Brazil boss Scolari faces tax fraud inquiry in Portugal

Mr Scolari is currently Brazil's coach but he managed Portugal's national team from 2003 to 2008

A criminal case has been opened in Portugal against Brazil's football coach Luiz Felipe Scolari weeks before Brazil hosts the World Cup.

He has been named as a formal suspect in a tax fraud investigation but he has not been arrested or charged.

Mr Scolari, 65, was Portugal's head coach from 2003 to 2008. The case is thought to be linked to his time there.

In a statement, the Brazilian said he had "always declared my earnings in all the countries I worked in".

"I am absolutely convinced of the correctness of my declarations. If there is something wrong, it is not of my doing," Mr Scolari's statement reads.

Portugal's move will be a unwanted distraction for Brazil's football team as they prepare for the World Cup

The attorney general's office in Portugal confirmed the investigation, which is being carried out by the Central Department for Criminal Investigations and Prosecutions.

Mr Scolari had been named an "arguido" (suspect), a statement said, as part of an investigation into events between 2003 and 2008 that concerned "a possible breach of tax regulations".

Funds

According to Dutch and Portuguese media reports, the investigation focuses on payments of 7.4m euros ($10m; £6m) made to Mr Scolari during his time as Portugal coach.

Dutch daily Het Financieele Dagblad published a document which alleges that Mr Scolari did not declare the income, which is said to stem from image rights.

The newspaper said that Mr Scolari transferred money through companies based in the Bahamas and other tax havens to a bank account in Miami.

Portugal has asked US authorities for assistance in the inquiry and has also sent requests to Britain, the Netherlands and Brazil.

Mr Scolari, who is Brazilian, led his country's national team to the World Cup title in 2002

Mr Scolari said he hoped "justice gets to the bottom of the facts".

He led Brazil to victory in the 2002 World Cup and last week announced his squad for the 2014 World Cup due to start in Brazil on 12 June.

As well as managing Brazil and Portugal, Mr Scolari has also coached in Japan and the Middle East and was boss of Premier League club Chelsea between 2008-09.

Portugal's government has set up special investigative teams and increased penalties in an effort to crack down on tax evasion.

The country needed a bailout of 78bn euros ($107bn/£64bn) in 2011 after high debts pushed it to the brink of bankruptcy.