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German Soccer Icon Accepts Jail Term for Tax Evasion
German Soccer Icon Accepts Jail Term for Tax Evasion
(about 5 hours later)
BERLIN — Uli Hoeness, long one of Germany’s most beloved soccer stars, said Friday that he would resign his post as president of the country’s most storied team, Bayern Munich, and would not appeal his sentence of three and a half years in prison for evading taxes estimated at more than 28 million euros.
BERLIN — When all of his cards were played and Uli Hoeness, a legend of German soccer both on and off the field, faced the prospect of a protracted and high-profile appeal of his conviction on charges of tax evasion, the Bayern Munich president chose to take his punishment.
With his conviction on Thursday, Mr. Hoeness became the most recent prominent catch in the drive in Europe to expose and prosecute tax dodgers. Even amid growing German anxiety over the conflict between Russia and Ukraine, his trial riveted the nation, pitting the appeal of an athletic hero against growing populist anger at the use by the wealthy and powerful of secret Swiss bank accounts and other means of tax avoidance.
In a surprise move that came only hours after his lawyers had revealed his intention to appeal a jail sentence of three and a half years, Hoeness announced Friday that he was quitting as president and chairman of the board of the storied Bayern Munich soccer club and preparing himself to serve time in jail.
Mr. Hoeness overruled his lawyers, who had said Thursday that they would appeal the verdict and sentencing, which sent shock waves through a country that for decades had viewed him as an upstanding sports and business figure.
“After discussing the matter with my family I have decided to accept the judgment passed by Munich District Court II regarding my tax affairs,” Hoeness, 62, wrote in a statement. “This corresponds to my understanding of integrity, decorum and personal responsibility.”
“Following discussions with my family, I have decided to accept the ruling of the Munich court,” Mr. Hoeness said in a personal statement posted on the Bayern Munich website. “I have asked my lawyers not to appeal. That reflects my understanding of decency, deportment and personal responsibility.”
After a four-day trial that absorbed the attention of this soccer-crazed nation, Judge Rupert Heindl ruled on Thursday that the disclosure Hoeness made to the authorities about his tax evasion was incomplete and riddled with errors, and therefore did not meet a necessary requirement of amnesty laws designed to encourage tax dodgers to come clean.
The Hoeness case was the latest in a series of tax evasion prosecutions against prominent people in Germany and is part of a broader trend in which governments across Europe, strapped for tax revenues, are cracking down on avoidance schemes, especially among the wealthy.
Hoeness’s decision on Friday to accept the decision earned him widespread praise, from Chancellor Angela Merkel, to the Bayern Munich board, to the thousands of Bayern fans who have stood by the man they credit with making their team an international powerhouse that appears poised for yet another record season in 2014.
Some 55,000 tax evaders have turned themselves in to the German authorities over the past four years and have paid a total of about €3.5 billion, or about $4.9 billion, in back taxes, according to the German taxpayers’ association, quoted by Reuters.
Merkel, a soccer fan frequently sighted cheering on the German national team and who had lunch with Hoeness the day before he turned himself in to the authorities, “respects the decision Mr. Hoeness took today,” Merkel’s spokesman, Steffen Seibert, told reporters in Berlin.
The number of voluntary disclosures reportedly rose fourfold in 2013 from 2012. Some observers have suggested the increase was in part prompted by the case against Mr. Hoeness.
As abrupt as the about-face by Hoeness appeared, the step seemed in keeping with a man who from 2001 to 2005 began living a double life that only caught up with him when he turned himself over to the authorities in January, amid fears that his millions of unpaid taxes might come to light.
Mr. Hoeness, 62, who grew up as a butcher’s son, joined Bayern, long one of Germany’s best soccer clubs, when he was 18 years old.
For years, Hoeness had cultivated a public persona of generosity and rectitude. Admired as a former national team player who helped West Germany win the World Cup on home soil in 1974, and as a managerial mastermind who helped Bayern Munich rise to unprecedented financial strength, he shared his private wealth from the bratwurst company he inherited from his family.
In eight and a half years as a player, he helped the team win three league titles and three European Cups.
“I tell my players all the time, they can light five candles a day and be thankful for economic security and affection,” Hoeness said last month, after announcing plans to build a home for disadvantaged youth through a foundation he supports financially and helps run. The comment reflected the folksy, conservative tone for which he became known.
In 1974, he was part of the German squad that won the World Cup, but he was essentially knocked out of top competitive soccer when he sustained a grave knee injury in 1975.
Yet behind the scenes, Hoeness played the markets, earning and losing as much as 18 million euros, or $25 million, a day and squirrelled away millions in a secret bank account in Switzerland. Although he was initially charged with withholding 3.5 million euros from the German authorities, that number multiplied as the trial unfolded over four days, first to 18.5 million, then 27.2 million and finally the 28.5 million euros (about $39.5 million) for which he was convicted.
That propelled him into the ranks of managers, where his successful record only helped his reputation. In recent years, he was a TV personality, known for his folksy style.
The German news media wasted little time tallying up what the missed tax income from Hoeness could buy, with speculation ranging from the absurd — 9,487,333 bratwurst sausages at Bayern's stadium — to the serious — 72,792 welfare stipends, or the annual salary for 1,284 state-employed nurses.
Answering a general appeal made to Germans holding secret Swiss bank accounts, Mr. Hoeness informed the authorities in January 2013 that he held an account with the Swiss bank Vontobel and said that it was used for private speculation in financial markets.
“Robbing the state of €28.5 million is a serious crime, and even Hoeness cannot hope to buy his way out of this, even if he regrets his actions,” the Bild newspaper wrote on Friday. “As hard as it is for him and his family, the judge had to send out a clear message to boost taxpayers’ morale.”
The four-day trial opened on Monday with Mr. Hoeness expressing remorse. He apologized for what he termed his “wrongdoing.”
Bayern’s board sought to keep morale high at the club, which eased into the quarterfinals of the Champions League with a 1-1 tie against Arsenal this past week. On Saturday, Bayern faces Bayer Leverkusen, the third-place team in the German league that Bayern comfortably leads.
But his original confession to evading €3.5 million in taxes was swiftly exposed as a small fraction of his dodges.
Hoeness “is very largely responsible for F.C. Bayern München becoming one of the most successful and attractive clubs in the world both in sporting and financial terms,” Herbert Hainer, the chief of Adidas, who was appointed to take over as chairman of Bayern’s board, said in a statement Friday. “We offer him heartfelt thanks and gratitude for this.”
By late Monday, the total had climbed to €18.5 million, and after the second day to €27.2 million. When sentence was passed on Thursday, the amount in question was said by the Munich court to be some €28.5 million.
The defendant bowed his head and stared at the floor when the verdict was delivered, his face turning red, according to reporters in what was described as a tense courtroom. He left without commenting to reporters or fans waiting outside.
State prosecutors, who had asked for a five-year sentence, said that they might take Mr. Hoeness to court again if fresh financial information came to light.
Past German tax scandals have enveloped the tennis champion Boris Becker, who was fined €500,000 and sentenced to two years’ probation in 2002, and Peter Graf, the late father of the tennis star Steffi Graf. Mr. Graf was sentenced in 1997 to three years and nine months in jail for evading the equivalent of €6.3 million. He was released on good behavior after serving half his term.
More recently, in 2009, the former head of Deutsche Post, Klaus Zumwinkel, was sentenced to two years’ probation and paid €1 million in fines.
This year, the drive to expose tax dodgers has caught some more surprising figures, including Alice Schwarzer, Germany’s leading feminist, who, like Mr. Hoeness, confessed to holding a Swiss bank account — back to the 1980s, it emerged — and paid about €200,000 in back taxes.
The former publisher and senior editor of the weekly Die Zeit, Theo Sommer, was sentenced to 19 months in jail — commuted to a probation of three years — and fined €20,000 for dodging €649,000 in taxes.
The source of the millions of euros with which Mr. Hoeness apparently engaged in bets on financial markets has remained unclear.
Back in April last year, as reports implicated the soccer star in multimillion-euro trades, even Chancellor Angela Merkel — an avowed soccer fan — expressed her shock. “Many people in Germany are now disappointed in Uli Hoeness,” her spokesman, Steffen Seibert, said then. “The chancellor is one of those people.”
