Julius Baer admits in court to facilitating money laundering in FIFA case

SWISS BANK JULIUS BAER has today admitted in court that it took part in a multi-million dollar laundering scheme connected to soccer’s governing body FIFA.

The admission comes alongside the announcement of a final agreement between the medium-sized private bank based in Zurich, and the United States Department of Justice.

It means the penalty payment of $79.7M originally announced in November of last year will go ahead as planned.

“Julius Baer welcomes the final resolution of this legacy matter,” the bank said in a statement Thursday.

“This marks another step in Julius Baer’s continued efforts to pursue the closure of remaining regulatory and legal matters in cooperation with the relevant authorities.”

For close to six years now, Julius Baer has been mired in accusations and legal probes over its connection to the much-publicised FIFA corruption case, which began to unfold in 2015.

American authorities – and in particular the DOJ – have been extensively involved in the resulting investigations and court proceedings from the outset.

According to a statement from the DOJ Thursday, the bank admitted in a New York court that it “conspired to launder over $36M in bribes through the United States.” The illicit funds ultimately ended up in the hands of FIFA officials – intended to grant sports marketing companies exclusive broadcast rights for football matches.

A US Internal Revenue Service agent attached to the case said that the Julius Baer had “aided corrupt IFA officials in laundering the millions,” while a member of the prosecution blasted the bank for turning a blind eye to “glaring red flags”.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division said that the resolution, “sends a strong message to all banks and other financial institutions that if they knowingly misuse our financial system to hide their clients’ criminal proceeds or to promote a corrupt scheme, they will be held to account.”

The Department’s summary of the bank’s misconduct laid heavy blame on its anti-money laundering controls – stressing that at the time of the illegal activity, those controls “failed to detect or prevent money laundering transactions related to the bribery schemes.”

It went on to note that if the supervisors or compliance colleagues of a primary suspect in the case – former Julius Baer relationship manager Jorge Luis Arzuaga – properly reviewed his lax due diligence as part of the scandal, things would have been different.

“They would have known there were multiple, significant red flags, including facially false contracts, payments to third parties at the direction of a FIFA official, and services purportedly rendered by shell corporations — all of which would have alerted the Bank to the bribery, money laundering or other illegal activity,” the DOJ said.

Arzuaga pleaded guilty in 2017 for his role in the conspiracy and was sentenced in November 2020 – around the time that this $79M payment was first announced.

Julius Baer has itself been expecting the payment for some time before today’s announcement and it was pre-emptively entered into the bank’s books for 2020.

Article credit: https://amlintelligence.com/2021/05/julius-baer-admits-in-court-to-facilitating-money-laundering-in-fifa-case-financial-penalty-close-to-80m-agreed-after-bank-ignored-glaring-red-flags/