Tax evasion trial for Real Madrid coach Carlo Ancelotti opens in Spain

MADRID (AP) — Real Madrid coach Carlo Ancelotti attended the opening of his trial on tax evasion charges in Spain on Wednesday.

The highly successful Italian manager spent two and-a-half hours inside the Madrid-based courthouse before telling reporters “all is well” upon leaving in a car. Ancelotti was dressed in one of his dark blue suits that he wears while coaching games.

Spanish prosecutors have accused Ancelotti of defrauding the state of 1 million euros ($1 million) in 2014 and 2015. State prosecutors are seeking a prison sentence of up to four years and nine months on two counts of tax fraud.

They accused Ancelotti in March 2024 of having used shell companies to hide his true earnings. Prosecutors claimed Ancelotti, for example, used one company that lacked “any real (economic) activity” in the Virgin Islands as part of an alleged scheme.

Ancelotti had denied any wrongdoing before the trial.

He proclaimed his innocence when first accused last year, arguing he was not a fiscal resident of Spain during part of that time. Prosecutors disagree.

“I already paid the fine, the money is with them, and now the lawyers are talking to try to find a solution,” Ancelotti said in March 2024. “Let’s see what the judge says.”

The 65-year-old Ancelotti is one of soccer’s most successful coaches. He has won the Champions League a record five times, three with Madrid and twice with AC Milan, and is the only coach to have won domestic league titles in England, Spain, Italy, Germany and France.

He coached Madrid from 2013-15 before starting his current stint in 2021.

Ancelotti is the latest in a string of major soccer profiles to face a crackdown by Spanish authorities over unpaid taxes, although none have actually been sent to prison so far.

In Spain a judge can suspend a sentence of less than two years for first-time offenders.

Former Madrid coach Jose Mourinho received a one-year suspended sentence after reaching a guilty plea for tax fraud in 2019. Star players Lionel Messi and Cristiano Ronaldo — among others — have also been found guilty of tax fraud in Spain. Similar to Ancelotti, Mourinho, Ronaldo and Messi were also accused of using shell companies outside Spain to hide revenue from image rights.

Many of those accused of fraud reached deals with the tax authorities and accepted guilt to reduce their sentences.

Ronaldo agreed to pay a fine of nearly 19 million euros (then $21.6 million) in 2019, and was handed a two-year suspended sentence that he didn’t have to serve.

Messi and his father were found guilty of defrauding tax authorities of 4.1 million euros (then $4.6 million) but also avoided a jail sentence by paying hefty fines.

Former Madrid player Xabi Alonso was one of the few soccer figures to stand trial and be acquitted of tax evasion charges.

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Real Madrid's head coach Carlo Ancelotti, center, arrives at the National Court in Madrid, Spain, Wednesday, April 2, 2025. (AP Photo/Manu Fernandez)

Real Madrid's head coach Carlo Ancelotti, center, arrives at the National Court in Madrid, Spain, Wednesday, April 2, 2025. (AP Photo/Manu Fernandez)

Real Madrid's head coach Carlo Ancelotti, center, arrives at the National Court in Madrid, Spain, Wednesday, April 2, 2025. (AP Photo/Manu Fernandez)

Real Madrid's head coach Carlo Ancelotti arrives at the National Court in Madrid, Spain, Wednesday, April 2, 2025. (AP Photo/Manu Fernandez)

Real Madrid's head coach Carlo Ancelotti sits before the Spanish Copa del Rey semifinal second leg soccer match between Real Madrid and and Real Sociedad in Madrid, Spain Tuesday, April 1, 2025. (AP Photo/Bernat Armangue)

A federal appeals panel on Thursday reversed a lower court decision that released former Columbia University graduate student Mahmoud Khalil from an immigration jail, bringing the government one step closer to detaining and ultimately deporting the Palestinian activist.

The three-judge panel of the 3rd U.S. Circuit Court of Appeals didn’t decide the key issue in Khalil’s case: whether the Trump administration’s effort to throw Khalil out of the U.S. over his campus activism and criticism of Israel is unconstitutional.

But in its 2-1 decision, the panel ruled a federal judge in New Jersey didn’t have jurisdiction to decide the matter at this time. Federal law requires the case to fully move through the immigration courts first, before Khalil can challenge the decision, they wrote.

“That scheme ensures that petitioners get just one bite at the apple — not zero or two,” the panel wrote. “But it also means that some petitioners, like Khalil, will have to wait to seek relief for allegedly unlawful government conduct.”

The law bars Khalil “from attacking his detention and removal in a habeas petition,” the panel added.

It was not clear whether the government would seek to detain Khalil, a legal permanent resident, again while his legal challenges continue.

Thursday’s decision marked a major win for the Trump administration’s sweeping campaign to detain and deport noncitizens who joined protests against Israel.

In a statement distributed by the American Civil Liberties Union, Khalil said the appeals ruling was “deeply disappointing, but it does not break our resolve.”

He added: “The door may have been opened for potential re-detainment down the line, but it has not closed our commitment to Palestine and to justice and accountability. I will continue to fight, through every legal avenue and with every ounce of determination, until my rights, and the rights of others like me, are fully protected.”

Baher Azmy, one of Khalil's lawyers, said the ruling was “contrary to rulings of other federal courts.” He noted the panel’s finding concerned a “hypertechnical jurisdictional matter,” rather than the legality of the Trump administration’s policy.

“Our legal options are by no means concluded, and we will fight with every available avenue,” he added, saying Khalil would remain free pending the full resolution of all appeals, which could take months or longer.

The ACLU said the Trump administration cannot lawfully re-detain Khalil until the order takes formal effect, which won't happen while he can still immediately appeal.

Khalil's lawyers can request the active judges on the 3rd Circuit hear an appeal, or they can go to the U.S. Supreme Court.

An outspoken leader of the pro-Palestinian movement at Columbia, Khalil was arrested on March 8, 2025. He then spent three months detained in a Louisiana immigration jail, missing the birth of his firstborn.

Federal officials have accused Khalil of leading activities “aligned to Hamas,” though they have not presented evidence to support the claim and have not accused him of criminal conduct. They have also accused Khalil, 30, of failing to disclose information on his green card application.

The government has justified the arrest under a seldom-used statute that allows for the expulsion of noncitizens whose beliefs are deemed to pose a threat to U.S. foreign policy interests.

In June, a federal judge in New Jersey ruled that justification would likely be declared unconstitutional and ordered Khalil released.

President Donald Trump's administration appealed that ruling, arguing the deportation decision should fall to an immigration judge, rather than a federal court.

Khalil has dismissed the allegations as “baseless and ridiculous,” framing his arrest and detention as a “direct consequence of exercising my right to free speech as I advocated for a free Palestine and an end to the genocide in Gaza.”

Judge Arianna Freeman dissented Thursday, writing that her colleagues were holding Khalil to the wrong legal standard. Khalil, she wrote, is raising “now-or-never claims” that can be handled at the district court level. He does not have a final order of removal, which would permit a challenge in an appellate court, she wrote.

Both judges who ruled against Khalil, Thomas Hardiman and Stephanos Bibas, were Republican appointees. President George W. Bush appointed Hardiman to the 3rd Circuit, while Trump appointed Bibas. President Joe Biden, a Democrat, appointed Freeman.

The majority opinion noted Freeman worried the ruling would leave Khalil with no remedy for unconstitutional immigration detention, even if he later can appeal.

“But our legal system routinely forces petitioners — even those with meritorious claims — to wait to raise their arguments, the judges wrote. “To be sure, the immigration judge’s order of removal is not yet final; the Board has not affirmed her ruling and has held the parties’ briefing deadlines in abeyance pending this opinion. But if the Board ultimately affirms, Khalil can get meaningful review.”

The decision comes as an appeals board in the immigration court system weighs a previous order that found Khalil could be deported. His attorneys have argued that the federal order should take precedence.

That judge has suggested Khalil could be deported to Algeria, where he maintains citizenship through a distant relative, or Syria, where he was born in a refugee camp to a Palestinian family.

His attorneys have said he faces mortal danger if forced to return to either country.

Associated Press Writer Larry Neumeister contributed to this story.

FILE - Palestinian activist Mahmoud Khalil holds a news conference outside Federal Court on Tuesday, Oct. 21, 2025 in Philadelphia (AP Photo/Matt Rourke, File)