The Little-Known IRS Agent Who Exposed the Biggest Scandal in Sports

There are two types of soccer executives, according to 2011 testimony given by Chuck Blazer, then the highest-ranking American in international soccer: those who take bribes, and those who pay them.

That, in a sentence, is the central theme running through Ken Bensinger’s new book, Red Card: How the U.S. Blew the Whistle on the World’s Biggest Sports Scandal. In it, the Buzzfeed investigative reporter details how the unlikeliest of countries—the one that cares the least about soccer—became the one that finally exposed its criminal underbelly.

International soccer, in Bensinger’s telling, became a hotbed for corruption in the early 1980s, when such tournaments as the World Cup and South America’s Copa America became viable commercial properties. A rush of money gave rise to a new kind of business: the sports marketing company, a middle agent that bought the media and sponsorship rights to a specific league or tournament, then turned around and sold segments of those rights to broadcasters and advertisers around the world.

Bribes are a principal part of those transactions. FIFA is made up of six regional bodies that, in turn, host more than 200 national associations. Each region has its own set of tournaments, World Cup qualifiers and league matches to sell. In order to gain the rights at a lower price, sports marketers often paid executives under the table. Many of those payments were processed by U.S. banks—Merrill Lynch, J.P. Morgan Chase, Wells Fargo.

That last point is critical. Because if you were looking for the perfect person to expose the widespread corruption within international soccer, a cubicle on the third floor of the IRS office in Laguna Niguel, California, might be the last place you’d have looked. read more »

Other American banks may have misbehaved as Wells Fargo did. Which ones?

A federal regulator determined Wells Fargo wasn't the only U.S. bank that opened accounts not authorized by customers –  but has no plans to identify the institutions publicly.

A review of roughly 40 banks found that as many as 10,000 customer accounts opened during a three-year period lacked customer authorization, Joseph Otting, the U.S. Comptroller of the Currency, testified during congressional hearings this week.

The banks did not have paperwork to show whether customers had authorized approximately 10,000 other accounts, Otting said.

The new mortgages, auto loans, credit cards, checking, savings and money market accounts represent a fraction of the estimated 600 million accounts the banks opened during the three-year period, he said.

"The OCC did not find pervasive or systemic issues in regard to improper account openings but did find the need for banks to improve their policies, procedures and controls," Otting told the Senate Banking Committee on Thursday.

Customers who were harmed by the practices are expected to be reimbursed "if they can document an account was opened inappropriately," Otting added. read more »

Bitcoin and ether shouldn’t be regulated like stocks and bonds, a top SEC official says

Two of the world's biggest virtual currencies need not be regulated like stocks and bonds, a top official at the Securities and Exchange Commission said Thursday, putting to rest months of uncertainty about how the financial regulator views bitcoin and ether, the cryptocurrency behind Ethereum.

Speaking at an industry conference in San Francisco, William Hinman, the SEC's director of corporate finance, said the two top cryptocurrencies don't meet the criteria for regulation that the agency typically applies to traditional securities.

“Based on my understanding of the present state of ether, the Ethereum network and its decentralized structure, current offers and sales of ether are not securities transactions,” Hinman said. read more »