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Newcastle United is "under investigation over alleged 'extensive' tax evasion on player transfers," according to Rob Davies of the London GUARDIAN. Details of the allegations have emerged as the club "failed in a legal challenge against search warrants" issued to U.K. tax authority HMRC during Operation Loom, which saw dawn raids by HMRC on premises including St. James' Park as part of a £5M ($6.5M) tax investigation "involving Premier League and French clubs." Court papers show HMRC investigators suspect Newcastle, owned by Sports Direct Founder Mike Ashley, of "involvement in an elaborate scheme to evade income tax, VAT and national insurance." The allegations "relate to the club's part in the transfers of players" including Demba Ba, Moussa Sissoko, Papiss Cissé, Sylvain Marveaux and Davide Santon. HMRC said that Newcastle had "'systematically abused the tax system' with the use of 'sham' contracts that disguised the true recipients of agents' fees." HMRC cited Ba's free transfer from West Ham, whose London Stadium was also raided during Operation Loom, as an "example of how the alleged tax scam worked." Court papers referred to a £1.9M ($2.4M) fee paid by Newcastle to Simon Stainrod, an "agent acting on behalf of the club during negotiations to sign the Senegalese player" in '11. The vast majority of that money was then "allegedly 'secretly transferred' via a law firm to companies linked to Ba and unlicensed agents." HMRC Officer Lee Griffiths said that the alleged arrangement was in "breach of FA agents' regulations and happened in the 'full knowledge' of Newcastle" (
GUARDIAN, 10/5).
