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On February 8, authorities in Panama raided the offices of Mossack Fonseca, the law firm at the center of the sprawling Panama Papers scandal, and arrested the firm’s founders, Juergen Mossack and Ramon Fonseca. Reuters reports that Panama’s Attorney General announced on Twitter that the raid and arrests were tied to the investigation of Odebrecht S.A., the Brazilian construction company that in December reached a $3.5 billion combined global settlement with U.S., Brazilian, and Swiss authorities to resolve FCPA allegations. Until now, the investigations spawned by the 2016 release of millions of documents stolen from the law firm were focused on money laundering and tax evasion. The tie to the Odebrecht investigation brings anti-bribery investigations into the mix.
On May 18, former President of the Nicaraguan Football Federal Julio Rocha was extradited from Switzerland to the United States. He was the final FIFA official to be extradited following the arrests made in Zurich in May 2015, according to the Swiss Federal Office of Justice, which has handled the extradition proceedings over the past year. Mr. Rocha was indicted by the DOJ in May 2015 along with 13 other FIFA officials. Previous Scorecard coverage on the FIFA investigations can be found here.
The SEC announced on March 23, 2016 that it settled FCPA allegations with Switzerland-based pharmaceutical company Novartis AG, via a cease and desist order finding that Novartis violated the FCPAs book and records and internal controls provisions related to activities in China. The SEC found that employees of two Novartis Chinese subsidiaries gave money and gifts to Chinese health care providers at state-owned hospitals in order to boost sales. In some cases, the order found, Novartis employees created spreadsheets that linked payments to individual Chinese health care providers to increased sales of certain drugs and created a ranking system for the health care providers. SECs order found that Novartis recorded the payments as lecture fees, conferences, seminars, medical studies, and travel and entertainment. The SEC further found that Novartis failed to devise and implement a sufficient system of internal accounting controls to detect the improper payments, and lacked an effective anti-corruption compliance program. The order did not say whether Novartis self-disclosed the involved conduct, but the order notes the company's cooperation and states that the company began an internal investigation after news reports surfaced that a competitor was investigating similar FCPA concerns in its Chinese subsidiaries. Novartis consented to the SECs order without admitting or denying the charges and agreed to pay $25 million to resolve the case, including a $2 million penalty, disgorgement of $21.5 million in profits, and $1.5 million in prejudgment interest. Novartis will also provide status reports to the SEC for the next two years regarding remediation efforts and new anti-corruption compliance measures.
DOJ Charges 16 Additional Individuals with FIFA-Related Corruption; Swiss Authorities Arrest Two High-Ranking FIFA Members
On December 3, 2015 the DOJ charged an additional 16 individuals in connection with the DOJs ongoing corruption investigation into FIFA. The new indictment included a number of high ranking FIFA members, including Alfredo Hawit, the president of the Confederation of North, Central America and Caribbean Association Football (CONCACAF) and vice-president of FIFA, and Juan Angel Napout, the president of the South American Football Confederation (CONMEBOL) and a member of the FIFA executive committee. Both of these individuals were arrested by Swiss authorities in Zurich and are opposing extradition to the United States. With the additional 16 individuals, a total of 41 people and entities have now been charged as part of the DOJs ongoing investigation. Previous FCPA Scorecard coverage of the FIFA investigations can be found here.
Former President of Brazilian Football Confederation Waives Extradition and Pleads Not Guilty in U.S. FIFA Investigation
On October 28, the Swiss Federal Office of Justice announced that Jose Maria Marin, former President of the Brazilian Football Confederation, had agreed to be extradited from Switzerland to the United States as part of the U.S. governments investigation of alleged money laundering and bribery at FIFA. Marin is accused of having taken bribes worth millions of dollars from sports marketing companies in connection with the sale of marketing rights for Copa America and Copa do Brasil tournaments, and to have shared these bribes with other soccer officials. Marin previously had opposed extradition. On November 3, Marin appeared before Judge Raymond Dearie of the United States District Court in of the Eastern District of New York. Marin pleaded not guilty to an array of federal charges including conspiracy to commit racketeering, wire fraud, and money laundering. He was released on a $15 million personal recognizance bond with home detention and electronic monitoring. Marin is the second FIFA official to waive extradition. As noted in a previous post, Jeffrey Webb, a former vice president of FIFA, agreed to be extradited to the United States in July. Several other defendants are currently fighting extradition efforts.
After months of speculation about potential legal ramifications for FIFA President Joseph ("Sepp") Blatter, the Office of the Attorney General of Switzerland announced that Mr. Blatter is the subject of criminal proceedings in that country. The allegations include criminal mismanagement related to a contract with the Caribbean Football Union that was purportedly against the interests of FIFA, as well as misappropriation related to a payment to the President of the Union of European Football Associations (UEFA). The Office of the Attorney General also reported that Mr. Blatter was interrogated and his offices were searched. Previous FCPA Scorecard coverage of this investigation can be found here.
On July 15, after 50 days of detention, a high-ranking FIFA official widely reported to be former FIFA Vice President Jeffrey Webb was extradited from Switzerland to the United States. Webb ultimately agreed to be extradited despite initially contesting his extradition at a hearing following his arrest. Six other FIFA officials arrested in connection with DOJS corruption investigation are continuing to fight extradition. The Swiss Federal Office of Justice is overseeing the extradition proceedings. All seven officials were formally indicted by the DOJ on May 27. Previous FCPA Scorecard coverage of this investigation can be found here.
- Daniel R. Alonso to discuss "How to become an AUSA" at the New York City Bar Association Minorities in the Courts Committee “How To” series
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