THE Parramatta Eels have been been hit with one of the most severe punishments ever handed out in Australian rugby league following an investigation into alleged salary cap breaches.
NRL chief executive Todd Greenberg said the integrity unit discovered the Eels have been involved in a "deliberate, co-ordinated and sustained" system of salary cap rorting since 2013.
The punishments include:
- THE loss of 12 competition points
- FIVE officials deregistered
- $1.25 MILLION fine
- PLAYERS forced to leave club
- STRIPPED of its 2016 Auckland Nines pre-season title
A statement from the NRL said the integrity unit has discovered several examples where the club made payments to players that were not reported correctly to NRL officials.
The investigation, which analysed more than 700,000 documents and sources of evidence, also found the Eels were guilty of: "Conspiring with club suppliers to inflate or issue fictitious invoices to raise cash that was then relayed to players".
The Daily Telegraph reported the Eels were found to have been more than $3 million over the salary cap in a recent season.
In a stunning development, Weeks said the investigation found Parramatta is $570,000 over the 2016 cap right now because of illegitimate third-party deals sourced outside salary cap rules.
The Eels will have to move players to rival clubs before they can be considered eligible to compete for competition points this season.
Star playmaker Corey Norman could be forced out of Parramatta because of the salary cap breach.
Norman's manager Paul Sutton has confirmed he fears his off-contract star could be in the firing line when the Eels decide which players they need to offload.
The club is in crisis. $250,000 of the $1.25 million fine will be returned to the club if it implements changes recommended from a Price Waterhouse Cooper governance review.
The club's executive staff and board of directors have been decimated by the NRL's punishment.
Chairman Steve Sharp, CEO John Boulos, Head of football Daniel Anderson, Deputy Chairman Tom Issa, and Director Peter Serrao have all been handed show-cause notices as to why their NRL registration should not be ripped up.
Greenberg said the game was forced to act after exposing the Eels' culture of salary cap cheating.
"We will need to take a stand on behalf of the fans, the club and the game," Greenberg said.
"This would be a tough outcome for many people, particularly the players and fans, but we believe it would be the start of a process to make the Parramatta club the powerhouse it should be.
"Unfortunately, we may have to go through this pain for the long term health of the club and the game."
He said Parramatta has been fined for breaches of the salary cap in five of the past six years.
"As the governing body, we have a responsibility to act in the interests of the game for the long term," he said.
"At times, it gives us no pleasure to have to do so and this is one of those. But we have to take a stand on behalf of the fans, the club and the game."
Greenberg visited Eels headquarters on Tuesday morning to address Parramatta players and staff to inform them of the league's staunch punishment.
It comes after an NRL integrity unit forensic investigation, which into allegations of widespread salary cap breaches and third-party sponsorship agreements sourced outside salary cap rules.
Third-party agreements must be on an arm's length basis to ensure they do not become a way for NRL clubs to use sponsors to undermine the salary cap.
The reported punishment is the heaviest the NRL has handed out since the Melbourne Storm was sensationally stripped of two NRL premierships following an investigation in 2010.
The points deduction makes the Eels the fourth team in the history of the NRL to have points deducted for rorting, following on from Canterbury in 2002, the Warriors in 2006 and Melbourne in 2010.
Parramatta is still in a position to play finals football this season.
Club legend Peter Sterling attempted to find a positive in the disaster, arguing the Eels could still make the finals this season.
"If they won 12 of the remaining 15 games that would be close to the mark that would get them in," Sterling told Today.
"That's the ray of sunshine this morning on what's been a dark day and a dark couple of months."
He said this weekend's representative round also gave the club an opportunity to take stock of its situation and regroup.
THE MOMENTS THAT CRUSHED PARRAMATTA'S 2016 NRL SEASON
May 21, 2015 - Parramatta are fined $525,000 and issued with a suspended four-point penalty for breaching both tiers in the NRL and NYC salary caps.
Eels administrators are told to undergo a governance review if they wish to start the 2016 season on level pegging.
March 2, 2016 - The NRL confirm that Parramatta have avoided the four-point penalty after making the core governance changes recommended by an independent review.
March 9 - Leaked Parramatta board minutes from 2014 emerge, showing that the club reward third-party player sponsors with corporates boxes, according to News Corp Australia.
March 10 - More leaked documents show the Eels reduced club sponsorship values so a subsidiary company could make $27,500 of payments to former player Ben Smith. Allegations were also made that both Semi Radradra and former player Richie Fa'aoso had an apartment provided to them by a real estate agent.
March 11 - The NRL confirms they will reopen their investigation into Parramatta's salary cap.
March 15 - Further reports emerge suggesting Parramatta went in search of almost $600,000 and two cars as part of third-party agreements for their players in January 2014.
March 17 - Todd Greenberg is announced as the NRL's new chief executive, and promises a thorough investigation into the club and third-party deals in the game.
April 5 - Parramatta agree to former chief executive Scott Seward being interviewed by the NRL's investigators.
April 6 - News Corp Australia reports that the Eels owed more than $140,000 to players in 2013, which in some cases were made up by unregistered third-party payments. Parramatta hit back, questioning the relevance of the findings.
April 7 - Reports suggest the Eels made an advance payment of $35,000 to Semi Radradra and guaranteed former captain Tim Mannah $225,000 of third-party payments in 2014.
The Eels respond saying they had NRL clearance to make the Radradra payments, but make no comment regarding Mannah.
April 11 - Fairfax reports that English import Lee Mossop received unregistered extra payments into an overseas bank account as part of a release fee during the 2015 pre-season.
April 27 - Reports emerge that the Eels attempted to set up $75,000 worth of third-party deals with Parramatta council to have three players as ambassadors. The club denies any wrongdoing.
May 1 - Parramatta chairman Steve Sharp hints he will consider legal action against the NRL in response to any potential penalty in a letter to the club's members.
May 3 - The NRL announce Parramatta will lose all 12 competition points they have accrued, their 2016 Auckland Nines title and issues them with a $1 million fine for breaches totalling more than $500,000.
* There is no suggestion of any wrongdoing by the players or their third-party sponsors in any of the stories.
- News.com.au
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