The Big Fix (6 page)

The windows in Patrick Jay's corner office in the company tower provide a vivid image of the Hong Kong Jockey Club. Situated in Happy Valley, the horse track oval is kept pristinely, lushly hemmed in by the Tai Tam mountains. The valley was once a cemetery, but now it is full of life. Sports facilities populate the infield of the racetrack—­tennis courts, soccer fields—­and high-­rises ring the greater scene. “There's not an apartment here for less than one million dollars,” Jay says. As Jay looks down at the track, several coaches run a group of children through drills on one of the infield's soccer fields. Jay says that this is a youth soccer camp.

Then his talk turns away from games, and toward the business lessons he has learned while stationed here so far from home. “In Asia, the world is not as it seems,” Jay says. “There is multilayered ownership of banks, sportsbooks, businesses. The Chinese way of doing business is that everybody gets a percentage. Everything you learned at Goldman Sachs, Ford, McKinsey—­once you get to mainland China and Hong Kong, just forget it.” Jay takes a seat behind his desk. Above him on the wall hangs a Chelsea jersey in a frame. The autographs of the players of the 2009–2010 team cover the fabric.

It is Jay's business to know his competitors in the gambling market, what they are doing, whom they represent, where their money comes from, and where it goes. It is important to know all these things. Yet though Jay sits in their midst, they largely remain a mystery, in the black market and out in the open, their structures raveled across continents and shell companies and empty names.

“The issue in all of this is that we don't know what the issue is,” he says. He rattles off the names of some of the largest sportsbooks. “IBC, SBO, 188Bet. There are so many shades of gray. Illegal Asian gambling syndicate? Show me a legal gambling operation. Then show me an illegal gambling operation. Then show me the difference between legal and illegal.”

During these recent years of the Asian gambling boom, when soccer's biggest clubs have succeeded in becoming thriving business entities, attaining immense value, a similar blur has overcome the distinction between the game and gaming. Professional soccer players the world over, from the English Premier League on down, play the game with the logo of a bookmaker on their jerseys. Every one of the twenty clubs in the English Premier League has a sponsorship deal with a bookmaker, a club's so-­called betting partner. Manchester United's betting partner is 188Bet, one of the largest in the world, registered on the Isle of Man. Sure, this is business—­the companies paying for the privilege of association, like any other sponsor—­and there is no point in being prim about it. But associations matter.

“These behemoths are bigger than hedge funds,” Jay says. “But how much do we really know about them?” He looks again through the window and down below him, at the soccer academy on the territory of the gambling outfit. “That's Manchester United down there,” he says. The club is in the midst of an off-­season Asian swing, players and coaches running these children through their paces. The most popular club in the world gets around.

 

CHAPTER 7

H
ong Kong has so many bars like this one that it is difficult to remember which names belong to which places. Second-­floor slit windows overlook the street. Track lights flicker in the darkness. There are a few girls leaning against the bar in the tired way that professionals lean against bars. It's early, so there is still room to move. Music blares anyway, so William asks for a page out of my notebook. He must write to get his delicate point across.

In Asia's illegal gambling industry, William is what you may call a facilitator, which is why he prefers to utilize an alias. Thus concealed, he is happy to explain the architecture of the industry. The illegal betting world operates on a system of vouching. It is like joining a country club or a fraternity, though with greater ultimate consequences should conditions for the member go south. A prospective gambler gains entry to this world via the recommendation of a contact who already circulates within it. Once he passes muster as someone who will settle his debts, the gambler receives an account with someone who is known as an agent. The gambler places his bet with this agent, who then passes the wager to his superior. This person is known as a master agent, one step up in the hierarchy.

Above this master agent is the super agent. Of these, there are few in the world, and they are almost all Chinese. This man is a trusted, known criminal figure—­a face—­who can handle upwards of $50 million in bets. The super agent distributes his bets to the many legal and illegal books with which he has relationships, his initial $50 million stake often divvied up into smaller wagers throughout the shadow system. If a gambler loses a bet with his direct agent, someone higher up the chain of command may ultimately come calling.

That is how the money enters the structure. How does it travel through the system? The illegal betting world is so complicated that it requires many diagrams to understand it, and that is why William is drawing. For about fifteen minutes, he constructs an intricate flowchart, representing the way that money circulates through the Asian market. Cash moves from gambler to bookie through Chinese bank accounts in the names of “genuine but anonymous ­people,” as William labels things. Finally, via a “money changer,” the lost money of the gambler exits through a corporate entity, into the pocket of the criminal organization. William points to the money changer on his chart. “This is the guy,” he says. “Without him, they're dead in the water. This is the guy who takes money from offshore to onshore.” Then he says, “You think the chain stops here. It doesn't. It goes up. Way up.”

There is so much free-­flowing money in sports gambling in Asia that life within its boundaries could lead only to a single decadent outcome. “This is the best business in the world,” William claims. “You stay in the best hotels. Girls are on tap. You drink as much as you want. You eat the best food. Everybody has money. It's a merry-­go-­round, and it's very hard to get off.”

And the center of the spin is Manila. The Philippines is one of the only governments in Asia that permits gambling. Manila's outward-­facing sportsbooks accept offshore money only. Chief among these businesses is the book known as IBCbet. Once a gambler establishes an account with IBC, through an agent, he may bet through the company's online portal. Some industry experts estimate that IBC handles up to $150 billion in sports betting each year, a staggering number that may make it the largest quasi-­legal sportsbook in the world.

It is quasi-­legal because oversight in the Philippines is lax. Ronald Guto, the head of the cyber-­crimes division of the Filipino National Bureau of Investigation, says that he has never heard of IBC, though its turnover is equivalent to one-­third the size of the Filipino economy. At his humid office in Manila, he scrambles to write down the name of the company on a scrap of paper, and he promises to look into it.

At the seventeenth-­floor Manila offices of GWI Business Solutions Inc., it looks like any other day in the life of a medium-­sized corporation. GWI provides various ser­vices to online gaming companies, including IT and customer support. Beneath it all, here in the RCBC Plaza towers in Makati City, Manila, is where I understood IBCBet resided and it was here that I first sought to meet one of its executives.

It is only later, after months of emails, in a hotel lounge in Bangkok that is favored by Chinese clients, that I finally meet him. The face is worn. He is a slight man, and he gives the impression that he is taking a break from a weeklong party of endless temptations. His hug is loosely bound, sweaty, enthusiastic, and his eyes are aflame with what he has seen. The man says that he manages IBCbet. He talks about violence and great sums of money. He speaks in loops and parables. “What's impossible is impossible,” he says. “What is possible is possible. But sometimes what is possible is impossible.” He says that he wants to leave IBC, and his gentleman secretary nods along dutifully, sitting beside him. “I can't believe I got out of Manila alive,” says the man. Elsewhere, others have been less fortunate.

A
sia may be the king of the marketplace, but it is not the only place where business has been booming. PlanetWin365 is a fast-­growing European bookmaker, with $1.2 billion in turnover last year. Registered in Austria, the book enjoys its greatest business in Italy. When PlanetWin365 expanded into the Bulgarian market, the country was new to the European Union. Its government was enduring the growing pains of transitioning to the continental system, reforming its judiciary and political and business practices. Just one European bookmaker had been granted a license locally, and PlanetWin365 experienced great difficulty in establishing itself in Sofia, the Bulgarian capital. Eventually, PlanetWin365 would open more than twenty shops in the country. Business was good, clients attracted to the company's professional approach, which differentiated it from existing local books. “We had better odds,” says Giovanni Gentile, the company's spokesman. “It gave other bookmakers problems.”

PlanetWin365 was a partner with FIFA's Early Warning System (EWS), which attempts to identify compromised matches through gambling data. As PlanetWin365 made inroads into the Bulgarian market, its executives uncovered an uncomfortable fact. Criminal groups were manipulating a large number of matches in the domestic league. PlanetWin365 provided the Union of European Football Associations (UEFA) with information about fixed matches involving clubs including Zlavia Sofia, Lokomotiv Sofia, Litex Lovech, and Lokomotiv Plovdiv. With the support of FIFA and EWS administrators, PlanetWin365 spoke out publicly against the manipulation it had discovered. In December 2011, officials from the company hosted a press conference at the Sofia Sheraton hotel, where they announced their discoveries. At the end of the press conference, they were told that the president of one of the clubs was in the lobby, waiting for them. “We exited through another door,” Gentile says.

PlanetWin365's manager for Bulgaria, Yordan Dinov, spent a considerable amount of time fielding interview requests from local media outlets, rather than running the business that was rapidly expanding. “Our name in Bulgaria was linked to our activity against match-­fixing,” Gentile says. In April 2012, as the Bulgarian winter began its slide into spring, Dinov traveled to Sofia from his home in the village of Blagoevgrad. He met a man in central Sofia, in the afternoon. They spoke with one another on the street, part of the larger, milling city crowd. The man produced a handgun. He shot Dinov, killing him. Investigators pursued the theory that Dinov's assailant owed him a large sum of money, but PlanetWin365 executives couldn't help but believe that the murder was tied to their efforts on match-­fixing.

 

CHAPTER 8

WORLD CUP, SOUTH AFRICA, 2010

T
he price of security had gone up. As the 2010 World Cup approached, FIFA officials were increasingly apprehensive that a major terrorist act would befall them. They were also concerned that their players, coaches, and administrators would fall victim to the violent crime that was known to occur at a moment's notice in South Africa, the host nation.

In January 2010, at the African Cup of Nations, terrorists opened fire with machine guns on the Togo team bus as it crossed the border from the Democratic Republic of the Congo to Ca­binda, Angola. There were reports that al-­Qaeda was planning attacks on the World Cup. Sources claimed that a Saudi terrorist, Abdullah Azzam Saleh Misfar al-­Qahtani, was plotting to attack the Danish and Dutch national teams at the tournament.

In response to these unsettling events and reports, FIFA had beefed up security at the Under-­17 World Cup in Nigeria, and at the Under-­20 World Cup in Egypt, both held earlier in the year. FIFA hired the Freeh Group, led by former FBI director Louis Freeh, to provide field operatives for the competitions. FIFA had also consulted with Interpol. This was an expensive approach, however, totaling $12 million for the two tournaments. The cost of security, in South Africa, for an entire month's worth of soccer, would be staggering.

At the turn of the last century, FIFA had grown out of a European desire to establish a common body to govern international soccer competition. In the one hundred and ten years since then, and especially in the recent decades of the exponential growth of TV rights contracts, attendance, and sponsorship, FIFA had mutated into an insular plutocracy. The organization had developed a culture that outwardly championed egalitarianism on the field of play, while otherwise valuing the right of its leadership to personal enrichment. As it extolled the human virtues of sport, FIFA became an exclusionary territory of a new European business royalty. It was like a social club that withheld access to potential members, standing on the high ground of tradition, until an applicant opened his wallet.

FIFA clears roughly $4 billion for staging the World Cup, but like any organization, it looks for ways to trim its expense budget. Fewer expenses, more profit. But what was the right balance between safety and savings? FIFA officials met with their counterparts at Interpol and the Freeh Group, asking for guidance. Was there a more affordable solution to their security imperative?

Ron Noble deliberated. Noble had promoted Chris Eaton until he couldn't promote him any further. Still, Noble valued what Eaton could provide, and he knew his particular skills. He knocked on Eaton's office door one afternoon in March 2010 at Interpol's Lyon headquarters. He asked Eaton what he knew about soccer. “FIFA needed someone like Chris,” Noble says. “He has credibility worldwide for speaking the truth as he sees it and he isn't afraid to confront it. He is a tenacious law enforcement investigator.” Noble outlined the opportunity for Eaton. There was a consulting position available at FIFA, coordinating security at the World Cup, in concert with international policing bodies. No matter his vitality, Eaton was approaching retirement age. Noble described the position to Eaton as “a soft landing for your public ser­vice.”

Eaton had worked in Africa on numerous Interpol assignments. He counted the deputy commissioner of South Africa's federal police as a friend. He was comfortable in Africa. And he liked the sound of the job. Eaton had been looking for a graceful, though stimulating, way to exit Interpol, and the FIFA position appeared to be the right opportunity.

After ten years in Lyon, Eaton left Interpol with the blessing of his superiors, setting up camp in Johannesburg. He visited the ten different stadiums that would host World Cup matches. He represented FIFA in its relations with the various international police and military delegations assigned to protect national teams. He began assessing terrorist threats to the upcoming competition based on information gathered from an array of intelligence sources. His new FIFA bosses were impressed. They had never contracted anyone of Eaton's professionally intense police background. For Eaton, the job was exhilarating, though the work was second nature. He had hit the ground running. However, a new and different threat to the game was about to present itself, and this would knock Eaton off his stride.

I
n the lead-­up to the World Cup, FIFA programmers had developed the EWS computer system, which attempted to identify questionable matches by analyzing betting patterns. A month before the World Cup in South Africa, an EWS administrator received a troubling approach. Peter Limacher, a Swiss attorney, was the head of disciplinary ser­vices at UEFA, the European soccer authority. Limacher informed EWS that he possessed intelligence that fixers were preparing to rig several matches at the upcoming World Cup. He said that this information came from a UEFA operative under his direction.

If FIFA execs were stunned, they shouldn't have been. In 2005, as Germany prepared to host the previous World Cup, police revealed the biggest scandal in European soccer. A Germany-­based Croatian gambling syndicate had compromised a referee and players in the German second division. (A first-­division club was also suspected.) Ante Sapina, a Croat, led the ring. A new, related trial, charging four individuals with thirty-­eight counts of fraud, was about to open in Bochum, Germany, on the eve of the World Cup in South Africa.

Marco Villiger, FIFA's lead attorney, oversaw EWS. He wanted to keep these new allegations from UEFA under wraps until he had a chance to probe the claims personally. He phoned Limacher to arrange a meeting with the UEFA investigator who was the source of the information. The man's name was Robin Boksic.

Through Limacher, Villiger met Boksic, who claimed to possess intelligence reports and documented evidence that several national teams were preparing to fix matches during World Cup competition. Boksic didn't produce the information, but Villiger was so concerned by what he heard that he hired Boksic to work for FIFA in South Africa.

At FIFA headquarters, Villiger informed Jerome Valcke, FIFA's secretary general. Valcke admonished him, explaining that FIFA had just hired a veteran cop, Chris Eaton, to run security at the World Cup. FIFA didn't need two ­people covering the same ground in South Africa.

FIFA was confused. Historically, the organization's response to match-­fixing had been noncommittal, and that wasn't a surprise. FIFA execs did not believe that match-­fixing was their concern. Whenever national soccer federations notified FIFA about suspected incidents of match-­fixing, FIFA routinely claimed that the responsibility for eradicating fixing from the game lay with the federations themselves. This was a matter for law enforcement. “Every member association is responsible for organizing and supervising football in its country,” says FIFA spokesman Wolfgang Resch. “Since FIFA has jurisdiction only over persons affiliated with FIFA, it will never be possible to control parties outside the current system.”

FIFA did have a point. It was not a policing agency. It couldn't make arrests. It possessed no powers to investigate. Its business was sports management and promotion. FIFA's only mandated responsibility was staging the World Cup every four years, along with the assorted friendlies that elapsed in the time between the main competition. However, by remaining passive on the issue, rather than playing a strong hand, FIFA nurtured a culture of match-­fixing laissez-­faire. There was no single body that was more responsible for the welfare of the game. But as Eaton was soon to learn, it didn't appear as though anyone was responsible at all.

Match-­fixing was so far down the list of priorities at FIFA that the ­people who had hired Chris Eaton neglected to mention it to him. Eaton had never heard of match-­fixing. In all his years of police work, he had been focused on crimes that made a cop's career, transgressions of apparently more immediate importance—­violent crimes, financial crimes, trafficking. Like most cops he did not yet understand that match-­fixing, with its hundreds of billions of dollars in play, had become a violation that facilitated the traditional businesses of organized crime. Match-­fixing money mingled with drug money, prostitution money, blood money.

Ignorant though he was of match-­fixing, Eaton was no stranger to scandal and the damage it could bring to an institution. When he received an email from Marco Villiger, providing a sketch of Boksic's claims, Eaton naturally understood the impact that a fixing scandal could have on his new employer. “This would have sent fear through the hearts of Blatter and Valcke,” Eaton says. “They've already got the problem of confounded security at the World Cup, and now bloody allegations of match-­fixing?” As Eaton discussed the issue with Villiger further, he grew even more concerned. Villiger had no experience handling controlled informants, so Eaton placed little value on his assessment of Boksic's worth and reliability. Eaton so clearly grasped the threat to FIFA's integrity that he spoke with Villiger bluntly. Eaton would handle Boksic personally, without interference. He didn't want to get entangled in the corporate bureaucracy that he was trying to protect.

Boksic emailed Eaton, using an account under the name of Josip Fejervari, and the two eventually connected by phone. Although his English was halting, layered in a Croat-­German accent, Boksic managed to provide what sounded to Eaton like an embroidered account of himself. Boksic claimed that he was an undercover agent for the national intelligence agency of a European country, though he declined to say which one. He was investigating match-­fixing. He said that he was passing himself off as a fixer in order to gain proximity to criminals for the purpose of collecting evidence. He claimed that he was massaging two prominent Asian gamblers, one who lived in Norway and one in Malaysia. Boksic said that his intelligence chief had authorized him to cooperate with UEFA and now FIFA, and that he possessed secret transcripts of intercepted telephone conversations. These transcripts, he claimed, proved that there were plans to fix matches at the World Cup for corrupt gambling purposes. Eaton asked for details—­which criminal groups were behind the plot, which matches they were targeting—­but Boksic balked.

The conversation left Eaton in doubt. He possessed decades of experience working with undercover police, confidential sources, and international investigative operations. It wasn't common practice for an agent who was working undercover to expose himself so readily, especially by phone, and in the modern age, when you had to assume that a third party was listening in to every conversation. In addition, Boksic's evasiveness was also troubling.

In late May 2010, Boksic sent Eaton a text message. Two pre–World Cup friendlies were about to be played in Klagenfurt, Austria: Slovakia versus Cameroon, and Serbia versus New Zealand. Boksic told Eaton that he would attend the games. He claimed that the Serbian national team was planning to fix matches for the World Cup. He wanted to case the team's friendly in Austria, watching for criminal figures mixing with the players around the locker room. On May 26, three days before the Austrian matches, Boksic wrote to Eaton, asking for “appropriate access for all” for the upcoming games.

“Robin, what exactly do you mean by appropriate access?” Eaton wrote in reply.

Boksic responded: “I mean that i can go everywhere in the stadium-­cabine of the soccer teams press room etc.al to acces for the games slowakei-­kamerun and serbia-­neuseeland in klagenfurt 29.05 sat.”

“If this is important for what you are doing for us, then of course it can be arranged,” Eaton wrote, though his suspicion was evident. “I might come to Austria to be with you for the day.”

“Yes it is for cause because we have to know about the serbs and slovaks because ­people are trying to be the mafia to talk to the players and i want to see what ­people are talking and there are . . .” Boksic's text trailed off there.

FIFA had not properly vetted Boksic. Yet he appeared to have a clear pathway to representing the organization in the field in an official capacity, gaining access to international teams days before the start of a World Cup that was now under internal suspicion of being compromised. This was like giving a badge and a gun to a man off the street. The developing Boksic situation was serious enough to Eaton to divert his attention from security matters in Johannesburg. With the start of the World Cup just a few days away, with FIFA gravely concerned about a terrorist attack on the world's largest single event, Eaton boarded a plane for Austria.

B
oksic picked up Eaton at the Klagenfurt airport. A full-­faced man in his mid-­thirties, Boksic had a buzz cut and a little heft to him. He wore jeans and a blue T-­shirt, driving toward town behind the wheel of a rented SUV.

Along the drive, Boksic reiterated his suspicions of the Serbian team. He also mentioned Algeria, Ivory Coast, and Nigeria, claiming that these teams also had plans to tank World Cup matches. Eaton listened, feeling him out. Boksic was confident to the point of coarseness. He wasn't tense in Eaton's presence, unless bragging counted for nerves. He mentioned in passing that he had suffered a knife wound while protecting an intelligence ser­vices colleague some years ago, an injury so severe that it required six months' convalescence in a hospital. “Six months?” Eaton thought. Boksic said that he often traveled with a security detail. By the time they got to the hotel, Eaton had made his assessment. “I could smell criminal,” he says.