSA compliance program. -colloquially known as “know your customer”
Principal Parties and Entities;
Each named individual had a fiduciary and lawful duty to not only document suspicious transactions but they were required (by law) to report said activity. Instead they choose to cover it up or in some cases just turned a blind eye to the unlawful behavior. The rot and corruption runs so deep with these individuals and organizations - some running as far back as 1996 to 2016…
Jorge Luis Arzuaga: an Argentine national and, in or about andbetween June 2012 and May 2015, was a relationship manager in the Bank’s offices in Montevideo, Uruguay and Zurich, Switzerland…
Supervisor #1: during the relevant period, employed in a supervisory role at BJB relating to South and Central America business. Supervisor #1 directly supervised Arzuaga during the relevant period.
Supervisor #2: a senior supervisor at BJB with oversight responsibilities including South and Central America business. Supervisor #2 directly supervised Supervisor #1 during the relevant period and was a member of BJB’s executive board.
Torneos y Competencias, S.A45 a sports media and marketing company headquartered in Argentina, with subsidiaries and affiliates in the Cayman Islands, Netherlands, and Uruguay, among other locations. Torneos executives created and controlled off-the-books shell companies, including FPT Sports S.A. and Arco Business and Developments Ltd. to execute certain transactions with and on behalf of Torneos.
Torneos maintained two accounts at BJB in the names of Arco and FPT Sports
Alejandro Burzaco: the controlling principal of Torneos and its subsidiaries.
Confederación Sudamericana de Fútbol “CONMEBOL”: one of the six continental soccer confederations affiliated with FIFA. CONMEBOL, which was domiciled and headquartered in Paraguay, governed soccer in South America and had 10 national soccer association members. Among other tournaments, CONMEBOL organized the Copa América, Copa Libertadores, and Copa Sudamericana.
Soccer Official #1: a citizen of Argentina. Soccer Official #1 was a high-ranking official of FIFA, CONMEBOL, and Asociación de Futbol Argentina (“AFA”), the Argentinian soccer federation, which was a national member association of FIFA and CONMEBOL.
During 2013, Soccer Official #1 received at least $25 million in bribe payments through an account held at the Bank. Soccer Official #1 died on or about July 30, 2014.
Nicolás Leoz: served as the president of CONMEBOL and as a member of FIFA’s executive committee until approximately April 24, 2013, when he resigned from both positions, citing health issues.
Eugenio Figueredo: was the president of CONMEBOL from approximately April 2013 to August 2014, a member of FIFA’s executive committee from approximately May 2013 to May 2015, and previously served as a vice president of CONMEBOL and president of the Uruguayan Football Association.
Between approximately 2013 and 2014, Figueredo received at least $2 million in bribe payments through accounts held at the Bank.
Marco Polo del Nero: was a member of FIFA’s executive committee from approximately March 2012 to November 2015. He also served as the president of the Confederação Brasileira de Futebol (“CBF”), the Brazilian soccer federation, from approximately April 2015 to December 2015.
José Maria Marin: (gee I wonder what his address was/is in NYC) served as the president of the CBF from approximately March 2012 to April 2015…he was also a member of multiple FIFA standing committees, including the organizing committee for the Olympic football tournaments, as well as the organizing committees for the World Cup and the Confederations Cup, where he was a special adviser.
In or about 2013, companies controlled by Marin and Marco Polo Del Nero received at least $3.9 million in bribe payments through accounts held at the Bank.
Romer Osuna: served as the treasurer of CONMEBOL from approximately 1986 to 2013 and also served as a member of the FIFA audit and compliance committee.
In or about 2013, Osuna received at least one bribe payment in the amount of $600,000 through an account held at the Bank.
Sergio Jadue: served as the president of the National Football Association of Chile and a vice president of CONMEBOL.
In or about 2014, Jadue received at least one bribe payment of approximately $400,000 through an account held at the Bank.
…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—and others, to launder through the United States at least $36,368,400 in bribes paid to soccer officials in exchange for broadcasting rights to soccer matches.
DOJ-OPA Criminal Information FIFA May 27, 2021
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 in November 2015 to racketeering conspiracy and other offenses in connection with his involvement in paying bribes to soccer officials.
….the Bank, through its employee Arzuaga, agreed with sports marketing executives and soccer officials to launder at least $36,368,400.00 in bribe payments through the United States in furtherance of a scheme in which sports marketing companies bribed soccer officials in exchange for broadcasting rights to soccer matches…
Arzuaga conspired to execute these illegal transactions using accounts at BJB, knowing that the purpose of these transactions was to conceal and disguise the proceeds of bribery, and with the intention to promote honest services wire fraud.
The Copa Libertadores Laundering
The money laundering component involved tens of millions of dollars being paid in bribes to various sports marketing companies - which effectuated a broadcasting monopoly and unjustly and corruptly enriched numerous individuals and the Companies they controlled. Greed just pure unadulterated greed.
Torneos sent more than $30 million of these bribes and off-the-books payments from the Arco Account and the FPT Sports Account between approximately 2013 and March 2015. These payments were sent from or through accounts in the United States.
World Cup and FPT Sports Account Laundering
Not only is the amount staggering but it’s the complexity of individuals like Alejandro Burzaco and co-conspirators agreed and arranged to pay tens of millions in bribes. But it was the longer term broadcasting benefits afforded with the illegal bribes. As far as consciousness of guilty behavior - of creating sub accounts as to not attract attention to the tens of millions of dollars in bribes. Like I said the rot and corruption within FIFA and other affiliated organizations runs decades long and it’s deep.
….$30 million for his support in the award of regional broadcasting rights to Torneos for four World Cups in 2018, 2022, 2026 and 2030….
BJB conspired to launder bribes from Torneos to soccer officials through the FT Sports Account and the FPT Sports Sub-Account. Torneos laundered approximately $29,137,000.00 in bribes and other improper payments out of the FPT Sports Account at BJB from in or about 2013 through March 2015.
No really the rot and corruption runs deep that part of the World Cup Laundering scheme included the “heir 1”, attorneys and other named and unnamed co-conspirators… below are two relevant examples of the duplicitous actions - the moment those funds touched a USA Bank -that’s the moment the DOJ has actual jurisdiction;
April 11, 2013, Broadcasting Company Affiliate A, an affiliate of a major broadcasting company headquartered in Latin America…transferred $7.25 million from its account at a bank in New York to the FPT Sports Account. Torneos then transferred the funds on the same day to the FPT Sports Sub-Account
November 12, 2014, BJB executed a book transfer of approximately $16,567,000 from the FPT Sports Sub-Account to an account at BJB held in the name of one of Soccer Official #1’s heirs…Together with counsel at Torneos, Arzuaga worked with Heir #1 to create fraudulent contracts to support the transfer to Heir #1.
But Daddy is dead…
Don’t worry Heir # 1 and Heir # 2 - we have a really cool money laundering system set up - all you need to do is follow Arzuaga and his co-conspirators explicit instructions on how to open up a few sub accounts. Move the millions in bribes to a subaccount and we’ll take care of the rest - because daddy’s bribery apparatuses took a lot of work and this is his evergreen legacy. And if the Feds come knocking (which they will) just “act” like you have no idea how those sub accounts and fake contracts were executed…
…March 24, 2015, BJB executed a wire transfer of approximately $8 million from the FPT Sports Sub-Account…
Arzuaga also told both Supervisor #1 and Supervisor #2 about the use of a fake contract to justify the transfer to Heir #1.
Exclusive Broadcasting Rights? PAY ME BRIBES
Oh Dear (and yet oddly satisfying) Hugo Jinkis and Mariano Jinkis naughty naughty Son & Paip - circa 2020 why YES - Israeli Bank Hapoalim will pay a $ 30 million fine after admitting to the United States Department of Justice that laundered $ 20,733,322 from FIFA6…but seeing your name in the recent Criminal Information -oh so tasty- more please - I see the three way play finally boomeranged on you (snort)
..in 2010, CONMEBOL terminated its longstanding relationship with Traffic and entered into an agreement with Full Play…Full Play’s principals, Hugo Jinkis and Mariano Jinkis, agreed to pay bribes to various CONMEBOL officials
…Torneos, Full Play, and Traffic entered into a settlement regarding the rights to the Copa América tournament, through which the three companies equally participated in a joint venture known as Datisa…Datisa partners agreed to pay tens of millions of dollars in bribes to CONMEBOL official
The End…but only $79Million?
“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 “
- a highlighted and annotated copy of the Criminal Information found here
Can we all agree that FIFA should close up shop? Because the rot and corruption runs deep and is decades long. As further elucidated by this nifty website https://fifaiscorrupt.com (albeit its kind of out of date)
Institutions of Primary Laundering Concerns - Section 5318A of the Bank Secrecy Act, as added by section 311 of the USA PATRIOT Act, authorizes the Secretary of the Treasury to designate a foreign jurisdiction, institution, class of transaction, or type of account as being of "primary money-laundering concern," and to impose one or more of five "special measures."
This regulation requires every national bank to file a Suspicious Activity Report (SAR) when they detect certain known or suspected violations of federal law or suspicious transactions related to a money laundering activity or a violation of the BSA. A SAR filing is required for any potential crimes:
BSA-related reporting requirements for national banks and savings associations are administered by the US Department of Treasury's Financial Crimes Enforcement Network (FinCEN). Financial institutions must file reports electronically through the BSA E-Filing System.
Currency Transaction Report (CTR)
Report of International Transportation of Currency or Monetary Instruments (CMIR)
Report of Foreign Bank and Financial Accounts (FBAR)
see December 2016 - DOJ-OPA Press Release - Admits To Role In International Soccer Bribery Conspiracy And Agrees To $112 Million In Forfeiture And Criminal Penalties -Torneos y Competencias S.A. Enters Into Four-Year Deferred Prosecution Agreement; Agrees to Enhanced Internal Controls and Compliance Obligations
Uffda! Have got to reread this with my brains in. Thanks again!