Bank Hapoalim B.M. and Hapoalim (Switzerland) Ltd. Enter
Into Three-Year Non-Prosecution Agreement
BROOKLYN, NY – Bank Hapoalim B.M. (“BHBM”), an Israeli bank
with international operations, and its wholly owned subsidiary, Hapoalim
(Switzerland) Ltd. (“BHS”), have agreed to forfeit $20,733,322 and pay a fine
of $9,329,995 to resolve an investigation into their involvement in a money
laundering conspiracy that fueled an international soccer bribery scheme. Specifically, BHBM and BHS have admitted that
they, through certain of their employees, conspired to launder over $20 million
in bribes and kickbacks to soccer officials with Fédération Internationale de
Football Association (“FIFA”) and other soccer federations.
Richard P. Donoghue, United States Attorney for the Eastern
District of New York, Brian A. Benczkowski, Assistant Attorney General of the
Justice Department’s Criminal Division, William F. Sweeney, Assistant
Director-in-Charge, Federal Bureau of Investigation, New York Field Office
(FBI), and Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service
Criminal Investigation, Los Angeles Field Office (IRS-CI), made the
announcement.
“Today’s resolution marks another successful chapter in this
District’s effort to hold accountable those corporations and individuals who
participated in a bribery scheme that corrupted international soccer,” stated
United States Attorney Donoghue. “This
Office, along with our law enforcement partners, will continue to identify
wrongdoers who manipulate international soccer in order to reap illicit profits
and bring them to justice.”
“For nearly five years, Bank Hapoalim employees used the
U.S. financial system to launder tens of millions of dollars in bribe payments
to corrupt soccer officials in multiple countries,” stated AAG
Benczkowski. “Today’s announcement
demonstrates the Department’s commitment to holding financial institutions to
account when they knowingly facilitate corruption and other criminal conduct.”
“This announcement illustrates another aspect in the spider
web of bribery, corruption and backroom deals going on behind the scenes as
soccer games were played on the field. Bank Hapoalim admits executives looked
the other way, and allowed illicit activity to continue even when employees
discovered the scheme and reported it. The New York FBI Eurasian Organized
Crime Task Force and our law enforcement partners have doggedly pursued every
strand uncovered in this criminal investigation, and will keep at it until they
root out all of the bad actors,” stated FBI Assistant Director-in-Charge
Sweeney.
“This forfeiture sends a clear message that no matter how
complex or far reaching the conspiracy, justice will prevail. Bank Hapoalim B.M. and its subsidiary,
Hapoalim Ltd., participated in a conspiracy that corrupted international
soccer, its confederations, and member associations,” stated IRS-CI Special
Agent-in-Charge Korner. “IRS-CI is proud
to work alongside our international law enforcement partners, the FBI, and the
United States Attorney’s Office to bring closure to this egregious
international scandal that corrupted the sport of soccer.”
According to admissions in the statement of facts stipulated
to by BHBM and BHS as part of the agreement, from approximately December 10,
2010 to February 20, 2015, BHBM and BHS personnel conspired with sports
marketing executives, including executives associated with Full Play Group S.A.
(“Full Play”), a sports media and marketing business based in Argentina, and
others, to launder at least $20,733,322 in bribes and kickbacks to soccer
officials. In exchange for those bribes
and kickbacks, the soccer officials awarded or steered broadcasting rights for
soccer matches and tournaments to the sports marketing executives and their
companies. Full Play allegedly executed
the illegal payments from accounts held at BHS and BHBM’s branch in Miami,
Florida, which were held in the names of Full Play subsidiaries and affiliates.
BHBM and BHS admitted they, through BHS and BHBM’s Miami
branch, conspired to launder money for Luis Bedoya, who at various times served
as the president of the Federación Colombiana de Futbol, a vice president of
the Confederación Sudamericana de Fútbol (CONMEBOL), and a member of FIFA’s
executive committee. BHBM and BHS
allowed accounts controlled by Bedoya to be used to receive illicit bribe and
kickback payments. In November 2015,
Bedoya pleaded guilty to racketeering conspiracy and wire fraud conspiracy in
the Eastern District of New York. He is
awaiting sentencing.
Despite BHS compliance personnel repeatedly raising concerns
about certain payments made to soccer officials from the accounts associated
with Full Play, BHBM and BHS failed to take action. Instead, the banks’ relationship managers
continued executing illicit bribe and kickback payments on behalf of Full Play.
As outlined in the agreement, the government’s decision to
enter into a three-year, non-prosecution agreement with BHBM and BHS was
premised upon the banks’ thorough and complete cooperation, BHBM’s pledge to
review and improve its anti-money laundering program, and the banks’ other
substantial remedial efforts, which include closing Bank Hapoalim (Latin
America) S.A. and BHBM’s branch in Miami.
BHS is also in the process of closing its operations.
The agreement announced today is part of an investigation
led by the U.S. Attorney’s Office for the Eastern District of New York, the
Bank Integrity Unit in the Money Laundering and Asset Recovery Section of the Justice
Department’s Criminal Division in Washington, D.C., the FBI New York Field
Office, and the IRS-CI Los Angeles Field Office. Assistant U.S. Attorneys Sam Nitze, Lauren
Howard Elbert and Brian Morris of the U.S. Attorney’s Office and Trial Attorney
Michael P. Grady of the Bank Integrity Unit are responsible for the matter on
behalf of the U.S. Department of Justice.
The government of Switzerland provided significant assistance in this
matter, as did the Criminal Division’s Office of International Affairs.
The Defendants:
BANK HAPOALIM B.M.
BANK HAPOALIM (SWITZERLAND) LTD.
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