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(Adds comment from police in 10th paragraph.)
Feb. 8 (Bloomberg) -- Tottenham manager Harry Redknapp, the favorite to be next coach of England’s soccer team, was cleared of evading taxes after convincing the jury a Monaco bank account was a gift from a friend.
The 64-year-old was accused of working with Sheffield Wednesday owner Milan Mandaric to avoid taxes on $295,000 by placing the funds in the account named after Redknapp’s late bulldog Rosie when both men worked together at Portsmouth, a club Mandaric owned. Mandaric was also cleared of the two charges after the jury deliberated for five hours. The men embraced when the verdict was delivered, and mouthed “thank you” as the jury filed out.
“It’s been a nightmare,” Redknapp told reporters outside. “It’s been five years. This is a case that never should have come to court.”
Redknapp, who guided to Tottenham to European soccer’s Champions League for the first time last season, is U.K. bookies pick to replace Italian Fabio Capello, who’ll step down after the European Championships in July. Spurs are in third place in the Premier League, seven points off the lead.
The case ends almost six years of scrutiny into Redknapp’s financial affairs. He traveled to Monaco at Mandaric’s request to open the offshore account where prosecutors alleged he received a bonus payment of $145,000 in 2002 as his share of the profits of a player sale and a second one of $150,000 linked to keeping Portsmouth in the Premier League in 2004. The defendants both took the witness stand to insist the payments were unrelated to soccer and were for investments made in U.S. stocks on Redknapp’s behalf by Mandaric.
Mandaric, whose daughter flew to the U.K. to join him from California, said he was “delighted.”
“I never doubted the truth would prevail, nor the fact that the British justice system would come to the right conclusion,” he said.
The jury wasn’t told that Mandaric, 74, and former Portsmouth Chief Executive Officer Peter Storrie were cleared of separate tax evasion charges last year. In that case it was alleged that Mandaric paid cash to former Portsmouth players Amdy Faye and Eyal Berkovic via accounts in the British Virgin Islands and Monaco.
“We have no regrets about pursuing this case because it was vitally important that the facts were put before a jury,” Chris Martin, the assistant director for criminal investigations for the U.K.’s revenue service, said.
The City of London Police said it passed information to the tax agency after conducting a separate probe into soccer corruption. No one has been brought to trial under that investigation, which called Operation Apprentice.
During two days of cross-examination, Redknapp said he lied to a reporter from the now defunct News Corp.-owned tabloid the News of the World about the Monaco account because he “wanted to get him off my back,” telling him it contained a bonus for sale of striker Peter Crouch. He later told police and a Premier League corruption enquiry in 2006 the same thing.
In court, Redknapp said he felt he felt he was “morally” though not “contractually” owed a bonus after claiming 10 percent of the profits from the sale of Crouch. That was the sum he was due as Portsmouth’s director of football, before a new contract as manager reduced the figure to 5 percent following a hike in his base salary.
Redknapp said he had no idea about the second $150,000 payment, and backed up Mandaric’s claim the money was a loan to invest in stocks. The jury asked but was not told why there was no paperwork to account for the investments, which Mandaric told Redknapp were a “disaster.”
News of the World reporter Rob Beasley told the court he’d paid 8,000 pounds ($12,700) to an undisclosed person for information that led to him getting details of the case against Redknapp and Mandaric before they were questioned about it by police.
Attorneys for the defense described the use of the newspaper’s information by prosecutors as “repugnant to all basic instincts of fairness in the criminal justice process.” The newspaper was closed down last year after its reporters were found to have accessed the voicemails of celebrities, politicians and a murdered teenager.
Prosecutor John Black said the February 2009 interview, which took place almost a year before the men were charged, was the “most compelling evidence from the defendant himself about what all this is about.”
Redknapp denied Black’s claims that he was “telling a pack of lies” by offering to repeat his oath on the Bible.
“Everything I have told you is the truth, the whole truth and nothing but the truth, so help me God,” he said as his son, former soccer player Jamie Redknapp, looked on.
The case centered on whether the payments should’ve been taxed because they were from an employer to an employee as part of their professional relationship or a gift from one friend to another as Mandaric and then Redknapp claimed.
--Editor: Christopher Elser, Anthony Aarons
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