Offshore Tax Evasion & Worldwide Soccer

With the publication of the Panama Papers in 2016, some of the world’s wealthiest individuals were revealed as tax cheats who hide their assets offshore through anonymous companies. Worldwide soccer has now been thrust under a similar spotlight as some of its brightest stars are being prosecuted for tax evasion, fraud and related crimes. In the “eye of the storm” are the following:

1. Lionel Messi – The Barcelona star was sentenced to a suspended 21-month jail term (non-violent prison sentences under 2 years in Spain suspend incarceration for the crime) and paid a 2m+ Euro fine to Spain. Messi and his father (Jorge Messi) were found guilty of using offshore companies to avoid paying taxes on 4.16m Euros of income earned by Messi from his “Celebrity Image Rights” for 2007-2009.

2. Neymar – The Brazilian star forward and his parents stand trial in Spain (2017) for alleged corruption for his transfer from Santos (Brazil) to Spain in 2013.

3. Javier Maschereno – The former Barcelona Defender agreed to a one year suspended sentence for tax fraud in 2016 in Spain.

4. Fabio Coentrao – The Portugese fullback, soon joining Sporting Lisbon (on loan from Real Madrid) alleged to have failed to “correctly declare” 5.6m Euros of income earned from “Celebrity Image Rights” (2012-2013) while he was playing for Atletico Madrid.

5. Radamel Falcoa – Formerly with Atletico Madrid, now with Monaco, is suspected of failing to declare 1.3m Euros of income.

6. Angel Di Maria – On 6/21/17, Supersport reported that former Real Madrid player Angel Di Maria has reached an agreement with Spanish prosecutors over tax evasion charges related to his “Celebrity Image Rights.” The Argentinian midfielder is accused of failing to pay 1.3m Euros to Spanish tax authorities in 2012-2013 by “giving up his celebrity image rights” to offshore companies in tax havens (which include Panama). Di Maria will plead guilty to 2 charges of tax fraud, pay a 2m Euro settlement and receive an 8 month prison sentence (which under Spain’s rules of no jail for non-violent crimes under 2 years may not be incarcerated).

Other major tax cases currently pending include:

Cristiano Renaldo, 4 time world player of the year, has been summoned to appear before a judge in Spain on 7/31/17 (in Pozuelo de Alaron, a Madrid suburb) to respond to Spanish prosecutors allegations that he evaded 14.7m Euros in tax due by use of offshore companies between 2011-2014 and faces 4 charges of tax fraud.

Spanish prosecutors allege that Ronaldo evaded tax via shell companies in BVI and Ireland. He allegedly declared 11.5m Euros of Spanish related income from 2011-2014 while actually earning 43m Euros. He is alleged to have “voluntarily refused” to include 28.4m Euros in income from sale of his “image rights” for 2015-2020 to a Spanish Company.

Jose Mourinho, star coach who won multiple championships with Real Madrid (La Liga 2012, Spanish Cup 2011), Porto (2004), Inter Milan (2010) and in 2016 with Manchester United won Europa League and League WP, is accused by Spanish Tax authorities of failure to pay millions of Euros in taxes from 2010-2013 while coaching Real Madrid.

Spanish Authorities accuse Mourinho of 2 tax evasion offenses, failure to declare 3.3m in earned income between 2011-2012 (2011 1.6m Euros; 2012: 1.7m Euros)

In a related case, super agent Jorge Mendes, who represents Mourinho and Ronaldo (and other soccer stars) has been summoned to appear in Spanish court on 6/27/17 (at Pozuelo de Alarcon). The whistleblowing website, Football Leaks, exposed Mendes practices to “optimize enormous earnings from celebrity image rights for clients.”

The European media consortium, European Investigative Collaborations (EIC) claims that 185m Euros worth of income has been “concealed from tax authorities by using offshore shell companies and offshore accounts” much of which appears to be from the sale, license or assignment of Celebrity Image Rights.

As I explained in my numerous articles on the Estate of Michael Jackson (published among others by Lorman Education Services, one of America’s leading on line cpe providers, pre-eminent international magazine Offshore Investment and in my interviews: Hollywood Reporter and reprinted in Billboard), Celebrity Image Rights is an exploding area of huge worldwide revenues. For many years it appears much of this income received was either unreported, under-reported and concealed by a maze of offshore anonymous companies in the tax havens with BVI and Panama being two of the “major players”.

Now that Central Governments worldwide are seeking records, tax revenues and pursuing criminal prosecution, for those major stars who have been cheating on their taxes, or intend to continue cheating on their taxes they may best heed the advice of my favorite Nobel Laureate, Bob Dylan: “Its all over now, Baby blue.”

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