Why it matters: The worldwide soccer community has for years decried the brazen corruption that permeated FIFA, international soccer’s governing organization, but FIFA remained seemingly impervious . . . until now. On May 27, 2015, the DOJ announced a 47-count indictment of nine FIFA officials and five sports marketing executives for racketeering conspiracy, wire fraud and money laundering in a bribery and kickback scheme carried out over a 24-year period. The days since the May 27 announcement have brought additional explosive revelations and damning developments, including the resignation on June 2 of newly reelected FIFA President Sepp Blatter. The DOJ said at the May 27 press conference that the indictment was only the beginning of its wide-ranging investigation, and gave U.S. banks a strong indication that they may be next given the millions of dollars in illegal payments that are alleged to have been funneled through U.S. bank accounts.

Detailed discussion: On May 27, 2015, top law enforcement officials, led by Attorney General Loretta Lynch, Acting U.S. Attorney for the Eastern District of New York Kelly T. Currie, and FBI Director James Comey, announced the unsealing of a 47-count indictment charging 14 defendants with racketeering, wire fraud and money laundering conspiracies in connection with their participation in a 24-year scheme to “enrich themselves through the corruption of international soccer.” Among those indicted or who had already pled guilty were high-ranking officials of the Federation Internationale de Football Association (FIFA), international soccer’s governing body headquartered in Zurich. Three of the most prominent were Jeffrey Webb, Jack Warner and Charles “Chuck” Blazer, current and former high-profile officers both of FIFA and of CONCACAF, the continental confederation of North/Central American and Caribbean soccer organizations under FIFA that was headquartered in New York and Miami during the time charged. In its May 27 press release, the DOJ announced that Blazer was one of four individual defendants who had already pled guilty, along with two of Warner’s sons, and that Warner was one of seven defendants that had been arrested earlier that morning in Zurich in a dramatic raid at a luxury hotel carried out by Swiss police. Interpol is aiding in the extradition of the remaining defendants. The indictment also names five U.S. and South American sports media and marketing executives who are alleged to have paid the exorbitant bribes and kickbacks to the defendants in order to obtain lucrative media and marketing rights to international soccer tournaments.

Briefly, the indictment alleged that FIFA, its six confederations (including CONCACAF) and the other regional soccer organizations operating under it, together with various national member associations and sports marketing companies, were acting as an “enterprise” for purposes of the federal racketeering laws. The indictment alleges that, from 1991 to the present, the defendants and their coconspirators “corrupted the enterprise” by engaging in criminal wire fraud and money laundering activities in connection with the solicitation and taking of bribes and kickbacks in excess of $150 million relating to the sale of media and marketing rights to flagship soccer tournaments such as the World Cup.

Acting U.S. Attorney Currie said at the May 27 press conference: “[l]et me be clear: this indictment is not the final chapter in our investigation” and it is the millions of dollars in illegal payments and how they were transacted that are giving U.S. banks cause for concern. Attorney General Loretta Lynch said at the same press conference that the defendants “abused the U.S. financial system” by using the “banking and wire facilities of the United States to distribute bribe payments.” Currie said that “[t]he bribes were often funneled through intermediaries ... using the U.S. banking system and transferring funds to the United States.” As one element establishing U.S. jurisdiction, Currie said that “[a] lot of the banking institutions and the way that these monies were funneled passed through the United States.” While not charged with any wrongdoing, the indictment names numerous banks and financial institutions located in the United States through which the illegal bribery and kickback payments were allegedly funneled, including Bank of America, JP Morgan Chase, HSBC, UBS and Citigroup. As Currie said in the Q&A part of the press conference, “[p]art of our investigation will look at the conduct of the financial institutions to see whether they were cognizant of the fact they were helping launder these bribe payments. It’s too early to say if there is any problematic behavior, but it will be part of our investigation.”

See here to read the DOJ press release dated 5/27/15, titled “Nine FIFA Officials and Five Corporate Executives Indicted for Racketeering Conspiracy and Corruption.”

For more on this matter, read (1) the DOJ press release dated 5/27/15, titled “Attorney General Loretta E. Lynch Delivers Remarks at Press Conference Announcing Charges Against Nine FIFA Officials and Five Corporate Executives” and (2) the transcript of the 5/27/15 Press Briefing Q&A on the Justice Department’s FIFA Indictments found at Whatthefolly.com.