Torneos y Competencias, an Argentine sports marketing company, agreed to pay over $112.8 million in forfeiture and criminal penalties to resolve U.S. charges relating to wire fraud conspiracy in connection with the FIFA corruption scandal.
As part of its deferred prosecution agreement (DPA) with the government, Torneos further agreed to implement enhanced internal controls and a rigorous corporate compliance program and to cooperate fully with the government’s ongoing investigation. The DPA was disclosed in court papers filed Dec. 13 by the U.S. Attorney’s Office for the Eastern District of New York in Brooklyn federal court in the case U.S. v. Torneos y Competencias.
According to court documents, Torneos engaged in a 15-year scheme by conspiring with others to systemically paying tens of millions of dollars in bribes and kickbacks to high-ranking officials of FIFA—the international governing body of professional soccer—as well as leading officials of the continental confederations, CONCACAF and CONMEBOL, and other soccer governing bodies that operate under the FIFA umbrella, including the Argentine national soccer federation (AFA), to obtain lucrative media and marketing rights to international soccer tournaments and matches.
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 resolution of the case “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,” Robert Capers, U.S. Attorney for the Eastern District of New York, said in a statement.
“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,” Capers added. “We are following the evidence where it leads and will continue to bring the individuals and entities who have corrupted soccer to justice.”
Under the DPA, 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 agreed to forfeit $89 million, which represents profits it made from corrupt contracts, and pay a $23.76 million criminal penalty. Prosecutors charged Torneos with one count of wire fraud conspiracy, which will be dropped if it abides by the DPA’s terms for four years.
As part of its remedial actions to date, Torneos has terminated its entire senior management team and hired a new general manager, chief financial officer, legal director, chief compliance officer, and compliance manager.
According to the Justice Department, Torneos also has committed to, among other things:
Accept and acknowledge responsibility for its conduct;
Continue its cooperation;
Agree to forfeiture and make the payment of a financial penalty; and
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.
If Torneos complies with its obligations under the agreement, the government said it will defer the prosecution for a period of 48 months and 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. If Torneos violates the agreement, however, it is subject to full criminal prosecution.
The government’s investigation remains ongoing.