Court told payments were secret 'bungs'

SOCCER NEWS:THE FORMER Portsmouth FC chairman Milan Mandaric tried to mislead police and avoid tax by disguising a six-figure payment to the club's former manager Harry Redknapp as a loan, a court has heard.

Mandaric paid $145,000 (£92,900 – €110,326) into an offshore account set up by Redknapp in 2002, when both were based at the club, and later made a second payment of $150,000 (€115,358).

Southwark crown court was told yesterday the payments were secret “bungs” paid into the Monaco account to conceal them from British tax authorities. Both men face two charges of avoiding tax on the payments, which they deny.

John Black QC, prosecuting, said that after police learned of the account’s existence and asked Mandaric about his payments, he had his lawyer request repayment of the initial deposit from Redknapp, now manager of Tottenham Hotspur.

He said: “This was a transparent device by Mr Mandaric in an attempt to create an impression that the monies paid into Mr Redknapp’s Monaco account had only ever been advanced by the way of a loan.”

Black told the jury that Redknapp (64), had failed to declare the existence of the account for six years even while undergoing a separate tax inquiry over a similar payment from his former club, West Ham, over the sale of Rio Ferdinand.

When asked about his offshore holdings during a wider inquiry in 2008 into alleged financial irregularities in the Premier League, Redknapp finally mentioned the Monaco account but “feign(ed) almost complete ignorance of its existence”. This was despite the fact he had flown to Monaco personally to open the account in 2002, and had named it Rosie 47 after his pet bulldog and the year of his birth. Black said it was “implausible that the . . . inquiry merely jogged Mr Redknapp’s memory of the existence of an account”.

The jury heard details of separate phone interviews the men gave in February 2009 to Rob Beasley, then a reporter at the News of the World, in which Mandaric said the payment had been “a favour to Harry” that was “nothing to do with the football club”, in which he offered to make an investment and allow Redknapp the profits.

But Redknapp, called days later by Beasley, insisted the payment had been part of his bonus for selling Peter Crouch to Aston Villa, making a £3 million profit (€3.6m) for the club.

“The revenue know about it. There’s nothing crooked about it,” he told the reporter. Told that Mandaric had described the payment as an investment unrelated to football, Redknapp said: “He don’t know what he is f*****g talking about. What is he talking about? It is a bonus.”

Redknapp told Beasley that if the journalist reported in the paper that the manager was taking bungs, he would “sue the bollocks” off him.

Interviewed under caution in June 2009, Redknapp said he and Mandaric had a dispute over the proportion of the profit he was owed from the Crouch sale.

Told he would get only five per cent rather than the 10 per cent he believed was his due, he said Mandaric had said he would “sort something out” by paying a sum in an offshore account.

Redknapp claimed to police Mandaric had told him: “Harry, there is no tax. I’ve paid the tax. There is no tax for you.” He said he believed Rosie 47 to be a “dead account” controlled solely by Mandaric. Questioned in turn, Mandaric told police he had placed the money in an offshore account as a “personal gesture” unrelated to Redknapp’s bonus.

The jury heard that he had told police: “I believed that only Harry . . . had authority to operate the account.”

The case will continue today.

Guardian Service