British overseas tax havens in the Caribbean played a key role in what US authorities have called “rampant, systemic and deep-rooted” corruption in the world of football, according to Britain’s Observer newspaper.
Outlining the case against FIFA officials and marketing executives the US Department of Justice indictment shows that three BOTs, the British Virgin Islands (BVI), the Cayman Islands, and the Turks and Caicos Islands (TCI), were allegedly involved in masking kickbacks between officials and executives.
According to the 164-page US indictment, UK citizen Costas Takkas, who acted as attaché to FIFA’s vice-president Jeffrey Webb, used Kosson Ventures, a firm registered in BVI and with bank accounts in the Cayman Islands, to allegedly facilitate illegal payments between a South American sports marketing agency, Traffic, and FIFA officials.
The indictment raises questions about whether the banks in the Caribbean islands should have flagged the transactions to the authorities as a potential concern.
“On or about November 21, 2012, two wire transfers, of $750,000 and $250,000, were sent from Front Company A’s account at HSBC bank in Hong Kong to a correspondent account at Standard Chartered Bank in New York for credit to an account in the name of Kosson Ventures, controlled by Takkas, at Fidelity Bank in the Cayman Islands,” the indictment states.
Traffic made a $500,000 payment to Webb “through the account of another individual, a business associate of Co-Conspirator #2, to another account controlled by the defendant Costas Takkas at Fidelity Bank in the Cayman Islands.”
Another of the defendants, marketing executive Jose Margulies, had a controlling interest in a TCI- based firm called Somerton.
The indictment states that Margulies used the accounts of Somerton and a Panama-based firm, referred to by the US authorities as “Margulies Intermediaries,” to “mask the sources and beneficiaries of bribe and kickback payments”.
Between March 2003 and March 2008, “Margulies Intermediaries wired more than $3.5m into accounts controlled by the defendants Rafael Esquivel [president of the Venezuelan football federation], Nicolás Leoz [former president of South America’s football confederation] and Eugenio Figueredo [head of Conmebol, the South American football confederation], almost entirely through even, six-figure payments.”
Meanwhile, the Cayman Islands appear to have been used to facilitate the allegedly corrupt transactions for many years.
In 1999, according to the indictment, “Traffic caused $200,000 to be wired to a correspondent account at Barclays Bank in New York, for credit to an account held in the name of an entity controlled by Co-Conspirator #1 at Barclays Bank in the Cayman Islands.”
The Cayman Islands are also said to have been involved in a bribery scheme to allegedly persuade FIFA officials to vote for the hosting of the 2010 World Cup in South Africa.
Austin “Jack” Warner, then-president of CONCACAF (the federation representing the North and Central American and Caribbean football nations), is alleged to have promised one official $1 million in exchange for his backing of South Africa.
It is claimed that “the first payment in the amount of $298,500 was made by wire transfer sent on or about December 19, 2008 … to a Bank of America correspondent account in New York, New York, for credit to an account controlled by Co-Conspirator #1 at a bank in the Cayman Islands.”
Moving on to 2012, Jeffrey Webb of the Cayman Islands emerged as a candidate to succeed Trinidad and Tobago’s Warner as CONCACAF president.
According to the US authorities, “an executive at Traffic USA supported Webb’s candidacy by causing $50,000 to be paid from Traffic USA’s operating account to a Caymanian company” controlled by Takkas. Some of the money channeled through the British Overseas Territories in the Caribbean was allegedly funneled into property.
Takkas reportedly transferred funds from his Kosson Ventures account at Fidelity Bank in the Cayman Islands to SunTrust Bank in the United States, allegedly to help Webb buy luxury homes in Georgia.
According to the US prosecutors, the use of Kosson Ventures in the scheme was “intended to conceal the fact that the defendant Jeffrey Webb was the beneficiary of the payment.”
Commenting on the FIFA scandal, British Labor MP and Treasury select committee member John Mann was quoted as saying that the use of British tax havens made the investigation all the more difficult.
“The problem is that the Serious Fraud Office here [Britain] can’t investigate these tax havens, and that anomaly needs rectifying. They are centers for money laundering in a very big way,” he said.
“We are negotiating to change relations with the European Union, but we should spend just as much time renegotiating the deals with the overseas territories. They are becoming a serious problem for the world.”