Helio Castroneves’ trial starts
Race car driver and “Dancing with the Stars” winner Helio Castroneves was in court claiming his innocence today. His defense attorney, Roy Black, gave his opening statement, claiming that his client never tried to evade U.S. income taxes and planned to pay the Internal Revenue Service when he received $5 million from a deal made a decade ago.
Black argued that the Brazilian Indy 500 winner doesn’t know about U.S. tax laws and depended on experts to handle his finances. Black said there was no scheme to hide money from the IRS.
“All his taxes were properly done. They were properly paid,” Black told the 12-person federal jury.
The prosecution, however, disagreed. Federal prosecutor Matt Axelrod painted a picture of a willfully fraudulent behavior, going back to 1999 and involving a Panamanian corporation created to dodge taxes. Axelrod accused Castroneves’ business manager-sister, Katiucia, and Michigan sports attorney Alan Miller of playing a role in the fraud.
“When it came time to pay taxes on the millions of dollars that he made, he turned his back. He didn’t pay,” Axelrod said.
The three are charged in a seven-count indictment with tax evasion and conspiracy, which could land each of them behind bars for more than six years. The trial is expected to last up to six weeks.
Black argued that Seven Promotions, a Panamian entity, was formed by Castroneves’ father to promote his son’s early racing career and that the younger Castroneves had no ownership. Axelrod said it was set up to appear that way, and that all three defendants repeatedly lied about the race car driver’s control of the business.
When Castroneves was hired in 1999 to drive for Team Penske, Miller wrote a contract that called for about $5 million to go to Seven Promotions. But then Miller then asked the money to go to a Dutch company called Fintage Licensing B.V.
Black and Miller’s lawyer, Robert Bennett, said that deal was legal, and Castroneves will pay taxes on the money when he gets the money in May.
Axelrod said the deal was a diversion because Miller discovered Penske would withhold 30 percent of $5 million for taxes before transferring the money to Seven Promotions.
Axelrod claims even though Castroneves has not been directly paid the Penske money, he should have paid taxes long ago. The ultimate goal, the prosecutor said, was for Castroneves to leave the U.S. and escape the IRS.
“It was the only way they could achieve their goal of having Helio Castroneves illegally get his money tax-free,” Axelrod said.
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