Tax officials looking into 30 Argentine transfers

Tax officials looking into 30 Argentine transfers

Published Aug. 24, 2012 10:45 p.m. ET

Argentina's tax agency said Friday it was looking into the transfers of about 30 football players as part of a crackdown on tax evasion and money laundering in the country's top two divisions.

Ricardo Echegaray, head of the tax agency known by the Spanish-language acronym AFIP, said the body had also blacklisted 146 player agents from working legally in Argentina. He said 210 agents were registered with AFA, the governing body of Argentine football.

Echegaray did not name the players under suspicion, although two were confirmed earlier in the week: Jonathan Bottinelli of River Plate and Ignacio Piatti of San Lorenzo. AFA has banned both from playing until the transfers are clarified.

''One is either paying taxes, or one is evading them,'' Echegaray said. ''We have to work together for healthy football. The agency is only after one thing - that there is no tax evasion.''


The suspicious transfers are reported to involve some of Argentina's most famous clubs, including Boca Juniors, River Plate, Racing, San Lorenzo and Independiente.

The announcement is the first sign that government rules published earlier this year may be starting to bite. The regulations require AFA and clubs in the top two divisions to report the financial details of transfers, salaries, bonuses and other contracts that have long escaped examination in Argentina.

The crackdown in football is part of a larger effort by Argentina's government to increase tax collection, and to gain the confidence of international financial markets.

Many Argentine clubs are deeply in debt despite the vast sums of money that flow through the country's football industry. The league has long survived by selling off prospects to wealthy European leagues, which has lowered the quality of play and reduced the league's attractiveness.

The cases of Bottinelli and Piatti illustrate how third parties are used to hide financial deals.

Bottinelli spent last season with San Lorenzo, but AFIP said records show River Plate buying his rights from Chilean club Union San Felipe. Bottinelli has never played in Chile.

Piatti was with Italian club Lecce last season, but San Lorenzo shows him moving from Uruguay club Sud America.

Echegaray listed a dozen small clubs in Chile, Uruguay and Switzerland that have been used as third parties, calling them ''sporting paradises.''

Echegaray said he had sent letters to Julio Grondona, the AFA President, and Joseph Blatter, President of FIFA, the governing body of world football. Grondona is also a senior Vice President of FIFA and one of Blatter's top allies.

''If club directors allow irregular player signings and do not report them to AFIP, they are accepting capital flight and evasion,'' he said in his letter.

Echegaray said it was up to AFA and the clubs to ban players involved in suspicious transfers. He also denied reports that play in the Argentine league would be suspended this weekend.

''There is no reason to suspend this round,'' he said. ''AFIP is not involved in keeping players from playing in the league.''

Earlier this year, an Argentine watchdog agency - the Financial Information Unit - described football as a pit of temptations.

Jose Sbattella, the agency's chief, wrote: ''The international organizations in question maintain that the sport today faces new threats and challenges that come along with commercial activity, exploitation of young players, doping, corruption, racism, illegal betting, violence, money laundering and other activities.''

Money laundering tricks range from basic to complex and sophisticated, the agency warned, including cash, international transfers, shell companies, and the illegal use of non-banking professionals to move money. In particular, selling rights to a player or team's image for undeclared amounts was being increasingly used to evade taxes, the agency said.


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