Julius Baer Starts Probe Amid FIFA Corruption Allegations
Julius Baer of Switzerland became the latest bank to start an internal probe of money transfers linked to an investigation of FIFA, world soccer’s ruling body.
Julius Baer joined banks including the U.K.’s Standard Chartered Plc in reporting that it began an inquiry. The Zurich-based firm was named as one of the lenders involved in money transfers in a U.S. indictment of 14 FIFA and regional soccer officials in May.
“We have launched an internal investigation and we are fully cooperating with the authorities,” Jan Vonder Muehll, a spokesman for the bank, said by telephone from Zurich on Wednesday.
Julius Baer, which isn’t accused of any wrongdoing, has already been waiting 3 1/2 years to resolve a separate investigation by the Justice Department into how it and other Swiss banks helped American taxpayers hide money offshore. Resolving that dispute will provide certainty over the amount of capital the firm might return to shareholders, use to make acquisitions or invest in existing operations.
“This could be an extra risk on top of the U.S. tax case,” Jonas Floriani, an analyst with Keefe, Bruyette & Woods in London, said by telephone. “The last thing it needs is another run-in with the Justice Department.”
Standard Chartered, based in London, is looking into two payments it cleared that were mentioned in the FIFA indictment, it said on May 31. HSBC Holdings Plc and Barclays Plc are also studying transactions to ensure proper procedures were followed, the Sunday Times reported last month, citing people it didn’t identify.
Wire Fraud
Swiss police arrested FIFA and regional soccer officials in Zurich on May 27 at the request of U.S. prosecutors, who accuse the individuals of racketeering, wire fraud and money laundering. The 14 charged include Alejandro Burzaco, an Argentinian executive and a controlling principal of FPT Sports. FPT Sports had an account, or accounts, at Julius Baer that received transfers of $5 million and $1.7 million from U.S. correspondent accounts, according to the Justice Department indictment.
Neither the authorities nor Julius Baer have provided much clarity on how it might be involved with the FIFA scandal, according to Floriani.
The same charge sheet also mentions accounts at UBS Group AG, Switzerland’s biggest bank, the Swiss unit of Israel’s Bank Hapoalim BM and some of the biggest names on Wall Street. Most of the accounts mentioned in the 164-page indictment were at U.S. banks.
UBS officials declined to comment. Bank Hapoalim said in an e-mailed statement that the indictment makes no claims against the firm and it operated according to the law.
Financial firms in Switzerland are obliged to flag suspicious activities to MROS, the country’s money-laundering reporting office. Banks have announced 53 suspicious banking relations under anti-money laundering rules, Switzerland’s Attorney General Michael Lauber told reporters in Bern on Wednesday. Prosecutors also learned separately of 104 banking relations and seized around 9 terabytes of data for the investigation, Lauber said.
Julius Baer’s Vonder Muehll declined to comment further on how the bank was cooperating with the authorities.
