Banks did not do enough to police FIFA transactions, says global agency

From Business Insider –

“A global group of government anti-money-laundering agencies said that financial institutions have not done enough to police suspicious financial activity by officials at soccer’s global governing body FIFA, and cautioned banks to step up scrutiny.

The warning from the Paris-based Financial Action Task Force came in the wake of last month’s indictment by the U.S. of nine current and former FIFA officials and five business executives on a series of corruption charges, including bribery, money laundering and wire fraud.

With the U.S. investigation continuing to widen, and a separate Swiss probe gearing up into whether there was corruption involved in FIFA’s awarding of the hosting rights to Russia and Qatar for the next soccer World Cups in 2018 and 2022, the warning will add to banks’ concern about handling certain soccer accounts for organizations and individuals.”

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How Watergate helps explain how the U.S. can prosecute FIFA officials

From The Washington Post –

The U.S. Justice Department unsealed an indictment Wednesday that charges 47 individuals, including FIFA officials, with bribery, racketeering, money laundering, fraud and other related crimes. While many of the details are still unclear, it appears that many of these alleged crimes were neither committed in the United States nor by U.S. citizens:

“The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States,” said Attorney General Lynch. “It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks. And it has profoundly harmed a multitude of victims, from the youth leagues and developing countries that should benefit from the revenue generated by the commercial rights these organizations hold, to the fans at home and throughout the world whose support for the game makes those rights valuable. Today’s action makes clear that this Department of Justice intends to end any such corrupt practices, to root out misconduct, and to bring wrongdoers to justice – and we look forward to continuing to work with other countries in this effort.”

Why is it that the United States can prosecute non-citizens who work for an organization located in Switzerland and who are accused of taking bribes abroad? Philip Bump explains that there are U.S. statutes that that can target foreign citizens for crimes committed abroad as long as these foreign citizens have some ties to the United States. An especially important legal instrument is the 1977 Foreign Corrupt Practices Act (FCPA). The Justice Department (for criminal investigations) and the Securities and Exchange Commission (SEC) frequently use this law: For instance, the law was used to levy heavy fines against German companies, registered with the New York Stock Exchange, that bribed foreign government officials to win contracts.

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New UBS Tax Evasion Probe, Again Over Americans

From Forbes –
“UBS AG got into trouble with the IRS and Justice Department, launched thousands of voluntary disclosures to the IRS, and changed bank secrecy forever. Eventually, the Swiss Parliament passed a measure enabling banks to hand over client identities to American authorities without violating Swiss bank-secrecy laws. After getting bruised in court battles with the IRS, in 2009, UBS paid $780 million to settle charges that it helped wealthy Americans evade taxes.

Now, UBS faces more of the same, this time over whether UBS helped Americans evade taxes through investments banned in the U.S. This déjà vu comes at an awkward time, as banks everywhere are reeling with FATCA compliance. Meanwhile, U.S. account holders the world over are scrambling to comply to their banks, and ultimately to the IRS.”

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