Ancelotti’s tax trial wraps up in Spain with prosecutors seeking jail

MADRID: Real Madrid coach Carlo Ancelotti´s tax fraud trial wrapped up Thursday in Spain, with public prosecutors seeking he be jailed for four years and nine months for allegedly hiding income from the tax office.

Ancelotti -- who as a coach has won a record five Champions League trophies including three with Real Madrid -- is accused of failing to pay more than one million euros ($1.1 million) due to undeclared earnings from image rights in 2014 and 2015 during his first spell at the club.

Prosecutors allege the 65-year-old set up a “confusing” and “complex” system of shell companies to hide his extra earnings during this time from his image rights and other sources such as real estate, and only reported his salary.

“We consider the acts of fraud, concealment and omission to be proven,” the lead prosector told the High Court of Justice in Madrid in his closing arguments, adding Ancelotti´s claim that he was not aware of what was happening is “difficult” to believe.

He maintained his demand that Ancelotti be jailed for four years and nine months. Under Spain´s legal system, prosecutors can add or drop charges, and alter the penalty they are seeking, depending on the evidence that is presented during a trial.

Ancelotti, 65, denied having intentionally committed tax fraud when he took the stand on Wednesday on the first day of the trial. He told the court that on the advice of the club, a firm was set up when he joined Real Madrid so he could collect 15 percent of his annual salary of six million euros in image rights, and that he never realised that this allowed him to pay less tax.

“At that time, all the players and coaches were doing it that way, it seemed like the right thing to do,” he said, adding former Real coach Jose Mourinho had a similar arrangement. “I never realised that something wasn´t right” until 2018 when the public prosecutor´s office opened a probe into his finances, the Real Madrid coach said.

During his closing arguments on Thursday, Ancelotti´s lawyer, Carlos Zabala, said Real Madrid was responsible for “the contractual nonsense” that caused his client´s problems by seeking to pay part of his salary through image rights to have “a more convenient taxation”.

“Mr.Ancelotti did not fully understand what he was signing,” he added, asking the court to acquit the Real coach. The case could have been settled without going to trial but Spanish tax authorities wanted to submit Ancelotti to a “public humiliation”, Zabala said.

Previous cases involving footballers have resulted in suspended sentences, often via an out-of-court settlement. Spain has cracked down in recent years on football stars who have not paid their due. Mourinho received a one-year suspended sentence after pleading guilty to tax fraud in 2019.

Lionel Messi and Cristiano Ronaldo were both found guilty of tax evasion and received prison sentences that were waived for being first-time offenders. Colombian superstar artist Shakira in 2023 agreed a three-year suspended sentence and paid 7.3 million euros in fines to settle a tax fraud case and avoid trial.

Prosecutors had accused the “Hips Don´t Lie” singer of defrauding the Spanish state of 14.5 million euros on income earned between 2012 and 2014, charges Shakira had denied, saying she only moved to Spain full-time in 2015.

She was in a relationship at the time with Barcelona defender Gerard Pique. Ancelotti took over at Real Madrid in 2013, leaving in May 2015, before being appointed by Bayern Munich the following year. The former Italy international midfielder, who as a player won the European Cup twice with AC Milan, later managed Napoli and Everton before returning to Real Madrid in 2021.

Aside from his success in the Champions League, he has won domestic league titles with Madrid and Milan, in England with Chelsea, in Germany with Bayern Munich and in France with Paris Saint-Germain.