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December 17, 2017
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Argentine banker admits sending US$25 million in bribes to Grondona

Late AFA president and FIFA official, Julio Grondona.
Late AFA president and FIFA official, Julio Grondona.
Late AFA president and FIFA official, Julio Grondona.

Jorge Luis Arzuaga, who worked at two Swiss banks, pleads guilty in NY court to graft involving Torneos y Competencias and FIFA officials

An Argentine banker who worked in high-ranking positions for major banking firms in Switzerland pleaded guilty yesterday to helping facilitate huge bribes to high-ranking soccer officials at FIFA, implicating former AFA chief Julio Grondona.

In the US government’s first charges against a banker in the investigation probing illegal payments at the world soccer organisation, Jorge Luis Arzuaga — a former managing director at the Swiss bank Julius Baer who also worked for Credit Suisse — delivered his plea before a federal court in Brooklyn, New York, where he admitted being part of a five-year international money-laundering and bribery scheme involving million of dollars.

The 56-year-old is the first banker convicted among the more than 40 soccer and marketing officials who have been implicated in the scandal involving FIFA. Arzuaga admitted to arranging financial transfers involving more than US$25 million in bribes and kickbacks from 2010 to 2015.

“I deeply regret what I did,” Arzuaga said in court. “I am ashamed.”

Over the five-year period, Arzuaga — while working for the two Swiss banks — managed accounts in the name of Alejandro Burzaco, the former CEO of Argentine sports media and marketing firm Torneos y Competencias SA. Prosecutors believe Burzaco and Arzuaga used these accounts to send approximately US$25 million to Grondona, the late president of the Argentine Football Association (AFA) who also served as senior vice-president of FIFA, under then-chief Joseph “Sepp” Blatter.

The scheme allowed Torneos y Competencias to win multi-year broadcasting and media rights for various FIFA tournaments. Arzuaga is believed to have received bonuses of around US$1 million as a result of his work.

FIFA’s headquarters are in Zurich.

According to a report in yesterday’s New York Times, Arazuaga’s “conviction suggests a new phase for the (US investigation), shifting its focus to the financial institutions through which bribe money travelled.”

‘Soccer Official #1’

Grondona, who died in 2014, was not named in the investigation or indictment formally. However, the document did little to disguise his identity, declaring that Arzuaga had paid bribes to the president of the AFA in 2014.

After the official’s death, Arzuaga said he helped distribute bribe money left in his account to the official’s heirs. Arzuaga said he received payments for helping with the transfers. As part of his plea, Arzuaga has agreed to forfeit US$1,046,000 in improper payments that he received.

Arzuaga confirmed in court he helped transfer the bribes by setting up accounts at two banks where he worked. He was an employee of Credit Suisse until 2012, and at Julius Baer from 2012 until 2015.

The Argentine banker has also been investigated by Swiss authorities, who are expected to announce a resolution of their own charges against him soon, US prosecutors said yesterday. Credit Suisse and Julius Baer could not immediately be reached for comment.

Julius Baer, Switzerland’s third-largest private bank, was charged last year with helping wealthy US citizens dodge taxes, resulting in a deferred prosecution agreement, which requires Julius Baer to steer clear of wrongdoing for three years to ensure that the charges are eventually dismissed.

A spokesman for the bank said last week that it was cooperating in the FIFA investigation, and said there was no indication that the investigation would affect the 2016 agreement

Grondona, who was known by many in soccer circles as “Don Julio,” continues to cast a long shadow over Argentine soccer, which at an organisational level is in chaos.

Burzaco pleaded guilty to his role in the corruption scheme back in November, 2015, when he acknowledged that he played a role in bribing soccer officials.

— Herald staff

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