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Jury Begins Deliberations in Castroneves Tax Case

2:59 PM, Apr 11, 2009   |    comments
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MIAMI (AP) -- Jurors began deliberating Friday on tax evasion charges against race car driver Helio Castroneves and two advisers after prosecutors said in closing arguments that the driver enjoyed ample wealth but defrauded the government to get more.

"This case is about people who had everything, but for them, for some reason, everything wasn't enough," Assistant U.S. Attorney Matthew Axelrod told the jury, which is weighing charges that Castroneves, his sister and business manager Katiucia Castroneves, and Michigan attorney Alan Miller conspired to evade millions in taxes.

Jurors deliberated for about 2 1/2 hours before adjourning until Monday morning.

Prosecutors allege that Castroneves and the others tried to conceal his control of a Panamanian shell company, called Seven Promotions, and lied to tax lawyers and accountants about his true income. They say documents and witnesses back up claims that Castroneves knowingly dodged millions in U.S. taxes over a five-year period.

Axelrod disputed previous testimony in which Castroneves' father, Helio Castroneves Sr., said he created the company to promote his son, and it was later controlled by lawyers and businessmen, but never the younger Castroneves. Axelrod said Friday it didn't make sense for the younger Castroneves to send so much money to a company he did not run.

"You don't send millions of dollars to a company you don't own or control," he said.

Castroneves, a Brazilian, has twice won the Indianapolis 500 and gained wider fame after winning the popular television show "Dancing With The Stars" in 2007. If convicted of the conspiracy and tax evasion charges, Castroneves, his sister and Miller could each face more than six years in prison.

Miller's defense attorney, Robert Bennett, said in closing arguments Friday that there was no evidence to show that Miller was part of a conspiracy, and said he wasn't involved in the preparation or filing of income tax returns.

"They have not proven the most fundamental thing they have to prove -- that there was an agreement to defraud the United States government," Bennett said.

The case involves a $2 million sponsorship deal Castroneves had with the Brazilian firm Coimex and his $5 million licensing agreement with Penske Racing, which was signed in 1999. In addition to the the Penske and Coimex money, prosecutors say Castroneves claimed thousands of dollars in improper tax deductions and failed to disclose as income clothing and airline tickets he received.

Penske was initially going to pay the money to Seven Promotions, but prosecutors said Miller abruptly told them not to send the money there. The Penske money ultimately wound up in a Dutch deferred income account, where it remains. Castroneves' lawyers say he has always planned to pay U.S. taxes once he actually receives the money later this year.

Prosecutors argue that Castroneves controlled Seven and owed U.S. taxes on the $5 million because Penske stood ready to make the payments, even if they ended up elsewhere.

Castroneves is still part of Team Penske but has been replaced by Australian driver Will Power pending the outcome of the trial.

 

Associated Press

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