News 1st May 2020

Bank admits facilitating bribes to football officials as part of $30m NPA

Bank Hapoalim has admitted facilitating at least US$20.7 million in bribes to football officials and has agreed to pay a $9.3 million penalty as part of a Non Prosecution Agreement (NPA) with US authorities, the Department of Justice (DoJ) announced yesterday. Under the Full Agreement (PDF below) the Bank admits that from 10 December to 20 February 2015, its Relationship Managers conspired with sports marketing executives and football officials as part of a bribery scheme for the broadcasting rights to football matches. The Full Agreement reveals that the charges against the Bank stemmed from the 18 March 2020 Superseding Indictment unsealed earlier this month, which charged three new defendants and a sports marketing company with fraud, money laundering and related offences.

‘The Relationship Managers conspired to conceal and disguise the proceeds of bribery’, reads the above Agreement. ‘In executing the payments and maintaining the relationships, the Relationship Managers also intended, at least in part, to benefit the Bank, which in fact did realize fees and profits from the accounts in question’.

The Agreement details the payments made to various football officials through sports marketing companies Full Play S.A. and its subsidiaries Bayan Group, Cross Trading, and Yorkfields, which are listed in the table on the right. The Agreement outlines that the defendants conspired with Hugo and Mariano Jinkis, the owners of Full Play, to launder money paid to these officials through accounts with Bank Hapoalim and its subsidiaries.

It mentions that many of the payments from an account with Yorkfields triggered the Bank’s anti-money laundering (AML) system however despite this, they were approved. It details three examples, the first of which is a 7 November 2007 payment of $200,000 to a currency exchange house to a Bolivian Football Federation official for the award of broadcasting rights to Full Play.  ‘[The] compliance employee cleared the alert and took no further action, notwithstanding the fact that Yorkfields was purportedly paying an individual, “an executive with the Bolivian Football Federation”, for rights to the Bolivian national team and directing that the payment be made to an unrelated third party, the case de cambia [currency exchange house]’, reads the Agreement.

27 May 2015 conversation between Co-Conspirator 1 and his spouse…

It details email evidence between Co-Conspirators 1 and 2 suggesting that they knew the money paid by Full Play and its subsidiaries was intended to bribe football officials in return for broadcasting rights. It also details a telephone conversation between between Co-Conspirator 1 and his spouse, in which he appears to realise that his activity is likely to be discovered (see right).

Five Bank employees were involved – Co-Conspirator 1, a Uruguayan national who served as a Relationship Manager for the Bank; Co-Conspirator 2, a Swiss national who served as Deputy Branch Manager at the Bank’s Zurich branch; Relationship Manager 1, based in the Bank’s Miami branch; Compliance Employees 1 and 2, who worked in the compliance department at the Zurich branch.

Bank Hapoalim will have seven working days from 30 April in which to pay the full $30 million and as part of the NPA, has agreed to end all private banking business outside of Israel, where its headquarters are located. The DoJ praised the Bank for reviewing over 250,000 documents as part of an internal investigation, as well as hundreds of video recordings. It also received praise for producing over 330,000 documents at the request of the US authorities.

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