It was the US dollar—millions of them—which featured in “racketeering, wire fraud and money laundering conspiracies” which enabled US Attorney General Loretta Lynch to reveal a 47-count indictment against 14 defendants (present FIFA officials and, in the case of Jack Warner, former vice-president of the world governing body for football) for their “participation in a 24-year scheme to enrich themselves through the corruption of international soccer”.
United States law enforcement spent years following their printed currency.
It finally yielded results.
Six regional banks, three of which are local banks—First Citizens (T&T), Intercommercial Bank (T&T) and Republic Bank (T&T)—are listed in the US indictment as having completed wire transfers of large sums of money for the FIFA officials.
Why local banks?
When the question was put to president of the Bankers Association last week, RBC Royal Bank’s Darryl White responded: “Why banks here? One can infer a lot of reasons but I wouldn’t guess that.”
Two of the major transactions in the US indictment—an alleged US$10 million bribe paid to Warner to host the 2010 World Cup and another US$1.2 million alleged bribe from Qatari billionaire Mohamed bin Hammam, for Warner’s facilitation of the May 2011 Confederation of North, Central American and Caribbean Associations of Football (CONCACAF) meeting where the cash-for-votes scandal occurred—passed through local banks.
With 121 financial institutions, Trinidad and Tobago has a robust sector.
According to the Caribbean Financial Task Force (CFATF), T&T’s eight banks boast US$20.161 billion in assets.
The banks are regulated by the Central Bank and conform to the legislation by the Financial Intelligence Unit (FIU), which was operationalised in 2010 and falls under the Ministry of Finance.
So how was the US able to detect suspicious activity and the local banks didn’t?
How was the US able classify over US$4.8 million worth of bank drafts sold to the JTA supermarket group as a wire fraud?
When asked, White countered with a question of his own: “What in that says that these transactions weren’t flagged?”
The Sunday Express asked: “Were they?”
White was unable to provide any details: “Why is it that people assume that these transactions were not flagged? There seems to be an assumption that these transactions were not flagged.”
In 2011, the Financial Intelligence Unit (FIU) reported it had received 303 suspicious activity reports.
Seventy-one of those cases were closed in 2011 while 219 are cited as “ongoing analysis”.
Was Warner’s transaction among those?
White explained: “The bank’s rules are to send reports of suspicious activity to the FIU. I can assure you that we send. The most important thing is to do what you are supposed to do, to flag transactions.”
If the transactions were flagged, then what happened?
Last week, director of the FIU Susan Francois said: “The FIU is an intelligence-gathering agency. We receive reports of suspicious transactions from banks and certain business sectors; we evaluate, analyse and add information to the suspicious transaction reports and we send it to the law enforcement agencies.”
So if such transactions were flagged and submitted to law enforcement, the final responsibility resides with the Trinidad and Tobago Police Service (TTPS).
It is the Financial Intelligence Bureau (FIB) of the TTPS that the FIU submits reports to.
The Sunday Express was unable to get a response on whether any active investigation was taking place.
Acting Commissioner of Police Stephen Williams said Snr Supt Wendy Wilkinson was in charge of the FIB, having taken over from Mervyn Richardson.
The Source of Funds
Under existing legislation, had T&T’s banks detected fraud in the source of funds, people could have been prosecuted.
A retired banking official explained the source of funds was the critical element in detecting suspicious activity.
He noted if a bank were comfortable with a client, they could become exempt from completing source of funds.
Did the banks fall down on the job?
The former official responded: “With hindsight, yes.”
But White had another answer.
“I am very confident that the banks have robust systems to identify and flag transactions,” he said.
White explained: “There is a rigorous framework. Banks are regularly inspected by the Central Bank to ensure that we adhere to those frameworks.”
When asked specifically by the Sunday Express how the US was able to detect a pattern of behaviour going back to 25 years and local banks did not, White answered that most banks abide by standards set by more than one regulator.
“We also have to bear in mind that 25 years ago, we did not have the measures we have in place now. After 9/11, the world changed. The second thing is that we have several large international banks. The large international banks are all regulated in their jurisdictions as well, so therefore, they always had that standard. We have local banks that are also in the international space,” he said.
Asked if the banks would co-operate if a forensic audit were initiated to determine whether FIFA funds subsequently ended up funding the People’s Partnership election campaign through payment to advertisers, he answered: “The banks will always co-operate. We are very vigilant with our record- keeping and transactions are kept for six years and we will always comply with regulations and laws.”
Warner was listed among 14 high-ranking FIFA officials who were indicted for racketeering, wire fraud and money laundering two weeks ago.
According to the indictment, Warner “began to solicit and accept bribes in connection with his official duties, including the election of the host nation for the World Cups held in 1998 and 2010, which he participated in as a member of the FIFA executive committee”.