Luiz Felipe Scolari is the subject of a criminal investigation in Portugal, authorities said Wednesday, bringing an unwelcome distraction for the Brazil coach as his country prepares to host the World Cup.
Officials wouldn't say what the investigation is about. In Portugal, ongoing investigations fall under the country's judicial secrecy law.
The Portuguese attorney general's office said in an email to The Associated Press that the Department for Criminal Investigation and Prosecution has opened an inquiry into Scolari, but it provided no further details.
Unconfirmed reports in Brazil and the Netherlands say Scolari is suspected of failing to declare millions of dollars in income, but he has denied any wrongdoing.
"I have correctly filed all my tax returns. In all the countries where I've worked, I've always declared my income," Scolari said in a statement sent to the AP in Sao Paulo late Tuesday. "If anything is wrong, it's not my fault. I hope justice gets to the bottom of the facts."
Officials at the Portuguese Football Federation, which employed Scolari as national team coach from 2003-08, did not immediately reply to a request for comment.
FIFA had no comment on the investigation. FIFA's code of ethics can be applied to conduct "that damages the integrity and reputation of football and in particular to illegal, immoral and unethical behavior."
Sanctions for breaching the code range from a warning to a ban from any football-related activity.
If the Portuguese authorities decide to file charges based on what they find, Scolari would have to answer in a Portuguese court.
Tax evasion concerning large amounts of money carries a prison sentence of up to eight years in Portugal, though courts commonly prefer imposing heavy fines.
Scolari, who is Brazilian, led his country's national team to the World Cup title in 2002. He will again coach the Brazilian team at this year's World Cup.
Scolari was Portugal's most successful coach. He guided the Portuguese to the final of the 2004 European Championship and to the semifinals of the 2006 World Cup. Along the way, he gave Cristiano Ronaldo his national team debut and made him captain.
To help pay the salary of a World Cup-winning coach — and to prevent him from being poached by other clubs and countries which offered him contracts, including England — the Portuguese federation signed multimillion-dollar sponsorship deals, including with Nike and two Portuguese banks. Scolari, whose salary in Portugal was never made public, appeared in advertising campaigns.
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 78 billion euro ($107 billion) bailout in 2011 after high debts pushed it to the brink of bankruptcy.
In neighbouring Spain, where authorities have also targeted tax evaders, officials have brought tax fraud charges against Lionel Messi and his club, Barcelona.