KEIR RADNEDGE REPORTS —- For some the ‘trial of the century’ is taking place in South Africa. For others that label will switch continents today with Uli Hoeness appearing before Landgericht München II accused of massive tax evasion.
Hoeness, the most powerful man in German football as president of world, European and domestic champions Bayern Munich, denies the charges. He says that he owned up as soon as he realised his illicit handling of revenues in a Swiss bank account.
Some German legal experts have speculated that the sums involved may be too high for voluntary disclosure to save him from a prison sentence.
This is indeed “the game of his life” as some newspapers and magazines have predictably entitled the coming week. Bizarrely, on Tuesday evening, Bayern attention will swing briefly away to the Allianz Arena and a Champions League return tie against Arsenal, English intruders in a most difficult week.
First whispers of scandal in the offing emerged at the start of last year when a German news magazine, Stern, noted that a senior Bavarian football official faced awkward questions over earnings from share dealing which sat in account 4028BEA at the Zurich private bank Vontobel. These earnings had not been declared to the German authorities.
All such earnings had become criminally vulnerable after the Green Party forced the collapse of a parliamentary bill aimed at creating a short-term moratorium on admission of such accounts.
Subsequently Hoeness issued a statement saying that he had held such an account, that he and his accountants and lawyers had declared it to the taxman in January last year and made a payment of €3.2m for tax due. The trial this week will clarify whether Hoeness acted before formal inquiries had begun.
Either way, tax investigators raided his offices and home, including inquiries into accounts Hoeness used through the family-owned sausage factory.
The seven charges, laid out over 30 pages, allege that ‘Ulrich H’ – as he must be known, formally, under German law – banked “tens of millions of shares and foreign exchange transactions.” Media reports claim the sums, generated between 2003 and 2009, add up to around €30m.
Hoeness has gone public with a ‘confession’ that he had long been addicted to gambling on the stock market. It is believed that he had run up huge debts at one stage and was refinanced with two loans from the late Robert Louis-Dreyfus, a friend and businessman. Louis-Dreyfus had been ceo of Saatchi & Saatchi before becoming boss of Bayern sponsor Adidas between 1994 and 2001.
Free on bail
Louis-Dreyfus cannot answer to the truth. He died of leukaemia in 2009. His widow Margarita (president of French club Marseille and reputedly Russia’s richest woman) has said she knows nothing of any arrangement between the two men.
Hoeness was arrested, charged and freed on bail last spring while Bayern were approaching the climax of the club’s greatest season. Hoeness, offered voluble public support by fans as well as by chief executive Karl-Heinz Rummenigge and honorary president Franz Beckenbauer, remained in the celebratory background.
Bayern’s managing board, which includes major figures in German industry, (including Adidas ceo Herbert Hainer) rejected his offer of resignation on the basis of innocent until proved guilty. In any case, at the stage, it was unclear whether Hoeness would even be brought before a court.
“I am confident of a good solution,” he said in July. He was wrong. Last September the case was accepted by the Munich court and Hoeness, 62, was committed for trial.
The confidential nature of tax law means that media and public may be excluded from the court for some stages though the 49 seats reserved for the media were snapped up within 27 seconds of being offered. The court had received 454 accreditation applications.
Only four days are scheduled in Court Three for the case. The charges will be read on the opening day followed by evidence from three tax inspectors (one of whom is compromised because he is alleged to have helped Hoeness, an old friend, in making his ‘self-declaration).
On Tuesday, the fourth expert witness will give evidence and take the court through the various financial records. The third day has been reserved for pleadings with judgment in case 68 Js 3284/13 due on Thursday morning.
If Hoeness is found liable and sentenced to prison despite being a first-offender, he can maintain his freedom through appeal. If the appeal fails and the jail term is reinstated, he can expect a good-behaviour allocation to a local ‘Freigangerhaus’ (the open prison which is ‘home’ to Gerhard Gribkowsky, the banker convicted of trying to blackmail Formula I boss Bernie Ecclestone).
The judge is Rupert Heindl, a 47-year-old with a reputation as a hard-liner. Back in 1985 a former Bayern president Willi O Hoffmann – nicknamed ‘Champagne Willi’ – was also arraigned for tax evasion. The prosecutor was Otto Heindl, Rudolf’s father.
Hoffmann went to jail for a year.
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