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TYPES OF FRAUD
 Non-sport specific fraud

Non-sport specific fraud refers to fraud that is not specific to the sports sector, but can also occur in other sectors/contexts. We make a distinction between:

Financial fraud

Undeclared income (e.g. entrance fees, proceeds from food festivals, sponsorship contributions), undeclared expenses (e.g. compensation for athletes or trainers), VAT fraud, fictitious non-profit organization status, portrait rights fraud, tax domicile fraud.

  • Different actors can be involved in financial fraud, for example: athletes, coaches, sponsors, sports clubs, sports agents, accountants...

  • There can be different motives for claiming financial fraud:

    • financial motives: paying less taxes, receiving higher compensation, publicity, money laundering, establishing an exclusivity relationship

    • sporting motives: attracting or retaining (better) athletes or coaches

  • Use of dirty money and so-called ‘under-the-table’ payments, false invoices, over- and undervaluation of the purchase and sale value of players, offshore constructions, fictitious assignments.

  • Tax fraud occurs in all kinds of sports, both at amateur and professional level. The more serious and/or organised tax fraud has mainly occurred in professional sports where large financial amounts circulate, such as professional football or cycling.

    • 4.4% of sports clubs indicate that they evade taxes

    • 20.2% of sports clubs indicate that they receive manipulated invoices

    • 21.8% of sports clubs indicate that they issue manipulated invoices

Subsidy fraud

Subsidy fraud means that financial support from government institutions or sports federations is wrongly requested or used for purposes other than those for which this subsidy is actually intended. A distinction can be made between:

  • subsidy recovery: receiving subsidy money that was obtained through fraud.

  • subsidy fraud: deliberately providing incorrect information in order to qualify for a subsidy to which you are not entitled.

  • subsidy diversion: using subsidies for purposes other than those for which the subsidy was awarded.

  • Subsidy fraud can be committed by sports clubs, sports federations or athletes themselves.

  • There can be various motives for alleging subsidy fraud:

    • financial motives: receiving more (financial) resources

    • sporting motives: attracting or retaining (better) athletes or coaches

  • False statements (for example about membership numbers), false documents (for example trainers' diplomas), failure to comply with subsidy conditions or obligations, using subsidies for purposes other than those for which they are intended (for example using them to pay professional players instead of investing in youth work).

  • Subsidy fraud occurs in all kinds of sports, both at the amateur and professional level.

    • 5.6% of sports clubs report subsidy fraud with federation resources

    • 5.1% of sports clubs report subsidy fraud with government resources

Social fraud

Social fraud means that social security law or labor law is violated or abused. In sports clubs this can take the form of not declaring work or 'black work', fictitious volunteer work, no (correct) residence permit, no (correct) work permit, violation of permit conditions and false self-employment.

  • Social fraud can be committed by sports clubs, athletes, coaches.

  • There can be various motives for claiming social fraud:

    • Financial motives; maintain social benefits, receive higher compensation, pay fewer contributions

    • Sporty motifs; getting foreign players/trainers to join sports clubs (faster), attracting or retaining (better) athletes or trainers

  • Through the use of false expense reimbursements, false statements, false documents.

  • Social fraud can occur in any sports club that works with paid athletes, trainers, employees or members. Social fraud occurs to a large extent at clubs that have recently been promoted or have ambitions to do so.

    • 1 in 2 sports clubs sometimes pays club members in the black

    • 28.9% of sports clubs indicate that they pay athletes and coaches in the black

    • 20.5% of sports clubs indicate that they pay volunteers in the black

    • 9.5% of sports clubs indicate that they pay board members in the black

Embezzlement of resources

Embezzlement of funds means that someone within the sports organization (e.g. treasurer, director), uses money or other resources of the sports organization for personal use without permission.

  • All kinds of actors can embezzle resources from a sports organization, such as directors, treasurers, members, volunteers, employees of the sports club, etc.

  • Individuals will typically embezzle funds for financial motives or for personal enrichment.

  • Abuse or misapplication of (financial) resources or assets (e.g. embezzling sports equipment).

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  • Embezzlement of funds occurs remarkably often in amateur sports clubs. The chance that resources will be misused is greater when there is little control over the (financial) resources of the sports organization.

    • 16.1% of sports clubs indicate that they have experienced theft of club resources

    • 14.1% say sponsorship resources were wasted or misused

Corruption

Corruption generally refers to the abuse of power for personal gain.

  • Board members, athletes, coaches...

  • There are different motivations:

    • financial motives

    • the accumulation or consolidation of positions of power

  • Corruption is a broad concept and can take place in different ways. A typical form of corruption is bribery. In addition, conflicts of interest and cronyism or favoritism are also common forms of corruption.

  • Corruption can occur in all sports at all levels.

    • 26.7% of sports clubs indicate that they have had to deal with conflicts of interest

    • Almost half indicate that there is favoritism in the sports club

    • 7.8% indicate that there has been bribery in the sports club

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