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FIFA action welcome but recovering misappropriated money will be a challenge, say experts


Football's world governing body's admission of corruption by some of its officials is a welcome step in the rehabilitation of the organisation but its action to recover misappropriated funds from those individuals might prove challenging, experts have said.

Dispute resolution and sports law specialist Julian Diaz-Rainey and civil fraud and asset recovery expert Alan Sheeley both of Pinsent Masons, the law firm behind Out-Law.com, were commenting after new FIFA president Gianni Infantino outlined plans to "to reclaim tens of millions of dollars pocketed illegally by corrupt FIFA members and other football officials".

"This initiative is as much about asset recovery as it is about FIFA trying to rebuild its reputation in the eyes of the public and commercial partners alike," Diaz-Rainey said. "It needs to show that it can deal with its own internal affairs as well as regulate football on a global basis. If FIFA opts for transparency it can only succeed."

Sheeley said: "It will be difficult for FIFA to recover all of the assets because monies have been paid to various parties throughout the world over numerous years. The passage of time always impacts on the chances of success as time allows money to be dissipated or transferred through many jurisdictions, financial institutions and corporates making it extremely difficult to trace. Sadly, in international assert tracing comity of law does not always prevail. Therefore problems will arise regarding different laws and codes for each specific jurisdiction."

"Also, the asset recovery exercise will be further hampered by the use of various trading vehicles such as offshore corporations or trusts. David Cameron has tried hard in the last six months to make it easier to understand who is ultimately behind corporations and trusts in the usual offshore jurisdictions. However, in reality, his drive for greater transparency in the offshore world has failed. This does not mean that FIFA should give up," he said.

"It is of vital importance that FIFA is successful in recovering all of the money in the fight against the endemic fraud that has taken place over so many years. The eyes of the world are on this investigation and total asset recovery is the difference between success and failure," Sheeley said.

In papers filed to a district court in New York (22-page / 176KB PDF), FIFA said that it is apparent that "multiple members" of its executive committee had "abused their positions and sold their votes [relating to the hosting of the FIFA World Cup] on multiple occasions".

FIFA said it has been the victim of crime carried out by those officials and by some officials from other football organisations and executives of sports marketing companies that are the subject of legal proceedings in the US.

It is attempting to recover the money those people had "pocketed to enrich themselves", as well as "the salaries, benefits and bonuses that were paid to them during their tenure at FIFA and other football organisations". FIFA has also claimed it is entitled to damages from the individuals "for the damage their actions caused to FIFA’s brand and reputation, its intellectual property and its business relationships".

Under US law courts are required to ensure that the victims of certain offences, including in respect of fraud or deceit, receive "restitution" for those offences where they are "an identifiable victim" of the crime and have suffered financial loss.

A 'victim' is defined under the US Mandatory Restitution to Victims Act as being "a person directly and proximately harmed as a result of the commission of an offense for which restitution may be ordered including, in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity, any person directly harmed by the defendant’s criminal conduct in the course of the scheme, conspiracy, or pattern".

FIFA has claimed that its brand has been "deeply tarnished" and that its "ability to use its resources for positive actions throughout the world, and to meet its global mission of supporting and enhancing the game of football" has been "impaired" as a consequence of the actions of the football officials and sports marketing executives targeted in the US proceedings.

It said: "[The defendants] did violence to FIFA’s principles, goals, and objectives as they promoted their own self-interests and sought to enrich themselves at FIFA’s and football’s expense. They sold the power of their positions, including by taking bribes and kickbacks in return for selling the valuable marketing rights associated with football tournaments and competitions. Together, the defendants misappropriated FIFA’s resources, its brand, and its commercial value to enlarge their own bank accounts."

Infantino said any money FIFA recovers will be put back into football.

In its court papers FIFA said that US authorities have currently "ensured the forfeiture of more than $190 million in assets and identified, recovered, or frozen more than $100 million in the United States and abroad relating to the defendants’ felonious schemes".

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