Lionel Messi is having one roller coaster of a month.
On Saturday, the FC Barcelona (“Barca”) soccer star helped boost his team to a 3-1 win over Juventus in the UEFA Champions League final, marking the fifth time that Barca has taken home the league trophy. While Messi didn’t score in that game, he clearly played a pivotal role. He also played a big part in getting Barca to the finals, scoring two of the three goals in Barca’s semi-final tie match against Bayern Munich to make it to the finals. Xavi Hernández, who sat down with UEFA.com after his final Barca match, labeled his teammate “a phenomenon… He’s the best at everything, no matter what he does.”
But all of the accolades and trophies in the world can’t save Messi from pending tax charges. Today, a Spanish court confirmed that Messi and his father, Jorge Horacio Messi, remain under investigation on tax fraud charges and will face trial.
According to the complaint filed in 2013, Messi’s father, Jorge, initiated a scheme using a series of shell companies in tax havens to shield royalties and other licensing income from Spanish income tax. The tax havens, said to be located in Belize and Uruguay, were the ultimate destination for the funds, allegedly funneled through an elaborate maze including the U.K. and Switzerland. The scheme reportedly allowed the pair to avoid paying nearly €4.165 million ($5.5 million U.S.) in tax. You can read the original complaint here (downloads as a pdf – in Spanish).
Messi, who hails from Argentina, made his debut on the world football stage in Barcelona in 2000 at the age of 13. His age is key since the scheme was reportedly hatched in 2005. While Messi was a minor for much of 2005, he turned 18 on June 24, 2005. According to prosecutors, Messi allegedly signed documents related to licensing revenues after that time and in January of 2006, he subsequently ratified documents that were signed on his behalf. The specific years initially targeted by the prosecution were 2006, 2007, 2008 and 2009.
According to El Pais, the years at issue for purposes of trial are 2007, 2008 and 2009 (it has been widely speculated that the investigation would be extended to include 2010, 2011 and 2012 but that hasn’t happened, so far as we know).
Messi has endorsements and licensing agreements with a number of companies, including Adidas and Turkish Airlines. In 2014, nearly a third of his earnings were linked to endorsements with his $65 million take landing him at #45 on Forbes’ Celebrity 100 and #4 on Forbes’ list of the world’s highest paid athletes (trailing boxer Floyd Mayweather, Real Madrid’s Cristiano Ronaldo and NBA superstar LeBron James, at numbers 1, 2 and 3, respectively).
Messi and his father have always denied wrongdoing. Shortly after the charges were made public, Messi claimed that he had no idea that they were coming, telling his fans on his Facebook page:
Comunicamos que “Nos hemos enterado por la prensa de las acciones iniciadas por la fiscalía española. Algo que nos causa sorpresa porque nunca hemos cometido infracción alguna. Siempre hemos atendido todas nuestras obligaciones tributarias siguiendo los consejos de nuestros asesores fiscales, quienes se encargarán de aclarar esta situación.”
In addition to issuing a denial, the message reads, in part, “We have always taken care of all our tax obligations on the advice of our tax advisors.”
After issuing that statement, it was reported that Messi took steps to clear his tax debt, making a “corrective payment” of €5 million ($6.56743 million U.S. at the time). That did not, however, wipe out the criminal charges.
Despite Messi’s defense that he had “never devoted a minute of his life to reading, studying or analyzing,” the judges focused on his ratification of those contracts once he was no longer a minor. Additionally, they noted that Messi’s name is listed as the sole administrator of one of the companies involved in the scheme. And, even if he wasn’t aware of the specific details, the court found that he benefited from the scheme.
That doesn’t mean that Messi has been found guilty. The judges didn’t rule that he was culpable, merely that there is enough evidence to warrant prosecution. Ironically, the state attorney has expressed a lack of interest in moving forward with the case but the Tax Agency – which clearly wants to send a message – is pushing ahead.
Messi has been charged under Article 305 of the Spanish Criminal Code. If convicted, Messi could face a fine of up to €24 million ($31,274,400 US) and up to five years in prison. That would be crushing for the four time FIFA Player of the Year, considered by many to be the best player in the world.
While Messi’s upcoming trial is significant, it’s not the only tax matter on Barca’s mind these days. Last month, the club learned that the Spanish National Court accepted the state prosecutor’s request to move forward with a trial against the club, club president Josep Bartomeu, and former club president Alexandre “Sandro” Rosell. The charges are connected to the signing of the Brazil forward Neymar da Silva Júnior (known simply as Neymar). The total amount of tax at issue is at least €13m ($15 million US) though reports have suggested that the amounts may be more.
Despite the two black eyes, with the UEFA Champions League trophy in hand, Barca is ranked at #2 on Forbes’ list of the World’s Most Valuable Soccer Teams, thought to be worth $3.16 billion.
