Taxman first chased Redknapp over £300k Ferdinand payment

Monaco account 'was intended to obscure money trails'

Southwark Crown Court

Harry Redknapp had previously been investigated by the British tax authorities for a £300,000 payment over the transfer of Rio Ferdinand from West Ham United, a court heard yesterday in a dramatic opening day to the Tottenham Hotspur manager's trial on tax evasion charges.

The payment in Ferdinand's transfer to Leeds United in November 2000, when Redknapp was West Ham manager, was the subject of an investigation by tax officials from January 2004 to October 2006, the court heard.

The £18m transfer of Ferdinand was a British record and the disclosure by prosecutors came on the day when Redknapp was accused of taking a $295,000 [£200,000] "bung" which was paid into his secret Monaco bank account over a separate deal for Peter Crouch in 2002.

The Monaco bank account, set up in April 2002, and the £200,000 paid into it was the centrepiece of yesterday's prosecution case against Redknapp. The court heard that during the separate, earlier 22-month investigation into Redknapp's tax affairs, prompted by the Ferdinand payment, the Spurs manager had failed to mention the existence of the Monaco account. Less than 24 hours after his Spurs team were beaten 3-2 in their crucial Premier League clash with Manchester City on Sunday afternoon, Redknapp was at Southwark Crown Court yesterday morning, accompanied by his younger son Jamie, the former and England international, now a Sky Sports pundit, to hear the charges against him.

Redknapp, 64, whose Spurs side are currently third in the Premier League, sat behind glass in the dock of Court Six alongside his former chairman at Portsmouth, Milan Mandaric. Both men are accused of two counts of cheating the public revenue, tax evasion, in a case that Justice Leonard QC said he expected to last for two weeks.

The case centres on two payments of $145,000 [£93,000] and $150,000 [£96,000] – which were transferred to Redknapp's Monaco account in June 2002 and then April 2004 while he was the manager of Portsmouth – by the club's then chairman Mandaric. There was laughter in court when it was revealed that Redknapp had named his Monaco bank account "Rosie47" after his pet dog – now dead – and his year of birth.

A courtroom that was full to capacity with media for most of the day, heard that the payments from Mandaric had been made to an "offshore account" and been "deliberately and dishonestly paid" and "deliberately and dishonestly received by Redknapp" in order to evade the British tax authorities.

Mr Black QC, for the prosecution, said that the payments were a "bung" to make up a shortfall Redknapp believed was his due after the club renegotiated his cut of transfer deals on players moving out of Portsmouth. In this case the payments related to the transfer of Crouch from Portsmouth – in the player's first spell at the club – to Aston Villa in March 2002 for the fee of £4.5m.

Black said: "We say there were many and various explanations given [for the payments] and we say there were increasingly unrealistic attempts to conceal that the payments were a bung, an off-record bonus which the parties had no intention of declaring for tax and never did."

When Redknapp was appointed by Portsmouth in June 2001, he was brought to the club as director of football, the court heard. He had an agreement with Mandaric that he would be paid 10 per cent of profits from all transfer deals on players he brought to the club and sold on.

Redknapp had signed Crouch within days of taking up this position. However, by the time the player was sold to Villa, the terms of Redknapp's contract had changed. He had become manager of the club and his cut of transfer deals had been reduced to 5 per cent.

According to the new terms of the deal, the court heard, Redknapp was paid £115,473 by the club for his part in the Crouch transfer. Black said: "Redknapp did not wait long before taking steps to ensure he would receive what he regarded as his due by way of an offshore payment from the chairman."

In April 2002, four days after his five per cent payment, Redknapp flew to Monaco to open the "Rosie47" account at the HSBC branch of the principality. In February 2008, the court heard that Redknapp closed down the account and transferred a balance of $207,000 [£132,000] to his HSBC account in London.

Black said: "What was sent to tax authorities in the UK about this account? For the best part of four and a half years the short answer is nothing. The existence of the offshore account was not disclosed and the payments not disclosed.

"This is despite the fact that from January 2004 to October 2006, Harry Redknapp had participated in a civil tax investigation by revenue and customs into his affairs. This was prompted by concerns of a substantial £300,000 payment from his former club made by onward sale of another high-profile player ... Rio Ferdinand."

The existence of the bank account was not acknowledged by Redknapp, the court heard, until November 2006. He said: "You have to decide whether there was secrecy or whether there was full and frank disclosure in relation to Mr Mandaric and Mr Redknapp." He added that the purpose of the offshore account was "quite deliberate and intended to obscure the money trails and nature of the payments".

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