lucia's: Harry Redknapp payment to offshore Monaco account 'disguised as loan'

Tuesday, January 24, 2012

Harry Redknapp payment to offshore Monaco account 'disguised as loan'

Jury told that former Portsmouth chairman Milan Mandaric paid 'bungs' into account that went undeclared for six years

The former Portsmouth FC chairman Milan Mandaric tried to mislead police and avoid paying tax by disguising a secret six-figure payment to the club's former manager Harry Redknapp as a loan, a court has been told.

Mandaric paid $145,000 into an offshore account set up by Redknapp in 2002, when both men were based at the south coast club, and later made a second payment of $150,000.

A jury at Southwark crown court has been told that the payments were secret "bungs" paid into the Monaco account to conceal them from British tax authorities. Both men face two charges of cheating the public revenue by avoiding tax on the payments, which they deny.

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

Black told the jury of eight men and four women that Redknapp, 64, had failed to declare the existence of the account for six years even while undergoing a separate inquiry into his tax affairs over a similar payment from his former club, West Ham, over the sale of the player Rio Ferdinand.

When he finally admitted to the Monaco account, after being questioned about his offshore holdings as part of a wider inquiry into financial irregularities in the Premier League, Redknapp had been "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."

On the second day of his opening statement, Black detailed "many and various explanations" which the two men had offered to police, Her Majesty's Revenue and Customs and a journalist about the payments.

"You will see that the payments have been variously characterised as employment income, as a loan, as a gift and in some instances a combination of all or some of them," he said.

The jury heard details of separate phone interviews both 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" which was "nothing to do with the football club", in which he offered to make an investment and allow Redknapp the profits. "I did something for my friend, away from England, away from football, away from Portsmouth," he had told the reporter.

But Redknapp, contacted days later by the same reporter, insisted the payment had been part of his bonus for selling the player Peter Crouch to Aston Villa, making a �3m profit for the club.

He told the reporter he understood Mandaric had already paid tax on the sum in the US, but to be sure he had informed HMRC when he had transferred the money to his British account in 2008. "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 fucking talking about. What is he talking about? It is a bonus."

Interviewed under police caution in June that year, Redknapp had said he and Mandaric had a dispute over the proportion of the net profit he was entitled to from the �5.5m Crouch sale. Told he would get only 5% rather than the 10% he believed was his due, he said Mandaric had told him he would "sort something out" by paying a sum in an offshore account.

Redknapp claimed to police he had asked about the tax position and had been told "Harry, there is no tax. I've paid the tax. There is no tax for you."

He said Mandaric had made an investment drawing funds from Rosie47 which had been a "disaster", and that subsequently he believed it 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, as a sum which Redknapp would be able to invest, keeping any profits for himself.

"I believed that only Harry ... had authority to operate the account," he had told police, the court heard. The case continues.

Esther Addley