Gino Pozzo, son of Udinese owner Giampaolo, denies claims the family evaded tax in Italy and Spain to fund Watford.
It was reported in April 2016 that the family was under investigation for tax evasion, involving their three clubs Udinese, Granada and Watford.
Granada have since been sold by the Pozzos.
Now La Repubblica is reporting that Madrid prosecutor José de la Mata and Udine prosector Antonio De Nicolo are both investigating what is known as ‘The Pozzo System’.
That system is described a Spanish magistrate as “alleged irregularities committed by Gino Pozzo and Enrique Pina Campuzano, as well as by the companies and football clubs connected to them”.
Pina was arrested for alleged tax fraud last month, suspected of money laundering as well as evasion.
La Repubblica claims to have seen papers detailing the links between the three clubs, with revenues from player sales hidden from the tax authorities.
It’s alleged that income generated by selling players ended up in a holding company in Luxembourg called Fifteen Securitisation.
That company, according to the Spanish financial register, hasn’t filed accounts since 2015.
The newspaper then alleges that Fifteen Securitisation is connected to two more holding companies in the tax haven, Gesapar and Kalmuna, which it claims are controlled by Gino Pozzo.
Giampaolo Pozzo owns just 1.56 per cent of Gesapar, with his son owning 0.1 per cent, and the company is run by Swiss trustee Giuseppe Volpi and Jean Faber, a Luxembourger.
This triangle of holding companies, which own businesses in China and have offshore holdings, are claimed by prosecutors to have been draining money from Udinese and Granada, and using it to fund Watford.
The Premier League’s television deal makes it a far more lucrative business prospect than Serie A or La Liga, with Sunderland earning more from TV than Juventus did domestically last season, once exchange rates are factored in.
In their two year investigation, the Guardia di Finanza has cloned evidence from the server at Udinese’s headquarters.
Prosecutors sent 24 rotatory letters to countries such as Spain, England, Luxembourg, Monaco, Switzerland, Ghana, Holland and China to account for €63m which appeared to have gone missing in transfer dealings.
Of that, €40m allegedly ended up going to Watford, with the rest passing to Granada before the Spanish club, in turn, moved it on to the Hornets.
“It’s not true,” Gino Pozzo insisted, speaking to La Repubblica.
“We have survey signed by Deloitte which shows that, during the period of more active collaboration between the clubs, Udinese brought in more than it contributed.”
However, La Repubblica quotes the Guardia di Finanza’s charges as finding “non-existent transactions” between the two clubs for “a taxable value of €16m” which were done “for the sole purpose of justifying the transfer of significant capital from the Italian company to the foreign one”.
The newspaper also notes that former Watford chairman Raffaele Riva, this week spoke to Scotland Yard, over suspicions that some HSBC bank guarantees were falsified.
Spanish prosector De La Mata asked about Fifteen Securitisation, where up to 90 per cent of money exchanged between Granada, Udinese and Watford ended up.
It’s reported that Pina replied: “We have never carried out activities to identify who was behind the fund. I trusted Gino, who was the owner”.
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