Miami arm of The Traffic Group at the center of soccer scandal

Jose Hawilla
Jose Hawilla

The Miami branch of a Brazilian conglomerate ruled the lucrative soccer media market on two continents — largely, federal authorities say, because it also paid out the richest bribes to the sport’s top officials.

The Traffic Group — founded by Jose Hawilla, who secretly pleaded guilty to corruption charges late last year — is at the center of a $150 million racketeering scandal that has rocked the world of professional soccer. Hawilla expanded his empire from the soccer hotbed of South America to Miami in 1992 and over the years built it into a dominant broker of television, advertising and licensing deals in North America.

Hawilla’s plea deal was exposed Wednesday when federal authorities in New York indicted 14 other defendants on a variety of kickback, money-laundering and fraud charges. Hawilla admitted that Traffic Sports USA — based on Brickell Key — paid millions of dollars in bribes to high-ranking soccer officials who ran the Miami Beach regional headquarters of the Confederation of North, Central America and the Caribbean Football Association (CONCACAF).

Though the company was little known outside of soccer circles, federal authorities say its powerful criminal influence stained the wildly popular sport and its parent governing body, the Federation Internationale de Football (FIFA).

In a statement, FBI Director James Comey said “the defendants fostered a culture of corruption and greed that created an uneven playing field for the biggest sport in the world. Undisclosed and illegal payments, kickbacks and bribes became a way of doing business at FIFA.”

Other targets of the Justice Department probe include Traffic Sports USA’s president, Aaron Davidson, who was arrested in Miami by FBI agents late Tuesday night. Agents also raided Traffic Sports’ Miami office to gather evidence for the widening racketeering case.

Since Davidson’s arrest, agents have been questioning the marketing executive about his part in the alleged bribery scheme, numerous co-conspirators and Hawilla, his boss. Hawilla has been cooperating with the FBI and prosecutors in New York for more than a year, providing insider information about his central role as the paymaster in the international kickback conspiracy, according to sources familiar with the probe.

In an unusual move, Davidson did not have a customary removal hearing in Miami federal court this week before his transfer to New York for arraignment. Davidson pleaded not guilty Friday to racketeering and other charges in Brooklyn federal court, and he was granted a $5 million bond secured by homes owned by him, his wife and other family members. He is the first of the 14 defendants to be arraigned in the soccer case.

Also in the cross-hairs of the probe, which has been directed like a secretive organized crime case, is Enrique Sanz. He is a former Traffic Sports vice president who became general secretary of CONCACAF in 2012 after bribery allegations tainted the organization’s prior leadership. Sanz, who lives in Miami, is battling leukemia and has not been charged in the 47-count indictment returned by the New York federal grand jury naming Davidson and other defendants.

Defense attorneys for Davidson, Hawilla and Sanz either could not be reached or declined comment.

Assistant U.S. Attorney Evan Norris, who is the lead New York prosecutor and has a history of prosecuting organized crime cases, could not be reached for comment, either.

Traffic Sports — which once owned the Fort Lauderdale Strikers — is accused of buying advertising and media rights from CONCACAF and then paying officials kickbacks from broadcast contracts for tournaments such as the World Cup. Of the 12 bribery schemes outlined in the 164-page indictment unsealed Wednesday, Traffic Sports was involved in more than half, prosecutors say.

Prosecutors said that Hawilla and his sports marketing companies had one goal: to keep their contracts with professional soccer in South America and the United States and to shut out competition by paying bribes to high-ranking officials.

“The damage inflicted by the defendants and their co-conspirators was far reaching,” the indictment stated, noting that their “schemes had powerful anti-competitive effects.”

According to the indictment, Hawilla’s Traffic Sports quickly made inroads into the U.S. and North American soccer markets by plying Jack Warner, the longtime CONCACAF president and FIFA vice president, and Charles Blazer, the regional organization’s general secretary, with bribes over two decades.

Warner, from Trinidad and Tobago, surrendered Wednesday to Trinidadian authorities and was granted a $2.5 million bond. He awaits extradition to the United States. Blazer secretly pleaded guilty to racketeering and other conspiracy charges in late 2013 and has been cooperating with federal prosecutors.

In the mid-1990s after launching his Miami branch, Hawilla pitched to both men the idea of replicating the success of South America’s Copa America with a similar North American tournament called the Gold Cup to be held in the United States. Traffic Sports scored the deal to buy CONCACAF’s commercial rights to the Gold Cup, beginning in 1996.

“During this period, Traffic caused hundreds of thousands of dollars in bribe payments to be made to” Warner and Blazer through U.S. banks, according to the indictment.

Hawilla persuaded Warner, who was also president of the Caribbean Football Union, to sell Traffic Sports the commercial rights to the region’s World Cup qualifying matches, starting in 2002. According to the indictment, Traffic Sports landed that deal by diverting two bribes of $800,000 and $900,000 to Warner-controlled bank accounts in Trinidad and Tobago.

Warner’s status in the soccer world plunged in 2011 when he was accused of directing an attempt to bribe Caribbean delegates with $40,000 each to support unsuccessful FIFA presidential candidate, Mohamed Bin Hamman of Qatar.

The following year, CONCACAF moved its headquarters from New York to Miami Beach — but not with Warner or his general secretary Blazer. By then, both men had been forced out amid corruption allegations.

They were replaced by men who vowed to run things on the up and up. Jeffrey Webb became president and a FIFA vice president. Webb, from the Cayman Islands, also was indicted on Wednesday. Sanz, the Traffic Sports executive, replaced Blazer, getting his new position through Hawilla’s influence.

“Upon assuming their respective positions, [they] made public pronouncements about reforming CONCACAF,” the indictment stated. “Almost immediately after taking office, however, both men resumed their involvement in criminal schemes.”

Prosecutors say that Sanz learned the kickback trade from his Traffic Sports bosses during the past decade. They had directed him to deal with six-figure bribe requests from soccer officials in Costa Rica, Nicaragua and other Central American nations for future World Cup qualifying matches.

After he became CONCACAF’s general secretary, Sanz solicited a $1.1 million bribe from his old company, Traffic Sports, at the direction of his new boss, Webb, according to the indictment. Sanz made the solicitation in 2012 during negotiations for CONCACAF’s marketing and media rights to that year’s Gold Cup and Champions League series.

Traffic’s founder, Hawilla, and the company’s Miami president, Davidson, agreed to the solicitation, the indictment said. In 2013, the bribe payment was wired to Webb through Traffic’s Miami bank account via New York to Panama.

During 2013 negotiations for CONCACAF’s commercial rights to future Gold Cup and Champions League series, Webb directed Sanz to solicit more bribes from Traffic Sports, according to the indictment. Both Hawilla and Davidson settled on $2 million in kickbacks to win the commercial rights to those upcoming soccer tournaments.

During a meeting in Queens, New York in March 2014, Davidson discussed the bribe schemes with Hawilla, wondering aloud about the legality.

“Is it illegal? It is illegal,” Davidson told him, according to the indictment. “Within the big picture of things, a company that has worked in this industry for 30 years, is it bad? It is bad.”

What Davidson did not know was that Hawilla was wearing a wire to record their conversation.

FBI agents set up the meeting in Queens so it would be in the jurisdiction of the Eastern District of New York, where the indictment was unsealed on Wednesday.

Hawilla was first confronted by FBI agents about the bribery allegations in the fall of 2013, after Blazer cut a plea deal and implicated Traffic’s founder. New York prosecutors have been building their soccer racketeering case on evidence from Blazer, Hawilla and now, apparently, Davidson.

Related stories from Miami Herald