Brazilian race car driver and “Dancing With The Stars” champ Helio Castroneves was acquitted today of most charges that he conspired with his sister and lawyer to evade more than $2.3 million in U.S. income taxes.
A Florida federal jury acquitted Castroneves on six counts of tax evasion but was undecided (or “hung”) on one count of conspiracy. The jury returned identical verdicts for his sister Katiucia Castroneves, who is Castroneves’s business manager. Michigan motorsports attorney (who knew there was such a thing as a “motorsports attorney”?!) Alan Miller was acquitted on all counts.
The jury deliberated six days after a six-week trial.
All three faced more than six years in prison if convicted of conspiracy and tax evasion between 1999 and 2004. The case mainly revolved around income from a $2 million sponsorship deal Castroneves had with the Brazilian firm Coimex and his $5 million licensing deal he reached with Penske Racing in late 1999.
Federal prosecutors alleged that the money went to a Panamanian company called Seven Promotions and that the company was a shell corporation set up so Castroneves could avoid U.S. income taxes. The driver’s father testified that he set the company up to promote Castroneves in Brazil and that Castroneves had no ownership interest.
If the company was owned by the younger Castroneves, the IRS maintained that he owed U.S. taxes on the full $5 million from Penske even though he has never actually received the money. The Penske money was invested in a deferred compensation deal with the Dutch firm Fintage Licensing B.V.
Castroneves’s attorney Roy Black told jurors in closing arguments that such deals are common — and perfectly legal — for athletes who have relatively short careers and face injury or worse at any moment. Black also said Castroneves had only a minimal understanding of his financial affairs and relied on professional managers and advisers to assist him in handling his finances.
In addition to the Penske and Coimex funds, Castroneves was charged with claiming improper tax deductions and failing to disclose as income Hugo Boss clothing and airline tickets he received.
An acquittal doesn’t necessarily mean that a jury believed Castroneves to be innocent – only that the jury didn’t feel the prosecutors connected all the dots and proved the charges beyond a reasonable doubt.
