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Football fraud trial starts

Fifa was rocked by huge financial losses after the collapse of ISL/ISMM Keystone Archive

Six executives of a former marketing agency employed by the world football governing body Fifa have gone on trial in Zug charged with fraud and embezzlement.

The agency ISL/ISMM went bankrupt in 2001 amid allegations of bribery to sports officials to secure contracts. It left behind an estimated debt of $300 million (SFr306.25 million).

Prosecutors say executives knew SFr18 million was paid to people involved in the negotiation of rights contracts and overall more than SFr100 million was criminally mishandled by ISL and its parent group ISMM, which owned the television and marketing rights to the 2002 and 2006 World Cups.

The former executives deny various charges of fraud, embezzlement, fraudulent bankruptcy, damaging creditors and falsification of documents, for which each defendant faces up to four and a half years in prison.

Zug authorities launched a criminal investigation into the agency after the company’s collapse tore a hole in Fifa’s finances, prompting the Zurich-based body to lodge a criminal complaint over irregularities in ISL/ISMM’s accounts.

It also led to bitter clashes between Blatter and his former second-in-command, Michel Zen-Ruffinen, and former European football supremo Lennart Johannson.

Zen-Ruffinen accused Blatter of engaging in irregular payments in connection with marketing deals. The president denied any wrongdoing and was re-elected in 2002 for a second term as head of one of the world’s most powerful sports bodies.

“It was a major crisis for Fifa,” admitted Andreas Herren, a spokesman for the organisation.

“Ninety-two per cent of all revenue that Fifa generates comes from the television rights and the marketing rights for the World Cup,” he added. “Anything affecting those rights is a major issue for us.”

Criminal complaint dropped

In 2004, Fifa said it would try to recover SFr125 million francs it was owed by ISL/ISMM through civil proceedings, and dropped its criminal complaint.

But Zug investigating magistrate Thomas Hildbrand continued his probe, saying his investigation in five countries had found evidence of alleged financial crimes.

His 228-page indictment of ISL/ISMM was presented before a Zug court last month.

Fifa president Sepp Blatter said the body had been affected by the case but was not worried about the trial.

He said: “Why should we fear something we have started? This will not disturb the work and responsibilities of the world of football, and FIFA and the president.”

A verdict is expected later in the year.

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The former International Sports and Leisure/International Sports Media and Marketing (ISL/ISMM) agency did marketing for Fifa for almost 20 years.

The group collapsed with losses of about $300 million (SFr306.25 million).

In 2006 Fifa tried to ban the sale in Switzerland of a book detailing allegations of corruption in the organisation around the collapse of ISL/ISMM.

Fifa said the book, Foul! The Secret World of Fifa: Bribes, Vote Rigging and Ticket Scandals by British journalist Andrew Jennings, contained defamatory passages and “inaccurate statements and aspersions”. It later withdrew its request for an injunction.

Fifa (The International Federation of Association Football) is soccer’s governing body and is based in Zurich.

Founded in Paris in 1904 Fifa is the umbrella organisation of the confederations from the six continents.

It organises a number of different football competitions, among them the World Cup for men and women.

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