Well-known Swiss Bank Julius Baer admits to laundering more than $36 million in bribes involving soccer officials of Fédération Internationale de Football Association (FIFA) and other soccer organizations.
The bribes were part of a scheme that involved sports marketing companies bribing soccer officials to get rights for broadcasting soccer matches. As a result, Bank Julius Baer (BJB) was officially charged with money laundering conspiracy. The bank admitted to the conspiracy in Brooklyn federal court on May 27, 2021. Julius Baer then entered into an agreement to resolve the investigation into its involvement in the money-laundering conspiracy. As a part of the said agreement, Julius Baer had to pay over $79 million in penalties. The penalties included a fine worth $43,320,000 and forfeiture worth $36,368,400. The arrangement was held in the presence of United States District Judge Pamela K. Chen.
Arzuaga’s Role in Bank Julius Baer’s Laundering Case
Jorge Luis Arzuaga, a former relationship manager in Bank Julius Baer pleaded guilty on June 15, 2017. Arzuaga, who worked in BJB’s offices in Zurich, Switzerland and Montevideo, Uruguay, was sentenced by the same judge to three years’ probation in November 2020.
From February 2013 to May 2015, Bank Julius Baer, via Arzuaga conspired with sports marketing executives to launder at least $36,368,400 worth of bribes for soccer officials for rights to broadcast soccer games.
Among the said executives include Alejandro Burzaco, the then CEO of Torneos y Competencias, a sports marketing company in Argentina. Burzaco admitted to the charges of racketeering conspiracy and other offenses associated with him paying bribes in November 2015. Bank Julius Baer conspired with Burzaco and others to perform illegal transactions through BJB accounts. The Bank helped conceal the actual nature of the payments and promote the scheme. At the time of the offense, Bank Julius Baer’s Anti-Money Laundering protocols failed to prevent or detect the money laundering scheme.
Had officials thoroughly reviewed Arzuaga’s due diligence on Torneos y Competencias, they would have seen several red flags. They would have seen the payments to third parties, fake contracts, and services reportedly provided by shell corporations. All of these transactions could have warned Bank Julius Baer about the money laundering scheme. According to Bank Julius Baer, the bank knew that the accounts of Arzuaga’s clients were linked to global soccer. BJB also understood that international soccer involved high risks. However, a BJB executive still approved and even rushed the opening of the accounts in an effort to profit a lot from them.
Acting Assistant Attorney General McQuaid stated that the resolution sends a powerful message to all financial institutions that they will be held accountable if they hide their client’s crimes or promote a corrupt scheme.
“From the time of the first FIFA-related indictment, the Department has promised to hold accountable the financial institutions involved in this global criminal scheme. We are delivering on that promise,” McQuaid said.
Moreover, Julius Baer’s admission shows that IRS Criminal Investigation persistently goes after criminals who use their positions to damage and misuse the financial system.