That the U.S.—notoriously uninterested in soccer relative to the rest of the world—has pursued charges against FIFA is an irony not lost on anyone. Bloggers and analysts have variously thrashed the U.S. for overreach or applauded its efforts for taking on the megapower that is FIFA. Interestingly, it’s the nation’s AML laws that have provided an avenue to pursue broader charges for activities occurring outside of American territory.
Peter J. Henning explored the issue in-depth in the New York Times recently when he explained how AML laws and the alleged clearing of laundered dollars through financial institutions in the U.S. provided leverage to the Justice Department to pursue RICO violations against indicted FIFA officials.
RICO—the Racketeer Influenced and Corrupt Organizations Act—provides a major weapon for authorities in the fight against U.S.-based mob activities, corporate fraud, and political corruption. But most of the alleged FIFA misdeeds involve non-U.S. citizens conducting illicit transactions outside of the U.S.
Henning traces the roots of the RICO statute and the key court cases involving the use of racketeering prosecutions that involve non-U.S. defendants. He writes that U.S. case law is not entirely clear and that FIFA defendants will no doubt argue that this statute cannot be applied to them for actions undertaken outside the U.S.
A key part of the argument by the U.S. Justice Department will hinge on U.S. money laundering prohibitions and the power to prosecute based on processing criminal proceeds through a bank in the United States. If these behaviors show a pattern of criminal activity shown to be part of a larger criminal enterprise, these broader charges may be allowed to go forward.
A recent article in The Economist also offered explanation regarding the U.S. charges against FIFA officials and it discussed the issue of banks who provided financial services to these FIFA officials. It notes that at least 31 banks or branches around the world were identified, though none as yet have been charged with wrongdoing.
With expectations rising in the U.S. and around the world for higher and higher standards of customer due diligence / know-your-customer to be followed by sustained behavioral monitoring, some financial institutions are likely revisiting the Compliance scrutiny applied to their FIFA account holders.
AML Partners provides the most agile and customizable BSA/AML software solutions on the market in the financial services industry. If you’d like to learn how AML Partners can provide the consulting expertise and integrated software solutions to upgrade your CDD (KYC) and transaction monitoring efforts, contact us today.