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Bayern Munich President Evaded $18.5 Mil in Taxes: Used Money for Gambling

Written by:
Reuters
Published on:
Mar/12/2014
Bayern Munich President Evaded $18.5 Mil in Taxes: Used Money for Gambling

(Reuters) - Bayern Munich president Uli Hoeness stunned a German court on Monday by admitting he had evaded taxes of 18.5 million euros ($26 million) using a secret Swiss bank account - more than five times the amount on a prosecutors' charge sheet.

Once one of Germany’s most admired managers, Hoeness apologised and appealed for leniency at the start of a trial in a case that shocked Germany and prompted other tax dodgers to turn themselves in.

State prosecutor Achim von Engel read the charge sheet in which he was accused of evading 3.5 million euros in taxes - on undeclared income of 33.5 million euros between 2003 and 2009. 

Hoeness, who turned Bayern Munich into a sports and commercial success before his fall from grace, could be sentenced to between five and 10 years in jail if convicted of evading more than 1 million euros in taxes.

"I'm glad that this is all out in the open now," 62-year-old Hoeness, who was wearing a dark suit and smiling nervously, told the court. "I deeply regret my wrongdoing. I'm doing everything I can to put this unhappy chapter behind me."

Hoeness, who as a player won the World Cup with West Germany in 1974 and as manager led Bayern Munich to two European Champions League and many domestic league titles, is hoping the voluntary disclosure will help him avoid jail.

He paid 10 million euros to the tax office in January 2013, and says he voluntarily alerted tax authorities then about his Swiss bank account and undeclared income. What is unclear is whether he informed the tax office about his offence early enough or comprehensively enough to avoid jail.

German legal experts say it appears unlikely he fulfilled those requirements.

About 100 journalists and spectators packed into the courtroom to witness the start of the four-day trial. Outside the courtroom Bayern Munich fans held up posters expressing their support for Hoeness and pleading for leniency.

Hoeness told the court he used his secret account for more than 50,000 speculative trades in financial markets such as foreign exchange and derivatives from 2001 to 2010. He said he lost a million euros between 2003 and 2009.

"It was always clear to me that the account was mainly for gambling," he said. "It was a real kick, pure adrenaline. I lost track of it all. Everything was a real mess in the end."

Hoeness said he was disappointed that the state prosecutors raided his house and arrested him before charging him with tax evasion after his voluntary disclosure in 2013. He said he had received death threats when the public learned of his case.

"The consequences of all this for me and my family have been a disaster," said Hoeness, and he had donated more than five million euros to charity in past years and paid more than 50 million euros in taxes in Germany, he said.

"I'm not a social parasite," he said in response to the criticism that by evading taxes he cheated other taxpayers.

The case against Hoeness, and other celebrities caught or confessing to tax evasion, led thousands to pre-emptively pay back taxes in the hope of avoiding prosecution, and helped change the public's perception of tax evasion as a misdemeanour to it being seen as a serious crime.

Alice Schwarzer, a leading feminist, Chancellor Angela Merkel's party treasurer Helmut Linssen, Berlin's culture minister Andre Schmitz and former top journalist Theo Sommer have been in the public spotlight for tax evasion issues.

The German taxpayers association said that more than 55,000 tax evaders have turned themselves in over the last four years, many in the last year, and paid a total of about 3.5 billion euros in back taxes.

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