This file photo taken on June 24, 2015 shows President of the European Olympic Committees (EOC) Patrick Hickey of Ireland speaking during an interview at the 2015 European Games in Baku.JACK GUEZ/AFP / Getty Images
Europe's top Olympic official has been arrested in Rio and charged with scalping tickets to the Summer Games, in connection with an illegal ticket resale ring.
Patrick Hickey, who is president of the Olympic Council of Ireland and an International Olympic Committee executive, was arrested in an upscale hotel near the main Olympic Park early on Wednesday morning and taken to hospital. Mr. Hickey is 71, and reportedly has had heart trouble previously.
One other Irish citizen, the director of a hospitality company at the centre of the alleged scam, is in custody, and there are warrants for seven more European men who are not in Brazil; the police say they are co-ordinating with Interpol to seek their arrest.
The ticket resale scam could be worth as much as 10 million Brazilian reais, or $4-million, police say.
"We apprehended 823 tickets with an original value of R$626,000 and they were being sold for 30 times over the original price," said Ricardo Barbosa, an investigator in the fraud department of the Rio de Janeiro state police.
He said police went to the beachfront hotel, one reserved for IOC members, around 7 a.m. Wednesday and knocked at Mr. Hickey's hotel room, where his wife told them he had returned to Ireland. They then began to search the hotel and found Mr. Hickey in the room next door, which was occupied by his son; Brazilian media have aired footage of Mr. Hickey opening the door to police naked and then being questioned in a bathrobe.
Det. Barbosa said police seized Mr. Hickey's passport, IOC credentials, cellphone and laptop, which contained e-mails he exchanged with his lawyer after the recent arrest in Rio of another Irish citizen whom police say had tickets bound for resale at a profit, which is illegal in Brazil.
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Kevin Mallon, a director of a British hospitality company called THG Sports, was arrested on Aug. 5 at a hotel near Olympic Park and police said he had the 823 tickets in his possession bound for resale at higher than face value. They included a "significant number" of tickets earmarked for use by the Irish Olympic committee, Det. Barbosa said.
The investigator said the alleged scam worked like this: The Irish Olympic committee under Mr. Hickey accredited a newly created Irish company called Pro10 Sports Management to be the authorized reseller of Summer Games tickets allotted to the committee by the IOC. The Irish committee could not use THG Sports, which was its authorized ticket reseller for the 2012 London Games and the 2014 Winter Olympics in Sochi, because the company was implicated in ticket scalping in the 2014 World Cup in Brazil.
But the Rio investigators say Pro10 simply received the tickets and handed them to THG Sports, which resold them above face value as part of a fake "hospitality program."
Police have now issued warrants for executives of both Pro10 and THG Sports, including Marcus Evans, owner of both the parent company for THG Sports and of the English soccer club Ipswich Town FC.
"The main goal of this group was profiting from the ticket sales," Det. Barbosa said, adding it used the fake hospitality company to make it harder to track the resale. "Some of the tickets, which cost R$1,400 [at face value], were sold for $8,000 U.S. We apprehended 823 tickets during the entire operation and some of them were designated for the Irish Olympic committee [friends and family]. Also, we were able to track the others with the barcode – all of them were destined to the Irish audience. And these tickets cannot be resold."
Pro10 said in a statement its staff has "always acted properly and fully in line with [ticket resale] guidelines.… The allegation that a portion of the [Olympic Council of Ireland]'s family-and-friends tickets were being made available by Pro10 for general sale is utterly untrue." THG Sports said. Mr. Mallon had not sold or sought to sell tickets but had been holding them for collection by clients of Pro10.
The IOC will co-operate with the police investigation if approached by police, spokesman Mark Adams said. "Mr. Hickey is entitled for the world and everyone to believe he is innocent until he is proven guilty," Mr. Adams said. He emphasized the relatively small number of tickets known to be involved in this case so far. "This involves 1,000 tickets from the Irish national Olympic committee. There are 6.5 million tickets on sale here; it is the biggest ticketing organization that happens at any event in world."
The Irish Olympic committee said Mr. Hickey is "temporarily stepping down" from his all of his positions. He has been in charge of the Olympic Council of Ireland since 1989, was elected head of the European Olympic Committees in 2006 and has served on the IOC's executive board since 2012.
The allegations about scalping come even as Rio 2016 organizers face persistent questions about why event venues are often less than half-full – even for high-demand events that show as "sold out" on the main ticketing website. Det. Barbosa, the investigator, said the tickets being resold were for the most expensive seating at the highest-profile events, such as the opening and closing ceremonies.
The case is evocative of a similar arrest in Rio during the 2014 World Cup, when a dozen men, including Raymond Whelan, an executive from the official hospitality partner of FIFA, soccer's governing body, and a THG staff member, were arrested for ticket scalping. That case is still before the courts, with a judgment expected in September.
"Everybody followed the incidents after the World Cup and we wanted to make sure there were no similar incidents in the Games," Rio 2016 spokesperson Mario Andrada said on Wednesday. "We worked on the ticketing system for Rio 2016 consulting and gave information to the police from the beginning … the goal here is to produce a system whereby no illegal actions are taken and where the profits of tickets sales go to the organizing committee." Rio 2016 went so far as to modify the appearance of tickets to make them easier for police to monitor, he said.
"We don't see this investigation and even today's developments as a taint to the Rio 2016 Olympic Games," Mr. Andrada said.
After Mr. Mallon's arrest, the Irish Olympic committee said it would investigate how friends-and-family tickets came to be in his possession. This past weekend, Irish Minister for Sport Shane Ross flew to Rio to meet with Mr. Hickey on the issue. After that meeting, Mr. Ross released a statement saying he was "stunned" that the Ireland committee was insisting on conducting its own investigation, with no transparency or involvement of independent parties.
Mr. Hickey has been an IOC member since 2005 and is reported to have a close relationship with president Thomas Bach. Mr. Hickey had said he planned to step down as president of the Irish committee after these Games.