Australia: The FIFA World Cup of Fraud: A reminder of the long reach of the US law


On Wednesday 27 May 2015, authorities in Switzerland arrested 7 current and former executives of the Fédération Internationale de Football Association (FIFA) at a exclusive hotel in Zurich. The officials arrested in Zurich include citizens of Brazil, Costa Rica and Trinidad and Tobago. Each of them faces extradition to the United States to face charges.

Two of the arrested officials are current vice presidents of FIFA's executive committee. A further 2 former FIFA officials and 4 individuals, being sports marketing executives, were also arrested in the United States. The arrests are the culmination of an investigation lasting 3 years by the United Stated Department of Justice (DOJ).1


Officials from the DOJ allege that the arrested FIFA officials had obtained bribes totalling US$150million since 1990.2 The charges against the FIFA officials (brought under various provisions of the US criminal code), are set out in a pleading that stretches to 164 pages and can be broadly summarised as:

  1. obtaining bribes in connection with the selection of the host location and the determination of the broadcast rights for the World Cup;
  2. money-laundering;
  3. fraud; and
  4. tax evasion.3

The charges against the sports marketing executives relate to the payment of, and agreement to pay, bribes to secure lucrative television broadcast deals.

The DOJ also revealed that it had accepted guilty pleas from four individuals and two corporate defendants, in connection with the same allegations. Those defendants, including Mr Charles Blazer, a former member of FIFA's executive committee, have been assisting the DOJ with its investigations into other FIFA officials.


In a press conference that appeared somewhat theatrical by Australian standards, US prosecutors stated that they were issuing a "red card" to FIFA and that "this is only the beginning". The arrests occurred within days of a scheduled election of FIFA's president and may therefore undermine the standing of FIFA's long serving president, Sepp Blatter. Immediately prior to the election, it appeared that football associations from the United States and Australia, together with a significant number of delegates from UEFA, the European football association, intended to support Mr Blatter's challenger, Prince Ali bin Al-Hussein of Jordan, at that election.4 Ultimately, Mr Blatter was re-elected for a fifth presidential term.

In a separate investigation, Swiss Federal Prosecutors have opened an investigation into the selection of the location for the 2018 and 2022 World Cups. FIFA officials will be interviewed as part of this investigation. Both the United States and Australia unsuccessfully bid to be the host nation of the 2022 World Cup. Prominent Australians, including Senator Nick Xenophon, have previously criticised the manner in which Qatar was selected as host of the 2022 World Cup.5

Clearly, these events will have a significant impact on FIFA's operations and reputation, although exact outcomes may not be known for some time.


The long reach of US law

The DOJ states that it will prioritise prosecutions according to what it considers to be the "most serious offences". Specifically, offences that cause Americans to suffer financial fraud, will be a priority.6 The FIFA arrests remind us that the United States will prosecute contraventions of its laws, even where they occur overseas or are committed by individuals who are not United States' citizens.

Prosecutions of this nature depend on the conduct giving rise to the offence having some "connection" with the United States. In the present case, the DOJ relies on the fact that FIFA maintained a development office in the United States and the involvement of members of CONCACAF, FIFA's North American regional association, as jurisdictional grounds to bring these criminal proceedings, including against US and non-US citizens. In any event, the requisite "connection" does not need to be significant, for example, the use of a United States bank account may be enough to bring an entity within the reach of US laws, at least in the context of contraventions of the Foreign Corrupt Practices Act 1977.7

Where a sufficient connection is demonstrated, and the DOJ elects to commence proceedings, the US may then rely on requests for extradition, that is the removal of a person from one country to another, in order to bring the individual before a United States court. Australia and the US have agreed an extradition treaty by which Australians who are alleged to have contravened the laws of the United States may be extradited to the US in order to be tried under the laws of that country.8

Effect on key stakeholders

Reports immediately following the FIFA arrests indicated that one of FIFA's major sponsors, Coca-Cola, had called for FIFA to "put its house in order".9 Similarly, any business that is found to have engaged in corrupt conduct is likely to find that its key customers and suppliers will distance themselves from that conduct and even the company, in order to prevent their own reputations from being tarnished.

Apart from significant reputational damage, corrupt conduct undermines business efficiency. The diversion of money to pay bribes or the loss of funds to fraud, removes cash from your business and can therefore contribute to cash flow issues. Such conduct will also limit the returns available to shareholders and other investors.

Preventing and managing fraud and bribery

Organisations need to ensure that they have proper systems in place to understand risks to their business. Where instances of fraud or other corrupt conduct are revealed, swift action is required to manage regulatory, reputational and financial risk. Investigations by a regulator are particularly expensive to a business in financial terms, but also in terms of lost productivity and ongoing uncertainty.

It is worth noting that the penalties faced by those who plead guilty early in the process and who cooperate with US authorities, such as Mr Blazer, are likely to be significantly more lenient than for the officials arrested on Wednesday morning. Regulators in Australia similarly have mechanisms by which leniency may be provided to those who cooperate with regulators and assist with investigations.

UPDATE - 3 JUNE 2015

Less than a week after securing re-election as president of FIFA for a fifth term, Sepp Blatter has resigned. An election for his successor will be held towards the end of the year and Mr Blatter has indicated that he will stay on as interim president until that time.

At the time of this update there were reports that Mr Blatter was also the subject of an investigation by the FBI.10 It seems clear that the arrests during the FIFA conference, last week, will have a profound and ongoing impact on the organisation.


1" Nine FIFA Officials and Five Corporate Executives Indicted for Racketeering Conspiracy and Corruption", 27 May 2015, United States Department of Justice


3 United States of America v Webb & Others, 15 CR 0252 (RJD) (RML), filed in the Eastern District of New York, United States District Court on 20 May 2015

4" Fifa crisis: Blatter denies responsibility and rebuffs Platini plea to resign", 29 May 2015

5 " Sponsors should hand FIFA a red card", 14 November 2014, Xenophon, N, The Hon Senator

6" Smart on Crime: Reforming The Criminal Justice System for the 21st Century", August 2013, US Department of Justice

7 See for example, "Siemens AG and Three Subsidiaries Plead Guilty to Foreign Corrupt Practices Act Violations and Agree to Pay $450 Million in Combined Criminal Fines" 15 December 2008, US Department of Justice

8See Extradition Act 1988 (Cth), generally, and more specifically the Extradition (United States of America) Regulations

9 " Coca-Cola says corruption has 'tarnished' the World Cup", 28 May 2015

10 FBI now targeting Sepp Blatter", 3 June 2015 & "Fifa corruption probe: Sepp Blatter is being investigated by FBI, claims report", 3 June 2015

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions