Dinamo Zagreb officials charged with tax evasion and embezzling transfer profits

Dinamo Zagreb officials charged with tax evasion and embezzling transfer profits
By bne IntelliNews April 26, 2016

Croatia's anti-graft agency USKOK announced on April 26 that anti-corruption police have charged three current and former senior officials from football club Dinamo Zagreb with tax evasion amounting to HRK12.2mn (€1.63mn) and siphoning off profits worth HRK116mn from player transfers.

According to a recent study carried out for the European Parliament by the Rand Europe research institute, Croatia is the third most corrupt country in the EU, after Romania and Bulgaria. The country has seena series of high-profile corruption scandals recently. 

In February, USKOK launched a probe into Zdravko Mamic, the executive director of Dinamo Zagreb, for alleged embezzlement. This was the third investigation to be launched against the most powerful man in Croatian football in the last year. He was suspected of tax fraud, bribery and siphoning funds off from the club, resulting in total losses of at least €27mn for Dinamo.

Apart from Mamic, the investigation targeted his brother Zoran Mamic who is the club’s coach, and his son Mario as well as former Dinamo director and the current top official of the Croatian football federation HNS, Damir Vrbanovic, businessmen Igor Krota and Sandro Stipancic, and one other suspect.

The official statement on April 26 included only the initials of the three officials in question, but Croatian state television confirmed that they were Zdravko Mamic, Zoran Mamic and Vrbanovic.

Zdravko Mamic and the other suspects are believed to have concluded fake contracts between Dinamo and companies from Hong Kong, Switzerland, the UAE, the UK, the US and several Caribbean countries for fictitious brokering services in player transfers.

Moreover, Zdravko Mamic is suspected of concluding contracts that allowed certain players to receive 50% of future transfer fees, which should have been paid entirely to the club, and that this money then ended up in foreign companies.

The Mamic brothers were first arrested in mid-2015 on suspicion of tax evasion, bribery and other offences, which were reported to have cost the football club HRK118mn and the Croatian state HRK12mn.

In November 2015, Mamic was placed in investigative custody after the finance ministry’s tax fraud investigators found that €10.1mn and £500,000 had been siphoned off from the football club through offshore companies since 2004.

Dinamo Zagreb is at the top of the Croatian First Football League (Prva HNL), having won most of the titles since the league was established in 1992. Despite the club’s popularity, Zdravko Mamic is a controversial figure in Croatia, where he has made several violent verbal attacks on journalists and public figures as well as insulting ethnic and sexual minorities.

Croatia was recently rocked by another high-profile scandal when police announced on April 22 that former organised crime department chief Zeljko Dolacki had been arrested for stealing cash, gold and confidential documents from a safe in police headquarters.

According to Freedom House’s Nations in Transit 2016 report, in terms of democracy, Croatia kept its leading position in the Balkans region in 2016, while it had the worst score compared to its EU peers in Central Europe as its corruption score deteriorated.

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