Exclusive: Watford fined £4m for submitting forged banking letter in Gino Pozzo's takeover of club
Watford have been fined almost £4 million after admitting supplying falsified financial information to the football authorities. The Premier League club have been punished for submitting a forged banking letter – the existence of which was exclusively revealed by Telegraph Sportin October – when Gino Pozzo became their sole owner. The faked filing, provided as proof Pozzo had enough funds to bankroll Watford, allowed the Italian to take full control of the Hertfordshire club. Fabricated to appear as though it was written by HSBC, one of the world’s largest banks, the letter was submitted to the Football League (now EFL) shortly before the club’s 2014-15 promotion-winning campaign. A copy of the document was obtained by the Telegraph, which it passed on both to HSBC and the police after alerting the EFL, sparking an internal investigation by Watford and a 10-month inquiry by the governing body. The club pleaded guilty to filing the letter and have been fined £3.95m - the largest ever EFL financial penalty - by a disciplinary commission and ordered to pay an additional £350,000 in costs. The fine would have been even larger - £5.75m - but it was cut by £1.8m in mitigation after Watford were deemed to have fully cooperated with an independent investigation and had met their financial commitments in full. Raffaele Riva, who resigned as the club’s executive chairman a week after the Telegraph revealed he had secured the faked letter, was on Thursday night facing separate disciplinary action from the EFL over the affair. The inquiry found no evidence Pozzo himself had any knowledge a forgery had been obtained or submitted on his behalf, despite it allowing him to succeed his father, Giampaolo, as the club’s ultimate beneficial owner in the summer of 2014. The fabricated document stated that the holding company which owns Watford, Hornets Investment Limited, had sufficient financial resources with the bank for it to issue “a cash-backed unsecured bank guarantee up to the amount of £7 million” during the 2014-15 season. The letter was headed HSBC ‘Premier’, an arm of the bank that did not even deal with corporate customers, while a source told the Telegraph Hornets Investment had never been a customer of HSBC. The Pozzo family at Vicarage Road Credit: GETTY IMAGES The faked document was one of two obtained by the Telegraph dated a week apart and worded almost identically. Riva secured the letters from an associate, who, according to information received by the Telegraph, denied any intention for them to be used in any formal filing. A week before resigning, Riva issued a statement in which he said he said he had no knowledge he had been provided with a forgery until informed by the Telegraph. Saying he had not worked with the associate since the end of 2015, he added: “For two years, I had no reason to believe the letter was anything but genuine. “Indeed, since the letter was submitted to the EFL, Hornets Investment Limited have put into the club over three times the amount specified in the proof of funds letter. “It has come as a huge shock to be notified there are doubts over the veracity of the letter.” Watford would not comment in October on precisely who else at the club saw the document before it was submitted, and accepted by the Football League, amid serious questions about exactly what checks took place to validate it. 19 EFL players Premier League clubs could sign Before the fake HSBC letter was filed, Watford submitted a two-year-old document from Credit Suisse – with which Hornets Investment did bank – that was rejected by the league as proof of funds because it was out of date. Gino Pozzo was aware of the knockback, as was the club’s chief executive Scott Duxbury - who succeeded Riva as chairman - although the inquiry found no evidence he or anyone else at the club had any knowledge of the forgery. The inquiry also found no evidence Pozzo did not have sufficient funds to satisfy the league over the change of ownership, with Watford deemed to have obtained no competitive advantage by submitting a falsified document. No evidence was found of other irregularities in Watford’s submissions to the EFL. 19 EFL players Premier League clubs could sign There is no known precedent in professional English football for the filing of forged documents, although Chesterfield were docked nine points in 2001 for financial irregularities, including falsifying gate receipts and giving a player two contracts.