Harry Redknapp and Milan Mandaric’s tax evasion trial began at Southwark Crown Court on Monday 23 January, the first two days saw the prosecution outlining the case to the jury…
Harry Redknapp and Milan Mandaric have been accused of cheating the public revenue on two counts, both during Redknapp and Mandaric’s time at Portsmouth FC as manager and acting chairman.
The trial is centered on two payments allegedly made by Mandaric to Redknapp totaling $295,000 to an offshore bank account in Monaco, between 1 April 2002 and 28 November 2007. These payments avoided both income tax and national insurance.
Full accounts of both charges can be read in our news story ‘Harry Redknapp Tax Evasion case set to kick-off in court on 23 January 2012’.
The Crown alleges that the payments were made by Mandaric to Redknapp “with intent to defraud and to the prejudice of HM Revenue and Customs as a result of or in connection with Henry James Redknapp’s employment and as a reward for services”.
Both Redknapp and Mandaric deny the charges.
On the morning of the first day at Redknapp and Mandaric’s tax evasion trial Judge Leonard QC asked potential jurors to declare if they had “strong allegiances in favour or against” football clubs that Redknapp and Mandaric have been involved with:
“This case is about tax fraud, not football, but it is tax fraud within the football world. If you are chosen to serve on the jury you will take oath to reach true verdicts according to the evidence you hear”, he said.
“You must leave all prejudice and favour behind”, Judge Leonard QC added.
The juury selected and sworn in for the Redknapp and Mandaric case consisted of 8 men and 4 women.
The jury were told that they must not discuss the trial outside of the courtroom and that they must abide to the rules and not research the case or do their own investigations on the internet and Twitter; “this case will attract publicity…My advice don’t read or listen”, said Judge Leonard QC.
Despite this warning the prosecution began with the opening arguments 40 minutes later than expected, due to a new jury having to be sworn in when court resumed at 2pm because one of the original 12 jurors had allegedly been named on Twitter.
A new jury was re-selected and sworn in, again 8 men and 4 women were chosen.
During the tax evasion trial, which is expected to last two weeks, Redknapp is being represented by John Kelsey QC, and Lord Ken Macdonald QC is representing Mandaric. While the prosecution is being led by John Black QC.
On the first day in court the jury heard how Redknapp is “unusually talented” and a “hard headed businessman with financial acumen” and that he was entitled to “contractual bonuses”.
The prosecution told the jury that Redknapp was entitled to 10% net profit on player transfers when acting as Director of football at Portsmouth FC and that this entitlement was reduced to 5% when he became manager in 2002
An example given in court was of Peter Crouch’s signing to Aston Villa for £4.5m. Redknapp originally signed Peter Crouch at Portsmouth FC for £1.2m, making a profit of £3.5m which Redknapp, as manager, was entitled to receive a 5% transfer bonus on.
Peter Crouch was sold to Aston Villa only 9 days after Redknapp took the post as manager at Portsmouth FC, which saw the transfer fee he was entitled to drop by half from 10% to 5%.
Prosecution told the jury that Redknapp’s transfer bonus for Peter Crouch was paid “off-record” by Milan Mandaric into a ‘secret’ bank account in Monaco, allegedly opened by Redknapp, in order to hide the payments from the public revenue.
The ‘secret’ bank account in question was allegedly opened in Monaco by Redknapp under the name ‘Rosie27’, a combination of the name of his dog (Rosie) and the year that he was born (1947).
John Black QC, leading the prosecution, told the jury that there was “no obvious reason why the account could not have been opened in the name of Harry Redknapp”, and in reference to the 5% that Redknapp missed out on Crouch’s transfer fee, said, “[Redknapp] did not wait long before taking steps to receive what he saw as his due”.
The prosecution stated that on 4 June 2002 a payment of $145,000 was allegedly paid by Mandaric into Redknapp’s Monaco bank account, ‘Rosie47’.
4 January 2003, 7 months later, Redknapp allegedly instructed HSBC Monaco to transfer $100,000 from his ‘Rosie47’ account to a company in Miami, Florida named First Star International, which Mandaric is alleged to be a Director of. The $100,000 was said to be transferred 9 days after the request on 13 January 2003.
21 April 2004 a second payment of $150,000 was allegedly made by Mandaric into Redknapp’s ‘secret’ Monaco account from First Star International. Prosecution told the jury that the First Star International account was being used as a personal account by Mandaric and not as an investment vehicle.
46 months later Redknapp allegedly instructed HSBC in Monaco to close down his account ‘Rosie47’ in February 2008. The instruction was said to have been sent by fax and requested that the remaining funds of $207,000 be transferred to his HSBC bank account in London.
Prosecution presented to the jury that information on said transfer payments were brought to light during a civil tax investigation that looked into a £300,000 payment to Redknapp from football club West Ham United during the transfer of footballer Rio Ferdinand.
The prosecution closed the first day in court by telling the jury that Redknapp and Mandaric had not disclosed the existence of the ‘Rosie47’ account in Monaco for the first four years since it was opened (2002-2006).
John Black QC said that Monaco was chosen as a destination for the bank account due to the fact that it could be hidden because of Monaco’s “minimal taxation and long history of banking secrecy”. The jury was told that it would be their decision as to whether there was “full and frank disclosure” of the Monaco account.
At 10am on Tuesday 24 January the prosecution continued their opening argument to the jury at the second day of Harry Redknapp and Milan Mandaric’s tax evasion trial. Jamie Redknapp was again present to show support for his father.
The trial was delayed from resuming at 10am due to a legal discussion after which the Judge informed all journalists that tweeting would no longer be permitted from inside the courtroom during the trial.
For most of the morning the prosecution presented to the jury various sources of evidence about the origin of Redknapp’s Monaco bank account.
Leading prosecutor, John Black QC, proceeded outlining the case to the jury and said that Redknapp had not disclosed the existence of his Monaco ‘Rosie47’ account to his accountant for four and a half years and his bank relations manager for 5 years and 8 months.
John Black QC told the jury that Redknapp and Mandaric had deliberately avoided paying tax on the payments made into the ‘Rosie47’ bank account in Monaco and that:
“The significance of this omission by Mr Redknapp is that were his tax advisor or bank relationship manager told it would almost certainly have resulted in the money in the account being entered on Mr Redknapp’s tax return and coming to the attention of the Inland Revenue.
“Unless they were declared, Revenue and Customs would have no idea and the monies would have been kept secret.”
The jury was told how Redknapp had only revealed the existence of his Monaco bank account when the Premier League’s Quest inquiry into bung payments in football was opened in 2006 and Redknapp was asked, “Do you have an offshore bank account?”
When the Premier League Quest inquiry asked Redknapp about the ‘Rosie47’ account he told them that he had an accountant who invested money into the Monaco account on his behalf and that his accountant had informed him that half of the ‘investment’ in the ‘Rosie47’ account had been lost.
Contradictory to Redknapp’s claim, the Premier League Quest inquiry later received a letter from Milan Mandaric which declared that Mandaric had opened the Monaco bank account for Redknapp and that Mandaric had been the one who had ‘invested’ money into the account.
Excerpts from taped interviews by the News of the World – one questioning Mandaric and another questioning Redknapp – were then read to the jury by the prosecution.
When asked by News of the World reporter, Rob Beasley, about the existence of the Monaco bank account Mandaric had said that payments made were “nothing to do with bonuses” and that it was “not money from football”. Mandaric was then quoted telling the reporter, “I did something for my friend, just to help him.”
When the News of the World reporter then spoke with Redknapp he said that the payment was made to an account in Monaco as Mandaric did not have a UK account, so had to pay the money from an account in the US to the Monaco account Mandaric had opened for him.
Redknapp told Beasley he had realised that if he did not go along with Mandaric’s payment plan then he would not have gotten the money at all: “I said I didn’t want Monaco, I just want UK”, Redknapp told the reporter.
When asked about the bonus received for selling Peter Crouch Redknapp told the News of the World:
“I was due 10%. They paid me 5%. I said to Mandaric you owe me 10% not 5%. Mandaric said don’t worry, i’ll sort it,” and that;
“The money was paid to me as a bonus for selling Peter Crouch.”
When Beasley told Redknapp that Mandaric had said that the payment into the Monaco account had not been a bonus, Redknapp responded by questioning why it had then been paid to him, saying that Mandaric was ‘wrong’ if he had said it was an ‘investment’.
“[Mandaric] doesn’t know what he’s f****ing talking about. It’s a bonus”, Redknapp replied.
When told by Beasley that the payment looked like a bung – a secret, unauthorised payment seen as a financial incentive to help a transfer go through – Redknapp said:
“Don’t say it was a bung, it is nothing to do with a bung, it is paid by the chairman, how can it be a bung when the chairman of the football club paid me? A bung doesn’t come into it. It’s not a bung, it’s a f***ing sick word.”
After breaking for lunch the trial resumed in the afternoon with the prosecution presenting the jury with an interview between Harry Redknapp and the Police that took place in 2009.
In this interview Redknapp told the police that he had never touched the Monaco account and left it all to Mandaric, who later told Redknapp that the investment in Monaco had been ‘a disaster’ and that they money had been ‘wiped out’.
“I never mentioned it again. I just thought that’s history. He’s had me. Maybe he never put the money in. I don’t know”, Redknapp told the police.
The prosecution ended day two by telling the jury that Redknapp told police he had no control over the Monaco account, he had forgotten about it and never paid anything in or out; but he had failed to tell the police that it was himself who had instructed the HSBC Monaco bank to transfer the $100,000 to Miami, Florida via fax.
Redknapp told police that he had not informed his accountant of the ‘Rosie47’ bank account in Monaco because he believed that there was no money in it.
Kevin Kinsella, of KinsellaTax, said:
“This is going to be a very interesting case.”
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