BROOKLYN, NY
In a 47-count indictment was unsealed Wednesday morning in federal court, nine FIFA officials and five corporate executives were charged with racketeering, wire fraud, money laundering and other felony crimes.
The charges were in connection with a so-called 24-In scheme, which authorities allege was set up to enrich the defendants through the corruption of international soccer, officials said.
The guilty pleas of four individual defendants and two corporate defendants were also unsealed Wednesday.
The defendants charged in the indictment include high-ranking officials of the Fédération Internationale de Football Association (FIFA), the organization responsible for the regulation and promotion of soccer worldwide, as well as leading officials of other soccer governing bodies that operate under the FIFA umbrella.
The defendants include two current FIFA vice presidents and the current and former presidents of the Confederation of North, Central American, and Caribbean Association Football or CONCACAF, officials said.
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The defendants Jeffrey Webb and Jack Warner—the current and former presidents CONCACAF, the continental confederation under FIFA headquartered in the United States—are among the soccer officials charged with racketeering and bribery offenses.
The defendants also include U.S. and South American sports marketing executives who are alleged to have systematically paid and agreed to pay well over $150 million in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments.
Also Swiss authorities in Zurich arrested seven of the defendants charged in the indictment, the defendants Jeffrey Webb, Eduardo Li, Julio Rocha, Costas Takkas, Eugenio Figueredo, Rafael Esquivel, and José Maria Marin, at the request of the United States.
The guilty pleas of the four individual and two corporate defendants include: Charles Blazer, the long-serving former general secretary of CONCACAF and former U.S. representative on the FIFA executive committee; José Hawilla, the owner and founder of the Traffic Group, a multinational sports marketing conglomerate headquartered in Brazil; and two of Hawilla’s companies, Traffic Sports International, Inc. and Traffic Sports USA, Inc., which is based in Florida.
The Enterprise
FIFA is composed of 209 member associations, each representing organized soccer in a particular nation or territory, including the United States and four of its overseas territories.
FIFA also recognizes six continental confederations that assist it in governing soccer in different regions of the world.
The U.S. Soccer Federation is one of 41 member associations of the confederation known as CONCACAF, which has been headquartered in the United States throughout the period charged in the indictment.
The South American confederation, called CONMEBOL, is also a focus of the indictment.
As alleged in the indictment, FIFA and its six continental confederations, together with affiliated regional federations, national member associations, and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of the federal racketeering laws.
The purpose of the enterprise is to regulate and promote the sport of soccer worldwide.
As alleged in the indictment, one key way the enterprise derives revenue is to commercialize the media and marketing rights associated with soccer events and tournaments.
The organizing entity that owns those rights—as FIFA and CONCACAF do with respect to the World Cup and the Gold Cup, their respective flagship tournaments—sells them to sports marketing companies, often through multi-year contracts covering multiple editions of the tournaments.
The sports marketing companies, in turn, sell the rights downstream to TV and radio broadcast networks, major corporate sponsors, and other sub-licensees who want to broadcast the matches or promote their brands.
The revenue generated from these contracts is substantial: according to FIFA, 70% of its $5.7 billion in total revenues between 2011 and 2014 was attributable to the sale of TV and marketing rights to the 2014 World Cup.
The Racketeering Conspiracy
The indictment alleges that, between 1991 and the present, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery, and money laundering.
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 $150 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.
Most of the schemes alleged in the indictment relate to the solicitation and receipt of bribes and kickbacks by soccer officials from sports marketing executives in connection with the commercialization of the media and marketing rights associated with various soccer matches and tournaments, including FIFA World Cup qualifiers in the CONCACAF region, the CONCACAF Gold Cup, the CONCACAF Champions League, the jointly organized CONMEBOL/CONCACAF Copa América Centenario, the CONMEBOL Copa América, the CONMEBOL Copa Libertadores, and the Copa do Brasil, which is organized by the Brazilian national soccer federation (CBF).
Other alleged schemes relate to the payment and receipt of bribes and kickbacks in connection with the sponsorship of CBF by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup, and the 2011 FIFA presidential election.
The Indicted Defendants
The defendants and their co-conspirators fall generally into three categories: soccer officials acting in a fiduciary capacity within FIFA and one or more of its constituent organizations; sports media and marketing company executives; and businessmen, bankers, and other trusted intermediaries who laundered illicit payments.
Nine of the defendants were FIFA officials by operation of the FIFA statutes, as well as officials of one or more other bodies:
- Jeffrey Webb: Current FIFA vice president and executive committee member, CONCACAF president, Caribbean Football Union (CFU) executive committee member, and Cayman Islands Football Association (CIFA) president.
- Eduardo Li: Current FIFA executive committee member-elect, CONCACAF executive committee member, and Costa Rican soccer federation (FEDEFUT) president.
- Julio Rocha: Current FIFA development officer. Former Central American Football Union (UNCAF) president and Nicaraguan soccer federation (FENIFUT) president.
- Costas Takkas: Current attaché to the CONCACAF president. Former CIFA general secretary.
- Jack Warner: Former FIFA vice president and executive committee member, CONCACAF president, CFU president, and Trinidad and Tobago Football Federation (TTFF) special adviser.
- Eugenio Figueredo: Current FIFA vice president and executive committee member. Former CONMEBOL president and Uruguayan soccer federation (AUF) president.
- Rafael Esquivel: Current CONMEBOL executive committee member and Venezuelan soccer federation (FVF) president.
- José Maria Marin: Current member of the FIFA organizing committee for the Olympic football tournaments. Former CBF president.
- Nicolás Leoz: Former FIFA executive committee member and CONMEBOL president.
Four of the defendants were sports marketing executives: - Alejandro Burzaco: Controlling principal of Torneos y Competencias S.A., a sports marketing business based in Argentina, and its affiliates.
- Aaron Davidson: President of Traffic Sports USA, Inc. (Traffic USA).
Hugo and Mariano Jinkis: Controlling principals of Full Play Group S.A., a sports marketing business based in Argentina, and its affiliates. - And one of the defendants was in the broadcasting business but allegedly served as an intermediary to facilitate illicit payments between sports marketing executives and soccer officials:
- José Margulies: Controlling principal of Valente Corp. and Somerton Ltd.
The Convicted Individuals and Corporations
The defendants are presumed innocent until proven guilty.
The following individuals and corporations previously pled guilty under seal:
On July 15, 2013, the defendant Daryll Warner, son of defendant Jack Warner and a former FIFA development officer, waived indictment and pled guilty to a two-count information charging him with wire fraud and the structuring of financial transactions.
On October 25, 2013, the defendant Daryan Warner, son of defendant Jack Warner and a businessman, waived indictment and pled guilty to a three-count information charging him with wire fraud conspiracy, money laundering conspiracy, and the structuring of financial transactions. Daryan Warner forfeited over $1.1 million around the time of his plea and has agreed to pay a second forfeiture money judgment at the time of sentencing.
On November 25, 2013, the defendant Charles Blazer, the former CONCACAF general secretary and a former FIFA executive committee member, waived indictment and pled guilty to a 10-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy, income tax evasion, and failure to file a Report of Foreign Bank and Financial Accounts (FBAR). Blazer forfeited over $1.9 million at the time of his plea and has agreed to pay a second amount to be determined at the time of sentencing.
On December 12, 2014, the defendant José Hawilla, the owner and founder of the Traffic Group, the Brazilian sports marketing conglomerate, waived indictment and pled guilty to a four-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy, and obstruction of justice. Hawilla also agreed to forfeit over $151 million, $25 million of which was paid at the time of his plea.
On May 14, 2015, the defendants Traffic Sports USA, Inc. and Traffic Sports International, Inc. pled guilty to wire fraud conspiracy.
All money forfeited by the defendants is being held in reserve to ensure its availability to satisfy any order of restitution entered at sentencing for the benefit of any individuals or entities that qualify as victims of the defendants’ crimes under federal law.
If Convicted, Officials Face Prison Sentences
The indicted and convicted individual defendants face maximum terms of incarceration of 20 years for the RICO conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering, and obstruction of justice charges.
In addition, the defendant Eugenio Figueredo faces a maximum term of incarceration of 10 years for a charge of naturalization fraud and could have his U.S. citizenship revoked. He also faces a maximum term of incarceration of five years for each tax charge.
The defendant Charles Blazer faces a maximum term of incarceration of 10 years for the FBAR charge and five years for the tax evasion charges; and the defendants Daryan and Daryll Warner face maximum terms of incarceration of 10 years for structuring financial transactions to evade currency reporting requirements.
Each individual defendant also faces mandatory restitution, forfeiture, and a fine. By the terms of their plea agreements, the corporate defendants face fines of $500,000 and one year of probation.
The government’s investigation is ongoing.