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SBD Global/September 27, 2013/Finance

Lionel Messi To Face Court After Plea To Drop Tax Evasion Case Fails

Lionel Messi, facing tax evasion charges, is due in court on Friday.
Lionel Messi will appear in court Friday after his lawyer "failed to strike an eleventh-hour deal to get prosecutors to drop a tax evasion case" against him, according to Graham Keeley of the LONDON TIMES. Messi and his father "are to appear in court in Barcelona to face allegations" that they evaded €4.2M($5.6M) in taxes "on the sale of image rights." Messi’s lawyer, Cristobal Martell, "tried to convince prosecutors this week to drop the case" against the player and "to take action only against his father." But prosecutors "refused to accept a deal." A judge must decide at Friday’s hearing "whether to charge both men with criminal tax evasion and proceed to trial or to drop the case." If convicted, Messi could face a fine of up to €21M ($28M) and a one-year suspended sentence (LONDON TIMES, 9/26).

SPAIN'S 'NASTY' REGULATIONS: BLOOMBERG's Staley & Duff reported the case against Messi, who holds dual citizenship in Argentina and Spain, "is part of an aggressive push by Spain, U.K. and other deficit-ridden governments to tackle tax evasion" in Europe’s €19.4B football industry. After decades of "coddling Europe’s most popular -- and politically influential -- sport, authorities are pursuing players and teams that collectively owe billions of euros in unpaid taxes." British accountant Alistair Spence Clarke, who works in Marbella, Spain, said the Messi case "is definitely a statement of Spain today." Clarke added, "Spain has introduced some pretty nasty tax avoidance regulations. It’s really becoming very aggressive." Tax lawyers in Spain "expressed surprise that Messi would be drawn into a criminal court." Spanish attorney Rodrigo Garcia, who represents other players, said that, normally, "the revenue service begins with a civil inquiry and offers the accused an opportunity to settle." Messi "denied any wrongdoing." Messi’s father, Jorge, "placed the blame" on sports agent Rodolfo Schinocca, hired by the family in '05. Jorge Messi said, "Lionel was 15 years at the time; he didn’t have anything to do with this. He is a footballer and that’s it. If there was an error, it was by our financial adviser. He created the company. My mistake was to have trusted the adviser. I’m going to take the blame for that. I had confidence in someone I shouldn’t have had." In an email from Argentina, Schinocca said that "he had nothing to do with Messi’s taxes and was asked instead to help secure sponsorship deals." Schinocca said that "he hasn’t been contacted by prosecutors in the Messi case." Schinocca: "I never employed this structure for any soccer player. It wasn’t my job. I was a commercial partner" (BLOOMBERG, 9/26).
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