Football clubs perfect for money laundering
Reuters - Wednesday 01 July 2009, 13:31
PARIS - Criminals are increasingly using
football for money laundering and tax evasion, helped by the
globalisation of the sport and financial needs of clubs, an
anti-corruption body said on Wednesday.
The world's most popular sport is attracting criminals with
its huge cross-border money transfers and often obscure
accounting methods, a unit of the Organisation for Economic
Cooperation and Development said in a report.
"Football clubs are indeed seen by criminals as
the perfect vehicles for money laundering," the OECD's Financial
Action Task Force (FATF) said.
While other sports like cricket, rugby, horse racing or
motor racing were also under threat, football was "an obvious
candidate to examine money laundering through sport" because it
dwarfed all the others in its global scale.
In one case, the report said, investigators thwarted an
attempt to launder money through the purchase of a famous
Italian football club with funds supplied by a criminal
association operating in central Italy.
"Proceedings for money laundering, insider trading,
extortion, unfair competition and other offences are ongoing,"
it said, without naming the club.
Based on 20 cases of money laundering in football, the report
concluded that the structure, financing and culture of the sport
are all conducive to financial crimes.
It cited two examples of tax evasion involving players in
Britain, one linked to image rights and the other to a
signing-on fee that was hidden from tax authorities.
MONEY FLOWS
Boosted by lucrative television rights, the amount of money
in football has exploded, turning venerable clubs into massive
business enterprises.
The heady sums paid for top players
reached new heights last month when Manchester United winger
Cristiano Ronaldo completed a record 80 million pound transfer to Real Madrid.
Despite the sport's scale, with 38 million registered
players and 5 million referees and officials, many clubs are
managed by amateurs and can easily be acquired by dubious
investors, the report said.
Massive money flows that move in and out of tax havens, huge
and irrational transfer payments, inflated agent fees and
betting networks can all help criminals trying to pass off their
illicit gains as legal.
The sport's image also plays a role. Clubs are less likely
to report money laundering for fear of losing sponsors, while
criminals may use ownership of a club to forge legal business
ties and win lucrative construction contracts.
The report cites several examples of clubs in financial
difficulties whose deficits were funded by suspected criminals.
Investors may get their "laundered" funds back by selling
the club's equipment and services at inflated prices, or via
sales of media rights, tickets, players and merchandise.
Global transfers of young football players can also attract
human traffickers, the report said. The task force recommends
building better awareness and improving governance and financial
transparency as ways of fighting crime in football.