Cartan Tours, the biggest authorised ticket reseller (ATR) for next year's Olympic Games in Rio de Janeiro, is facing a multi-million dollar legal case after it was sued by by Confederation of North, Central American and Caribbean Association Football (CONCACAF).
A Federal lawsuit has been filed by Sidley Austin LLP in a court in Los Angeles seeking damages from parties involved with Cartan Tours, a travel agency that CONCACAF’s suit accuses of taking $40 million (£27 million/€36 million) in less than three years through “fraudulent, unfair, and unlawful business practices".
The lawsuit claims the defendants maintained a “clandestine, kickback-based, and parasitic relationship” with Jeffrey Webb and Enrique Sanz, the former President and secretary general of CONCACAF.
The 42-page document alleges Webb and Sanz hatched a scheme with Cartan’s owner, David Elmore, that made Cartan an exclusive travel partner of CONCACAF and “illicitly enriched themselves” through a system of extraordinarily high rates and kickbacks".
According to the CONCACAF's complaint, the cost of the Gold Cup, the governing body's main tournament for national teams held every two years, doubled from 2011 to 2013 because of inflated billing by the travel services provider.
CONCACAF seeks no less than $50 million (£34 million/€46 million) in compensatory and punitive damages, according to the lawsuit.
Elmore and Daniel Gamba, an executive in one of Elmore’s several companies, are listed as defendants.
Webb, who succeeded Jack Warner as President of CONCACAF, was one of nine FIFA officials charged in a racketeering and bribery indictment unsealed May 27.
The United States Department of Justice claim Webb took millions of dollars in bribes and kickbacks for media rights to tournaments.
He pleaded guilty last month in Federal Court in Brooklyn, New York City, after agreeing to be extradited to the US from Switzerland, where he had been arrested.
Sanz, meanwhile, has been an unnamed co-conspirator and key Government witness in the case.
Cartan, whose history dates back to 1899, has been appointed by Rio 2016 as the exclusive ATR in 36 countries and territories.
They include the Cayman Islands, Webb's home country, and Colombia, where Sanz was born.
Other countries they are ATR for include Greece, Jamaica, Mexico, Trinidad and Tobago and Venezuela.
At London 2012 they were the ATR for 40 National Olympic Committees, including 37 of he 42 countries belonging to the Pan American Sports Organization.
Cartan Tours called the CONCACAF lawsuit “baseless”, according to the New York Times.
They claimed it “grossly distorts the parties’ business relationship in an effort to weave a tale that has no basis in fact.”
The company said it planned to make its own claims for damages in response.