As the star players of two of the largest clubs and fiercest rivals in European soccer, Cristiano Ronaldo and Lionel Messi are constantly pitted against one another in arguments all over the world to determine who the greater player is. Ronaldo supporters will point to his sheer power and athleticism, combined with his knack for scoring goals. Messi supporters will counter with the Argentinian’s technical abilities and unmatched eye for the game.

But the two have decided to challenge one another in a new competitive realm. On Tuesday, Ronaldo was called to appear in court on July 31 to testify in a case in which he is accused of evading taxes. The announcement came less than one year after rival Messi was found guilty of three counts of tax fraud by a Barcelona court.

Just as no two players are created equal, no two tax fraud cases are either. In order to settle the debate of who truly is the best player, we need to find out who had the better tax-related scandal. Each case will be analyzed using five different criteria: total taxes missing, the player’s excuse, their alleged reactions to the accusation, the locations where the money was hidden, and the potential prison sentence.

Total Taxes Missing

Earlier this month, the Spanish daily sports newspaper Marca reported that Ronaldo is accused of evading 14.75 million euros ($16 million) in taxes between 2011 and 2014, totaling around 3.7 million euros ($4 million) a year. Of course, that total was not reached in such a nice-and-easy manner. Spanish authorities say that the amount of taxes evaded grew over time, with 1.39 million euros in 2011, 1.66 million euros in 2012, 3.2 million euros in 2013, and 8.5 million euros in 2014.

Messi, on the other hand, was convicted of tax evasion for his unpaid dues between 2007 and 2009. Much like his Champions League campaign with Barcelona this year, Messi’s efforts to keep up with Ronaldo simply were not enough. The Argentinian forward totaled only 4 million euros in unpaid taxes (roughly $5.3 million), according to Forbes. Even on a year-by-year average, he doesn’t come close to Ronaldo, averaging only 1.3 million euros a year.

Winner: Ronaldo. Numbers don’t lie.

Excuses

Jamaican-American reggae fusion singer Shaggy said it best when he simply replied, “it wasn’t me” to admittedly legitimate accusations of adultery back in 2000. Messi decided that this was the best course of action as well.

During his trial, he admitted that he had not read many of the documents that he signed during that time period and claimed that he had no idea how the tax system operated in Spain. This tactic worked at first, as Spanish tax authorities decided to accept the superstar’s reasoning in 2013 and initially only charged Messi’s father. But in 2014, a Spanish prosecutor decided to expand charges to Messi, saying, “even 10-year-old children” know taxes must be paid.

Ronaldo’s defense focused on the technical details of the charges, as well as intent. His legal team argued that the Spanish government is overstepping their bounds by taxing income that he earned abroad. They’ve also said that he paid tax to the Spanish treasury on 20 percent of his total image rights when, in fact, more than 90 percent of these are generated outside Spain. “There is no tax evasion scheme… There has never been any hiding nor any intention to hide anything,” Ronaldo’s representatives said.

Winner: Ronaldo. His legal team basically said, “it’s not his fault he’s so popular.” That’s bold.

Initial Reactions

It seemed like the story of the summer for many. After the accusations against Ronaldo came to light, numerous media outlets–including the BBC–reported that the Portuguese superstar wanted to leave Spain to get away from the legal mess. Naturally, Manchester United, the club where he grew to international fame, was one of the first listed as a likely destination, exciting fans everywhere.

But at the time of the initial accusations against him, it seemed like Messi was keeping calm, cool, and collected. However, it was reported that he also wanted out of Spain to join his former Barcelona manager Pep Guardiola at Manchester City after the 21-month jail sentence was handed down to him and his father.

Winner: Messi. Ronaldo’s tantrum was reported by all major European news outlets. The most reputable source for Messi’s was the Daily Mail.

Where they Stashed the Money

Messi’s money was reportedly embezzled through offshore accounts in the U.K., Switzerland, Uruguay, and Belize. Ronaldo’s only made it to a shell company in the British Virgin Islands.

Winner: Messi. He clearly tried harder.

Prison Sentences

Spain has an unwritten rule that any sentence less than two years does not actually have to be served in prison and can be substituted with probation. Messi made it just under that bar with his 21-month sentence, though at one point it could have been as high as five years along with millions in fines.

Ronaldo’s situation might be a bit more difficult to overcome. The BBC reported that three of the four accusations of tax fraud are considered by prosecutors to be “aggravated,” which means they carry a minimum sentence of two years each, and if all four are met with guilty verdicts, he could face up to seven years. In order to slip under the two-year maximum, Ronaldo would have to admit guilt and pay taxes and fines in advance to get his sentence suspended.

Winner: Messi. Sentenced to less than two years and not actually having to serve them.

The debate over who is the best on the pitch will rage on well after both have retired, but the question of who is better at defrauding the Spanish government of taxes has well been decided.

Overall Winner: Messi 3/5

Gabe Fernandez

Gabe is an editorial intern at Law Street. He is a Peruvian-American Senior at the University of Maryland pursuing a double degree in Multiplatform Journalism and Marketing. In his free time, he can be found photographing concerts, running around the city, and supporting Manchester United. Contact Gabe at Staff@LawStreetMedia.com.

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On Sunday, the International Consortium of Investigative Journalists (ICIJ) published a massive leak of legal documents dubbed the “Panama Papers,” easily surpassing the Pentagon Papers, Snowden’s global surveillance documents, and WikiLeaks’ Cablegate to become the biggest data leak in whistleblower history.

The extensive leak dispensed decades of confidential offshore banking records for the rich and famous, resulting in the financial scrutiny of many high profile world leaders.

Here are some of the key facts you need to know.

What are the Panama Papers?

The “Panama Papers” are a collection of more than 11 million confidential internal documents that were leaked from the prominent Panamanian law firm Mossack Fonseca. The leak, which included 4.8 million emails, 3 million folders, and 2.1 million PDFs, according to the Daily Beast, exposed 40 years worth of shady offshore business dealings from some of the world’s most influential celebrities, public figures, and political power players.

Notable names like Russian President Vladimir Putin, Icelandic Prime Minister Sigmundur Gunnlaugsson, Ukrainian President Petro Poroshenko, FIFA’s Ethics Committee member Juan Pedro Damiani, action movie star Jackie Chan, and Spanish soccer player Lionel Messi all used Mossack Fonesca to hide their money using shell corporations in offshore “tax havens”–and they’re just the tip of the iceberg.

Investigators suspect that Putin was the primary target of the data leak. The large number of the records seemingly confirmed the existence of the hidden money network of the Russian leader’s inner circle, revealing that “as much as $2 billion has been secretly shuffled through banks and shadow companies linked to Putin’s associates.”

How did they get leaked?

The documents were first leaked to Süddeutsche Zeitung reporter Bastian Obermayer by an anonymous whistleblower who contacted him via an encrypted chat in late 2014. Obermayer then enlisted the help of ICIJ to coordinate an intensive investigation into the documents, the findings of which were later shared with over 100 media outlets.

What is a shell corporation?

A shell corporation is a company used to hide assets for an individual with very minimal government oversight. Often times these companies are established in countries or regions known as “tax havens,” where personal and business taxes are very low or even non-existent. That allows individuals to pay significantly less money in taxes than they would in their home countries.

Still don’t get it?  Watch these two Fusion explainers narrated by a pro-wrestler and a porn star to learn more.

Is it illegal?

Moving your money into an offshore bank account as a means to avoid international law enforcement or tax collectors sounds super shady, but technically speaking it isn’t illegal. That being said, often times individuals with shell corporations use these companies to hide away illegally sourced assets. According to CNN, the ICIJ has stated that “the files include people and companies that the U.S. has blacklisted due to drug trafficking and terrorism links.”

What will happen next?

For the most part, the accused have begun responding to the allegations with a mix of denial and silence since news of the data leak broke. Gunnlaugsson has resigned amid protests, and the Kremlin called the leak “a series of fibs” and a smear campaign ahead of legislative elections in September and presidential elections in 2018. Mossack Fonseca also responded by releasing a 4-page statement denying any and all claims of legal wrongdoing. 

Several countries including Britain, France, Australia and Mexico have also vowed to launch investigations into possible tax evasion for their accused citizens. However, the world’s response is still very much in the early stages. As more information inevitably continues to roll out, we may begin to see more world powers’ political dynamics change.

Alexis Evans

Alexis Evans is an Assistant Editor at Law Street and a Buckeye State native. She has a Bachelor’s Degree in Journalism and a minor in Business from Ohio University. Contact Alexis at aevans@LawStreetMedia.com.

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Bitcoin first started making headlines in 2009 and has continued to grow into one of the world’s most well-recognized, thorough, and usable cryptocurrencies. But with multiple legal controversies and the general public’s skepticism when it comes to something as new as “cryptocurrency,” it’s difficult to tell whether Bitcoin has much of a future. Read on to learn more about the currency and its future.

What is Bitcoin?

Bitcoins are widely known as a digital or cryptocurrency. Unlike conventional currencies that are regulated by central authorities in their respective regions (such as the Federal Reserve Bank for the United States Dollar), Bitcoin is border-less and managed by a cryptographically-secured peer-to-peer network. The demand for Bitcoins determines their value in the market, and their supply is determined by complex mathematical algorithms developed by the founder–a person who goes by the pseudonym Satoshi Nakamoto. This supply generation process is called Bitcoin mining. So, Bitcoins are usually created by being “mined” by computers solving a complex string of processing problems, although one can now purchase existing Bitcoins.

Only fifty were created at the time of the cryptocurrency’s genesis and the maximum number of coins that can be issued is locked at 21 million. Just like the lowest value that the United States dollar can be divided into is one-cent pennies, a Bitcoin can at most be divided into eight decimal places. It gained prominence in April 2013 when its value spiked to $266 US Dollars compared to only $22 earlier that  same year. More than 10 million coins had been issued at that point at a total market value of $2 billion.

Courtesy of Idology.com.

Who likes Bitcoins?

Proponents of the cryptocurrency appreciate its purity in terms of supply and demand without any governmental interference. Bitcoins mitigate privacy concerns because they eliminate the need to enter information such as name and address for online transactions. For many tech aficionados, the cryptocurrency provides the thrill of following a new trend in the virtual world. Bitcoins are now being accepted by many platforms like WikiLeaks, restaurants, mobile payment applications, and retail apps that have partnered with major consumer brands like GAP and Sephora.

A federal district court recently ruled that Bitcoin is indeed a currency, given that it can be either used to purchase goods and services directly, or to purchase currency that can in turn be used to purchase goods and services. According to a study conducted by the European Central Bank, Bitcoins do not pose a risk to price instability given that their supply is capped at 21 million coins, and will not negatively affect  the economy as long as the government monitors it to ensure that its not being used for fraudulent purposes.

Who doesn’t like Bitcoins?

Opponents worry that the unregulated and anonymous nature of cryptocurrency lends itself to be used for illegal trade, tax evasion, money laundering, and investment frauds like Ponzi schemes. Dread Pirate Roberts, the owner of Silk Road, an online drug market in the deep web that is now shutdown, blatantly admitted that Bitcoin helped him win the war of drugs against the state.

Opponents also criticize Bitcoin’s algorithmic design for specifically inducing rise and fall in its value. But unlike traditional currencies, Bitcoin is not insured by the government in case it gets devalued enough to cause a major financial crisis in its market. Some claim that Bitcoin is being used more like a stock than a currency and that once the initial hype dies down its value will eventually decrease to nothing because it doesn’t have anything to offer except for its cool factor. Since Bitcoin is primarily digital (though coins are now available), it can be lost forever if a user loses his/her computer or account in which it’s stored.

What’s next for Bitcoin?

Bitcoin’s future is somewhat uncertain. While the cryptocurrency is still growing, there are many concerns that it’s not worth it. Detractors point out things like a possible Ponzi-style scheme involving Bitcoin in North Texas as indicative of the worthlessness of the currency. On the other hand, Bitcoin-based ventures have been growing, such as the development of startups like Coinffeine, which aims to create a new way to exchange Bitcoins. These are just a few examples of the ways in which Bitcoin is slowly breaking its way in into the mainstream, albeit with many setbacks.

Conclusion

Bitcoin. and other similar digital currencies, is just one of many interesting developments that has come about because of the internet. In essence, it’s a pretty revolutionary and fascinating idea, but whether or not it is actually good for the global economy remains to be seen. The potential for the use of Bitcoin as part of illegal activity though, should not stop people from using it for legitimate means. It’s only through incorporating online tools into the mainstream that it will become a genuinely useful and productive innovation.

Resources

Primary 

Bitcoin: Official Site

US District Court: Securities & Exchange Commission v. Trendon T. Shavers  and Bitcoin Savings & Trust

Additional

European Central Bank: Virtual Currency Schemes

Techland: Online Cash Bitcoin Could Challenge Government, Banks

Coindesk: Confirmed: Bloomberg Staff Are Testing a Bitcoin Price Ticker

CIO: In Kenya, Bitcoin :Linked to Popular Mobile Payment System

ParityNews: The Internet Archive Starts Accepting Bitcoin Donations

Webcite: In Bitcoin We Trust: The Berlin District Where Virtual Currency is as Easy as Cash

Readwrite: What’s Bitcoin Worth in the Real World?

Wire: Today’s Bitcoin Shows Why It’s Not Really a Currency

Fox Business: The Consumer Risks of Bitcoins

Slate: My Money is Cooler Than Yours

Washington Post: Imagining a World Without the Dollar

Social Science Research Network: Are Cryptocurrencies ‘Super’ Tax Havens?

The New York Times: Winklevoss Twins Plan First Funds for Bitcoins

Forbes: Goodbye Switzerland, Hello Bitcoins

Treasury Department: Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies

GAO: Virtual Economies and Currencies: Additional IRS Guidance Could Reduce Tax Compliance Risks

Forbes: IRS Takes a Bite Out of Bitcoin

The New York Times: New York and U.S. Open Investigations Into Bitcoins

TechCrunch: New York’s Financial Services Subpoenas Bitcoin Firms To “Root Out Illegal Activity”

Salome Vakharia

Salome Vakharia is a Mumbai native who now calls New York and New Jersey her home. She attended New York School of Law, and she is a founding member of Law Street Media. Contact Salome at staff@LawStreetMedia.com.

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