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Corinthians-MSI deal unravels in charges of money laundering, world intrigue

Corinthians-MSI deal unravels in charges of money laundering, world intrigue

It seemed like the perfect deal for Brazil's famed Corinthians soccer team, the favorite of millions of impoverished slum dwellers and the nation's first working class president: A huge infusion of foreign cash to transform the club into one of the region's best.
Tens of millions of dollars from a British international sports investment fund would be used to sign top players for the "Timao" (big team in Portuguese), and even build a new stadium.
The money started flowing but ended abruptly amid accusations Corinthians was being used as a money laundering front by a Russian tycoon living in exile in Britain. The intrigue has grown to include counter accusations of a Russian government conspiracy involving the murder of Alexander Litvinenko in London.
Corinthians is now struggling to survive as Brazil decides whether to seek an international arrest warrant for controversial billionaire Boris Berezovsky, accused of being the secret financier for Media Sports Investments and its high profile agent, Kia Joorabchian.
Both men deny the accusations.
Brazil's Justice Ministry is determining whether to approve the arrest warrant issued by a judge in July, ministry spokeswoman Daniela Almeida said. If approved, the Foreign Ministry would then seek to have Berezovsky arrested pending an extradition request.
Meanwhile, Corinthians copes with massive debt, and fans who originally supported the deal with MSI say they believe the club was used and destroyed in the process.
It all started when Joorabchian, accused by prosecutors of being a front man for Berezovsky, arrived in Brazil in 2004 looking to invest a reported US$56 million (euro41 million) from people whose names he never revealed. MSI and Corinthians signed a 10-year partnership giving MSI 51 percent of the team's future profits.
Corinthians went on to win the league title in 2005, but top players were then sold without being replaced. Plans for a new stadium never materialized and Corinthians is now struggling to rebuild under new management.
"There was a lot of money coming in, but the partnership contract was very obscure from the start," said Helbert Cesar Ferreira, president of Corinthians' largest fan club. "Now we know the full story. We know what was behind it."
Corinthians is 15th in the 20-team Brazilian league, and just fired coach Paulo Cesar Carpegiani.
Its bank accounts are frozen and team directors are also under investigation in what Brazilian sports analyst Juca Kfouri calls the worst scandal in the country's soccer history.
"Unfortunately the leaders of Brazilian soccer teams rarely concern themselves with the well-being of their teams," said Kfouri, a Corinthians fan who was jeered by supporters for criticizing the deal before prosecutors made their criminal case public.
Court documents seeking the arrest warrant listed recorded telephone conversations between Brazilian MSI and Corinthians officials which suggest that as much as US$150 million (euro110 million) from abroad was invested in the team.
Prosecutors and the judge did not say how much money they actually believe had been laundered, nor did they specify how the alleged scheme was carried out.
The arrest warrant approved by the judge, however, concluded "there is enough circumstantial evidence indicating that the MSI-Corinthians partnership is being used for the laundering of money, most of which was received from Boris Berezovsky."
The Russian billionaire denied the allegations, saying he's the target of a smear campaign orchestrated by the Kremlin.
"I did not invest in MSI," Berezovsky told The Associated Press in a telephone interview.
He doesn't fear extradition because prosecutors "did not prove it's my money, that's the first point. The second point is, if it's my money, they didn't prove it's dirty money."
To bring Berezovsky to Sao Paulo, Brazil must supply substantial evidence of guilt to a British judge, who would decide whether he can be extradited.
Berezovsky said Joorabchian _ who could not be reached for comment _ also says the charges are groundless. The two have been friends since Joorabchian sold a Russian newspaper to Berezovsky in 1999. MSI has said Berezovsky was never an investor in MSI.
The partnership was terminated by Corinthians last month, but most are predicting a bleak future for the club _ founded by a group of working-class Brazilians in 1910 after seeing their very first game, played by Britons in Sao Paulo.
"MSI is gone, but Corinthians is still suffering because of them," Ferreira said.
Berezovsky, a former Kremlin insider whose net worth is estimated to be US$1.1 billion (euro807 million) by Forbes magazine, is currently being tried in absentia in Russia for the alleged embezzlement of millions of dollars from flagship airline Aeroflot in the 1990s.
Last month, Russian prosecutors said they have also asked a Moscow court to issue an arrest warrant for Berezovsky on charges he stole US$13 million (euro9.5 million) from the SBS-Agro banking giant.
Berezovsky, who has refugee status in London, said the charges in Brazil are an extension of the Kremlin's politicized campaign against him to divert attention away from the radiation poisoning of his ally, Litvinenko.
"Russia has tried to use Brazil, like they use other countries," he said. "They are trying to use the international mechanism to fight against political opposition."
The MSI-Corinthians began with MSI's acquisition of Argentina forward Carlos Tevez from Boca Juniors for nearly US$20 million (euro14.6 million) _ a record transfer for a Brazilian club _ and signed Argentine coach Daniel Passarella.
It added Argentina's Javier Mascherano for US$15 million (euro11 million), and Sebastian Dominguez from Newells' Old Boys for US$2.5 million (euro1.8 million).
The players helped the club win the 2005 title, but last year Tevez and Mascherano suddenly left with little explanation and were subsequently signed by England's West Ham.
Corinthians struggled after the 2005 title, relying mostly on youth squad graduates. The team's top player is now 33-year-old veteran Vampeta, a member of Brazil's World Cup-winning squad in 2002.
"We can only regret what happened to the club," Ferreira said. "The team will eventually get through it, but it won't be easy."
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Associated Press writer Tariq Panja contributed to this report from London.


Updated : 2021-05-16 08:41 GMT+08:00