What is Money Laundering (ML)?
It is “the crime of moving money that has been obtained illegally through banks and other businesses to make it seem as if the money has been obtained legally.” Usually, this is done through banks and other businesses.
In Malta, the maximum penalty for money laundering is a fine not exceeding €2,500,000.00 or imprisonment for a period not exceeding 18 years or both. With Malta’s recent emphasis on the fight against Money Laundering, we wonder: how have sport organisations been used in the past to commit this illegal act?
Money Laundering on the Field
A recent Europol report stated that organized crimes are using match-fixing to launder large amounts of money. Football is at the centre of this criminal ring. Football accounts f more than 50% of the global betting market which could be an appealing reason why it is being targeted by the organized criminals.
Watch this video for more on ‘match-fixing’ :
The Financial Action Task Force (FATF) also published a report in July 2009 titled ‘Money Laundering through the Football Sector”. There are around 265 million registered football players in the world with the highest ranking in Germany followed by the United States and Brazil. The size and diversity of the sport are huge money-generating factors, which attracts criminal activity to achieve financial gain. In 2008 alone, the 5 biggest European leagues generated a total of 7.2 Billion Euros accumulating 52% of the total globally. According to the FATF, football is being infiltrated through these four ways:
1) Ownership of football clubs
2) The transfer market and ownership of players
3) Betting activities and image rights
4) Sponsorship and advertising arrangements.
Fictitious Example 1: Funding Semi-Professional Football Clubs
To better explain the process, let’s use fictitious accounts of a small football club. This fictitious amateur club always seemed to be in deficit. The owner of the club always chose to balance the books at the end of the season through very generous donations by a number of his companies. After further investigation, it was found that these companies had not properly registered their Financial Statements as required by the law. It was also realized that this fictitious owner had been misusing company funds by withdrawing large amounts of money without justification, which is an ML matter.
Fictitious Example 2: Political Corruption
A businessman acquires ownership of a locally based football club. He invites politically affiliated people to matches and gives them VIP treatment. This is done in order to take advantage of their decision-making powers which puts him in a beneficial position and boosts business growth.
Although these cases of money laundering are not given the spotlight to protect the image of innocence attached to football, it is rather important to raise awareness. After all, football belongs to everyone and we must safe-keep the values enrolled within the beautiful game.
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