Harry Redknapp tax evasion trial: Prosecution call first witness

Redknapp returns to court as prosecution calls opening witnesses over claims of secret bungs

Prosecutors accusing Tottenham manager Harry Redknapp of taking bungs in an offshore tax dodge call their first witnesses this morning.

Redknapp secretly received transfer 'bungs' worth 189,000 in a Monaco bank account opened up in the name of his pet bulldog, a court heard on Monday.

Day two: Harry Redknapp was followed into court by son Jamie

Day two: Harry Redknapp was followed into court by son Jamie

Back: Milan Mandaric arrives at Southwark Crown Court on Tuesday

Back: Milan Mandaric arrives at Southwark Crown Court on Tuesday

The Tottenham boss – tipped to be the next England manager – is accused of hiding the two 'off-the-record' payments in an offshore tax haven.

Redknapp, 64, flew to the Mediterranean principality to open the account called Rosie 47, a combination of his dog's name and the year of his birth, a jury was told.

Both payments were made in American
dollars by Portsmouth chairman, Milan Mandaric, when
Redknapp worked at the club, the court heard.

Court: Tottenham boss Harry Redknapp - who was wearing glasses - appears in the dock accused of tax evasion

Court: Tottenham boss Harry Redknapp – who was wearing glasses – appears in the dock accused of tax evasion

Facing court: Harry Redknapp, right, enters Southwark Crown Court. His son Jamie, left, who is a pundit and former footballer was in the public gallery to support him

Facing court: Harry Redknapp, right, enters Southwark Crown Court. His son Jamie, left, who is a pundit and former footballer was in the public gallery to support him

But the cash was 'deliberately and
dishonestly' concealed with the prime purpose of avoiding the payment of
tax, the jury was told.

Prosecutor John Black QC told
Southwark Crown Court 'both parties must have known' they were avoiding
taxes. 'These payments were a bung or offshore bonus that the parties
had absolutely no intention of paying taxes for,' he said.

Redknapp, who underwent heart surgery
last year to unblock his arteries, is the most successful English
manager in the modern game. He led Portsmouth to FA Cup success and
Spurs into last season's Uefa Champions' League. Mandaric, 73, is now
chairman of Sheffield Wednesday, and has previously worked at Leicester
City.

Man's best friend: Redknapp with his pet bull dogs Rosie, left, who the account was named after, and Buster

Man's best friend: Redknapp with his pet bull dogs Rosie, left, who the account was named after, and Buster

Mr Black told the court Redknapp was
'no ordinary employee' of Portsmouth and had the 'greatest capacity to
influence the success or failure of his football club'.

He said: 'He is currently enjoying
football success as manager of Tottenham Hotspur. They are currently
riding high and I think today they are placed third in the Premier
League. Even in the early 2000s, it was obvious he was unusually
talented.' But he added: 'Talented and popular he might have been, the
Crown say he was nevertheless a hard-headed businessman, with a
financial acumen and pecuniary sense of his influence to his employers.'

The court heard Redknapp had a series
of lucrative bonuses built into his contract when he was made director
of football at Portsmouth in 2001, including 10 per cent of any profit
made from any players he bought and sold.

Those bonuses could total up to 500,000 depending on profits the club made from transfers.

However, the court heard that in 2002 –
when Redknapp went from being director of football to the club's team
manager – the bonus for trading players was halved to 5 per cent.

Accused: Tottenham Hotspur manager Harry Redknapp arrives at Southwark Crown Court where he faces trial over tax evasion charges

Accused: Tottenham Hotspur manager Harry Redknapp arrives at Southwark Crown Court where he faces trial over tax evasion charges

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The prosecution's case

Plush: Harry Redknapp's 10million home in Sandbanks, Poole, Dorset

Plush: Harry Redknapp's 10million home in Sandbanks, Poole, Dorset

Eight days after Redknapp joined
Portsmouth in June 2001, England striker Peter Crouch was bought from
Queen's Park Rangers for 1.25million.

Crouch stayed at Portsmouth for nine months before being sold to Aston Villa for more than 4million in 2002, the court heard.

The net profit of the sale was
2.3million, but, because of the revised terms of Redknapp's new
contract, he was due only 5 per cent of that, which was 115,473. This
was paid to him via his wages.

But Mr Black said the pair made an
'off-the-record' arrangement to compensate Redknapp for taking a smaller
cut after the deal had gone through.

He added: 'It seemed clear that Mr
Mandaric and Mr Redknapp arranged that Redknapp, in addition to being
paid by the club any sums due to him under the new transfer bonus
clause, would receive sums off the record.

'Such off-the-record sums would remain hidden from the UK tax authorities. That is what the Crown say is exactly what happened.'

Charges: Former Portsmouth owner Milan Mandaric, left, arrives at Southwark Crown Court where he faces charges of tax evasion

Charges: Former Portsmouth owner Milan Mandaric, left, arrives at Southwark Crown Court where he faces charges of tax evasion

The court heard Redknapp waited just
four days after receiving the legal bonus from the Crouch sale before
taking steps to ensure that he would receive 'what he regarded was his
due'.

The court heard how he flew to Monaco
to open the private Rosie 47 HSBC account. The prosecution said there
was no good reason why the account couldn't have been opened in
Redknapp's own name. It is alleged that Mandaric, a Serbian billionaire,
made two payments into the account.

The first charge relates to 93,000
allegedly paid by Mandaric to Redknapp's account between April 1, 2002,
and November 28, 2007, without paying NI contributions or tax. The
second relates to 96,500 allegedly paid by Mandaric to Redknapp between
May 1, 2004, and November 28, 2007, again into the Monaco account
without paying NI contributions or tax.

The jury has not been told why the second payment was made.

But the Monaco bank account eventually
came to light during an inquiry into illicit payments in football led
by Lord Stevens, the former Metropolitan Police commissioner.

Claims: Redknapp and Mandaric were at Portsmouth Football Club in the period the charges relate to. The club play their games at Fratton Park, pictured

Claims: Redknapp and Mandaric were both at Portsmouth Football Club in the period to which the charges relate. The club play at Fratton Park

Tottenham boss: Harry Redknapp on the touchline as his team were beaten 3-2 by fellow title chasers Manchester City at the Etihad Stadium

Tottenham boss: Harry Redknapp on the touchline as his team were beaten 3-2 by fellow title chasers Manchester City at the Etihad Stadium

The results of that investigation,
known as the Quest inquiry, was handed to the Premier League chief
executive, Richard Scudamore, in July 2007.

Redknapp had been investigated by HM
Revenue & Customs officials over his transfer dealings at one of his
previous clubs, West Ham United, the court heard. But he made no
mention of the Monaco account when interviewed in November 2006. This
probe, between January 2004 and October 2006, 'was originally prompted
by concerns over a 300,000 payment' regarding profit made in the
transfer of Rio Ferdinand.

Mr Black said: 'That was the first
time anyone heard of the Monaco bank account.' He added: 'It is
significant, the Crown suggests, that the bank account opened by Mr
Mandaric was located in an offshore tax haven.

'The Crown suggests this was quite
deliberate and was intended to obscure and to render less transparent
the nature of the money payments.'

Redknapp, who lives in Poole, Dorset,
was dressed in a dark blue suit, white shirt and tie. He had arrived in
court with his son Jamie, an ex-player and respected football pundit.

Redknapp senior sat next to Mandaric
behind toughened bulletproof glass in the witness box. He and Mandaric,
of Oadby, Leicestershire, deny two counts of cheating the public
revenue.

The trial continues.

Co-accused: Milan Mandaric, left, with Harry Redknapp in 2005 when the pair were at Portsmouth

Co-accused: Milan Mandaric, left, with Harry Redknapp in 2005 when the pair were at Portsmouth