The salary cap breaches by the Melbourne Storm are 80 per cent higher than previously forecast by the NRL, according to an independent report by auditors Deloitte.
John Hartigan, chairman of the league club's owners, News Ltd, said that the breaches between 2006 and 2010 were $3.17 million, as the Herald reported on Tuesday, and the Storm was also forecast to be $1.3 million over the cap next year.
He said there had been a deliberate and well-orchestrated campaign of deception at the club and he confirmed at a media briefing today that the Deloitte report would now be referred to the Victorian Police.
"Is it fraud? That’s something for the police to decide," he said.
Mr Hartigan said the investigations' findings justified the NRL decision to strip the club of its two premierships.
"The investigation has confirmed that, while the penalties are very tough, they are warranted," he said.
"To us the issue is clear - the club engaged in wide-ranging and elaborate cheating and must take its medicine."
Mr Hartigan said there was "some evidence" that senior management worked together "to cover their tracks".
Independent directors removed
All independent directors on the Storm board have now been removed, Mr Hartigan said. They are chairman Rob Moodie, Petra Fawcett, Peter Maher and Jayco caravan king Gerry Ryan.
Stephen Rue was appointed to the board alongside Craig Watt and Frank Stanton, the acting chief executive.
Third-party payments
Hartigan said the main method used to conceal extra payments to players was through third-party payments, from companies including the Unity Foundation and the McManus Group, run by Andrew McManus.
But Mr Hartigan stressed companies might not have been aware they were being used to rort the cap.
The Deloitte report also listed a number of tricks supposedly used by senior management to avoid detection, including creating different invoices to sponsors.
Players involved
Mr Hartigan said 13 players, including seven current squad members, received extra payments.
They were current players Billy Slater, captain Cameron Smith, Greg Inglis, Cooper Cronk, Ryan Hoffman, Anthony Quinn and Brett White and former players Dallas Johnson, Will Chambers, Mick Crocker, Matt Geyer, Steve Turner and Antonio Kaufusi.
Managers named
Mr Hartigan said the investigation identified five Storm managers who were involved in cheating the system, whom he labelled "rats in the ranks".
He named former chief executive Brian Waldron as well as Matt Hanson, Paul Gregory, Peter O'Sullivan (who is now with the Roosters) and Cameron Vale (who is now with AFL club North Melbourne). News Ltd later said that Mr O'Sullivan may not have known about the payments.
"How did this happen? The answer is we had some rats in our ranks," he said.
"A small group of senior managers at the club, orchestrated and concealed the extra payments.
"All up the investigation has identified five managers who were either directly involved or were involved in transactions that resulted in the breaches.
"Hansen and Gregory remain at the club but were suspended from duty soon after April 22. Their futures are a matter for the board. But my position is clear. There is no place for them in our club."
News Ltd up for $14 million
Mr Hartigan said the total cost of the scandal, including loss of income, sponsors and fines would cost News Ltd an estimated $14 million.
Mr Hartigan said he empathised with the Storm fans and players, promising a "new leadership direction" for the club.
He also said News Ltd remained committed to the club.
Mr Hartigan said there was no evidence players knew of the cap rorts, but said no player co-operated with the Deloitte investigation.
He said coach Craig Bellamy, who did talk to investigators, had been cleared over the scandal.
Mr Hartigan said the report might be made available to the NRL, while the Australian Taxation Office had also shown interest in the investigation's outcome.
The NRL is due to release a statement at 2pm.
- with AAP
Earlier, Brad Walter wrote: Melbourne Storm captain Cameron Smith has been cleared of any wrongdoing in the club's salary cap scandal and it is believed that all other Melbourne players are also in the clear following the investigation by News Ltd commissioned auditors Deloitte.
"Thankfully our great captain [Smith], as we all know, has been cleared," Mr Hartigan told a Brisbane newspaper.
Melbourne coach Craig Bellamy had already been cleared and it is understood that no Storm players are implicated in the Deloitte report, which states that the total of the club's salary cap breaches had now ballooned to $3.2 million - almost double the original amount of $1.7 million announced by the NRL on April 22.
The $3.2 million was spread over the past five seasons and the amount of the Storm's breaches increased each year.
The report to News Ltd also estimates the club would be $1.3 million over the salary cap next year unless players are cut.
Smith, who is one of the big four players around whom Storm management plan to rebuild the club next season, had become the face of the scandal after his third-party deal with Fox Sports was revealed as the issue that sparked NRL salary cap auditor Ian Schubert's investigation into the 2009 premiers.
The $100,000 a year deal with Fox Sports was ruled illegal under salary cap rules because the Storm had guaranteed the payments to Smith but did not declare that to the NRL.
He is unlikely to be able to remove that guarantee from his contract next season to help the Storm get under the salary cap but the club can legally include the figure in the $4.2 million ceiling for player payments.
Former Storm chief executive Brian Waldron, whom Hartigan infamously dubbed the "chief rat" in the salary cap scandal, is the person to whom most of the blame for the rorting has been apportioned.
Waldron's replacement Matt Hansen was stood down after confessing his role in the scandal.
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