How cash for refugees vanished into tax havens
Top footballers have been paid using an offshore company in Uruguay to play with Lionel Messi during charity matches, set up in 2012 and 2013 by the Barcelona forward's foundation
Although cash from the matches was destined for Syrian refugee children, 1.5 million USD from these high-profile friendlies evaporated into tax havens
Police in Madrid wanted to open a major international investigation to probe the financial flows from the games
But a Barcelona judge dismissed the case, and some police investigators wondered whether Messi had been “covered from above”
Football Leaks investigation by Rafael Buschmann, Michael Wulzinger, Nicola Naber (Der Spiegel) and Yann Philippin (Mediapart) for EIC Network
This version by The Black Sea
More here on Messi's Charity Foundation Controversy
2015. Madrid. The Spanish police were preparing to launch a major international investigation into alleged tax fraud, targeting the Argentinian striker Lionel Messi, his father and agent Jorge Messi, as well as three of his teammates from FC Barcelona.
The group were under a probe for allegedly receiving undeclared income for participating in friendly games organized in the Americas in 2012 and 2013, under the auspices of the Lionel Messi Foundation for children in need.
But on 14 December 2015, a Barcelona judge ruled that the allegations could not be substantiated.
This decision appears surprising after reading the case report by the Unidad Central Operativa (UCO), an elite police unit of the Guardia Civil in Madrid, which we reveal today.
In this confidential document dated 3 December 2015, obtained by Der Spiegel and analyzed by Mediapart and its partners in the European Investigative Collaborations (EIC) network, the investigators argued that the probe should continue, given “the relevance of the facts under investigation and the seriousness of the crimes likely that have been committed […]”.
The UCO did not find evidence of payments to the Messi clan. But the police have accumulated disturbing elements. The Messi foundation does not seem to have earned money from the operation, but 1.5 million USD from these so-called 'Messi y sus amigos' (Messi and Friends) matches were transferred to offshore accounts in the Caribbean state of Curacao, known as a tax haven, and Hong Kong.
In the conclusion to their report, the police ask the Barcelona judge to launch international rogatory commissions - requests to a foreign court for judicial assistance - in eight different countries.
These were aimed to track the money flows and identify the final beneficiaries of the offshore transfers. The investigators also asked for access to tax records of the four-time Ballon d’Or winner and his foundation since 2011.
The judge refused. Several police officers at the Guardia Civil believe that Lionel Messi was “covered from above” in this case - but they have no evidence.
This police report and other exclusive documents passed to Mediapart and the EIC by Der Spiegel, including from Football Leaks, reinforce concerns around these matches, which backs up reports already published in 2013 by Spanish partner El Mundo.
These documents show that the 'Messi y sus amigos' operation was secretly conducted by an offshore structure called Players Image SA, registered in Uruguay.
But the level of cash from these games for charity is pathetic. The Messi family accepted that Players Image SA would give only three per cent of proceeds from the ‘Messi and Friends’ matches to its foundation.
But it is understood that the same Uruguay company, which earned around seven million USD from contracts connected to the games, generously paid some of the 'Amigos' stars to participate in the charity matches.
On the other hand, the children whom the ticket-buying fans thought they would help have hardly seen any cash. Unicef received only 300,000 USD from the Messi Foundation in 2013, but it is unclear if this money came from the 'Messi y sus amigos' operation.
Contacted by EIC, Rodrigo Messi, elder brother of the player and president of the Leo Messi Foundation in Barcelona (FLM), refused to answer our questions.
“Spanish courts have already dismissed the case of the Messi & Friends matches, ruling that neither Mr. Lionel Messi or the [Foundation] were involved in [organizational] matters and that they had not received payment from those events,” he stated.
The games started in June 2012, when Lionel Messi flew to Cancun (Mexico), Bogota (Colombia) and Miami. There was another tour the following summer in Medellin (Colombia), Lima (Peru) and Chicago.
The advertising posters boasted: 'The Fight of Stars: Messi and his Friends against the Rest of the World.'
The price? 55 USD minimum for a seat in Chicago; 1,200 to 2,500 USD depending on the country for a place with the VIPs, including a shirt signed by the Barça forward.
But it was for a good cause: the profits were destined to fund the Messi Foundation and several local NGOs, with a view to aiding Syrian refugee children and kids with incurable diseases in Argentina.
Messi gathered an impressive bunch of stars on the field: his Barça teammates Pinto, Dani Alves and Mascherano; Neymar and Edinson Cavani; top strikers James Rodríguez and Radamel Falcao, and a slew of old glories from French football: Thierry Henry, Florent Malouda, Didier Drogba and Eric Abidal.
According to our confidential documents, the Uruguay-based company chosen by the foundation to organise matches, Players Image SA, paid for their plane tickets and accommodation, “on terms negotiated with each of them”.
As charity does not exclude comfort, Lionel Messi and his relatives were entitled to a private jet and nights in five-star hotels, funded by ticket sales. But officially, nobody received money.
The Spanish police report points out the “the disastrous organization” of the matches and “the lack of involvement by the organizers”. In Cancun, the stadium was only half full because of the “high ticket prices”.
In Colombia, families with children delayed the match by 90 minutes with a demonstration because they did not have the shirts with a Messi autograph to which they were entitled.
Even worse, some NGOs had not received the promised donations.
The scandal broke out in December 2013 when Spanish daily El Mundo revealed that the Unidad Central Operativa (UCO) opened an investigation into 'Messi & Friends', following a lead from Columbia.
A cartel of Mexican drug traffickers allegedly used the charity operation, without the Messi clan being aware, to launder money through the matches, thanks to the purchase of tickets located at “row 0”, which was a fictitious spread of seats.
The key man in the case is Argentina's Guillermo Marin. The boss of a sports marketing agency in Buenos Aires, Marin is a major business figure in Latin American sports, where he negotiated sponsorship deals for Lionel Messi and other top players. He is close to Jorge Messi, the player's father, who manages the footballer's business and foundation.
Marin is probably most renowned for organising a race in the center of Buenos Aires between 100-metre record-breaking sprinter Usain Bolt and a bus.
Marin won the right to run the 'Messi & Friends' matches from the Leo Messi Foundation, and he subcontracted the organization to local companies. One of these was headed by the Colombian Andres Barco, a man suspected of helping the narcos launder their money through the match held in Bogota.
Thanks to wiretaps, the UCO investigators come across a revealing phone conversation. Two employees of Barco explain that their boss needs to pay “four melons” (a euphemism for four million in cash) to Guillermo Marin to pay players in Bogota.
“It has never been a charity match,” confirmed a witness to the investigators, who says that this payment amounted to five billion Columbian Pesos (2.2 million USD at the time).
A few months later, Andrés Barco told El Mundo and the police that he paid 1.37 million USD to an offshore account in Curaçao, at the request of Guillermo Marin.
Barco added that he “could not know why Messi's representative [Marin] wanted this money”. He said to the UCO investigators that he paid all the expenses of the game (2.2 million dollars, including 100,000 USD for the players' plane tickets) and sent the Money to Marin.
The UCO police report reveals another suspicious payment, this time related to the Medellin match in Columbia. The local organizer transferred, through an American bank, 120,000 USD to an account in Hong Kong.
This account is controlled by a shell company named Roskella Trading registered in the British Virgin Islands, one of the most opaque tax havens on the planet.
Heard as witnesses by the investigators, Lionel Messi, his father and his Barça teammates strongly denied any allegations of wrongdoing. They say they have not been paid at all. The Leo Messi foundation of Argentina gave 300,000 USD to UNICEF in 2013 after the tour. But does this money really come from the charity matches?
It was transferred to Unicef by the Leo Messi Foundation in Argentina. However proceeds from the 'Messi and Friends' matches were destined for the Barcelona-based Leo Messi Foundation, which is a separate legal entity.
An unsigned version of the contract between the Messi Foundation of Barcelona and Guillermo Marin shows that the financial scheme was, from the start, far from charitable.
Marin admitted to the UCO that the contracts signed with the local organizers stated that his company would receive 12.3 million USD. However, Marin’s contract with Messi’s charity states that he has to give back only 300,000 USD (50,000 USD per game) to the foundation, which is less than three per cent of the expected revenue.
It is surprising, to say the least, that the Messi clan accepted a deal so unfavorable to their charity work.
This is not the only anomaly. Officially, the matches were organized by Imagen Deportivo, Marin’s official sports marketing agency in Buenos Aires. Even the police think so.
But, according to the draft contract, the foundation was contracted with the structure controlled by Marin: Players Image SA, registered in Uruguay, a notorious tax haven, nicknamed “the Switzerland of Latin America”.
This is the same company mentioned in the tax fraud case for which Lionel Messi was convicted in 2016. Players Image SA negotiated two of the sponsorship agreements (with Pepsi and Telefonica), whose revenues were concealed in a tax haven by the star and his father.
Why did the intermediary of the Messis need to use such an offshore structure to manage the money from charity matches? To avoid taxes? Hide financial flows? He did not answer questions on these issues when confronted by EIC.
In front of the police in the UCO, Guillermo Marin declared that his company received only seven million USD from the operation, instead of the 12.3 million USD originally planned. He admitted that part of the money was used to pay players, without mentioning names or amounts.
His contract with the foundation states that he was in charge of “recruiting” players. But this did not stop at footballers. He was generous to Fabio Capello, who was acting as a kind of coach for a made-up team.
As we revealed during the Football Leaks, the Italian coach obtained 75,000 USD for three matches, a sum eventually reduced to 50,000 USD because one game was cancelled. Capello’s representatives sent the invoice to the offshore company Players Image SA.
This means that the money paid by more than 1,000 spectators has exclusively been used to pay the former coach of Juventus, AC Milan and England. Is it moral to get so much for a match destined to relieve the suffering of Syrian children?
Capello's lawyer did not answer, just stating that these revenues have been declared to the tax authorities.
Guillermo Marin was ready to spend ridiculous sums to recruit top players, as reveals news magazine Der Spiegel. In the Spring of 2013, Marin's collaborators contacted the agent of Robert Lewandowski.
The Polish striker of Borussia Dortmund had just risen to the rank of world star, after scoring four goals against Real Madrid in the semifinals of the Champions League (4-1).
Guillermo Marin wants him. “Our basic package consists of two business class tickets per player, accommodation in a five-star hotel, and a sum of money,” writes his staff to Lewandowski’s agent.
Marin’s guys present themselves as working for the agency Imagen Deportivo in Buenos Aires, but the draft contracts sent by email were to be signed by Players Image SA, the offshore company in Uruguay.
The initial proposal is 30,000 USD. Lewandowski refuses. Marin's team goes up to 90,000 USD. Then 110,000. And finally 250,000. Yes, 250,000 dollars to play a charity match. To stop the auction, Lewandowski's agent stopped picking up when an Argentinian number appeared on his phone.
Who are the 'Amigos' who hit the jackpot? Mediapart contacted all the players linked to France. In theory, they should have been proud to have done charity work with Lionel Messi.
But they all remained silent.
Edinson Cavani refused to answer. Neymar, Radamel Falcao, Ezequiel Lavezzi, Thierry Henry, Florent Malouda and Eric Abidal did not respond.
The press officer of Didier Drogba, the former Olympique de Marseille and Chelsea striker, “thinks that a donation was made to the foundation of Didier in exchange for his participation in the match.”
After two years of investigation, the Madrid police accumulated many troubling elements. On 3 December 2015, they ask in their final report for international investigators to trace the financial flows through different countries, including the 1.5 million USD transferred to Curacao and Hong Kong.
Because there is a suspicions of tax evasion, the judge looking into the case had to be from Messi's place of residence - which is Catalonia.
Before making her decision, the Barcelona judge who inherited this case wanted to hear from Guillermo Marin. He was the organizer of the matches chosen by Messi and the person at the heart of offshore scheme.
In her conclusion, quoted by Spanish newspaper El Confidencial, the judge states that Marin's “long and detailed” testimony undermined the suspicions of the police.
Marin reiterated that Lionel Messi and his Barça teammates have not been paid. He added that the organization's (real) fiasco and the lack of success of the operation resulted in “economic losses” for his company, given the “high expenses incurred in various participated in the events”.
The businessman admitted that he had paid some players, but only those who were not among the richest (this seems to contradict the strategies used on Lewandowski and Capello detailed above).
The judge concurred with Marin, pointing out that the last match in Los Angeles was canceled due to lack of money. Regarding the Leo Messi Foundation, the magistrate emphasized “that it could not be determined whether [the charity matches] could bring money” and that the project “was lost” for the foundation because of economic difficulties.
The judge concluded that “there is no evidence of tax evasion by Lionel Messi and/or the Leo Messi Foundation”. At this stage of the investigation, this was accurate. But the judge did not want to allow a further probe.
As she refused to order international investigations into cash flows, she made it impossible to know if the millions generated by the 'Messi y sus amigos' were lost for everyone.