Following the dramatic indictments of 14 executives and officials on allegations of corruption and bribery at FIFA, it’s not just soccer officials who are biting their nails. Major financial institutions on Wall Street and abroad appear to be wrapped up in the investigation as well.
Banks including JPMorgan, Citigroup and Wells Fargo maintained accounts or processed bribe money for the officials and executives central to the sprawling criminal scheme, according to the Justice Department’s criminal complaint, issued Wednesday.
Kelly Currie , the U.S. attorney for the Eastern District, told Financial Times that banks were being probed over the matter. “It’s too early to say whether there is any problematic behavior, but it will be part of our investigation,” she said.
In a pointed section of the indictment titled “The Centrality of the U.S. Financial System,” the Justice Department noted that "the defendants and their co-conspirators relied heavily on the United States financial system in connection with their activities.”
The complaint continued, “This reliance was significant and sustained and was one of the central methods and means through which they promoted and concealed their schemes.”
Although this particular section of the indictment didn’t name individual banks, it detailed how “the New York branch of a major U.S. financial institution” routed tens of millions of dollars for Traffic Group, the sports marketing agency whose owner pleaded guilty to charges including wire fraud and money laundering.
Later in the complaint, however, banks are named. Bribes ranging in the millions of dollars allegedly found their way between accounts at Citibank, JPMorgan and other banks.
In one instance, the complaint alleges, a Traffic Group subsidiary made $11 million in bribe payments from its account at Citibank in Miami to the JPMorgan account of the North American soccer federation. The bribes were allegedly used to guarantee the marketing firm the rights to a major tournament.
Other banks named in the indictment include HSBC and Barclays, firms that have paid multibillion-dollar fines over money laundering in recent years.
Could the FIFA investigations be the next big-bank scandal?
Michael McDonald, an attorney and leading expert in money laundering law, isn’t so sure. “It’s a stretch to say they’re going to be pursuing the institutions,” he told International Business Times, noting that investigators would need to conclusively prove bribery on the part of the account-holders before they could pursue charges.
Moreover, while the scope of the alleged corruption at FIFA was staggering, McDonald says it may not stack up to providing financing to Iran or allowing Mexican drug cartels to launder money, charges banks like BNP Paribas and HSBC have settled over.
“It’s not like these guys are terrorists or drug traffickers,” McDonald said of the FIFA officials. Still, knowingly allowing massive bribes to pass through their accounts, he said, could potentially expose the banks to allegations of failing to stop money laundering.
JPMorgan did not comment on the story. Citigroup did not respond to queries as of press time.
Under federal money laundering law, banks are barred from disclosing whether they have tipped off authorities to suspicious activity.