NEW YORK
FOXSoccer.com's Kyle McCarthy provides some background and legal insight into what may go down as a pivotal day for world football's governing body, after the arrests of FIFA officials on corruption charges on Wednesday. Kyle is a graduate of the University of Connecticut School of Law. He is a member of the bar in Massachusetts and an inactive member of the bar in Rhode Island.
What exactly happened on Wednesday morning?
Law enforcement officials in the United States and Switzerland acted in concert on Wednesday morning to conduct raids in Miami and Zurich to secure and seize documents relevant to separate investigations in both countries.
Swiss officials collected information from local banks prior to the raid and focused on securing data and documents stored in the IT system at FIFA. Those measures were conducted with the cooperation of FIFA, according to a statement issued by the Office of the Attorney General of Switzerland on Wednesday morning. Those files will serve as evidence for ongoing and potential criminal proceedings in Switzerland and the United States. FBI and IRS officials conducted a similar raid at CONCACAF headquarters to gather documents from the regional governing body.
In conjunction with those efforts, Swiss law enforcement officials arrested CONCACAF president Jeffrey Webb (Cayman Islands), FIFA vice president Eugenio Figueredo (Uruguay) and five other senior officials in Zurich pursuant to indictments unsealed in the Eastern District of New York early Wednesday morning. Figueredo, Webb and their five colleagues — Rafael Esquivel (Venezuela), Eduardo Li (Costa Rica), Jose Maria Marin (Brazil), Julio Rocha (Nicaragua) and Costas Takkas (United Kingdom) — face extradition to the United States under the terms of a treaty signed between the two countries in 1990 and enacted in 1997.
At the same time, the U.S. Department of Justice revealed a 47-count indictment involving the seven officials detained in Switzerland and five more parties on charges including racketeering, wire fraud and money laundering, according to a statement.
The Department of Justice alleged the 12 named parties — including former CONMEBOL president Nicolás Leoz Almirón (Paraguay), CONCACAF president Jack Warner (Trinidad & Tobago) and Traffic Group USA president Aaron Davidson (United States) — participated in a "24-year scheme to enrich themselves through the corruption of soccer." The scheme included "well over $150 million in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments," according to the DOJ statement.
In addition to those indictments, the DOJ revealed four people and two corporations pled guilty over the past two years in conjunction with the probe:
● Former CONCACAF general secretary Chuck Blazer (10 counts, including income tax evasion, racketeering conspiracy and money laundering conspiracy)
● Traffic Group owner and founder José Hawilla (racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy and obstruction of justice)
● Daryan Warner (money laundering conspiracy, wire fraud conspiracy, and the structuring of financial transactions)
● Daryll Warner (wire fraud and the structuring of transactions)
● Traffic Sports USA, Inc. (wire fraud conspiracy)
● Traffic Sports International, Inc. (wire fraud conspiracy)
Three of those parties agreed to forfeit significant sums: Blazer ($1.9 million) Hawilla ($151 million, including an immediate payment of $25 million) and Daryan Warner ($1.1 million, plus a further amount to be determined at the time of sentencing).
What did American officials need to prove in order to obtain the indictments?
U.S. officials needed to establish jurisdiction over the actions first and foremost. Most FIFA-related activities occur outside American soil. It is not a coincidence that many of the parties — CONCACAF and Traffic Sports, specifically — operate primarily in the U.S. There are extraterritorial provisions designed to expand the reach of certain statutes (wire fraud, in particular), but these cases require a jurisdictional hook in order to withstand legal challenges.
In this instance, the nexus — or connection, in more digestible terms — came from the completion, the conduct or the initiation of illegal activities on American soil. For example, the deposit or the withdrawal of money in an American-based bank as part of a scheme to defraud would satisfy jurisdictional concerns on wire fraud charges.
Once those jurisdictional elements are in place (and they serve as the bedrock of any case), the authorities attempt to gather evidence to substantiate the other elements required to bring the desired charges. Justice Department lawyers must present the essential facts to a grand jury in pursuit of an indictment unless the defendant waives such a privilege. Federal grand juries must determine that probable cause exists regarding the commission of a crime before it can indict.
Why did American and Swiss authorities act in concert?
Law enforcement officials typically execute search warrants at multiple locations in a bid to preserve documentation and prevent targeted individuals from destroying documents relevant to potential prosecutions.
The importance of simultaneous execution is heightened in particularly complex cases. Bribery, racketeering and wire fraud cases are notoriously difficult to pursue given the complicated nature of the governing statutes and the pressing need for substantiation to obtain convictions on the charges. American and Swiss officials meticulously gathered information over a number of years — Blazer, in particular, offered guidance on the schemes involved — to bolster their cases, but they needed to obtain emails and other relevant documentation to reinforce their pursuits.
Are the American and Swiss investigations identical?
No. The two countries are coordinating their efforts, but they are not conducting any joint investigations, according to Swiss officials. American authorities are focusing primarily on the pursuit of financial malfeasance related to media and marketing rights contracts with FIFA, CONCACAF and their partners. Swiss authorities are targeting irregularities in the bidding process for the 2018 and 2022 FIFA World Cups in conjunction with a criminal complaint filed by FIFA last November.
What are the next steps for the accused defendants?
It depends on their current location and situation, but it probably involves fighting extradition requests. Six out of the seven defendants arrested in Zurich on Wednesday morning are expected to oppose extradition to the U.S. to face charges, according to Swiss officials. Other foreign-based targets — Warner, who surrendered to authorities after an arrest warrant was issued at the request of U.S. authorities — are likely to follow suit.
Extradition varies from jurisdiction to jurisdiction. The extradition treaty between Switzerland and the United States allows the Swiss to refuse extradition for "violated provisions of law relating exclusively to currency policy, trade policy or economic policy" and acts "intended exclusively to reduce taxes or duties." It is unlikely those provisions apply exclusively in this case, but the accused may attempt to cite them nevertheless. In other criminal matters, Switzerland generally cooperates with extradition requests.
What are the next steps for the Department of Justice?
The immediate priorities involve extraditing the seven detained officials in Zurich and the other foreign-based persons named in the indictments, sifting through the evidence gathered in Miami and sorting through the materials obtained by Swiss authorities in Zurich.
Wednesday marked a significant step forward in this case, but it is merely the opening salvo. Any potential trials loom far, far off in the distance. The indictments serve as leverage to prompt cooperation for further exploration of the issues at hand, though Justice Department officials must ensure a smooth extradition process in order to use them.
DOJ officials can point to the magnitude of the charges (conviction on all counts could lead to maximum incarceration terms of 20 years, according to a statement), the stringent nature of federal sentencing guidelines and their impact on parole (convicted parties must serve at least 85 percent of their initial sentence, according to Comprehensive Crime Control Act of 1984), and their successful track record (93 percent conviction rate in all criminal cases in fiscal year 2012, according to a DOJ report) to entice cooperation.
All of those factors provide plenty of incentive for the indicted parties to share their knowledge with federal investigators as they pursue further charges. At this point, the next, post-extradition steps are likely dictated by what the indicted parties know and whether they can provide the information required to prove it.
What are the next steps in the Swiss investigation?
Swiss officials are still in the process of gathering information before determining their next steps. Office of the Attorney General officials are expected to question 10 FIFA Executive Committee members who participated in the bidding process to award the 2018 and 2022 World Cup, according to an OAG statement.
The particular nature of the crimes pursued in Switzerland place considerable importance on the content of the bank records seized on Wednesday morning. OAG officials will comb through them carefully to search of any irregularities in conjunction with the bidding process.
What is next for FIFA?
It is business as usual in Zurich at the moment as FIFA prepares for the Congress this week and the vote for president scheduled for Friday. FIFA confirmed on Wednesday it does not plan to postpone the presidential vote — incumbent president Sepp Blatter is expected to be re-elected for a fifth term — or weigh the possibility of moving the 2018 or 2022 World Cups at this time. Blatter released an official statement on his Twitter page:
We welcome the actions of the Swiss & US authorities. Read my statement - http://t.co/f2Z25cwm5d
— Joseph S Blatter (@SeppBlatter) May 27, 2015
From a political perspective, Blatter has no pressing reason to push off the vote. He boasts the necessary support to defeat challenger Prince Ali and secure another term in office if the vote takes place. His best path forward involves securing his post for the foreseeable future and waiting to see how the prosecutions unfold in the weeks, the months and the years ahead.
It is, of course, not that simple. UEFA has called on FIFA to postpone the election, while the reactions of partners and sponsors across the world bear watching as well. The question is whether these indictments will spark broad support for introspection through a large segment of the 209 member federations. The dynamic is worth watching in the days and the weeks ahead as FIFA moves forward and processes the fallout from the indictments.
How did U.S. Soccer respond?
"The United States Soccer Federation firmly believes there is no higher priority, and nothing more important, than protecting the integrity of our game," the federation said in a statement released on Wednesday afternoon. "We are committed to the highest ethical standards and business practices, and we will continue to encourage CONCACAF and FIFA to promote the same values. Out of respect for the ongoing investigation, we will not speculate or comment further on this matter at this time."
U.S. Soccer Federation Statement: http://t.co/KCaLFPsYdd
— U.S. Soccer (@ussoccer) May 27, 2015
