Swiss prosecutors opened their court case against ISL/ISMM, FIFA’s marketing partner for almost two decades, on Tuesday by alleging that six executives of the now-defunct company left an estimated debt of $300 million when it collapsed in 2001. The executives, who cannot be named due to Swiss privacy law, were charged with embezzlement, fraud, fraudulent bankruptcy, damaging creditors and falsifying documents. The defendants face up to four and a half years in prison.
Prosecutors said the criminal mishandling at ISL/ISMM amounted to more than $98 million, and said the company paid out about $18 million in bribes through a satellite company in Liechtenstein to sell sponsorship and broadcasting contracts. ISMM, the parent company of ISL, owned television and marketing rights to the 2002 and 2006 World Cups.
The bankruptcy filing led to a bitter clash between FIFA, soccer’s world governing body, and European governing body UEFA, which questioned FIFA president Sepp Blatter’s handling of the marketing deals. Shortly after the filing, FIFA lodged a criminal complaint against ISL/ISMM over accounting irregularities. At the time, FIFA No. 2 Michel Zen-Ruffinen publicly accused Blatter of engaging in the illegal activity tied to the marketing deals. FIFA later withdrew the complaint but launched a civil case to reclaim $122 million.