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TSN Legal Analyst

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FIFA will never be the same again. In a stunning and unprecedented move early Wednesday morning, more than a dozen plain-clothed Swiss police officers attended the five-star hotel Baur au Lac hotel overlooking the majestic Swiss Alps. They went to the front desk, secured the keys to various rooms and calmly arrested seven FIFA officials.

With U.S. Attorney General Loretta E. Lynch leading the charge, these arrests were part of a far-reaching 47-count indictment issued by the U.S. Department of Justice. In all, fourteen high-ranking FIFA officials were named in the indictment. They are charged with racketeering, wire fraud and money laundering conspiracies and tax evasion, among other offences, in connection with a 24-year scheme to enrich themselves through the corruption of international soccer. Among the allegations leveled against FIFA executives is they "systematically paid and agreed to pay well over $150 million in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments."

These bribes and kickbacks were associated with various soccer matches and tournaments, including FIFA World Cup qualifiers in the CONCACAF region, the CONCACAF Gold Cup, the CONCACAF Champions League, the jointly organized CONMEBOL/CONCACAF Copa América Centenario, the CONMEBOL Copa América, the CONMEBOL Copa Libertadores and the Copa do Brasil, which is organized by the Brazilian national soccer federation (CBF). Other alleged schemes relate to the payment and receipt of bribes and kickbacks in connection with the sponsorship of CBF by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup and the 2011 FIFA presidential election.

Lynch pulled no punches, declaring "the indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States". Then she added this:

"It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks. And it has profoundly harmed a multitude of victims, from the youth leagues and developing countries that should benefit from the revenue generated by the commercial rights these organizations hold, to the fans at home and throughout the world whose support for the game makes those rights valuable. Today's action makes clear that this Department of Justice intends to end any such corrupt practices, to root out misconduct, and to bring wrongdoers to justice – and we look forward to continuing to work with other countries in this effort."


How On Earth Can The U.S. Charge Foreign FIFA Executives?
 
While it may seem a bit counter-intuitive, the U.S. may criminally charge foreign nationals in instances where those foreign individuals have used U.S. institutions, like banks, as part of perpetrating fraudulent schemes. So by way of example, the U.S. government is in a position to assert jurisdiction over FIFA officials once those officials began wiring bribe money and kickbacks through U.S. banks. That breaks U.S. law, and as a result, a U.S. court can properly assert jurisdiction over these individuals.
 

The Charges

That brings us to the key charges: racketeering, wire fraud and money laundering.
 
With respect to racketeering, the government needs to prove that a defendant (1) participated in a criminal organization, and (2) committed at least two criminal acts from a list of 35 federal and state crimes, which includes things like bribery, wire fraud and money laundering. If the government can establish these two elements, a defendant may be found guilty of racketeering.
 
For that reason, Lynch declared that FIFA officials had turned soccer "into a criminal enterprise". That was done intentionally so as to invoke a racketeering charge.
 
Wire fraud refers to transmitting funds across state lines as part of a fraudulent scheme. For example, on January 12, 2004, one of the defendants wired $1.2 million from a bank account in Miami to a bank account in New York. Cue wire fraud.
 
Money laundering refers to an attempt to conceal or disguise illegally obtained proceeds so they appear to have originated from a legitimate source. It's basically trying to clean otherwise dirty money.
 
Setting up a shell company that looks legitimate to accept bribes would be one example of money laundering. According to the indictment, one defendant "used a number of sophisticated money laundering techniques, including the use of a numbered account at a Swiss bank, currency dealers, and trusted intermediaries, to effect bribe and kickback payments in a manner that concealed their true source and nature and promoted the corrupt schemes".
 

Getting the Defendants to the U.S.
 
The next step for the U.S. government is getting the defendants extradited to the U.S. to stand trial. "Extradition" refers to one state or nation handing over an individual to another state or nation for the purpose of facing criminal charges. The whole idea is to try and ensure that serious crimes do not go unpunished as a result of a defendant fleeing.
 
The U.S. has a treaty with Switzerland which provides for extradition in connection with various types of crimes. In order to qualify as an extraditable offence, the crime needs to be punishable under the laws of the surrendering or asylum country. This is referred to as the principle of "dual criminality". Criminal acts such as money laundering and wire fraud are also crimes in Switzerland, which means that the condition of dual criminality would in theory be met.
 
In any event, we know the Swiss government is onboard since they handled the early morning arrests at the direction of the U.S. government. If the Swiss didn't believe the U.S. had a case or that extradition was appropriate, they would not have made the arrests.

While Swiss officials are cooperating with the Department of Justice, a Swiss judge will still need to be convinced that extradition is warranted. The defendants will of course retain top lawyers and vigorously contest extradition. After all, they want at all costs to avoid stepping on U.S. soil and facing trial.
 
Extradition takes time and will not be resolved overnight. It could drag on for a year or more.
 
This is just getting started.