Bermuda Post

Wednesday, Apr 24, 2024

Julius Baer to Pay $80 Million to End FIFA Laundering Probe

Julius Baer to Pay $80 Million to End FIFA Laundering Probe

Julius Baer Group Ltd. will pay almost $80 million to resolve a U.S. probe of its role in the payment of tens of millions of dollars in bribes to leaders of FIFA, the governing body for world soccer.

The U.S. charged the Swiss private bank with a money-laundering conspiracy and will drop the case in three years as part of a deferred-prosecution agreement, if the bank meets certain conditions. Federal prosecutors and the bank’s general counsel appeared in a video conference Thursday before U.S. District Judge Pamela Chen in Brooklyn, New York.

Julius Baer will pay a fine of $43.3 million and forfeit $36.4 million. The bank said in November it had set aside $79.7 million to resolve the case. It has cooperated with U.S. authorities since 2015 in a corruption investigation involving officials and affiliates of FIFA and associated sports media and marketing firms.

The bank “agreed with sports marketing executives and soccer officials to launder at least $36,368,400 in bribe payments through the United States in furtherance of a scheme in which sports marketing companies bribed soccer officials in exchange for broadcasting rights to soccer matches,” according to a statement of facts that Julius Baer admitted.

The bank declined to comment on the agreement.

Massive Crackdown


The pact is part of a massive U.S. crackdown on corruption in FIFA that led to at least 26 guilty pleas as well as deferred- or non-prosecution agreements involving several sports marketing and athletic apparel corporations.

A former Julius Baer banker, Jorge Arzuaga, was sentenced in November to three years of probation for facilitating the payment of bribes to the presidents of the Argentine Soccer Federation and the South American Football Confederation. Arzuaga cooperated with investigators.

While the bank contacted prosecutors shortly after the U.S. made its first FIFA arrests in May 2015, it failed to “come forward with all evidence pertaining to the involvement of senior management,” according to court papers. That conduct involved two senior managers, including one executive board member. Neither manager was named.

Since then, the bank has made a “significant effort to remediate its historically deficient compliance program,” spending $112 million on a three-year program to bolster its anti-money laundering controls, the papers said.

The bank has faced other scandals in recent years. In 2018, former banker Matthias Krull was sentenced to 10 years in prison for his role in a plot to launder $1.2 billion stolen from Venezuela’s state-owned oil producer, Petroleos de Venezuela SA. In 2016 the bank paid $547 million and signed a deferred-prosecution agreement after admitting it helped thousands of Americans conceal billions of dollars in assets from the U.S. Internal Revenue Service. Two bankers pleaded guilty.

And in March, Julius Baer announced that Swiss regulator Finma was lifting a ban on complex acquisitions it imposed on the bank in February 2020 over its inadequate money-laundering controls.

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