Money laundering

[red_maradona]

I've lost count of the number of times Russian/Ukrainian/Greek teams buy players for big sums only for them to be sold for a fraction of that price later on.

Latest example - Kranjar, bought for 7m, season later loaned to QPR. there are lots of other transfers which I can't remember now.

Is this a form of money laundering? What is going on?

 

[Lippy]

Your only example of laundering via buying and selling players is a loan? And money has to change hands in the first place when the player is bought originally.

 

[Ossi]

Yeah! Carroll buying for £35m and Downing for £15m is beyond madness. Now we know the full story what Comolli was doing.

 

[C/O]

I recently watched a documentary called The two Escobars which covered this regarding laundering all the coke money in Columbia.. Definately worth a watch.
I'm sure its still prevalent today.

 

[red_maradona]

Your only example of laundering via buying and selling players is a loan? And money has to change hands in the first place when the player is bought originally.

Appreciate it was a loan example, but the point is that 'dirty' money in these countries is sanitised by sanctioning these transfers. Or is it, as Ossi highlights, just another example of football madness. Just curious.

 

[Spionkop69]

Ok but the money has to be dirty in the first place for people to want it to be laundered. So its about the source of the funds.

Are you suggesting these clubs just routinely take "dirty cash" from people and then buy players? I'm sure you'll realise that money laundering is a bit more complicated than that. Of course its well known that criminal organisations realise that £1m of dirty money will probably come back as less than half of that if laundered, which is why casinos and other such cash cows like currency exchanges are vital to criminal networks.

 

[Mystic]

Red Maradona really needs a sticker or something.

 

[Spionkop69]

Red Maradona really needs a sticker or something.

You may need to clarify that?

 

[Spionkop69]

Let me do a simple example of how dirty funds could be laundered by layering:

A man wants to buy a car with criminal proceeds. He obtains finance on it - any cash purchase over £10k has to be reported to the authorities so financing it, although more expensive, gives them the opportunity to launder the cash.

So he pays a deposit on the financed vehicle up to £9k to the finance broker. The broker then pays the finance company the £9k. The finance is set up and runs for a few months. The customer then decides to early settle the finance which of course incurs fees. To do this he can settle using a third party to do so having given the 3rd party the funds to do so. The vehicle is no longer owned by the finance company but by the criminal who wanted to clean his funds by multi transactions leaving a longer and varied trail.

The vehicle may will now be owned but not by outright purchase of the vehicle by cash but by layering it through the financial system through multiple transactions and 3rd parties. The money has now been laundered and an asset now sits at the end of the trail.

Obviously, the finance company has obligations to report any suspicious activity but this is still a method that could be used if the finance company hasn't got the necessary controls in place, which of course it should have.

 

[Hyena]

Probably Red Maradona's point is that it's easy to launder money using football because the value of players is indeterminate.

You could easily transfer large sums of money between two people just paying an inflated transfer fee or an agent's fee without drawing suspicion.

Of course, I suspect there are a lot easier, low profile and tax efficient ways to do it.

 

[Spionkop69]

Probably Red Maradona's point is that it's easy to launder money using football because the value of players is indeterminate.

You could easily transfer large sums of money between two people just paying an inflated transfer fee or an agent's fee without drawing suspicion.

Of course, I suspect there are a lot easier, low profile and tax efficient ways to do it.

Yes I get that. But the money has to be dirty in the first place to want to launder it. So we have to look at the source of the funds. I can't just turn up at Liverpool with a suitcase full of criminal proceeds, make them buy a player for me, then get them to sell him again at a lower price later and give me the money.

I'm not suggesting there is no crooked money in football, just that its not as easy as suggested unless there are "dirty" owners or dirty sources of funds into a club.

 

[Hyena]

Primitive example:
Say, if you own a football club and had £20 million of dirty money and Club A wanted one of your players, who they value at £9.5 million.

You pass the £20 million to the CEO of Club A.
Club A bids £24 million. You refuse. They raise it to £27.5million. You accept.
Club A pays you £27.5million.
You pay the player's agent Agent J £2 million fee. He pockets £1 million and passes £500k each to CEO A and Manager A.

Club A gets a £9.5 million player at a discount.
You get your £18 million back (depending on how much you really value this guy anyway)
You just need Manager A to explain that this guy is, really, really worth it.

 

[Hyena]

Yes I get that. But the money has to be dirty in the first place to want to launder it. So we have to look at the source of the funds. I can't just turn up at Liverpool with a suitcase full of criminal proceeds, make them buy a player for me, then get them to sell him again at a lower price later and give me the money.

I'm not suggesting there is no crooked money in football, just that its not as easy as suggested unless there are "dirty" owners or dirty sources of funds into a club.

Yup. It's hard to imagine any criminal would go to so much trouble when there are so many easier ways to launder money.

 

[RedStar]

One of the most obviously corrupt deals Ive ever seen was Utds purchase of Bebe sight unseen from Portugal, it wasnt money laundering but it was a clearly a deal arranged with the sole purpose of lining the pockets of a very influential agent. The player was just a pretense under which Utd paid $4m to Jorge Mendes the so called 'super agent' who represents amongst others Ronaldo, Anderson, Falcao, Thiago Silva etc There is no way you can look at the facts of that deal objectively and not conclude it was a bung

 

[Spionkop69]

Yup. It's hard to imagine any criminal would go to so much trouble when there are so many easier ways to launder money.

As the quote from the film goes, "years ago the problem was getting the money out of the banks, now the problem is getting the money back in again".

Controls are in place but the criminal will always find a new MO. As an example, you now should not be able to deal scrap metal for cash in this country. Part of the rationale for this was to reduce scrap metal theft. Has it? Not really, because now the criminals just export their stolen scrap metal to countries that do deal in cash for scrap metal.

Normally through the ports and containers which has little regulation or leglislation. Of course it makes the criminals work harder and spend more but all that means is that they will steal more to make the gains they previously had!!

 

[Rosco]

Yes I get that. But the money has to be dirty in the first place to want to launder it. So we have to look at the source of the funds. I can't just turn up at Liverpool with a suitcase full of criminal proceeds, make them buy a player for me, then get them to sell him again at a lower price later and give me the money.

I'm not suggesting there is no crooked money in football, just that its not as easy as suggested unless there are "dirty" owners or dirty sources of funds into a club.

And it's not a very clever operation if you buy a player for a large amount and don't sell him afterwards. You're throwing away money by doing that

 

[red_maradona]

Yes I get that. But the money has to be dirty in the first place to want to launder it. So we have to look at the source of the funds. I can't just turn up at Liverpool with a suitcase full of criminal proceeds, make them buy a player for me, then get them to sell him again at a lower price later and give me the money.

I'm not suggesting there is no crooked money in football, just that its not as easy as suggested unless there are "dirty" owners or dirty sources of funds into a club.

thanks, I appreciated the anlysis. my starting point was that these dodgy countries can't be trusted, which is a bit of a sweeping generalisation. in the end, there are probably easier ways than football to launder money, but football does bring with it an air of respectability, which might attract some.

 

[doctor_mac]

One of the most obviously corrupt deals Ive ever seen was Utds purchase of Bebe sight unseen from Portugal, it wasnt money laundering but it was a clearly a deal arranged with the sole purpose of lining the pockets of a very influential agent. The player was just a pretense under which Utd paid $4m to Jorge Mendes the so called 'super agent' who represents amongst others Ronaldo, Anderson, Falcao, Thiago Silva etc There is no way you can look at the facts of that deal objectively and not conclude it was a bung

The Portuguese police were investigating this move over a year ago, but I don't know what happened with it. At least £3 million pounds of the 7.5m transfer deal went missing.

 

[Pesam]

There was an article last month in The Economist which suggested that there was lots of money laundering, match-fixing and other forms of corruption going on in world football particularly in ex-Soviet countries.

 

[Spionkop69]

There was an article last month in The Economist which suggested that there was lots of money laundering, match-fixing and other forms of corruption going on in world football particularly in ex-Soviet countries.

There probably is, and I don't know what the accounting standards or record keeping are like in these countries. You'd have thought that given that all of these mentioned countries are FIFA member states then the standards should be uniform. Then I realised, its FIFA!

 

[Brizzle]

I watched an interesting documentary that was suggesting in Brazil that the Carnival was the biggest money laundering operation going (and some form of illegal lottery thing) with the money being donated to the schools for their parades that is paid back in prize money/ merchandise sales etc. I can't remember the full details but it was quite revealing!

 

[FoxForceFive]

I watched an interesting documentary that was suggesting in Brazil that the Carnival was the biggest money laundering operation going (and some form of illegal lottery thing) with the money being donated to the schools for their parades that is paid back in prize money/ merchandise sales etc. I can't remember the full details but it was quite revealing!

Yeah, I watched that too. Pretty sure it was a scam city episode that went off on a slight tangent when he uncovered it.

 

[Brizzle]

Yeah, I watched that too. Pretty sure it was a scam city episode that went off on a slight tangent when he uncovered it.

Yep, thats exactly the show. It was a good series actually but agree that it had the potential to be a realy good show but then got a bit average.

 

[King Binny]

Yeah! Carroll buying for £35m and Downing for £15m is beyond madness. Now we know the full story what Comolli was doing.

He must have heard @Ossi thus made this point over the weekend. 😛


[article=http://www.mirror.co.uk/sport/football/news/english-football-worst-enemy-according-2259446#ixzz2ePBEmUdv ]“When we talk about pressure, blame should be on the clubs not on the player. At Liverpool, and I would include myself in this because I was there, you have to manage expectations. But I would not say that has anything to do with Andy Carroll’s fee.

“There was an inflated price on Fernando Torres and we got unbelievable money for him. We looked at it not as a two-player deal, but as a four-player deal.

“We also sold Ryan Babel at that time and we signed Luis Suarez, and we made a profit. That is the way we looked at it at the time.

“I said we were overpaying by £15m for Carroll, but that if the player is not successful we will still get £20m back on him.

“And since then Liverpool have had a big loan fee from West Ham – they paid his wages for a year, and Liverpool have now sold him permanently to them.

“People have forgotten that and they shouldn’t.”[/article]

 

[Gerry_A_Trick]

He's wrong. Everyone remembers we overpaid by 15m for Carroll. It's very hard to forget.

 

[Silver Sean]

Chelsea for the last ten years.

 

[FoxForceFive]

Ha. As I understand it with him it was part of an overall strategy to make him both valuable to the new Russia & too well known a character in the global media to be 'dealt with' as many others in his position were.

I've only read a couple of articles but that's what they eluded to at least as I understood it.

 

[Woland]

Laundering money is quite easy. The last thing you'd want to do as a launderer of money is involve high profile transactions that millions of people had knowledge of.

So shut up.

 

[Leo]

 

[singlerider]

If you wanted to launder money, it'd be far easier just to do it through the City of London, via Jersey (or Cayman Islands, or any other number of tax havens)