A Frankfurt tax investigator has told the trial of three former German Football Federation (DFB) officials that a payment made in connection to Germany hosting the 2006 World Cup was probably a "sham transaction."
According to investigators, €6.7 million ($7.2 million) that the DFB transferred to football governing body FIFA in April 2005 was the repayment of a loan from French entrepreneur Robert Louis-Dreyfus and not a contribution to a World Cup gala, which never took place.
It is alleged the late Franz Beckenbauer used the original loan to buy votes in the hosting decision for the 2006 tournament. Theo Zwanziger, Wolfgang Niersbach and Horst R. Schmidt are on trial for tax evasion with regard to the payment and deny the charges.
"According to our findings, the 2006 booking was incorrect. We assumed it was a sham transaction," tax official Lutz Frank told the Frankfurt Regional Court on Monday.
During a search of the DFB headquarters and the private homes of the three defendants in November 2015, evidence was found that led to the conclusion that the former DFB officials were aware of the actual purpose of the €6.7 million payment.
For example, an email found on Schmidt's private computer stated: "...the then OC [Organizing Committee] treasurer Zwanziger came up with the idea of paying a grant for the gala, with the proviso that this loan from Dreyfus would be repaid by FIFA."
Zwanziger, Niersbach and Schmidt are alleged to have unlawfully declared the payment as a business expense in their tax returns for 2006, thereby reducing the tax for the World Cup year by around €13.7 million.
FIFA forwarded the €6.7 million to the late Louis-Dreyfus, a former Adidas chief executive, just one day after receiving it. In 2002, he had transferred a loan totalling 10 million Swiss francs to an account held by Beckenbauer.
This sum later ended up in a company account of the then FIFA vice president, Mohamed bin Hammam, in Qatar.