Financial Fraud: Torneos y Competencias S.A. (Torneos) Charged With Wire Fraud Conspiracy And Participation in a Scheme to Corrupt International Soccer
Argentine Sports Marketing Company Admits To Role In International Soccer Bribery Conspiracy And Agrees To $112 Million In Forfeiture And Criminal Penalties
Torneos y Competencias S.A. Enters Into Four-Year Deferred Prosecution Agreement; Agrees to Enhanced Internal Controls and Compliance Obligations
Earlier today, the U.S. Attorney’s Office for the Eastern District of New York filed a criminal information in Brooklyn federal court charging Torneos y Competencias S.A. (Torneos), a South American sports marketing company, with wire fraud conspiracy in connection with the company’s long-running participation in a scheme to corrupt international soccer. Torneos entered into a deferred prosecution agreement with the government in which the company admitted to its role in the 15-year scheme, including its role in paying tens of millions of dollars in bribes and kickbacks to a high-ranking FIFA official to secure his support for, among other things, the acquisition of rights to broadcast the 2018, 2022, 2026, and 2030 editions of the FIFA World Cup. As part of the deferred prosecution agreement, Torneos agreed to over $112.8 million in forfeiture and criminal penalties, and further agreed to implement enhanced internal controls and a rigorous corporate compliance program and to cooperate fully with the government’s ongoing investigation.
The charge and resolution were announced by Robert L. Capers, U.S. Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, FBI, New York Field Office; and Richard Weber, Chief, Internal Revenue Service (IRS) Criminal Investigation.
“Today’s announcement marks another important step in our continuing effort to root out corruption in international soccer and sends a clear message that corporate entities that rely on the U.S. financial system to enrich themselves through bribery will be held to account,” stated U.S. Attorney Capers. “Today, Torneos is being held to account for its conduct, but under new management it is also being given a chance to change the way the business of soccer is done in the future. This corporate resolution reflects the seriousness and sustained nature of Torneos’s criminal conduct as well as the prompt and decisive actions the company undertook to cooperate after the charges in this investigation were first unsealed last year. We are following the evidence where it leads and will continue to bring the individuals and entities who have corrupted soccer to justice.” Mr. Capers extended his thanks to the agents, analysts, and other investigative personnel with the FBI New York Eurasian Joint Organized Crime Squad and the IRS Criminal Investigation Los Angeles Field Office, as well as their colleagues abroad, for their continuing commitment and dedication over the course of this multi-year investigation.
“The only people who should be scoring in a soccer match are the players on the field, not the myriad of companies behind the scenes who see the game as an easy payday. As alleged in this case, we won’t allow businesses to use our financial systems for corrupt practices, and we will continue our search for those entities who are still doing so,” said FBI Assistant Director-in-Charge Sweeney.
“As today’s agreement reflects, Torneos y Competencias undermined the process of fair and open competition when they engaged in corrupt schemes to pay bribes in order to secure lucrative contracts,” said IRS Criminal Investigation Chief Weber. “The IRS is committed to aggressively investigating corporations that use a complex web of offshore entities and foreign and domestic bank accounts to enrich themselves through bribery.”
The Criminal Scheme
According to court documents, Torneos engaged in a 15-year scheme to corrupt international soccer through the payment of bribes and kickbacks to high-ranking officials of FIFA, the organization responsible for the regulation and promotion of soccer worldwide, as well as leading officials of the continental confederations and other soccer governing bodies that operate under the FIFA umbrella. Torneos conspired with others to systematically pay and agree to pay tens of millions of dollars in bribes and kickbacks to high-ranking officials of FIFA, two of FIFA’s confederations, CONCACAF and CONMEBOL, and several national member associations, including the Argentine national soccer federation (AFA), to obtain lucrative media and marketing rights to international soccer tournaments and matches. In addition to multiple editions of the FIFA World Cup, these tournaments and matches included the CONMEBOL Copa Libertadores, the CONMEBOL Copa América, the jointly organized CONMEBOL/CONCACAF Copa América Centenario, and international friendly matches played by the Argentinian national soccer team.
Torneos and its co-conspirators employed a variety of means to prevent the detection of their illegal activities and to conceal the location and ownership of proceeds of those activities, including the use of sham contracts and invoices, reliance on corrupt intermediaries and bankers, the creation and use of shell companies, and the use of cash. Torneos and its co-conspirators also relied on the integrity of the U.S. financial system and its banking institutions and wire facilities to facilitate their scheme, and on the growing U.S. market for soccer to generate profits from the scheme.
The following are three examples of the conduct encompassed in the wire fraud conspiracy charged in the information filed today and to which Torneos has admitted as part of its agreement with the government:
FIFA World Cup
Over the course of several years starting in approximately 2010, Torneos, at times with the assistance of an affiliate of a major broadcasting company headquartered in Latin America and one of its high-level executives, paid millions of dollars in bribes and kickbacks to a high-ranking and influential FIFA official in connection with the Latin American broadcasting company affiliate’s acquisition of rights to broadcast the 2018, 2022, 2026, and 2030 editions of the World Cup, and the subsequent purchase and exploitation by Torneos’s subsidiary TyC International B.V. (TyC International) of the rights to broadcast those editions of the World Cup to audiences in Argentina, Uruguay, and Paraguay. Among other things, the FIFA official – who was also a high-ranking official of CONMEBOL and AFA – used his enormous influence within the global governing body, in exchange for bribes, to push FIFA to sell lucrative rights to broadcast the 2026 and 2030 editions of the World Cup to the Latin American broadcasting company affiliate earlier than anticipated and long before the selection of host countries for those editions of the tournament.
CONMEBOL Copa Libertadores
Over the course of 15 years, Torneos executives and their co-conspirators systematically paid millions of dollars in annual bribe and kickback payments to high-ranking officials of CONMEBOL and its member associations in exchange for their support of Torneos affiliate T&T Sports Marketing Ltd. (T&T) as the holder of the broadcasting rights to the Copa Libertadores, South America’s premier club team tournament. T&T was owned by Torneos and, at various times and in part, by affiliates of a major broadcasting company headquartered in the United States. At times, Torneos paid the bribes and kickbacks with the agreement and support of the U.S. broadcasting company affiliates and their representatives, including three high-ranking executives. Torneos employed a variety of means to facilitate and disguise the annual bribe and kickback payments, including the use of intermediaries, shell companies created off the official books of Torneos, currency dealers, and cash.
CONMEBOL Copa América and CONMEBOL/CONCACAF Copa América Centenario
In 2013, Torneos and its co-conspirators formed a new company, Datisa S.A. (Datisa), which included as its three shareholders Torneos’s subsidiary Productora de Eventos S.A.; the Traffic Group, a multinational sports marketing conglomerate headquartered in Brazil; and another sports marketing company headquartered in Argentina. Datisa thereafter paid and agreed to pay tens of millions of dollars in bribe and kickback payments to high-ranking officials of CONMEBOL, CONMEBOL’s member associations, and the president of CONCACAF in connection with the companies’ acquisition of the media and marketing rights to the 2015, 2019, and 2023 editions of the Copa América and to the 2016 Copa América Centenario, a centennial edition of the tournament played earlier this year in stadiums across the United States. According to court documents, at least 17 soccer officials are implicated in this scheme alone.
Deferred Prosecution Agreement
Pursuant to the deferred prosecution agreement filed today, Torneos has waived federal indictment, agreed to the filing of the criminal information, and accepted responsibility for its criminal conduct and that of its senior executives and other employees. In addition, Torneos has agreed to forfeiture of $89,062,616, which represents profits it made from corrupt contracts, and to pay a criminal penalty of $23,760,000 to the government over the term of the agreement. In consideration of Torneos’s remedial actions to date – which has included the termination of its entire senior management team and the hiring of a new General Manager, Chief Financial Officer, Legal Director and Chief Compliance Officer, and Compliance Manager – and its commitment to, among other things: (a) accept and acknowledge responsibility for its conduct; (b) continue its cooperation; (c) agree to forfeiture and make the payment of a financial penalty; and (d) implement enhanced internal controls and a rigorous corporate compliance program that includes policies and procedures designed to detect and deter violations of all applicable federal, state, and foreign anti-corruption laws, the government agreed to defer the prosecution for a period of 48 months and to obtain an exclusion of time under the Speedy Trial Act to allow Torneos to demonstrate good conduct and compliance with the terms of this agreement. The Honorable Pamela K. Chen approved the exclusion of time at a proceeding held in Brooklyn federal court earlier today. If Torneos complies with its obligations under the agreement, the government will move to dismiss the charge filed today after the conclusion of the 48-month period. If Torneos violates the agreement, it is subject to full criminal prosecution.
The charge and resolution announced today are part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office of the Eastern District of New York, the FBI’s New York Field Office, and the IRS-CI Los Angeles Field Office. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Asset Forfeiture and Money Laundering Section, and the Fraud Section, as well as from INTERPOL Washington. Assistant United States Attorneys Evan M. Norris, Samuel P. Nitze, Brian D. Morris, M. Kristin Mace, and Tanya Hajjar are in charge of today’s prosecution.
The government’s investigation is ongoing.
TORNEOS Y COMPETENCIAS S.A.
Buenos Aires, Argentina
E.D.N.Y. Docket No.: 16 CR 634 (PKC)