Tottenham Hotspur manager Harry Redknapp evaded tax on “substantial payments” made to him offshore by his former employer, the prosecution said as his trial opened on Monday.
Redknapp was paid the “bungs or offshore bonuses” by former Portsmouth chairman Milan Mandaric while he was manager of the club, Southwark Crown Court in London heard.
The 64-year-old, whose success with Tottenham has made him a front-runner to become England’s next manager, is accused of receiving two untaxed payments totaling US$295,000 from Mandaric into a Monaco account.
Redknapp and Mandaric, who is standing trial with him, both deny two counts of cheating the public revenue.
Prosecution lawyer John Black told the jury that “both parties must have known” they were avoiding taxes.
“These payments were a bung or offshore bonus that the parties had absolutely no intention of paying taxes for,” Black said.
The lawyer described Redknapp as a “hard-headed businessman” as the jury of eight men and four women were shown a string of documents and his signature.
Bonuses paid to Redknapp during his time at the club would total up to ￡500,000 (US$780,000) depending on profits the club made on transfers of players, Black added.
“Harry Redknapp was, it goes without saying, no ordinary employee,” Black said.
He had the “greatest capacity to influence the success or failure of his football club,” he added.
The barrister said: “Talented and popular he might have been, the Crown say he was nevertheless a hard-headed businessman, with a financial acumen and pecuniary sense of his influence to his employers.”
Redknapp pored over notes as Black outlined how the manager received player transfer bonuses under a clause in his contract.
The lawyer focused on the purchase of striker Peter Crouch for ￡1.25 million before he was sold for ￡4.5 million, which prompted the first payment into the Monaco account.
Redknapp never declared the account as he was investigated three years later by British tax authorities investigating transfer dealings at his previous club, West Ham United, the court heard.
Tottenham are currently third in the Premier League, making Redknapp one of the few homegrown coaches to enjoy success in England in recent seasons.
When he took over the north London club in 2008, they were languishing near the bottom of the table.
Redknapp managed Portsmouth for two spells, from 2002 to 2004 and then from 2005 to 2008, the year he guided them to victory in the FA Cup.
The club from southeast England is currently in the second-tier Championship.
Mandaric, a 73-year-old Serb, is now chairman of League One side Sheffield Wednesday.