It may seem odd that a law written in 1970 to prosecute gangsters could be same law to be wielded against the governing body of the world’s most popular sport, but that is exactly what happened recently when the Justice Department filed RICO charges against FIFA, the Fédération Internationale de Football Association on May 27, 2015.
As we know in the compliance business, the arm of United States law is famously long, but this will test its power. Why? Because most of the alleged offenses took place overseas.
First, the charges. The Justice Department filed its 47-count indictment charging 14 defendants with offenses including racketeering, wire fraud and money laundering conspiracies, in connection with the alleged taking and giving of bribes and other favors in a 24-year scheme to enrich themselves through the governing body of international soccer. Those charged include current and former FIFA officials, other regional football officials (CONCACAF), and several sports marketing executives.
The Justice Department is using the Racketeer Influenced and Corrupt Organizations Act, known colloquially as RICO, in the case. Passed by Congress in 1970, RICO has been a popular tool for prosecutors to go after organized crime, corporate fraud, and corrupt politicians in the U.S. In the FIFA case, though, the Justice Department is attempting to use RICO to prosecute misconduct by foreigners that took place, for the most part, outside of U.S. boundaries. And it will be going after defendants who are not United States citizens.
That will be challenging. To prove its case using RICO, the Justice Department will have to show the crimes committed were part of a broader “pattern of racketeering activity” rather than just separate acts committed by the different defendants. The charges basically say that the defendants turned FIFA and CONCACAF into criminal enterprises for their personal enrichment.
The case is basically a bribery case, without actual bribery charges. Prosecutors are using the Travel Act in this case. The law basically says that it is illegal to engage in interstate or foreign travel, or use the mail system of any facility of interstate commerce to promote, manage, establish, or carry on an illegal activity. Obviously, some of the discussion and handling of the bribes happened when traveling through America. Plus, 30 of the banks involved are American. You can see how that will be used.
The FIFA defendants will probably challenge the case on the grounds that RICO can’t be used to prosecute allegations of conduct that only took place abroad. But the Justice Department will counter that transactions that ran through U.S. banks and the U.S. mail make the charges valid.
It should be interesting. And it highlights the intricacy of U.S. law, the creative lengths that can be used in its execution, and the need for RegTec to help you navigate the compliance issues that your company faces.