Money Laundering through the Football Sector

Introduction

With the major European football (soccer) leagues now hard into pre-season training and the Major League Soccer All-Star Game being played next week in the United States, it is timely to focus on a new counter money laundering initiative, looking at this crime throughout the football world.

Executive Summary

Criminals have shown adaptability in finding new channels to launder the proceeds of their illegal activities and sports is one of the many sectors that are at risk of being inflicted with criminal money. With the growing economic importance of sports during the last two decades, especially football, money gradually started to exert a strong influence on the world of sports. This influx of money has positive effects, but also negative consequences.

In order to get a better understanding, this study identifies vulnerabilities which make the football sector attractive to criminals. These are mainly related to the structure, the financing and the culture of this sector.

The study analyses several cases that illustrate the use of the football sector as a vehicle for laundering the proceeds of criminal activities. After this analysis, money laundering (ML) through the football sector is revealed to be deeper and more complex than previously understood. Indeed, this analysis appears to show that there is more than anecdotal evidence indicating that a variety of money flows and / or financial transactions may increase the risk of ML through football. These are related to the ownership of football clubs or players, the transfer market, betting activities, image rights and sponsorship or advertising arrangements. Other cases show that the football sector is also used as a vehicle for perpetrating various other criminal activities.

The ML techniques used vary from basic to complex techniques, including the use of cash, cross

border transfers, tax havens, front companies, non-financial professionals and PEPs. In many cases, connections with other well-known ML typologies were identified such as trade based

ML, the use of non-financial professionals and NPOs for ML purposes, ML through the security

sector, the real estate sector and the gaming sector.

Various initiatives are taken by international and national actors in order to combat threats to the integrity of football, including ML. Looking ahead, there appear to be a number of areas that could be considered to improve the capacity to cope with the ML risks associated with the football sector.

Link

"Money Laundering through the Football Sector", Financial Action Task Force, July 2009.