Bank Julius Baer, the third largest Swiss bank, will pay a $43.3 million fine and forfeit another $36.4 million for conducting the transactions between February 2013 and May 2015, according to the Department of Justice (DOJ). The settlement is part of a deferred prosecution agreement with federal prosecutors.
DOJ says the bank knowingly laundered the money through the U.S. “to conceal the true nature of the payments and promote the fraud.” The bribery scheme involved sports marketers giving illicit payments to officials from global soccer governing body FIFA and South American governing body CONMEBOL in exchange for the rights to broadcast soccer matches.
“Bank Julius Baer pursued the profit it could make laundering corrupt funds derived from a criminal scheme run by powerful FIFA officials,” William F. Sweeney Jr., assistant director-in-charge of the FBI’s New York Field Office, said in a statement. “Their behavior has earned them the equivalent of a red card, and the money the bank now owes the U.S. government is more than double what it admits to laundering.”
“Bank Julius Baer aided corrupt FIFA officials in laundering over $36 million,” added Special Agent in Charge Ryan L. Korner of the IRS’ Criminal Investigation division. “Banking officials that are a conduit for criminal activity undermine their own profession and the health of our financial system.”
Bank Julius Baer had been cooperating with the DOJ investigation since 2015 and reached an agreement to pay the almost $80 million last November, according to Reuters. The settlement amount includes a 5 percent reduction from what would have been typical under federal guidelines, due to prosecutors giving the bank “some credit for its significant effort to remediate its compliance program.”
Former Julius Baer banker Jorge Luis Arzuaga pleaded guilty to related conspiracy charges in June 2017 and was sentenced by U.S. District Judge Pamela K. Chen to three years probation in November 2020. Chen also presided over Thursday’s hearing.
“Julius Baer welcomes the final resolution of this legacy matter,” the bank said in a statement obtained by Newsweek. “This marks another step in Julius Baer’s continued efforts to pursue the closure of remaining regulatory and legal matters in cooperation with the relevant authorities.”
FINMA, the regulatory body for Swiss banking, has also imposed penalties on Bank Julius Baer for failing to adequately prevent money laundering in a transaction between Venezuela’s state-owned oil company PDVSA and FIFA. A ban on large acquisitions for the bank was lifted in March.
FIFA has been implicated in corruption scandals for decades. Thursday’s agreement grew out of a massive DOJ investigation that came to a head in 2015, resulting in dozens of arrests.
Update 5/28, 4:16 p.m.: This article has been updated to include a statement from Bank Julius Baer.
