This case of fraud is a scandal within a scandal and says a great deal about personal arrogance as well as how the world views status. Fraud super-stardom and ethics, another example of fraud due to self-absorption.
Although Portuguese soccer superstar Cristiano Ronaldo is an international sports star, he is as well known by tens of millions of soccer aficionados in the U.S. as he is in Europe, much in the same way LeBron is known in Portugal!
Two Year Sentence
“Ronaldo” as he is called, was just handed a two-year suspended sentence after pleading to tax fraud in Spain. The fine levied against him is nearly $22 million. Initially, the prosecution wanted him to serve jail time in prison. Apparently, under Spanish law, that as a first-time offender there is discretion to have his sentence suspended.
Ronaldo, who plays for a team called Juventus, an Italian soccer club, is one of the world’s richest athletes. He is ranked third in 2018 in terms of wealth behind U.S. boxer Floyd Mayweather and Argentine soccer player Lionel Messi. In just 2018, he was paid $108 million through salary, licensing and endorsements. He also has a lifetime contract (I’ll let this sink in) with Nike for $1 billion. He is such a phenomenal talent that his legs are insured for $144 million!
Before signing onto Juventus, he played for Real Madrid, a well-known team out of Madrid, Spain. During his time with Real Madrid, he did not pay taxes on $16 million in salary and endorsements. However, Rolando could not have acted alone; he created a tax shelter with the help of financial advisors to hide his earnings.
Ronaldo – Fraud Super-Stardom and Ethics
There are at least two levels to this fraud. A first level is a man of immense wealth and talent and those closest to him who had no ethical core. Of his wealth, he saw fit to hide tax payments on $16 million by creating an illegal tax shelter. He thought he had an opportunity to take the money either through his own arrogant behavior or advisors who knew better but thought they could get away with it. It is not at all unusual for those close to who or what they perceive as greatness to make big promises and sacrifice their ethics in order to create schemes and scams.
He had a need to not pay taxes. His vast wealth was not enough for him. Perhaps he was even convinced that “he was Rolando” and that he was above paying taxes. This is where he and his advisors rationalized the fraud away. It is certainly not the first time an athlete felt above the laws, we need only look at Pete Rose, Alex Rodriguez or Barry Bonds to sense that. In this particular fraud, the financial advisors, in a position to advise him against fraud were instead complicit.
What does this say about “us?”
Though it is difficult to speculate, if a business person, publicly-traded company or private entity were to create a phony shell company and try to “hide-away” $16 million in order to avoid paying taxes, it is doubtful that the prosecution would be so lenient. In writing and giving keynote presentations on the topic of fraud, most cases of this magnitude would carry some prison time. The fact that it occurred in Madrid, Spain and not New York or Los Angeles is hardly relevant; there are strict tax laws in play in Europe.
The next issue is Nike, with their immense revenues and social justice positions. When Rolando was put through the wringer of this scandal, Nike did not so much as ruffle their feathers. They were able to put this behind them as were the millions of Rolando fans who buy hundreds of millions of dollars of Rolando merchandise each year. Their justification for turning a blind-eye was obvious. Rolando is worth a lot more as an endorser than painted as a man who paid a huge tax debt to society. Social justice aside, “Rolando sells.”
Finally, as to fans, I well remember newspaper accounts of men such as Ray Rice, Ryan Lochte, Michael Phelps and Michael Vick getting standing ovations even while under the scrutiny of the law. We are all too quick to celebrate unethical behavior if they win for us. The celebrating is over while fraud, super-stardom and ethics live on scandalously.
