news Bad for racing business if Castroneves convicted of tax dodge

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Bad for racing business if Castroneves convicted of tax dodge


2 hours, 53 minutes ago





By Curt Anderson, The Associated Press

MIAMI - It would be "terrible" for Penske Racing and the sport if Helio Castroneves, the popular Indy racer and "Dancing with the Stars" champion, was convicted of tax evasion, a top Penske official testified Friday.
Lawrence Bluth, Penske's general counsel, was asked Friday by prosecutor Matt Axelrod what impact a guilty verdict against the two-time Indianapolis 500 winner might have. Bluth, a prosecution witness, provided earlier testimony that could be damaging to Castroneves, who signed with Penske in late 1999.
"It would be a terrible thing to lose one of the great drivers in the world, and probably our most popular driver," Bluth said.
"Would it be bad for business if Mr. Castroneves were to be convicted?" Axelrod asked.
"It would not be a good thing," Bluth said.
Castroneves, a 33-year-old Brazilian citizen; his sister and manager, Katiucia Castroneves, 35; and Michigan attorney Alan Miller, 71, each face more than six years behind bars if convicted of conspiracy and tax evasion charges involving some US$5.5 million. The trial ended its second week Friday.
Penske has temporarily replaced Castroneves with Australian driver Will Power on its Indy Racing League team pending the outcome of the case. The new racing season begins April 5.
Much of the case revolves around a Panamanian entity called Seven Promotions that prosecutors say was secretly owned by Castroneves - which the driver denies - where $5 million in Penske payments to Castroneves were originally to be deposited. Bluth testified he had no doubt that Castroneves owned Seven Promotions because "that's what Alan Miller told me."
The money never went to Panama and eventually was transferred in 2003 to a Dutch licensing firm, where it remains. But prosecutors and the IRS say Castroneves is still liable for income tax on the entire $5 million because he owned Seven Promotions and Penske was ready to pay it money.
More evidence on that issue came Friday from Miami banker Guido Chipy, who was involved in a 2001 mortgage taken out by Castroneves. In documents provided by Miller, Castroneves is identified as being the sole owner of a company in which the $5 million in Penske money will be deposited.
But Chipy also acknowledged that nearly all the mortgage application information came from Miller and that he had no contact with Castroneves during the process.
"The only thing he did was sign it?" asked Castroneves' lawyer David Garvin.
"That's correct," Chipy said.
Part of Castroneves' defence is that he focused on racing cars and relied on tax professionals and lawyers to handle his business affairs. Castroneves also won TV's "Dancing With The Stars" competition in 2007, but that's not part of his tax trial.