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Wednesday, May 29, 2024 | Back issues
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FIFA Scandal Dribbles|Into New York Court

(CN) — The international soccer scandal continues to unravel, with the governing body of the sport's South American region asking a judge to terminate a marketing contract due to FIFA bribery and corruption.

Confederación Sudamericana de Fútbol (CONMEBOL) sued International Soccer Marketing Inc. aka Team Libertadores Inc. (ISM), ISM President Zorana Danis, Libertad Marketing Deportivo and Bridgestone Corp. on Oct. 21 in New York County Supreme Court.

CONMEBOL seeks declaratory judgment voiding the defendants' title sponsorship rights to the annual Libertadores Cup, after a U.S. Department of Justice investigation last year revealed widespread corruption and bribery in FIFA.

"After May 2015, with the involvement of the U.S. Department of Justice, it has been conclusively and irrefutably established that the exclusive agency rights to commercialize the annual Libertadores Cup — which Defendant ISM (aka 'Team Libertadores') claims to hold — were procured and/or secured by fraud," the complaint states. "The specific agency rights at issue here are set out in a title sponsorship agreement dated as of October 19, 2012, for the benefit of Bridgestone."

The Bridgestone contract relates to the 2013-2017 Libertadores Cups. The agreement includes title sponsorship rights, advertising rights to Bridgestone, including the right to have its name included in the title of the Libertadores Cup tournament and ISM to be its irrevocable and exclusive agent relating to Libertadores Cup.

"Additionally, the Bridgestone Contract provides that ISM has the exclusive right to market the title naming rights and associated sponsorship rights to any corporate sponsor through the 2022 edition of the Libertadores Cup," the complaint states.

Danis was charged last year with wire fraud conspiracy in the FIFA scandal. She pleaded guilty on May 26, 2015, and as part of her plea, testified that she personally bribed high-ranking CONMEBOL officials to procure Libertadores Cup agency rights for ISM.

"Through her criminal fraud, Danis deprived CONMEBOL of its right to honest and faithful services from its agent ISM, and CONMEBOL therefore has the absolute right to terminate ISM's agency, as well as any agency rights in favor of Defendant Danis, if such rights exist," the complaint states.

"Additionally, Danis' fraud depressed the value of CONMEBOL's commercial rights in an amount at least equal to the sum of the illegal bribes and kickbacks paid by Danis to CONMEBOL high officials and forced CONMEBOL to pay commissions to which defendants ISM/Danis were not entitled."

On Aug. 30 this year, CONMEBOL says, it demanded that the defendants voluntarily terminate their agency rights to the Libertadores Cup. They refused.

The FIFA bribery scandal is one of the biggest sports fiascos in history, affecting the world's most popular sport and reaching around the globe.

On Oct. 7, the former president of the Costa Rican Soccer Federation pleaded guilty to racketeering conspiracy, wire fraud and wire fraud conspiracy.

On Oct. 20, a sports marketing executive pleaded guilty to paying more than $14 million in bribes to a FIFA executive in exchange for media and marketing rights to international soccer tournaments and matches.

CONMEBOL's lawsuit includes the criminal information against Danis and a transcript of her May 26, 2015 arraignment and pleading, which was closed at the time.

CONMEBOL is represented by Thomas Dewey with Dewey Pegno & Kramarsky.

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