The 2004–10 Italian football scandal, also known as Caso Plusvalenze, was a football scandal over alleged false accounting at Italian football clubs in the 2000s. The investigation started in 2004, and the last sentencing took place in 2010.
Contents
Backgrounds
In the early 2000s, various Italian football clubs declared bankruptcy as benefactors withdrew financial support. Profiteering had pushed the game into the background and law enforcement investigations found a widespread culture of illegality had emerged. These football clubs included A.C. Fiorentina (2002), Monza (2004), S.S.C. Napoli (2004), Ancona Calcio (2004), Torino Calcio (2005), A.C. Perugia (2005), Como (2005), Reggiana (2005), Salernitana Sport (2005) and A.C. Venezia (2005). In addition, Parma went into administration and was re-founded as Parma Football Club S.p.A. (2004).
Previously, some of these clubs made money by cross-trading players using the football transfer market. This was a system whereby two or more players switched clubs, with or without exchanging money . This practice typically resulted in short-term financial benefit for the club, but in the long term it increased expenditure through 'amortisation,' or the depreciation of players' financial value. In February 2003, a law was passed which allowed clubs to defer amortisation expenses (Italian Law 91/1981, Article 18B), allowing clubs to avoid recapitalisation through negative equity. Despite the law, many clubs continued to practice cross-trading in order to raise the short-term profit required to meet financial criteria for the 2003–04 season. The law was declared unconstitutional in 2005, causing some clubs to recapitalize and remove their amortisation fund on or before 30 June 2007. Thus, the clubs had to overcome yet another capital shortfall, which later created controversy when re-evaluating their brand and mortgaging to the banks.
Other scandals also involved inaccurate dating of profits obtained via the transfer of players. For example, Roma sold their Japanese international midfielder Hidetoshi Nakata for 55 billion lire in July 2001, but the club documented the profit in their accounts for the 2000–01 season, claiming the deal was agreed to before the cut-off of the financial year, 30 June 2001.
Cross-trading deals were prevalent before 2003, when the injustices came to light. Examples include the deals involving Giuseppe Colucci and Alberto Maria Fontana (Roma–Verona, both 12.5 billion lire fee); an exchange that involved Amedeo Mangone, Paolo Poggi and Sergei Gurenko for Diego Fuser, Raffaele Longo and Saliou Lassissi (Roma–Parma, both 65 billion lire transfer fees in total).
Other deals linked to this scandal included those of Matuzalém (Parma–Napoli, both 14 billion lire); Manuele Blasi and Giuseppe Cattivera (Roma–Perugia, both 18 billion lire); Paolo Ginestra and Matteo Bogani (Milan–Inter); Giammarco Frezza and Alessandro Frau (Inter–Roma, both 8.8 billion lire) in 2001; Vratislav Greško and Matías Almeyda (Inter–Parma, both €16M fee); Luigi Sartor and Sebastiano Siviglia (Parma-Roma, both around €9M fee); Francesco Coco and Clarence Seedorf (Milan–Inter, both €29M fee); Davide Bombardini and Franco Brienza (Palermo–Roma, 50% rights both €5.5M fee); Gabriele Paoletti and Luigi Panarelli for Fontana–Frezza (Torino–Roma, 50% rights both €10.5M fee) in 2002; Rubén Maldonado and Gonzalo Martínez in January 2003.
In a broad sense, the scandal was a culmination of the period that the Italian media dubbed doping amministrativo (doping[-like] administration), bilanciopoli (balance sheet scandal), plusvalenze fittizie or plusvalenze fai-da-te (DIY profit). The Bologna president, Giuseppe Gazzoni Frascara, proclaimed his innocence and reported false accounting to the FIGC. Bologna, however, were also involved in cross-trading, such as the remaining 50% rights of Jonatan Binotto (10 billion lire fee) was acquired from Juventus by selling Giacomo Cipriani, Alessandro Gamberini and Alex Pederzoli in 2000 for the same total transfer fee, as well as selling Binotto to Internazionale for Fabio Macellari in 2001.
The trading
As FIGC was unable to prove that the football clubs intended to 'flop' the price of mature footballers, only deals involving youth players were punished.
The investigation
In 2004, Roma and Lazio were investigated for false accounting. Soon followed by Milan and Internazionale.
However, in another line, the liquidator of Como pointed out its failure to Preziosi. The accusation suggested that the owner had transferred the asset of Como to Genoa at an uneconomical price, whilst the liquidator of Fiorentina had found that the date of player profit and cross-trading were wrong in the balance sheet. The failure of Perugia was also under investigation. The fall of Spezia Calcio was also linked to its previous owner Internazionale.
Moreover, a separate charge related to Brunelli's was exposed in 2007. Brunelli claimed the signature on the transfer document was not his and that he knew nothing when transferred from Milan to Internazionale. Brunelli was banned for two months from football, although he was retired at the time . Brunelli's agent was charged and dismissed. Brunelli sued Internazionale for negligence and forcing him to retire. This was also dismissed. Lazio were acquitted in 2007 as well as Juventus. Roma were fined by the court of Rome.
In January 2007, the prosecutor exposed the alleged false account of Crespo (cash-plus player swap) and Domenico Morfeo (failure of Fiorentina) and an ongoing investigation of Parma, as Amauri was signed by Parma from Napoli as a free agent but a massive agent fee was also paid. Amauri did not have EU citizenship and Italian clubs were commonly buying the non-EU registration quota from other clubs.
While the club sold the brand to their subsidiaries and mortgaged them, such as Inter Milan on "Inter Brand", A.C. Milan on "Milan Entertainment", A.S. Roma on "Soccer S.A.S. di Brand Management", "S.S. Lazio Marketing & Communication S.p.A.", the moves was attracted Guardia di Finanza to visit Co.Vi.Soc. of Italian Football Federation to collect information. However, no further action was taken.
Sporting Sentences
The following punishments were given to individuals:
Caso Como–Genoa
Aftermath
Sampdoria denied any wrongdoing in the Kalu–Antonini transfer. Zamparini, the president of Palermo, insisted the fine was heavy, as the cross-trading was under previous ownership (Sensi). The club just chose to defer to amortize the €10 million transfer fee of Franco Brienza (like every other club on flopped signing prior to 2002), instead of write-down €10 million immediately in order to reflect in the 2002–03 financial year.
Failure to recapitalize and balance sheet related scandals still occurred, namely Treviso, S.S.C. Venezia, Gallipoli Acireale, Pergocrema, and board members of the clubs were given heavy fines.
Some research had also stated the effectiveness of indicator by Covisoc to determine the financial health of the football club.