FIFA officials arrested on corruption charges; Swiss prosecutors open criminal proceedings into World Cups

Authorities in Zurich on Wednesday arrested several high-ranking FIFA officials on racketeering and corruption charges and will most likely extradite them to the US, The New York Times reported.

The charges relate to more than $150 million in alleged bribes and kickbacks from the 1990s to today.

"The individuals indicted were expected to uphold the rules that kept soccer honest. They instead corrupted the business to enrich themselves," Attorney General Loretta Lynch said in a press conference on Wednesday.

In an extensive statement, the US Department of Justice accused the officials in the international soccer governing body of a "24-year scheme to enrich themselves through the corruption of international soccer."

Four men, including former top-ranking FIFA executive Chuck Blazer, have already pleaded guilty.

The DOJ's indictment charges 14 defendants with racketeering, wire fraud, money-laundering conspiracies, and other offenses.

"This is the World Cup of fraud and we're issuing FIFA a red card," Richard Weber, IRS chief of criminal investigation, said at a press conference.

Seven FIFA officials are currently in custody, and the DOJ is now pursuing more arrests.

US officials say guilty pleas were also given by Daryan Warner and Daryll Warner, the sons of former senior FIFA official Jack Warner of Trinidad and Tobago, and Jose Hawilla, an executive of the Brazil-based sports marketing firm Traffic Sports. US officials say Hawilla has agreed to forfeit over $151 million.

The men face maximum jail 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."

FIFA officials are in Zurich for the congress where FIFA president Sepp Blatter on Friday will face a challenge from Jordan's Prince Ali Bin Al Hussein in a presidential election for the organization. The election will go forward as planned, FIFA officials said in a news conference.

Swiss prosecutors also announced on Wednesday that they had opened criminal proceedings into the two next World Cups — the 2018 World Cup in Russia and the 2022 World Cup in Qatar. Both tournaments will still take place as planned, officials said Wednesday in a news conference.

The Swiss attorney general has seized documents related to the case, according to a statement. The documents will be used in criminal proceedings in Switzerland and abroad.

The Swiss investigation is independent from the one by the US attorney's office that resulted in the arrest of the FIFA officials in Zurich. In the Swiss case, FIFA is considered the injured party, FIFA spokesman Walter de Gregorio said at a news conference.

"The timing may not be obviously the best but definitely FIFA welcomes this process and cooperates fully with the attorney general of Switzerland and the federal office of justice," Gregorio said. "In this case, FIFA is the damaged party. This leads to the fact that there were no searches within the offices of FIFA, the people of the federal attorney are here, we cooperate with them, we provide all the information requested by them, and this is for our own interest."

Gregorio noted that Blatter was not involved in the Swiss procedure.

The Times, citing anonymous law enforcement officials, said the US federal charges spanned two decades of misconduct in soccer's world governing body. Officials told The Times that the US investigation was ongoing and that Blatter had not been cleared of wrongdoing. He was not one of those arrested Wednesday.

The DOJ explains the bribery scheme in its press release:

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 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. ... 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.

The FOJ says that, in return for the bribes, various people and entities at the center of the investigation received "media, marketing, and sponsorship rights in connection with soccer tournaments in Latin America." The statement continues, saying "these crimes were agreed and prepared in the US, and payments were carried out via US banks."

The Times reports that these FIFA executives were charged: Jeffrey Webb, Eugenio Figueredo, Jack Warner, Eduardo Li, Julio Rocha, Costas Takkas, Rafael Esquivel, José Maria Marin, and Nicolás Leoz. Sports marketing executives Alejandro Burzaco, Aaron Davidson, Hugo Jinkis, and Mariano Jinkis are also expected to be charged, along with José Margulies, who authorities say was an intermediary who facilitated illegal payments.

Here is the full FOJ statement:

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