Europol Hits Russian Football Mafia

Europol Hits Russian Football Mafia

The European law enforcement agency Europol has dismantled a Russian mafia organization that has infiltrated football clubs in Europe for money laundering purposes on Tuesday May 4. During Operation Matrioskas (named after the Russian Matryoshka dolls) the Portuguese Police, in support of Europol, raided Portugal’s third division club União de Leiria, and arrested three members of the Russian gang.

It is understood that the mafia organization has been active since 2008, and is thought to be responsible for laundering several million euros accumulated through criminal activity across numerous EU countries.

Europol’s press statement explains that the mafia organization had identified various football clubs in financial distress, and then infiltrated them through benefactors, who provided cash injections through short-term investments or donations.

After gaining trust the mafia organisation would move towards purchasing the club through individuals “operating as front men for opaque and sophisticated networks of holding companies invariably owned by shell companies registered [in] offshore [countries] and in tax havens.” This setup guaranteed that the owners and the true origin of the funds would remain unidentified.

Once the club came under the control of the Russian mafia, clubs were used to launder dirty money through player transfers, television rights deals, and also betting activities.

União de Leira started to experience serious financial difficulties during the 2011-12 season, with players not being paid their wages for several months. Subsequently most of the squad rescinded their contracts, and the club had to drop down to the third division of Portuguese football. On June 28 2013 the club was declared bankrupt in a meeting with its creditors. The Portuguese government, however, abstained from €3.6 million owed by the club in from of taxes.

A new club was formed, which purchased the licence, and naming rights from the old club for €1000. Yet at this point the club already appeared to be under the control of the Russian mafia. Europol started their investigation as several red flag indicators were raised against suspects close to the club.

At this point the club came under the control of the Russian businessman Aleksandr Tolstikov, who according to CNN has been one of several members of the Russian mafia detained by Portugal’s police force.

Suspicion was aroused by the high standard of living of suspects, who used high value assets registered under different names. Furthermore, they imported large amounts of cash from Russia to Portugal in what were direct violations of EU cash regulations.

Europol has collected significant evidence showing that this criminal group had used União de Leira as a front for money laundering, tax fraud, corruption, and forgery of documents.

The head of Europol’s Financial Intelligence Group Igor Angelini said “The misuse of offshore companies to conceal the beneficial ownership of assets is still one of the major challenges for successful financial investigations. These barriers also frustrate the attempts of investigators to trace the origin of the money, often criminal, which is re-invested in sectors prone to such infiltration. The football sector presents vulnerabilities related to its structure, finance model and culture which could be exploited by criminals.”

Tuesday’s operation saw 22 houses and companies searched, including four football clubs—alongside Leira, SC Braga, Sporting Lisbon, and Benfica have also had their offices searched. The operation is understood to have aided the identification of transnational links with organised crimes committed in Austria, Estonia, Germany, Latvia, Moldova, and the United Kingdom.

The report indicates that various other football clubs across Europe could be involved in this scheme, and that match-fixing, but also the transfer system were used to launder money. The international player transfer system has especially come under scrutiny due to the heavy involvement of Third-Party Ownership groups, and the lack of transparency when it comes to most major transfers conducted. Europol’s investigation now shows that the current transfer system opens the door not just for investment groups, but also criminal organisations.

By Manuel Veth –

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