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Tottenham Hotspur boss Harry Redknapp is the man getting all the publicity, so it was easy to forget yesterday that businessman Milan Mandaric is on trial alongside him, writes Richard Curtis, who was at Southwark Crown Court.
Both men face two charges of cheating the public revenue. (The detailed indictments are listed at the end of this news feature.)
Monday, 23 January 2012 saw the prosecution open its case against the former manager and chairman, respectively, of Portsmouth City Football Club (known by fans and pundits as Pompey).
In his opening statement, John Black QC explained he would be outlining the evidence in respect of criminal prosecutions for tax evasion relating to two payments of $145,000 and $150,000 made by Mr Mandaric to a Monaco bank account of Mr Redknapp.
The jury were given folders containing copy documentation relating to the case and Mr Black took them through some aspects of Harry’s contract with Portsmouth City Football Club (PCFC), a limited company that was owned by Mr Mandaric who provided the majority of its finance and who effectively paid the wages of Mr Redknapp and the other employees.
Mr Redknapp, who yesterday sported the sort of lurid checked, blue suit typical of British footy bosses, joined PCFC in June 2001 as director of football, becoming manager in March 2002.
As the man charged with bringing footballing success to Pompey, Mr Redknapp was described as ‘no ordinary employee’ and his success then and subsequently as a manager was acknowledged.
However, he was also described as ‘a hard-headed businessman’ who knew his value and who had a highly-paid employment that included contractual bonus provisions.
In addition to his salary and bonuses (rising from £300,000 to £600,000) for gaining and maintaining Premiership status, he was also entitled to a percentage of the increase in the value of any player that he bought and subsequently sold.
However, Mr Black explained that this player’s bonus was reduced from 10% when he was director of football, to 5% when manager.
During Mr Redknapp’s time as director of football at PCFC, England footballer Peter Crouch was bought from Queens Park Rangers in July 2001 for £1.25m (plus VAT) and was sold on 27 March 2002 for £4.5m (plus VAT).
As director of football, Harry Redknapp would have been entitled to a bonus of approximately £300,000 from this sale.
However, the sale took place just days after he became manager on 18 March 2002, when his bonus was halved. This 5% bonus was paid to him under PAYE.
The prosecution said that on 26 April 2002, Mr Redknapp flew to Monaco and opened an account with HSBC Monaco.
The name of the account was ‘Rosie 47’, which Mr Black pointed out were the name of Mr Redknapp’s dog and the year of his birth. Mr Redknapp was shown as the account holder; on 4 June 2002, $145,000 was paid into this account.
Subsequently, in January 2003, $100,000 was transferred from Rosie 47 to First Star International, a company authorised to do business in Florida and owned by Mr Mandaric.
In April 2004, a further payment of $150,000 was made from the Milan Mandaric Revocable Trust Fund to the Rosie 47 account.
These were the only substantive transactions on the Rosie 47 account until it was closed in February 2008.
The prosecution pointed out that between 2004 and 2006, Mr Redknapp had been the subject of a civil tax investigation relating to a payment of £300,000 received from West Ham football club, arising from the sale of Rio Ferdinand, and that he had signed a certificate of full disclosure for HMRC in October 2006.
Despite this, the first time that anyone other than the two accused heard of the Monaco account was in an interview on 6 November 2006 in the course of the Lord Stevens’s ‘Quest’ enquiry into the football league and irregularities in transfer dealings, when the prosecution alleged that Mr Redknapp admitted that he had this account.
The Crown contended that even though the two payments made into the Rosie 47 account of $145,000 and $150,000 were not made from a PCFC account, they were undoubtedly referable to Mr Redknapp’s employment with the club and both parties must have known that these were taxable.
The Crown contended that the payments to Monaco were deliberately and dishonestly paid by Milan Mandaric and deliberately and dishonestly received by Mr Redknapp to conceal them from the tax authorities and evade tax.
The Crown’s contention was that they were therefore both guilty of cheating the public revenue.
The case continues and is expected to last for up to two weeks.
Count 1
Cheating the public revenue, contrary to common law
Milan Mandaric and Henry James Redknapp, between the 1st day of April 2002 and the 28th day of November 2007, at the material times respectively the Chairman and the Football Manager of Portsmouth City Football Club Limited, with intent to defraud and to the prejudice of HM Revenue and Customs, arranged for $145,000, paid by Milan Mandaric as a result of or in connection with Henry James Redknapp's employment and as a reward for services, to be transferred to a Monaco bank account opened by Henry James Redknapp for that purpose, in order to conceal the said emolument from HM Revenue and Customs and evade the payment of Income Tax and National Insurance Contributions thereon (whether by the operation of PAYE by the club or otherwise).
Count 2
Cheating the public revenue, contrary to common law
Milan Mandaric and Henry James Redknapp, between the 1st day of May 2004 and the 28th day of November 2007, at the material times the Chairman and the Football Manager of Portsmouth City Football Club Limited, with intent - to defraud and to the prejudice of HM Revenue and Customs, arranged for $150,000, paid by Milan Mandaric as a result of or in connection with Henry James Redknapp's employment and as a reward for services, to be transferred to a Monaco bank account opened by Henry James Redknapp for that purpose, in order to conceal the said employment income from HM Revenue and Customs and evade the payment of Income Tax and National lnsurance Contributions thereon (whether by the operation of PAYE by the club or otherwise).
