First banker expected to be convicted for his role in Fifa corruption scandal
A Swiss banker is expected to plead guilty to his role in football’s international corruption scandal, as investigators intensify their scrutiny of how banks allegedly helped move millions of dollars in bribe money, according to four people familiar with the matter.
Jorge Arzuaga, an Argentinian who worked at Credit Suisse and Julius Baer, would become the first banker convicted in a scandal that has led to 25 guilty pleas relating to Fifa, football’s governing body. Arzuaga could admit to a conspiracy charge as soon as June 15 in federal court in Brooklyn, New York, and also is negotiating a plea to a criminal charge in Switzerland, the people said.
Arzuaga is co-operating with US authorities, giving an inside account to prosecutors who are trying to determine whether any other Julius Baer bankers or the company itself helped to process suspicious transactions or violated anti-money-laundering laws, two of the people said.
Julius Baer, when asked about Arzuaga, said in a statement that it "parted with" an employee in 2015 after he admitted to "having violated applicable law and internal policies". That employee "never told anyone at the bank that any account was being used as a conduit for bribes and that indeed he denied having such knowledge", according to the statement, which did not refer to Arzuaga by name.
"If this former employee now admits that he used a bank account as a conduit for bribes; no one else at the bank was aware of or involved in such misconduct," the bank said. "The bank is fully supporting the ongoing investigations and cooperating with the authorities on this matter in compliance with applicable laws and regulations."
The bank said it began co-operating with US authorities in mid-2015, and there was "no indication whatsoever" the case would affect a 2016 settlement it reached with the US justice department. In that accord, Julius Baer agreed to pay $547m and admitted it helped thousands of American clients hide billions of dollars of assets from tax authorities.
The expected Arzuaga plea suggests prosecutors may detail in court the ways that bankers allegedly moved bribes and kickbacks around the world to influence the awarding of media and marketing rights to football tournaments in the Americas. Ongoing probes by US and Swiss authorities have upended Fifa, which organises the most-watched sporting event on the planet, the World Cup, and led to the ousting of its longtime chief, Sepp Blatter.
"The Swiss banks have found themselves under incredible pressure, which is only going to continue, as individual bankers are held accountable for their part in an international money-laundering conspiracy," said Jeffrey Neiman, a former federal prosecutor who is not involved in the case.
US authorities have said they traced bribe money through bank accounts in at least 40 nations, and they are expanding investigations of sports-marketing companies and financial institutions that facilitated money laundering. Banks are supposed to know where a customer got funds, the origin of money being wired, and the reason for transactions. Insiders like Arzuaga can make the hunt easier for investigators.
"With the co-operation of those who have already flipped, the justice department is more easily able to hold enabling Swiss banks and bankers accountable," Neiman said.
An attorney for Arzuaga declined to comment, as did a representative for the US attorney’s office in Brooklyn. A Credit Suisse spokesperson referred to a 2016 disclosure in which the bank said it had been contacted by US and Swiss authorities regarding its banking relationships with individuals associated with Fifa, and was co-operating with the inquiry.
Arzuaga was a private banker to Alejandro Burzaco, an Argentinian sports marketing executive who pleaded guilty, the people said. Burzaco admitted to money laundering, racketeering and wire fraud conspiracies, saying he used several banks over almost a decade to launder bribes to football officials.
Burzaco spent 15 years at Citigroup before buying a minority stake in Torneos y Competencias SA, a sports-marketing company, where he continued the company’s pattern of bribing soccer officials, he said in court. He became CEO in 2006, and he said his illicit payments continued until 2015. With his plea, Burzaco agreed to forfeit funds in 11 accounts, including at Julius Baer, Credit Suisse and three other banks.
"I knew that the US banking system would be involved in transferring payments related to the contracts secured through bribery and through exploitation of the commercial rights to the tournaments," Burzaco said at his guilty plea on November 16 2015. "I also knew it was highly likely that the US banking system would be used to facilitate bribe payments."
Arzuaga is expected to say he set up accounts at Credit Suisse and Julius Baer that enabled Torneos to funnel bribes to Julio Grondona, once a senior vice-president of Fifa, the people said. Arzuaga also is expected to admit he received secret payments from Torneos beyond his bank compensation, one of the people said.
Grondona, who died in 2014 at the age of 82, was an influential figure in football for decades and was head of the sport in Argentina. Fifa, which is co-operating with the justice department, said in June 2015 that Grondona authorised a $10m payment that prosecutors characterised as a bribe on behalf of SA’s successful 2010 World Cup bid.
At least eight banks have said they received requests for information from authorities or began internal investigations about football payments, including Citigroup, UBS, HSBC and Julius Baer. No banks have been accused of wrongdoing.
Prosecutors say soccer officials took almost $200m in bribes from sports marketing executives in the Americas seeking media and marketing rights to tournaments. Much of Fifa’s leadership has since been removed.
The US indictment of Burzaco and others describes how the conspirators used an array of deceptions to conceal their movement of money, including "trusted intermediaries, bankers, financial advisers and currency dealers."
They used shell companies and numbered bank accounts in tax havens, structured financial transactions to avoid currency reporting requirements and engaged in bulk cash smuggling, according to the indictment.