Money laundering through sports
Money laundering has become an issue of grave concern in the world of sports. Recent high-profile cases have exposed how much illegal cash is being laundered into certain activities - from match-fixing to doping - raising severe concerns about sports' integrity and fans' trust in athletes.
One of the most prevalent ways criminals launder money through sports is match-fixing. They bribe players, coaches, and referees to alter game outcomes in their favor so they can profit from illegal activities. Not only does this undermine the game's integrity, but it also puts players' safety at risk. For instance, in 2006, Italian football was rocked by the Calciopoli scandal when several top teams were revealed to have collaborated with referees to fix matches.
How does match-fixing become money laundering? Once illegal funds are obtained, criminals must find ways to make them appear legitimate. They may use shell companies to invest in sports teams or franchises and use legitimate business activities to launder dirty cash. Shell companies are a tool criminals use to launder money through sports. They invest in teams or franchises and use legitimate business activities as a cover for laundering dirty cash. This could include purchasing or investing in teams, sponsoring or advertising with sports leagues, or owning a stadium. For instance, in 2003, Russian oligarch Roman Abramovich purchased Chelsea Football Club - one of the top teams in the English Premier League - for an estimated PS140 million. At first, Abramovich's purchase of the club caused controversy, as he had little prior involvement in football. Subsequently, suspicions swirled that this transaction may have been used to launder illegal funds. These suspicions were compounded by Abramovich's reputation as a wealthy businessman with close ties to the Kremlin and his previous legal troubles in Russia, including accusations of fraud and embezzlement. In response to these suspicions, the UK government's National Crime Agency (NCA) investigated Abramovich's acquisition of Chelsea Football Club. The investigation reportedly focused on the source of Abramovich's wealth and whether any funds used to purchase the club were obtained illegally or fraudulently. However, the investigation did not result in any charges or legal action being taken against Abramovich, and it has yet to be proven that his wealth was not obtained illegally. Abramovich has maintained no wrongdoing and that his wealth was legitimately acquired. It's worth noting that while there were suspicions surrounding Abramovich's purchase of Chelsea Football Club, there is no concrete evidence to support money laundering claims. Nonetheless, this case is a cautionary tale regarding how sports clubs and franchises may be used for illicit funds laundering.
Criminals may create fake sponsorship or endorsement deals to launder money through sports. This could involve setting up false businesses that pretend to sponsor a team or athlete, then funneling illegal funds through those businesses and into legitimate channels. In 2015, it was reported that Ricardo Teixeira - then president of Brazil's Football Confederation - had created fake sponsorship deals worth millions of dollars to launder money. He had been accused of receiving bribes from companies in exchange for sponsorship deals with the Brazilian national team, then using those proceeds to launder money through legitimate channels. In 2016, French authorities arrested former UEFA president Michel Platini to investigate corruption and money laundering allegations. Platini was accused of receiving a fraudulent payment of over $2 million from FIFA in 2011 that was disguised as a sponsorship deal. Fake sponsorship and endorsement deals can be effective for criminals to launder money through sports. They may appear legitimate at first glance, making them difficult to detect. But with increased scrutiny and investigative efforts, authorities have been able to uncover these schemes and hold those responsible accountable.
Criminals sometimes employ the tactic of betting on fixed games with illegal money, then using any winnings to launder it. They may also employ intermediaries, such as friends or family members, to place bets for them and cover their tracks. In 2013, for instance, the Singaporean match-fixing syndicate was exposed for fixing matches worldwide, including in the English Premier League; they had laundered over $8 million through various means, such as betting companies and shell companies.
Media and title rights sales are often used for money laundering in sports. Criminals will invest in teams or leagues and inflate the value of media or title rights before selling them to legitimate buyers, turning their dirty money into legitimate profits. In 2015, FIFA experienced a major corruption scandal involving the sale of media rights for the World Cup; several high-ranking officials were arrested and charged with corruption and money laundering.
Fake ticket sales are another common method criminals use to launder money through sports. They create fake websites or sell tickets at exorbitant prices, then use the proceeds to launder funds through legitimate channels. In 2018, police in Spain arrested 28 individuals for allegedly using tickets sold for the UEFA Champions League final as a vehicle to launder cash.
Sports memorabilia is another method criminals use to launder money. By purchasing and selling high-value items such as jerseys or autographed equipment with this cash, they can legitimize the use of dirty money and make tracking harder. In 2012, the FBI discovered an international criminal group using sports memorabilia, including a signed baseball bat sold at $50,000 to launder funds.
Gambling can also be used as a vehicle for money laundering in sports. Criminals may place bets on sporting events with illicit funds and collect their winnings through legitimate channels or use intermediaries to place bets on their behalf, making it harder to trace back the source of the proceeds. In 2016, French police broke up an extensive money laundering ring using online gambling sites to launder millions of euros in illegal profits.
Player transfers can also be a vehicle for money laundering in sports. Criminals may purchase or sell players at inflated prices, using them as a cover to launder dirty money. For instance, in 2017, Brazilian soccer star Neymar was transferred from FC Barcelona to Paris Saint-Germain for an unprecedented EUR222 million fee; however, this transfer was later investigated for potential money laundering and tax evasion activities.
In conclusion, money laundering has become a significant problem in sports, and it has raised severe concerns about the integrity of sports and fans' trust in athletes. Match-fixing is one of the most prevalent ways criminals launder money in sports, bribing players, coaches, and referees to alter game outcomes. Other methods include creating fake sponsorship or endorsement deals, betting on fixed games, media, title rights sales, fake ticket sales, sports memorabilia, gambling, and player transfers. These methods make it difficult to track the source of the proceeds, and criminals use legitimate business activities to launder dirty cash. Authorities must increase their scrutiny and investigative efforts to uncover these schemes and hold those responsible accountable to maintain the integrity of sports.