HMRC football fraud investigation: Arrests made in France as situation ongoing

An Anglo-French investigation into suspected tax fraud in football has seen several men arrested in dawn raids at Newcastle United, West Ham and France.

Officers from HM Revenue and Customs (HMRC) also visited Premier League leaders Chelsea on Wednesday morning but no items were seized or arrests made.

And according to local reports, French officials have arrested four football agents, with Marseille’s transfer dealings understood to be under investigation.

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Newcastle’s managing director Lee Charnley is so far the only confirmed arrest but Press Association Sport understands he has already been released without charge. It also believed there were no arrests made at West Ham.

The dramatic series of events, which appear to have taken everybody by surprise, started with reports of police raids at Newcastle’s St James’ Park and training ground and West Ham’s London Stadium.

Soon after, a spokesperson for HMRC confirmed that its officers, not police, had “arrested several men working within the professional football industry for a suspected £5million income tax and National Insurance fraud”.

The co-ordinated raids, across the UK and France, involved 180 officers, with investigators searching premises in the north east and south east of England and seizing computers, mobile phones and paperwork.

The spokesperson continued: “The French authorities are assisting the UK investigation, have made arrests and several locations have been searched in France.

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“This criminal investigation sends a clear message that, whoever you are, if you commit tax fraud you can expect to face the consequences.”

A short statement from West Ham later confirmed their offices at the former Olympic stadium were raided but said the Premier League side was “cooperating fully” with the investigation.

West Ham are currently 14th in the Premier League table, seven points above the relegation zone, after an eventful first season in their new home.

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A spokesman for Chelsea said: “In connection with its wider investigation, HMRC has requested certain information which the club will provide.”

There is no suggestion of any wrongdoing on the Stamford Bridge club’s part and Marseille, sixth in Ligue 1, have not replied to a PA Sport request for comment.

Newcastle were the last of the English clubs to make a statement, waiting until the evening to confirm a “member of its staff has this morning been assisting HMRC with their inquiries”.

The club did not confirm it was Charnley who was detained but PA Sport understands this to be the case.

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The 39-year-old became Newcastle’s managing director three years ago, having quietly risen through the ranks at a club that has experienced considerable upheaval over the years.

Like his boss, club owner Mike Ashley, Charnley rarely, if ever, speaks to the media but has been credited for keeping manager Rafael Benitez at the club despite last season’s relegation from the Premier League.

That disappointment looked like it was behind the club on Monday when Benitez’s men sealed promotion with a 4-1 win over Preston but today’s shock news will alarm fans once more.

Andy Wood, a director at Enterprise Tax Consultants, believes HMRC’s aggressive tactics reveal just how keen the authorities are to make examples of those suspected of tax evasion.

Speaking to PA Sport, Wood said: “In my opinion, HMRC is being very bold in describing this as fraud from the outset, as that is a criminal offence and potentially carries severe penalties for individuals whom it can prove have been guilty of such activity.

“However, the Revenue has not been shy of late in making clear its desire to tackle high-profile figures and companies whom it believes are avoiding or evading tax, partly because of the deterrent effect.

“In football, that has been certainly the case following HMRC’s clamping down on the use of employee benefit trusts of the sort which were at the heart of Rangers’ liquidation in 2012 and the recent hearing in the Supreme Court.

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“As well as HMRC getting tougher with those even suspected of impropriety, the investigation involving Newcastle and West Ham provides yet more evidence of how its international reach in trying to bring tax evaders to book is continually being increased by co-operation with foreign tax authorities.”

Jason Collins, a tax expert with international law firm Pinsent Masons, believes HMRC is flexing its muscles ahead of the introduction of a new criminal offence which will punish companies that fail to prevent the facilitation of tax evasion.

In a press release, Collins said: “HMRC is stepping hard on the accelerator and all sectors need to be prepared.

“The scale of these raids is dramatic, even for HMRC. Dawn raids are partly undertaken to send a clear message of deterrence. HMRC wants tax evaders and facilitators to be scared.”

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France’s National Financial Office released a statement on Wednesday night, confirming reports of arrests in the country.

It read: “On April 26, 2017 a number of arrests and searches were carried out in France in connection with the execution by the national financial prosecutor (PNF) of a request on July 29, 2016 for mutual assistance from the British judicial authorities.

“Ten searches were carried out all over France and four people were held in custody. Documents were also seized.

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“The investigation is being conducted by Her Majesty’s Revenue and Customs (HMRC). It deals with cases of aggravated tax evasion and the laundering of aggravated tax fraud committed during several transfers of football players between French clubs and clubs playing in the Premier League. The UK authorities suspect hidden payments to certain players, their agents or third parties, allowing them to evade income taxes and social security contributions.

“This judicial operation to combat tax fraud, carried out jointly by the French and British authorities and supervised by two PNF magistrates, took several months to prepare and mobilised 32 investigators.”

Matt Slater, Press Association Chief Sports Reporter