Local soccer teams give criminal groups in the Northern Triangle countries of Central America the ability to launder proceeds, evade taxes, and accumulate enough political and social capital to avoid scrutiny.
These organizations center their criminal operations in small municipalities in Guatemala, El Salvador and Honduras, but they are international traffickers. The soccer teams form part of their vast economic portfolio, and provide them with local support in their areas of operation, which they use to expand their business and political connections and protect their licit and illicit interests.
(See response to article of one of the soccer team's sponsors.)
Part of this protection comes from the fact that the fortunes of these soccer franchises rise with organized crime at the helm. In Guatemala, for instance, the Heredia Jaguars in the Peten province -- which are owned by the Mendoza clan, an infamous family that has made its fortune via contraband, drug smuggling and government corruption -- have been virtually unbeaten since 2010.
In honor of the World Cup, InSight Crime is chronicling how soccer and organized crime intersect. See other stories here.
In El Salvador, the Isidro Metapan club, from the municipality of the same name, has won eight titles in the last seven years. Their president, Wilfredo Guerra Umaña, is the son of Juan Umaña Samayoa, the mayor of Metapan. Their partner, Adan Salazar, alias "Chepe Diablo," is the head of the Texis Cartel, according to the Security Ministry.
And in Honduras, Real Sociedad de Tocoa, from the Colon province, is reportedly owned by the Rivera Maradiaga family, also known as the Cachiros. Honduran and US authorities say the Cachiros are one of the most powerful criminal groups in Honduras, moving cocaine and other illegal substances for larger crime groups from Mexico.
SEE ALSO: Cachiros Profile
The US is pushing the Honduran government to capture and extradite the group's leaders, but if the local soccer fans have any say about this persecution, it may be a hard sell. After climbing to the premier division in 2012, Real Sociedad de Tocoa made it to the championship final two years in a row.
The reasons criminal groups buy into local soccer teams are numerous. To begin with, the soccer teams give them a way to launder money. There are few regulations regarding the teams. The owners can invest in whatever infrastructure they want.
Plaza Publica reported that the mayor of the municipality of San Juan (in Peten province), Julian Tesucun, spent close to $2 million on the Jaguars' stadium, a small fortune in that part of the world. It is not known how much money the Mendozas put into the construction, but Tesucun baptized it the "Milton Mendoza Oswaldo Mendoza Matta" stadium. (Its official name is the "Julian Tesucun y Tesucun" stadium.)
"[Mendoza] has contributed to the development of sports in the municipality," the municipality's website reported at the time, according to Plaza Publica.
The stadium deal helped Tesucun firm up his relationship with the Mendoza family, which Plaza Publica suggests led the Mendoza family to contribute to his political campaign for Congress in 2011. Tesucun won a congressional seat that year.
Soccer teams can also falsify contracts with employees and players, investigators say. They can set up "friendlies" with other teams for money. They can draw up papers showing earnings that do not exist, since there is so little regulation. And they can evade taxes.
In April, Salvadoran authorities charged alleged members of the Texis Cartel for tax evasion. Although the Isidro Metapan club was not mentioned as part of that investigation, La Prensa Grafica raised questions about the owners' ability to make tax-deductible donations to the club.
SEE ALSO: Texis Cartel Profile
These "donations" are made via another cash-heavy business, the rice and granary complex the group manages, and result in an advertisement on the team jerseys (see photo below).
(The owners of the club were so angry with La Prensa Grafica's coverage, they did not allow its reporters in the stadium following the publication of the article on tax evasion and the club.)
The interconnected nature of these businesses illustrates an important aspect of the money laundering trade: the movement of money between and amongst businesses of the same conglomerate help mask earnings and camouflage illicit activities.
Soccer clubs also help forge alliances with legitimate businesses and politicians. In Honduras, Real Sociedad de Tocoa is sponsored by one of the country's preeminent banks, Banco Continental, as well as a popular zoo owned by the Rivera Maradiaga family, which was taken over by the government last year as part of the investigation into the group.
The Cachiros also have a mining business, and African Palm and cattle ranches. Like the Mendozas, they intersect with local and national politicians of various political parties, government investigators told InSight Crime.
Despite the open connection between organized crime and soccer, there are no investigations into these clubs' finances, the movement of players, or the development of infrastructure.
In essence, soccer is untouchable, especially when it relates to a perennial winner. The clubs' success also gives these dubious economic groups power in the municipalities in which they operate. Business and political figures want to be associated with a winner, even if that winner is on the United States' list of extraditables.
In honor of the World Cup, InSight Crime is chronicling how soccer and organized crime intersect. See other stories here.
Jaime Rosenthal, President of Banco Continental in Honduras, responds:
Dear Mr. Dudley:
We have read the article you published with the headline "How a Good Soccer Team Gives Criminals Space to Operate" in "In SightCrime".
We believe your publication, besides being incorrect, makes dangerous assertions that are not true.
In Honduras football teams are not corporations, they have no stockholders and football teams make no profits, they have losses only.
Football or soccer is a passion in our country, people are interested in football (soccer) and in politics but they do not go to the stadiums because people do not have enough money to pay for the entrance.
Football teams live on donations from the directors and sponsors "patrocinio" from companies that put their logo in the uniforms for advertising purposes.
The other important income for the football teams is the TV rights to transmit the games; everybody sees the games on TV. We have a TV Station, Channel 11, and we have grown a lot because we buy the rights to transmit the games of 4 of the 10 teams in the Professional Football League. We also have a Sport Channel, the only one in Honduras.
The country does not originate many live programs, except the news and football. Out of the 10 teams in the Professional League, one of them does not transmit the games in TV in order to get the people to go to the stadiums. One of them is transmitted by two other channels in Honduras. One of these is the main TV station in the country, and it has 4 teams. Our TV station has 4 teams also. There is no way we can hide money or laundry money in this business.
All the sponsors that put their logo in the uniform are big companies and others since TV stations transmit all the games, putting the logo in the uniform is a very important advertising spot and very cheap because it has a large quantity of viewers.
The different teams in the Professional League try to sell their advertising space in the uniform as much as they can because that produces its revenue to pay the players. The good players in Honduras that are now at the World Cup are owned by foreign football clubs such as the Soccer League in the United States, Clubs in Europe or China.
This is the first time that somebody has mentioned the possibility that football can be used to laundry money, avoid paying taxes or other illegal activities, most clubs in Honduras are supported by important companies in different businesses whose owners or directors want to promote football and find that advertising on the football uniform is a good business.
The different football clubs sell their logo space as many times as they can in different parts of the uniform. We do not choose the other advertisers in the uniforms of any team.
We advertise in the following clubs: Marathon, which is our team, Vida in La Ceiba, Real Sociedad in Tocoa and Deportes Savio in Santa Rosa Copan.
Certainly your article damages our image and it is causing problems to us. We have been in business in Honduras for more than 100 years. Our business was started by an American Citizen, the Barrett Family from New Orleans, my Father came from Europe and entered the business in 1929, the Barrett's had no children and therefore, we bought the participation and expanded the business into many different areas, we are a conglomerate. We have audited statements for more than 35 years and we can prove the origin of every penny we have.
We believe that you should investigate and do your homework before publishing an article that damages the reputation of other people.
Very truly yours,
Jaime Rosenthal Oliva
President
Banco Continental, S. A.
Honduras, Central America
The research presented in this article is, in part, the result of a project funded by Canada's International Development Research Centre (IDRC). Its content is not necessarily a reflection of the positions of the IDRC. The ideas, thoughts and opinions contained in this document are those of the author or authors.
SUBSCRIBE