Bank Hapoalim to pay $904 million for role in FIFA bribe scandal, US tax evasion
An Israeli bank and its Swiss subsidiary agreed to pay over
$30 million for their role in conspiring to launder more than $20 million in
kickbacks to soccer officials, becoming the first financial institutions
implicated in the FIFA scandal to reach a resolution with US prosecutors.
Bank Hapoalim BM in Israel and its wholly owned Swiss
company Hapoalim Ltd. agreed to forfeit $20.73 million and pay a fine of $9.33
million as part of a non-prosecution agreement, the US attorney’s office in
Brooklyn said Thursday. The scheme took place through the banks’ Miami branch
from 2010-15, with many of the payments tied to marketing rights for the Copa
America.
Eugenio Figueredo, a former president of the South American
governing body CONMEBOL and Uruguay’s federation, was among those accused of
receiving the bribes, along with Luis Bedoya, a former president of Colombia’s
federation and like Figueredo a onetime member of FIFA’s executive committee.
Former federation presidents Sergio Jadue of Chile and
Rafael Esquivel of Venezuela also were implicated by the US Justice Department,
along with Jose Luis Chiriboga, whose father, Luis, was president of Ecuador’s
federation.
Bank Hapoalim (BHMB) and Hapoalim Ltd. (BHS) reached a deal
with the Justice Department and the US attorney’s office in which they and BHMB
subsidiary Hapoalim (Latin America) SA will not be subject to prosecution for
any of the crimes admitted in the deal, except for criminal tax violations. No
bank employees involved in the illegal activities were identified by name.
“This announcement illustrates another aspect in the spider
web of bribery, corruption and back-room deals going on behind the scenes as
soccer games were played on the field,” William F. Sweeney, assistant director
in charge of the FBI’s New York field office, said in a statement. “Bank
Hapoalim admits executives looked the other way, and allowed illicit activity
to continue even when employees discovered the scheme and reported it.”
In a weave of bribes that included details from wiretaps and
unidentified individuals referred to as Relationship Manager 1, Compliance
Employees 1 and 2 and Co-Conspirators 1 and 2, prosecutors detailed the actions
by Full Play Group, the Argentine company that won rights to sell media and
marketing for the 2015, 2016, 2019 and 2023 Copa Americas, South America’s
national team championship.
Traffic Sports, a Brazilian company, held the rights from
1987-2011. Traffic Sports and Traffic Sports USA reached guilty pleas and were
fined a total of $1 million last year.
Full Play is controlled by Hugo Jinkis and son Mariano, who
were first indicted in 2015 and have been charged with racketeering conspiracy,
wire fraud, wire fraud conspiracy and money laundering conspiracy.
Full Play had accounts at the banks in the names of
subsidiaries Bayan Group, Cross Trading and Yorkfields, and the two Jinkises
used those accounts to make at least 53 bribe payments totaling more than
$14.02 million from 2010-14 to Bedoya, Chiriboga, Esquivel and Figueredo as
part of Full Play’s deal to acquire marketing rights to the 2015, 2016, 2019
and 2023 Copa Americas, prosecutors said in a statement of facts.
“For nearly five years, Bank Hapoalim employees used the US
financial system to launder tens of millions of dollars in bribe payments to
corrupt soccer officials in multiple countries,” Brian A. Benczkowski,
assistant attorney general of the criminal division, said in a statement.
“Today’s announcement demonstrates the Department’s commitment to holding
financial institutions to account when they knowingly facilitate corruption and
other criminal conduct.”
Federal authorities in Manhattan said Thursday that Bank
Hapoalim and its Swiss subsidiary also agreed to pay $874 million to resolve
allegations they conspired with US taxpayers to hide more than $7.6 billion
from the IRS through deposits in more than 5,500 secret Swiss and Israeli bank
accounts.
Esquivel took at least 34 payments from about 2009-14
totaling more than $9.41 million. He pleaded guilty in November 2016 to
racketeering conspiracy, wire fraud conspiracy and money laundering conspiracy
and awaits sentencing.
Bedoya received 19 payments totaling $3.81 million from
2008-15. He pleaded guilty in November 2015 to racketeering conspiracy and wire
fraud conspiracy and awaits sentencing.
Jose Luis Chiriboga got 12 payments totaling $2.12 million
on behalf of his father from Jinkis-related accounts from about 2009-14, the
statement said. He was indicted in November 2015 on charges on racketeering
conspiracy, wire fraud conspiracy and money fraud conspiracy.
Jadue received three payments totaling $1.54 million in 2014
from Bayan. He pleaded guilty in November 2015 to racketeering conspiracy and
wire fraud conspiracy and awaits sentencing.
Figueredo received at least three payments from BHS totaling
$950,000 from 2012-14, prosecutors said. He was indicted in May 2015 on charges
of racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy,
unlawful procurement of naturalization, and aiding and assisting in the
preparation of false and fraudulent tax returns.
Full Play made at least 15 bribe payments totaling $1.74
million from the Yorkfields account to accounts belonging to or controlled by
soccer officials, and Full Play paid $130,000 from a Cross Trading account to
Bedoya’s account at BHBM. Yorkfields made a payment of about $200,000 in 2007
to a currency exchange.
Since the first arrests of people attending the FIFA
Congress in May 2015, there have been 26 publicly announced individual guilty
pleas, many from former soccer officials, including CONCACAF general secretary
Chuck Blazer.
Former Brazilian federation president José Maria Marin and
former CONMEBOL president Juan Ángel Napout of Paraguay were convicted at trial
and sentenced to prison, and there were four corporate guilty pleas and one
corporate deferred prosecution agreement. This was the second corporate
non-prosecution agreement following a deal by Imagina Media.
Prosecutors revealed new details on April 6 of alleged
bribes paid to FIFA executive committee members for their World Cup hosting
rights votes and charged a pair of former 21st Century Fox executives with
making illegal payments to win broadcast rights for the 2018 and 2022 tournaments.
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