‘I never realised something wasn’t right’: Carlo Ancelotti denies €1m tax fraud

The Real Madrid coach, Carlo Ancelotti, who is on trial for allegedly defrauding Spain’s tax office of more than €1m in undeclared earnings from image rights, has told a court he believed his financial affairs were in order and “never thought a fraud could have been committed”.

Prosecutors allege the 65-year-old former Chelsea and Everton manager used shell companies outside Spain to conceal “the real beneficiary of the income from the exploitation of his image rights” in 2014 and 2015. They are seeking a jail term of four years and nine months and a fine of €3.2m.

Giving evidence on Wednesday, the first morning of the two-day trial in Madrid, Ancelotti said he had focused on his salary and had left other financial matters in the hands of his advisers. “I’ve never been bothered about image rights,” he told the court. “Coaches aren’t that important – it’s the players who sell shirts. I was only bothered about getting the six million net for three years and I never realised that something wasn’t right and I didn’t receive any notification that I was under investigation by tax prosecutors.”

The manager said that when Real Madrid had proposed a payment scheme under which 15% of his salary would be paid from his image rights, he had said yes and had referred the matter to his British adviser. “I thought it was quite normal,” he said, adding that all the players and the previous coach had done the same thing.

“I got in touch with my British adviser and I didn’t think any more about it because it all seemed right,” he said. “I never thought a fraud could have been committed. But, given that I’m here, I guess things weren’t done that right.”

Prosecutors allege that, despite his status as a Spanish resident for tax purposes, Ancelotti declared only his personal earnings from the club and omitted the income he received from the sale of his image rights. The prosecutors allege that he failed to pay a total of €1,062,079 in tax on the sale of those rights, which amounted to €1.24m in 2014 and €2.96m the following year.

View image in fullscreen Ancelotti (centre) arrives at court to stand trial. Photograph: Jj Guillen/EPA

Ancelotti, the most successful manager in Champions League history, denies the charges. “I have total confidence in the law and in justice,” he said on Friday. “I’m not worried but I am obviously annoyed if they say that I’ve committed fraud, but, once again, I have total confidence in justice.”

The Italian is the latest high-profile football figure to find himself pursued by Spain’s tax authorities in recent years. In July 2016, Lionel Messi and his father, Jorge, were sentenced to 21 months in prison for evading tax on Lionel’s image rights during his time at Barcelona, with more than €4m owed in back payments. Both were spared jail time because sentences of under two years in Spain do not have to be served, and neither man had a criminal record.

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Six years ago, Cristiano Ronaldo admitted committing tax fraud while playing for Real Madrid and agreed to pay an €18.8m fine after striking a deal with prosecutors and tax authorities in return for a 23-month suspended prison sentence. In February 2019, José Mourinho was given a one-year suspended prison sentence and agreed to pay €2.2m in fines after admitting tax fraud while he was the manager of Real Madrid.

The following year, the Atlético Madrid forward Diego Costa paid a fine of €543,208 after pleading guilty to defrauding the tax authorities of more than €1m by not declaring payments of more than €5.15m from his 2014 move to Chelsea.

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