Another FC Barcelona Star Could Face Tax Evasion Charges Despite Paying Up

Superstar-laden FC Barcelona might be among the top teams in the Spanish Liga BBVA this season but the team is making news – again – for a more undesirable reason: tax investigations.

As Lionel Messi awaits trial on tax evasion charges, another Barcelona star may be joining him. Spanish news outlet El Pais has reported that teammate Javier Mascherano will face charges for two counts of tax fraud. It is “inevitable” that the charges will be filed, claims El Pais, despite the fact that Mascherano has already settled his outstanding tax bill by paying €1.5 million ($1.69 million US) in taxes plus €200,000 ($225,860 US) in interest. Mascherano has not, to date, admitted any wrongdoing but reportedly settled with the taxing authorities based on the advice of his lawyers.

Mascherano’s tax woes can be tied to assigning image rights to companies sited in alleged tax havens. Tax authorities claim that he failed to report earnings on those rights for the tax years 2011 and 2012 and possibly later years.

Mascherano moved over to FC Barcelona in August of 2010 after playing three years with Liverpool. In the summer of 2010, tax authorities claim Mascherano incorporated a business called Anadyr Overseas in Madeira (a politically autonomous region of Portugal). According to the allegations, Mascherano sold his image rights to the company and further directed Barcelona to pay the company directly. While Spanish law allows for a percentage of compensation to be paid through a company holding image rights, it’s alleged that Mascherano was trying to avoid paying tax by manipulating his payments.

Mascherano is also accused of funneling income related to his contract with Nike NKE +0.90% through a company he set up in Miami (USA) called Lofer. Mascherano has long been affiliated with Nike – since before he moved to Barcelona – and was one of three Argentinians to wear Nike cleats at the 2014 World Cup (Pablo Zabaleta and Gonzalo Higuaín were the others). Spanish tax authorities allege that tax on Mascherano’s income from the sports giant should have been paid in Spain since Mascherano was a Spanish resident. It is not clear whether Mascherano paid any U.S. tax on that income.

For tax purposes, Spain claims that Mascherano is a Spanish resident. The 31 year old was born in Argentina, like Messi, and plays for the Argentina national team, in addition to FC Barcelona. His Italian heritage means that he also holds an Italian passport.

Mascherano initially signed with Barcelona in 2010 and re-upped his contract in 2014 through 2018. His most recent contract contains a buyout clause worth €100 million ($113 million US).

Initial indications are that if the matter does go to trial, authorities will not be pushing for a significant penalty for Mascherano. In comparison, if convicted, Messi could face a fine of up to €24 million ($31,274,400 US) and up to five years in prison.

Mascherano’s team, FC Barcelona, is dealing with tax woes of its own: earlier this year, 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.

The trend is not liable to stop with Mascherano. In November of 2014, a partner at a high profile law firm in Spain advised that “Right now, four top players at Barça are being investigated.” Among the names dropped at the time? Iniesta, Piqué and yes, Mascherano.

Even with all of its tax woes, Barca is ranked at #2 on Forbes’ list of the World’s Most Valuable Soccer Teams, thought to be worth $3.16 billion.