U.S. authorities have intensified their scrutiny into a handful
of major financial institutions' handling of potentially tainted
funds connected to widespread allegations of corruption within
soccer's governing body, FIFA, according to people familiar with
the matter.
Prosecutors in the Brooklyn U.S. attorney's office and New
York's top banking regulator have separately contacted more than a
half dozen banks combined in connection with the soccer scandal in
recent weeks. Authorities are focused on whether the banks'
required anti-money-laundering systems should have caught the
allegedly corrupt payments, the people said. They have also told
the banks to scour their books for any illegal payments related to
FIFA, they said.
Prosecutors have questioned HSBC Holdings PLC, Standard
Chartered PLC and Delta National Bank and Trust Company, according
to the people. At least three other major international banks have
been contacted in the probe, the people said. Those banks could not
be identified and it's not clear if the separate probes by the U.S.
attorney's office and the New York regulator are looking at
identical groups of banks.
The probes are at an early stage, the people said, and
investigators could determine the banks under scrutiny are not at
fault.
The Brooklyn investigation is being headed by the U.S.
Attorney's business and securities fraud section, a separate unit
from the team heading the FIFA probe and which handles all
white-collar investigations for the office. The decision to move
the bank probe to the white-collar team and commit additional
resources to it is an indication that the banks may themselves
become targets, according to the people familiar with the
matter.
The New York State Department of Financial Services, meanwhile,
has sent initial inquiries to more than six banks as part of its
probe, one of the people said, including Standard Chartered,
Barclays PLC, Deutsche Bank AG, Credit Suisse Group AG, and Bank
Hapoalim, Israel's largest bank. The regulator, which gained a
reputation for being aggressive with banks under recently departed
head Benjamin Lawsky, is also looking into whether individuals at
the banks had a role in any potential controls lapses, the people
said.
An HSBC spokesman said "we are continuing to review the
allegations in the indictments against certain FIFA executives and
others, to ensure that our services are not being misused for
financial crime." Representatives for Standard Chartered, Barclays
and Delta declined to comment. Representatives for the other banks
didn't immediately return requests for comment.
Brooklyn prosecutors upended the soccer world in May when they
unsealed a voluminous indictment alleging that senior officials of
the International Federation of Association Football, known as
FIFA, got more than $150 million in bribes and kickbacks as part of
a sprawling scheme that functioned like a criminal enterprise.
The 161-page indictment charged 14 individuals, including top
officials and executives of soccer confederations as well as sports
marketing firms.
The previously undisclosed scrutiny from U.S. authorities
represents a new prong of the FIFA corruption case and creates the
potential for new money-laundering headaches for the financial
industry. The flow of dirty money is an area that has received
intense attention in recent years from regulators and resulted in
major fines for banks.
HSBC and Standard Chartered are currently under
deferred-prosecution agreements with the U.S. government related to
money-laundering or sanctions violations.
Write to Christopher M. Matthews at christopher.matthews@wsj.com
and Rachel Louise Ensign at rachel.ensign@wsj.com
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