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FBI raids Miami Beach office of CONCACAF as part of international soccer investigation

Screen Shot 2015-05-28 at 8.39.26 AM Screen Shot 2015-05-28 at 8.39.53 AMBy Michelle Kaufman, Jay Weaver and Jacqueline Charles From Miami Herald

U.S. law enforcement officials shook up — and vowed to clean up — the world of soccer Wednesday with a 47-count indictment charging top FIFA officials from Latin America and the Caribbean and several South Florida-based executives with “enriching themselves” by participating in a $150 million bribery scheme during the past two decades.

The three-year federal investigation found “rampant, systemic and deep-rooted” corruption. Fourteen soccer officials were named in the 164-page indictment, including some arrested during an early-morning raid of a posh hotel in Zurich, Switzerland, where they were attending the Federation Internationale de Football Association’s board elections this week.

“They were expected to uphold the rules that keep soccer honest. Instead, they corrupted the business of worldwide soccer to serve their interests and enrich themselves,” U.S. Attorney General Loretta Lynch said at a news conference in New York. “They did this over and over, year after year, tournament after tournament.

“These individuals and organizations engaged in bribery to decide who would televise games, where the games would be held, and who would run the organization overseeing organized soccer worldwide.”

Allegations of corruption center on the awarding of the 2010 World Cup to South Africa, the 2011 FIFA presidential election and kickbacks in connection with the broadcasting and marketing of Copa America, Copa Libertadores and Gold Cup — the three biggest tournaments held in the Americas.

Meanwhile, in a separate probe, Swiss federal prosecutors opened criminal proceedings in connection with the awarding of the 2018 World Cup to Russia and the 2022 tournament to Qatar. Those decisions were shrouded in accusations of corruption since the announcement of those sites was made in December 2010.

The federal investigation revolves around not only high-ranking FIFA officials but also those in charge of its North and Central American and Caribbean (CONCACAF) regional headquarters, which is based in Miami Beach. FBI agents raided the office early Wednesday.

Also implicated in the racketeering scheme, sports marketing firm Traffic Sports USA, which is based in Miami and until recently owned the Fort Lauderdale Strikers.

Among those indicted: CONCACAF president Jeffrey Webb, who is also a FIFA vice president and executive committee member; Jack Warner, CONCACAF’s former president, who also once served as a FIFA vice president and executive committee member; and Miami resident Aaron Davidson, president of Traffic Sports USA and Chairman of the Board of Governors of the North American Soccer League, a second-tier league of which the Strikers are a member.

FBI agents arrested Davidson late Tuesday night. He must first make a federal court appearance in Miami before his expected transfer to face racketeering charges in New York.

In light of the investigation, the North American Soccer League’s Board of Governors suspended Davidson, along with all business activities between the league and Traffic Sports. Commissioner Bill Peterson will serve as acting chairperson.

Tom Mulroy, a longtime South Florida soccer promoter, worked with Traffic as vice president of grass roots marketing from 2010 until earlier this year, and was also president of the Strikers. He said he never witnessed any shady dealings, was saddened to see his former employer implicated but happy that international soccer corruption is being exposed.

“Everyone at Traffic treated me well, and I hope Aaron [Davidson] lands on his feet and they find he had little or no involvement,” Mulroy said. “But from a soccer standpoint, this is something the sport needs badly, and only the U.S. government is strong enough to do something like this. This investigation will help the sport in the long run, change the way business is done and restore the credibility that had been lost.

“From the moment [FIFA president] Sepp Blatter pulled Qatar from that envelope, I thought, ‘This has to be corruption,’ and now we’ll find out what’s really going on.”

Before the indictment was unsealed Wednesday, four other defendants pleaded guilty, including Charles Blazer, former long-serving general secretary of CONCACAF and a former FIFA executive committee member. Also pleading guilty: Jose Hawilla, the owner and founder of the Traffic Group, a multinational sports marketing conglomerate headquartered in Brazil that is the parent company of Traffic Sports USA and Traffic Sports International.

This is how the alleged criminal “enterprise” operated during the past two decades, according to the Justice Department:

Federal authorities said top soccer officials “enriched” themselves with more than $150 million in bribes and kickbacks paid by sports marketing companies, such as Traffic Sports USA, which bought FIFA’s commercial rights to promote soccer events and tournaments.

In turn, the marketing companies sold those rights “downstream” to TV and radio networks, major corporate sponsors and others that broadcast soccer matches or advertise their brands. According to FIFA, 70 percent of its $5.7 billion in revenues from 2011 to 2014 was derived from the sale of TV and marketing rights to the 2014 World Cup.

Since 1991, the 14 defendants — along with the four others who have already pleaded guilty — “corrupted” the enterprise through various criminal activities, including fraud, bribery and money laundering, according to the Justice Department.

“The corruption of the enterprise became endemic,” read the indictment. “Certain defendants and co-conspirators rose to power, unlawfully amassed significant personal fortunes by defrauding the organizations they were chosen to serve, and were exposed and then either expelled from those organizations or forced to resign.

“Other defendants and co-conspirators came to power in the wake of scandal, promising reform. Rather than repair the harm done to the sport and its institutions, however, these defendants and co-conspirators quickly engaged in the same unlawful practices that had enriched their predecessors.”

In addition to Webb, who is from the Cayman Islands, others indicted included Eugenio Figueredo of Uruguay, Eduardo Li of Costa Rica, Julio Rocha of Nicaragua, Rafael Esquivel of Venezuela, Jose Maria Marin of Brazil and Costas Takkas of Britain, who was the former secretary general of the Cayman Islands Football Association. They face up to 20 years in prison if convicted.

Warner, from Trinidad and Tobago, surrendered Wednesday afternoon after an arrest warrant was issued for him by Trinidadian authorities. Bail was set at $2.5 million. Two of Warner’s sons, Daryll and Daryan, pleaded guilty to related charges after cooperating with U.S. investigators.

Warner is currently a member of the twin island’s parliament after losing his job as national security minister amid reports of an FBI probe into the damning corruption allegations. He maintained his innocence Wednesday. In a statement he released on his official Facebook page, Warner said he hasn’t been afforded any due process nor has he been questioned in the matter.

He quit FIFA and international football “more than four years ago,” he said.

“I have fought fearlessly against all forms of injustice and corruption,” he noted.

In an exclusive interview with Caribbean Communication Network/TV 6 senior multimedia investigative journalist Mark Bassant at his office Wednesday, Warner said he has nothing to hide and will be exonerated.

Warner has faced corruption allegations since the 1980s, but in 2011 — as vice president of FIFA — he was accused of attempting to bribe Caribbean delegates with $40,000 each to vote for FIFA presidential candidate Mohamed Bin Hammam.

Warner also was accused of embezzling $15 million of federation funds and misappropriating $1 million in FIFA money earmarked for a reconstruction project in Haiti. According to the soccer confederation ethics panel, Warner also failed to disclose that the $25.9 million Havelange Centre for Excellence in Port of Spain, built with soccer funds, sits on land he owns, according to the report.

Trinidad Attorney General Garvin Nicholas told the Miami Herald that the Justice Department has sought Warner’s extradition and “the procedure has commenced.” While the two nations have an extradition agreement, it could take months before Warner, one of the most powerful and wealthiest Caribbean nationals, is brought to the United States.

Federal authorities condemned Warner and the 13 others indicted Wednesday.

“Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks,” Justice Department officials said in a press release.

“All told, the soccer officials are charged with conspiring to solicit and receive well over $150 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.”

Despite the indictment, FIFA said Friday’s presidential election would continue as planned. Blatter, who was not named in either investigation, is going for a fifth term as president.

“This is a difficult time for football, the fans, and for FIFA as an organization,” Blatter said in a statement. “As unfortunate as these events are, it should be clear that we welcome the actions and the investigations by the US and Swiss authorities and believe that it will help to reinforce measures that FIFA has already taken to root out any wrongdoing in football.

“Let me be clear: such misconduct has no place in football and we will ensure that those who engage in it are put out of the game.”

That said, FIFA ruled out a new vote of the World Cups won by Russia in 2018 and Qatar in 2022.

The Swiss prosecutors’ office said in a statement that they seized “electronic data and documents” at FIFA’s headquarters on Wednesday as part of their probe. And Swiss police said they will question 10 FIFA executive committee members who took part in the World Cup votes in December 2010.

The Swiss investigation against “persons unknown on suspicion of criminal mismanagement and of money laundering” again throws into doubt the integrity of the voting.

“FIFA is fully cooperating with the investigation and is supporting the collection of evidence in this regard,” FIFA said in a statement.

Miami Herald wire services contributed to this report.

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