The World Cup of Fraud Continues

Integrity of sports is always a hot topic that will never go away. Questions of fraud and scandal will always be raised. This is not different when it comes to soccer. Worldwide soccer fans may always have had an inkling that FIFA and soccer have their moments of corruptness, despite the eerie quietness of such surrounding the beautiful game. In 2015, that inkling was undoubtedly exposed to the world. The fraud and scandal surrounding the beautiful game was coined as the “World Cup of Fraud”. Fitting no doubt.

It has now been around five years since the “World Cup of Fraud” was illuminated to the world. All the charges against the defendants were brought by individual governments and not the court of arbitration for sport because such court is akin to an “arbitration” setting rather than a “criminal” setting . Both the United States and the Swiss Government brought a plethora of charges against FIFA officials and corporate executives. In May of 2015, a forty-seven count indictment was brought against fourteen defendants in the Eastern District of New York. The defendants included 9 FIFA officials and 5 corporate executives. The initial charges alleged racketeering, conspiracy and corruption. Many of the defendants have been arrested and plead guilty to the charges .

The then current president of FIFA, Joseph “Sepp” Blatter, avoided having any indictments brought against him by the United States government, but did not avoid having charges brought against him by the Swiss Government. Two charges were brought against Blatter were: Criminal Mismanagement (Article 158 Swiss Criminal Code) and Misappropriation (Article 138 Swiss Criminal Code). However, four and half years after the charges brought against Blatter, the Swiss attorney general’s office announced that they will drop one of the only 2 charges against Blatter. As of 2015, there have been no convictions from the Swiss investigations, despite terabytes of files and possible evidence seized. It seems that the Swiss cases are stalling and have “hit problems”, while the United States and their assault against fraud and crimes against the integrity of the game is surging more than ever.

Joseph “Sepp” Blatter

On March 18, 2020 the Department of Justice filed superseding indictments, which were made public on April 7, 2020. This is the third superseding indictment. This means that it replaces two previous indictments brought by the DOJ. This indictment charges additional sports executive and a sports marketing company known as Full Play. The alleged crimes include wire fraud, money laundering and money laundering conspiracy, interstate and foreign travel in-aid-of racketeering and obstruction of justice and obstruction of justice conspiracy. All white collar crimes. The charges are the result of the alleged schemes of bribing soccer officials in order to obtain confidential bidding information for broadcasting rights connected to the 2018 Russia World Cup, and the 2022 Qatar World Cup.

Two of the newest defendants, Carlos Martinez and Hernan Lopez are both U.S. citizens have and have ties to one of the biggest broadcasting stations in the United States. Lopez served as CEO of Fox International Channels, which is a subsidiary of Fox and also oversaw Fox’s sports broadcasting businesses in Latin America. He is charged with conspiracy to pay and conceal bribes and kick back payments in order to get favorable broadcasting rights.

Hernan Lopez – Yahoo.com

Martinez is a co-conspirator along with Lopez who was president of Fox International Channels and was a high-ranking executive of the affiliated network, Fox Latin American Channel. The prosecutors stated the two co-conspirators “relied on loyalty secured through the payment of bribes to certain CONMEBOL officials in connection with the Copa Libertadores to advance the business interests of Fox.” The bribes and kickbacks most likely helped Fox secure certain broadcasting rights and thus hurt Fox’s competitors. This may open a window for Fox’s competitors to possibly sue Fox on theories such as vicarious liability. This would look as Fox is responsible for the wrong doing of Lopez and Martinez.

Even if competitors do pursue litigation, the question of jurisdiction arises. Would they have jurisdiction to prosecute in the United States. Referring back to the initial indictment and all the superseding indictments, how is that the United States Department of Justice have jurisdiction to prosecute a crime that did not occur in the United States? Many U.S. statutes have something known as extraterritorial provisions. Extraterritorial jurisdiction refers to a court’s ability to exercise power beyond its territorial limits, similar to state’s long-arm jurisdiction. The provisions allow for the U.S. to reach foreign citizens if they violate certain statutes. However, there still has to be some kind of jurisdictional hook. Depending on the statute violated, the jurisdictional hook can be as minute as a phone call to a person located in the United States, an email going through a U.S. server or money passing through a U.S. bank. In this case, the crimes charged are wire fraud. U.S. can have jurisdiction over defendants if the wire originates in the U.S.

The U.S obtained much of its evidence from CONCACAF’s headquarters in Miami, which may be the source of the jurisdiction. Once there is evidence, the defendants still need to be brought or lured into the U.S. This can be done with the cooperation of other nations. In this case Switzerland. Switzerland can extradite defendants to the U.S. for trial.  Extradition depends on the treaties among nations. There are certain financial crimes for which the Swiss will not extradite. What extraditions usually require is dual criminality. This means that the crime is also a crime in the country where the arrests are made, whether or not the crime goes by the same name. For the FIFA scandal, Switzerland has been very cooperative, despite not having any convictions themselves.

CONCACAF Raid by the FBI – Miami Herald

Notwithstanding that the US is famously an apathetic nation when it comes to soccer, I am glad the US is taking a hard stance against fraud and trying to increase the integrity of the beautiful game.

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