Court told Redknapp hid 'bungs'

ENGLISH PREMIER LEAGUE:HARRY REDKNAPP, the Tottenham Hotspur manager, opened an offshore bank account in Monaco to hide "bungs" totalling £189,000 (€228,160) when employed by Portsmouth football club, a court was told yesterday on the opening day of his trial into alleged tax evasion.

Redknapp, 64, denies the charge alongside co-defendant the former Portsmouth chairman Milan Mandaric.

John Black QC, for the prosecution, told Southwark crown court, south London, that Redknapp and Mandaric, 74, “must have known” they were avoiding taxes.

“These payments were a bung or offshore bonus that the parties had absolutely no intention of paying taxes for,” he said.

“The crown’s case is that the money transferred to that offshore Monaco account was deliberately and dishonestly paid by Mr Mandaric and was deliberately and dishonestly received by Mr Redknapp with the intention of concealing them from the UK tax authority. The prosecution alleges both these defendants are guilty of cheating the public revenue.”

The case, which is scheduled to run for two weeks, could have an effect on the England football team as Redknapp is widely viewed as the favourite to replace Fabio Capello as manager following the European Championships this summer.

The charges relate to the transfer of Peter Crouch from Portsmouth to Aston Villa on March 27th, 2002, for €5.4 million and the transfer bonus Redknapp received from the club for the sale under the terms of his contract.

Crouch had been bought from Queens Park Rangers in 2001 for €1.5 million but stayed at Portsmouth for nine months before being sold a few days after Redknapp had changed jobs from director of football at Portsmouth to manager.

Redknapp had a “number of contractual bonuses”, including a “transfer bonus” based on “net increase” of a player’s valuation, Black said.

Redknapp joined Portsmouth as director of football in summer 2001 when, it was alleged, his contract allowed him to receive 10 per cent of the net profit from the sale of any player on from Portsmouth. These terms changed to five per cent when he became the manager of the club on March 18th. At the time of the sale of Crouch to Villa, the crown alleged Redknapp’s player transfer bonus would be five per cent of the sales, or £115,473 (€186,790).

Black said it “doesn’t take a mathematician to see” a greater bonus would have been due to Redknapp if the transfer had occurred under the 10 per cent terms.

A bespectacled Redknapp sat alongside Mandaric for most of the proceedings in the glass-walled dock of court six, occasionally reading from notes as Black outlined in full the two charges against him and his co-defendant.

Redknapp was supported in court by executives from Tottenham, his son Jamie, a former Liverpool and Spurs player, and by Richard Bevan, chief executive of the League Managers Association.

The first charge alleges that between April 1st, 2002, and November 28th, 2007, Mandaric paid $145,000 (€1.12 million)) into an account in Monaco named “Rosie47” to avoid paying tax and national insurance. The account’s name is alleged to refer to that of Redknapp’s dog and the year of his birth.

The second count alleged that $150,000 (€116,487) was paid by Mandaric into the same account between May 1st, 2004, and November 28th 2007.

After Redknapp had asked for £100,000 (€120,720) to be moved to the accounts of First Star International Limited, a company set up by Mandaric in California in 1998 and based in Miami, he later closed the Rosie47 account in February 2008, the crown stated. Redknapp requested that all monies in that account be transferred to his London HSBC account.

The court heard how Redknapp flew to Monaco in April, 2002, to open the account, also with HSBC. Black said: “He flew to Monaco for the specific purpose of setting up a secret account, into which the off-the-record payments could be received.”

It was four years before the account became known to the police and tax authorities. Previously, Redknapp had never mentioned the Monaco account when he was investigated by HM Revenue and Customs over his transfer dealings at West Ham – an investigation that included the sale of the former England captain Rio Ferdinand to Leeds United for £18 million (€21.7 million) on November 22nd, 2000. That investigation, between January 2004 and October 2006, “was originally prompted by concerns over a £300,000 (€362,157) payment . . . regarding profit made in a player transfer, namely Rio Ferdinand,” Black said.

The Rosie47 account was only revealed during an inquiry into illicit payments in football, led by the former Metropolitan police commissioner Lord Stevens. The results of the investigation were handed to the Premier League chief executive, Richard Scudamore, in July 2007 after Redknapp had been interviewed the previous November as part of the investigation.

“That was the first time anyone heard of a Monaco bank account. It’s significant . . . that the bank account opened by Mr Redknapp was located in an offshore tax haven. The crown suggests this was quite deliberate and was intended to obscure and to render less transparent the nature of the money payments,” Black said.

Black added that Redknapp wanted payments promptly transferred in to the “tax haven”.

“The crown say that Redknapp did not wait long before taking steps to ensure that he would receive what he regarded as his due off-the-record payment.”

The case continues.

Guardian Service