DOJ Probing Mega Banks HSBC, Standard Chartered For FIFA Scandal Money Laundering

In the latest development in the seemingly made-for-Hollywood events surrounding the FIFA scandal, United States regulators are probing major banks over their possible handling and processing of “tainted funds.” The investigation is focused on whether the banks’ internal controls and regulations aimed at money laundering failed to spot suspicious payments made to or from FIFA officials. The investigation into the banks comes after Swiss police raided a luxury hotel in Zurich in late May in order to arrest FIFA officials for their alleged roles in the organization’s widespread corruption. Rob Sherman, a spokesperson for HSBC Holdings in New York, stated that “[the bank] is continuing to review the allegations in the indictments against certain FIFA executives and others, to ensure that [the bank’s] services are not being misused for financial crime.”

United States authorities have charged 14 people at this time, including soccer officials and sports business executives, alleging their involvement in paying greater than $150 million in bribes to secure marketing and television contracts for soccer tournaments. U.S. prosecutors say their investigation also exposes money laundering schemes, tens of millions of dollars in offshore accounts held by FIFA officials and millions of dollars in untaxed incomes of those officials. Swiss authorities are conducting a parallel investigation into whether FIFA officials used bribery when awarding the 2018 World Cup to FIFA friendly Russia and the 2022 World Cup to Qatar, a country with no soccer stadiums and 110 degree heat in the summer.

United States prosecutors asked Switzerland to extradite seven of the FIFA officials arrested in the May raid and the Swiss Federal Office of Justice stated it would rule on the extradition requests within a few weeks.

FIFA, which was organized in 1904 with eight European football associations, eventually expanded within a decade to include South Africa, Brazil, Argentina, the United States and Canada. Today, it is composed of 209 national soccer organizations and runs one of the world’s most proliferative events: the World Cup. FIFA’s scandals, which go back decades, have resulted not because of the actions of any one official but because FIFA falls within a gray area of legality: it is not a business nor a governmental organization. It is basically a member’s club that governs itself without the rules of business or government. The recent arrests have occurred partly because FIFA conducted business on United States soil and partly because it violated Switzerland’s anti-corruption laws, where it is headquartered.

The alleged bribes and payoffs central to the United States’ investigation include the payoffs that exchanged hands over the selection of South Africa to host the 2010 Men’s World Cup and kickbacks in exchange for votes in FIFA’s 2011 presidential elections. The FIFA-affiliated governing body for North and Central America and the Caribbean, also allegedly took bribes in exchange for the rights to World Cup qualifying events, such as the Gold Cup tournament. The indictments cover activities taking place over the past two decades.

While many people are happy that the United States and Switzerland finally got involved in prosecuting the endless number of crimes allegedly committed by FIFA officials and related executives, United States officials say their investigation is just the beginning.