Redknapp case: Mandaric and Redknapp cleared of all charges

Both Harry Redknapp and Milan Mandaric have been found not guilty on all charges in the high-profile tax evasion trial at Southwark Crown Court.

Redknapp and Mandaric hugged as the jury cleared them of all counts.

After nearly three weeks jurors accepted Redknapp's denials that he avoided tax on any payments over £189,000 found in a Monaco account.

The prosecution based the allegation on a News of the World report that Redknapp admitted to journalist Robert Beasley that the money was a bonus for the sale of Peter Crouch.

This brings to a close a five-year £8m police investigation which failed to yield a single conviction.

HMRC released a statement saying they have “no regrets” over bringing the case regardless of the outcome.

Continued...

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johnjenkins's picture

Come on you pundits

johnjenkins | | Permalink

what's it going to be Piggot or Doddy?

Doddy    1 thanks

Trevor Scott | | Permalink

Because of things I've heard about the defence, also the attitude prevalent at HMRC, not guilty of fraud.

johnjenkins's picture

I think if    1 thanks

johnjenkins | | Permalink

there was any chance of him going down, Spurs would have got rid of him ages ago.

Not a proper topic for comment    1 thanks

Siilycountry | | Permalink

as this is a high profile, ongoing trial. I'm surprised that comments are allowed on this.

andy.partridge's picture

Rosie    5 thanks

andy.partridge | | Permalink

He'll get away with it, but the dog's in big trouble.

robertlovell's picture

Closing comments    1 thanks

robertlovell | | Permalink

Thank you for your comment Sillycountry - a very good point you make there.

We want to keep members informed on this trial, but do not want comments published that could be construed as prejudicing a fair trial for the defendant, which includes speculation on whether he is guilty or not, without the full facts of the case.

We should have done this first, but we will now close all comments on this article.

We'll keep you informed on with contemporaneous accounts of the evidence presented in court and we will re-open  comments when the verdict is delivered.

robertlovell's picture

Comments now re-opened

robertlovell | | Permalink

 

However please bear in mind that they have been found innocent. To suggest otherwise in comments here would expose you and AccountingWEB to the risk of a libel suit. Please refrain from doing so.

johnjenkins's picture

What a surprise!!!!!    1 thanks

johnjenkins | | Permalink

Now we all know where HMRC is going to get the money they spent on this case. Robert, shame on you for not having enough trust in us. We might not worry about getting Aweb in the smelly stuff but I'm sure we wouldn't put ourselves there.

I hope ...

Trevor Scott | | Permalink

... Parliament get hold of HMRC's files and independently investigate HMRC's reasoning in deciding to prosecute. I suspect that they would learn a lot about issues at HMRC.

So, these funds paid into Monaco...

jockblue | | Permalink

If they were a genuine loan or gift from MM to HR, presumably they would have been paid out of MM's own taxed income wouldn't they?

Surely following the money trail would have told them what was happening rather than going to trial based on a conversation with a journalist?

Well presumably...    1 thanks

John Cotter | | Permalink

.. following the aquittal I can put untaxed money in an off shore account and not declare it as income.

Alas I doubt that very much.

Easy answer ?

frankdavid | | Permalink

I'm not a lawyer but just a simple accountant but as Jockblue implies the answer was very simple, did Mandaric claim a tax deduction for the payment ?  if he did then both guilty, if not it really was a gift or loan, so not guilty. Is that too simple a solution ?

 

On the bright side lets be grateful  that HMRC have wasted a big chunk of their legal costs budget this year !

crazy.....£8 million on case....

justsotax | | Permalink

for what .....max £80-90k tax......revenue - ever heard of return on investment?  Sure if he was a leach claiming benefits and then some i would have an issue but his salary alone was £3-4 million a year.....(tax and ni on that is not small) - and given that why would you then take a risk for the sake of saving £80k..... 

DMGbus's picture

Not guilty as "no intent" to defraud the Revenue    3 thanks

DMGbus | | Permalink

The defence lawyers did their job in convincing the the jury that there was "NO INTENT TO DEFRAUD THE REVENUE".

Clearly the jury of lay people thought that there was no INTENT to do anything wrong having a foreign bank account in a pet dog's name, they will have seen / heard a lot more evidence than has been published here / in the press and formed a conclusion accordingly that is correct in law (unless any successful appeal is mounted by HMRC).

The jury believed that there was lack of intent to defraud and so we have the result that we have.  NOT GUILTY.

I don't think that there's any question that the money was subject to tax, the sole issue on trial (so far as I am aware) was INTENT or lack of it to conceal a tax liability.   It is NOT fraud to fail to declare income if you believe that it is not subject to tax. 

Had an accountant done the same then the verdict more likely would have been guilty as an accountant should have the knowledge that a non-professional lacks about tax liabilities.

 

=== THE COMMENTS THAT FOLLOW ARE ABOUT TAX FRAUD CASES IN GENERAL,

ANY SIMILARITY TO THE ABOVE CASE IS UNINTENTIONAL AND INFER NOTHING ABOUT THE ABOVE CASE ===

Defence lawyers and defendents to this end in other cases over the years have (sometimes successfully, some times not) portrayed defendants as being reliant on others, not understanding anything, being individuals of weak mind, being poor businessmen, had a hard childhood, not being well-educated, sufferred ill-health, or when it comes to sentencing sufferring from serious physical disability or illness - or what I call..

the "my client is an idiot" or "my client has a disability" defence.

I do wonder if the juries in previous not guilty cases (not the current one) had been composed of accountants would the result would have been different.  There has been a school of thought for some years now that fraud trials need highly educated people as a jury members. 

 

ShirleyM's picture

So ....    2 thanks

ShirleyM | | Permalink

... will there now be a spate of 'it wasn't commission, it was a loan, guv!' defences????

Just goes to show though. You can write like a 2 yr old, be totally disorganised, be naive enough to think a Monaco account in a dogs name won't raise concerns, and still earn millions as a football manager. I wonder who negotiated his pay deal?

Euan MacLennan's picture

So ...

Euan MacLennan | | Permalink

... might you be an Arsenal supporter, ShirleyM?

memyself-eye's picture

don't be too "ruff" on HMRC

memyself-eye | | Permalink

It was a dog's breakfast of a case gave me the Collie wobbles  - they collared the wrong people cos they were barking up the wrong tree. Border line case in my view.... 

Got to Dash-hund for the bus now

(sorry)

johnjenkins's picture

Now if

johnjenkins | | Permalink

HR had have been able to tex etc. NOW might have been able to hack into his phone. Would that evidence have been allowed in court? Let's face it how many celebs play "cat and mouse" with reporters .

On a serious note I have husband and wife clients who do not wish the other to know what their earnings are and have bank accounts in maiden names (wives). If I won £40M on the lottery I would certainly think of having an account in a different name.

My view is that the audit trail of the money going into the "Rosie47" account would have been very easy to follow.

johnjenkins's picture

So HR's next job could be

johnjenkins | | Permalink

a German Shepherd or HMRC might employ him as a retriever. Biit canine this.

what a king waste of money    2 thanks

asking | | Permalink

An £8m case and the Revenue come out with a statement saying they have “no regrets” over bringing the case regardless of the outcome

It must be just me that looks at that statement and wonders what planet some people in this country live on?

 

HMRC failure

Sherlock | | Permalink

Every few years HMRC like to make a public example of a well-known celebrity. In this instance they have failed signally in the trials of Harry Redknapp and Milan Mandaric, which cost the public purse £8 miilion.

Instead of retiring in a blaze of glory, Dave Hartnett will leave with egg on his face.

Hopefully, the HMRC officials involved in the cases will not receive substantial bonuses.

johnjenkins's picture

Apart from the

johnjenkins | | Permalink

Spurs away kit has anybody had naughty e-mails yet? If so please send them on to me (privately).

Egg on face

frankdavid | | Permalink

Sherlock wrote:

 Dave Hartnett will leave with egg on his face.

.

 

This guy was drowning in egg even before this case, still, an index linked pension and possibly a sinecure at Price KMPG Young Loittes &Co will be enough to help him clean up

dunhamsjd's picture

Wider message

dunhamsjd | | Permalink

HMRC & the CPS have tried to make it into a wider message about paying the correct amounts of tax, though it would have more resonance had they actually secured a conviction. We also now know that Mandaric & Peter Storrie we found not gulity back in October 2011 on evasion charges relating to two transfers at Portsmouth FC, so they end up with a 2-0 defeat! 

If my cat opens an offshore

Stalytax | | Permalink

If my cat opens an offshore account, will he need a pet passport?

 

 

davidwinch's picture

Criminal law    1 thanks

davidwinch | | Permalink

I well remember decades ago when I first started out as an auditor in short trousers I was told by my olders and betters how documentary evidence was more reliable than oral evidence.

That may well be so in the world of auditing - but not in the world of criminal law.

In the courtroom oral evidence of the individual in the witness box is considered much more reliable and persuasive than a truck load of documents.

And often the key to a conviction (or acquittal) is not the facts of WHAT happened but the evidence of WHY it happened.

So (as already mentioned by another poster) the key to this case was, 'WHY did M pay monies to R (and WHY did R receive those monies)?'

If the jury could not be sure that the payment was made and received with a dishonest intention to cheat the taxman then the verdict has to be 'not guilty'.

Presumably the prosecution thought that the circumstantial evidence surrounding the change in R's contract in relation to the transfer of Crouch, the overseas bank account in a dog's name, and the conversation with the journalist would be sufficient to satisfy the jury that the payment was remuneration which was intentionally concealed from HMRC - but it appears that it was not.

David

I would like to see the law reversed    1 thanks

ringi | | Permalink

Personally I would like to see the law reversed so that any payment to/from or usage of offshore (or hidden) bank accounts are assumed to be dishonest until proven otherwise.

davidwinch's picture

Someone once said . . .

davidwinch | | Permalink

Someone once said to me that a person has an overseas bank account for one of three reasons: (1) he is using it for proceeds of crime, (2) he is using it to evade taxes, or (3) he is using it to conceal something from his wife.

That was a somewhat jaundiced view, I suggest!

In reality there would be grave difficulties with creating a legal presumption that conduct of a particular type is dishonest - it rather impinges upon the presumption of innocence found in the European Convention on Human Rights and the constitutions of a number of countries.

David

The law on offensive weapons assumes guilt

ringi | | Permalink

The law on offensive weapons - outlaws the possession in any public place of an offensive weapon "without lawful authority or reasonable excuse".

So the defendant has to prove he/her had a reasonable excuse, e.g. a carpentry going to a customer’s site can have a knife without problems.

So why  can't the same be done for overseas bank account in countries that don’t exchange information with our government?

Also giving a copy of all statements to the HMRC could be made to exempt someone from the legal presumption that conduct is dishonest.

(Note the reasonable excuse for offensive weapon only has to be proven by the defendant on balance of probability)

 

davidwinch wrote:

Someone once said to me that a person has an overseas bank account for one of three reasons: (1) he is using it for proceeds of crime, (2) he is using it to evade taxes, or (3) he is using it to conceal something from his wife.

That was a somewhat jaundiced view, I suggest!

In reality there would be grave difficulties with creating a legal presumption that conduct of a particular type is dishonest - it rather impinges upon the presumption of innocence found in the European Convention on Human Rights and the constitutions of a number of countries.

David

Locutus's picture

Did R give any coherent explanation ...

Locutus | | Permalink

... as to why he chose to fly all the way to Monaco to open a bank account in the dog's name and then later have the £189k loan / gift or whatever it was (but certainly NOT bonus!) transferred to that account, rather than just have it put in his, say, local HSBC account?

I think 99 times out of a hundred the only reason offshore accounts are opened is to either legally or illegally hide something.  I would add, obviously legally in the case of R as he was not found guilty of any crime.

davidwinch's picture

Offensive weapons

davidwinch | | Permalink

Fair point - there have been some harsh decisions on offensive weapons.  I remember reading about a chap who lent a carving knife to someone (it might have been his mother).  When she gave it back to him he put it in his car to take it home.  On arriving home he forgot about it, so it remained in his car.  A couple of weeks later he was stopped in the car by police.  The officer spotted the knife.  The chap was charged with possession of an offensive weapon without auhority or reasonable excuse.  He was convicted - it being held that he had no reasonable excuse for the knife having remained in the car for some time after it was returned to him.

But that is an offence which does not require a mental element (there was no need for him to have any INTENTION of wrongdoing).  Offences of dishonesty do require a mental element - what lawyers call 'mens rea' - so they are rather different.

David

Vindictive Prosecution

markfd | | Permalink

So £8m spent chasing a tiny amount of money based on tittle tattle to some newspaper rag who denies being tipped off by the only people who should have known.  How this fits into RIPA one can only wonder.  Thoroughly dishonest conduct by the state.

AnnaKournikovasKnickers's picture

It's official    3 thanks

AnnaKournikovas... | | Permalink

Indirect taxes are now voluntary in the UK

johnjenkins's picture

I think what everybody

johnjenkins | | Permalink

is forgetting is that HMRC weren't bothered about getting a conviction (did anyone see Mr Crispin's little warning). This was an £8m advertising exercise for those that might be thinking of "taking the plunge".

@stalytax - not if he travelled Siamese airlines.

@rnigi - by your logic we can carry a bomb around without interference or are there degrees of offensive weapons?.

This is (thank goodness) still a free society, and if someone wants to hide money then that is their perogative. If HMRC can't prove that the money is dodgy then it's probably not, or they should get investigators that can do their job properly.

Johnjenkins.....I couldn't agree more....

justsotax | | Permalink

a crazy waste of money....

Deterent effect    1 thanks

ThornyIssues | | Permalink

johnjenkins wrote:

is forgetting is that HMRC weren't bothered about getting a conviction (did anyone see Mr Crispin's little warning). This was an £8m advertising exercise for those that might be thinking of "taking the plunge".

@stalytax - not if he travelled Siamese airlines.

@rnigi - by your logic we can carry a bomb around without interference or are there degrees of offensive weapons?.

This is (thank goodness) still a free society, and if someone wants to hide money then that is their perogative. If HMRC can't prove that the money is dodgy then it's probably not, or they should get investigators that can do their job properly.

 

Indeed. HMRC have always defended the right to urniate money up the wall to protect their perceived "deterent effect". Just look at the cost of losing over 1800 IR35 tribunals at the hands of the PCG. Add that to the £8m and you get quite a few schools, hosptials, teacher, nurses ......

It is time the the people took the politicians to task.

deterrent ? or not ?

The Black Knight | | Permalink

I do wonder who this £8M investment deters ? Even if there had been a conviction.

Other football managers/players, wealthy bankers etc etc ...who can afford the same legal team ?

The ordinary businessman...who only skims a £1000 at a time...that HMRC are not interested in.

As far as I can see HMRC have advertised that :

1. They exist,

2. Will pursue you if it sells newspapers.(perhaps only if it sells newspapers)

3. Are complete buffoons

4. Are highly trained in PR statements making a rainy day sunny !

5.Are not very cost effective

6. Will perhaps drag out the time and cost so everyone involved gets a fair share of £8M per transaction, or was that a 2 for the price of one offer.

Still it was only the cost of 6 civil service pensions so the number is quite small.

Rosie47 ? what ? reminds me of when SC60 subbies were called Goofy, Donald and Mickey at least it made it interesting ! LOL

Does any one know/understand why a criminal action was pursued rather than a civil...other than his name was Harry ? perhaps they should have had Frank Bruno there as well ! (to say "well done Harry" that is.)

Brewsters millions ?

The Black Knight | | Permalink

£900M to spend now its only £892M....well on budget ! or do they need to fit a few more in before April ?

offensive weapons

The Black Knight | | Permalink

davidwinch wrote:

Fair point - there have been some harsh decisions on offensive weapons.  I remember reading about a chap who lent a carving knife to someone (it might have been his mother).  When she gave it back to him he put it in his car to take it home.  On arriving home he forgot about it, so it remained in his car.  A couple of weeks later he was stopped in the car by police.  The officer spotted the knife.  The chap was charged with possession of an offensive weapon without auhority or reasonable excuse.  He was convicted - it being held that he had no reasonable excuse for the knife having remained in the car for some time after it was returned to him.

But that is an offence which does not require a mental element (there was no need for him to have any INTENTION of wrongdoing).  Offences of dishonesty do require a mental element - what lawyers call 'mens rea' - so they are rather different.

David

A lorry driver I once knew had a Knife stuck in the dash board, because it supported a Sooty glove puppet.

That was used in road rage incidents. It was often found that a driver that had got out of his car to present himself violently,

was soon calmed down after having a chat with Sooty.

A legal precedent?    1 thanks

Stalytax | | Permalink

Obviously Mr R was entirely innocent, because the jury found him so.

However, if, say, Contractor C  were to pay Subcontractor S £2,000 per month via an offshore account, could one now argue that this was a long term investment in S' business (or S' dog's business), and not actually a payment meant to avoid tax?

Good luck with that....

 

 

 

johnjenkins's picture

Ah Stalytax

johnjenkins | | Permalink

it's not where the payment is going to it's where it's come from is the important thing. So in your scenario (I take it that the £2K is an investment and not payment for work done) Contractor C's books would show money going out as an investment. If however the money was coming out of Contractor C's business account and claimed in C's accounts as Subcontractor costs, then clearly that is not an investment. So either the payment to R was an investment, in which case HMRC need their backsides kicking, or their investigators ain't up to it.

By the way tax avoidance is legal it's tax evasion that's not.

offshore trust and loan account    1 thanks

The Black Knight | | Permalink

We are missing that money was held in trust offshore by Rosie the Dawg......47 must be the 47th account ? LOL

johnjenkins's picture

Perhaps

johnjenkins | | Permalink

the "dog whisperer" might find any more secrets.

What is worse..

Roland St Clere... | | Permalink

Is that Chris Martin of HMR & C  Prosecution Division had the nerve to say on the steps of the Court that whilst he respected the views of the Jury, which was nice of him, people should come and talk to HMR & C before HMR & C spoke to them.

Martin should be fired for that statement alone!

How much is he being paid? If the £8 million is is rumoured to have cost  us the tax payers was taken out of his fat salary and even fatter pension I'd feel better.

These people have no shame.

Its about time these people paid for their mistakes and arrogance with their jobs and pension pots.

peterlashmar's picture

Harry Redknapp    1 thanks

peterlashmar | | Permalink

I always like to look at the past for persuasive arguments on current events.  I remember some years ago that Norman Tebbitt said after some IRA chaps had been found not guilty in, I think Birmngham, that;

just because a Court found them innocent does not mean that they didn't do it.

Quite so Norman.

 

Harry's now famous "slush fund" bank account "Rosie 47" was, apparently named after his dog, Rosie, and "47" is Harry's year of birth. Need to keep these complicated codes to secret bank accounts simple enough for a football manager to remember. It was much simpler just having cash in briefcases.

This has provided an enormous amount of humorous entertainment for tax practitioners - not something our profession normally benefits from .

Peter J Lashmar

Lashmars Tax Accountants

tel   01590-688838

e     peter@lashmars.co.uk

 

Sour grapes

cwatkin | | Permalink

I agree with Roland St Clere that Chris Martin's public utterings were wholly inappropriate and that he should have kept his mouth shut and accepted defeat gracefully instead of making such an arrogant statement.

Where the payment came from    1 thanks

Dave Investigator | | Permalink

Where the payment came from did not form part of the allegation. One of the actual charges was:

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).

The allegation states that the payment was made by Mandaric therefore comments on this thread about the money trail appear irrelevant.  The whole point of the charge appears to be that the payment was made by Mandaric in order to "conceal" the payment as being one of emoluments.

In any other employer/employee relationship a charge arises from the employment regardless of the payer (earnings) unless it can be proven that the payment was made in a personal capacity (a gift). In this particular case the Jury agreed with the defence that it was not from the employment.  There is a history of case law on this subject with one or two involving footballers or sportspersons (Shilton etc) and HMRC has always been very protective of employment tax legislation and their legal advisers must have thought they had a prosecutable case.

Until we see a breakdown of the £8m it may relate to the whole investigation of payments in football since 2006 which culminated in this trial.

Rednapp

Brinner | | Permalink

If an employee receives a free holiday from, say, a supplier that is taxable "by reason of their employment." What's the difference? Think we will pay all our staff minimum wage now and then at the end of the year give them a gift to "invest." Ha Ha..........

RJ&Co's picture

As Dave says in the previous

RJ&Co | | Permalink

As Dave says in the previous post, we don't know the details yet, but I think it very unlikely that the country would actually be £8m better off if this case had not been brought.  Its far more likely, I would surmise, that this figure is mainly an allocation of predominantly fixed costs,  that would have been spent anyway,  but just on different matters.   I doubt if the true marginal cost of this case would be a particularly significant amount. 

I would also comment that I agree with the earlier poster that it is strange that cases of this nature are heard and judged by non-specialist judges and jurors. The case shuold have mainly revolved around whether or not the payments into the notorious Rosie account were derived from Redknapp's employment, which if that were the case, would have made the payments taxable.  But in fact  the case appears to have been ultimately judged on whether or not Redknapp deliberately concealed the payments, whether or not they were actually subject to tax.   In this case,  the jury's decision is that Redknapp did not deliberately or knowingly fail to declare the payments as being taxable income.  Does this therefore leave the question that despite the acquittal,  on the basis of not being guilty of deliberate fraud,  that Redknapp might yet end up paying tax on the payments,  as being taxable but innocently (as against fraudulently)  not declared?   Or does the judgement in itself now preclude that result?   My own legal knowledge does not run that far, but other readers of this correspondence will know better.  (David W, what do you think?) 

My own guess is that this is a one stop shop, and the payments are now considered outside the scope of tax for whatever reason.  But  I wonder what might have happened if HMRC had said earlier "OK, we accept that you did not fraudulently fail to declare the payments,  but we still believe they are taxable,  so pay us the tax and a bit of interest and penalty, and thats the end of it"  Or maybe they did, in fact, do exactly that?

Richard Joseph

£8m was lost from day 1

markfd | | Permalink

Whether or not the payments (despite not being actually made by the employer) were subject to tax could have been established quickly and for a fraction of the cost at the tax tribunal.

This case, such as others (Kevin Maxwell being arrested at 6 am on TV?) was doomed (whatever the outcome) from the time the police decided to tip the media off and launch a dawn raid on Redknapp and others, most of whom have not even been prosecuted let alone convicted.  From that point on the police had decided they were guilty and, presumably for reasons of self-aggrandisement, or perhaps to influence a subsequent trial, wanted to do it in a blaze of publicity.

The objection to spending the £8m for me is more the attitude, very prevalent at HMRC, that it's ok to use unlimited amounts of taxpayers money attacking any chosen individual, whether a rational and sober consideration of the facts would justify it, or as here, not.

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