Spanish state prosecutors have accused Real Madrid coach Carlo Ancelotti of alleged tax fraud, claiming he used shell companies to hide parts of his income during his first stint at the club a decade ago.
Prosecutors said in a statement on Wednesday that they were accusing Ancelotti of two counts of tax fraud that would be punishable with four years and nine months in prison.
They accused the Italian coach of having defrauded 1 million euros ($1.7 million) in 2014 and 2015 by only declaring the income he received from Real Madrid, while omitting his income from image rights.
Prosecutors claimed he set up a “confusing” system of shell companies to hide his extra earnings. Ancelotti allegedly used companies “lacking any real activity” based outside Spain “so that neither he nor the mentioned companies had to pay taxes on the large sums earned in Spain or outside our country”, the prosecutors said.
The 64-year-old Ancelotti coached Madrid from 2013 to 2015 before rejoining the club in 2021. He is yet to comment on the accusations.
Ancelotti is one of soccer’s most successful coaches. He is the only coach to have won the Champions League four times — twice with Madrid and twice with AC Milan — and the only coach to have won domestic league titles in England, Spain, Italy, Germany and France.
He is the latest in a string of major soccer figures to face a crackdown by Spanish authorities over unpaid taxes, although none have actually been sent to prison so far.
Former Madrid coach Jose Mourinho received a one-year suspended sentence after pleading guilty to tax fraud in 2019.
Star players Lionel Messi and Cristiano Ronaldo — among others — have also been found guilty of tax fraud in Spain. Similar to Ancelotti, Mourinho, Ronaldo and Messi were also accused of using shell companies outside Spain to hide revenue from image rights.
Ronaldo agreed to pay a fine of nearly 19 million euros in 2019, and was handed a two-year suspended sentence that he didn’t have to serve.
Messi and his father were found guilty of defrauding tax authorities of 4.1 million euros on income made from image rights but also avoided a jail sentence by paying hefty fines.
In Spain, a judge can suspend a sentence of less than two years for first-time offenders.
AP