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Castroneves To Court On Tax Evasion Charges

Spokesman: Castroneves Will Race Saturday

POSTED: 4:24 pm EDT October 2, 2008
UPDATED: 11:21 am EDT October 3, 2008

A court appearance was scheduled Friday for former Indianapolis 500 champion Helio Castroneves after he was indicted on charges of tax evasion.

Castroneves, 33, his sister, Kati Castroneves, and lawyer, Allan Miller, are accused of failing to pay taxes on $5.5 million to the Internal Revenue Service, said officials with the U.S. District Court in Miami. Castroneves was charged with conspiracy and six counts of tax evasion from 1999 through 2004.

The indictment alleges that Castroneves used offshore accounts to hide the money from the IRS.

One of his attorneys, David Garvin, said he was disappointed that the tax dispute could not be resolved without criminal charges.

"Helio has always done the appropriate thing and hired accountants and attorneys he relied upon," Garvin said. "We are of the strong belief that he did not do anything wrong. We're looking forward to going to court."

Castroneves' public relations spokesman, Bud Danker, told 6News on Thursday night that Castroneves and his employer, Team Penske, were cooperating in the investigation.

"Penske Racing is aware of the tax matter filed against Helio Castroneves and we fully support his right to his day in court," he said. "In fact, we intend to have Helio continue to drive for Penske Racing, including this week's race in Atlanta, Georgia as the matter proceeds in court."

Kati Castroneves and Miller were also scheduled to make court appearances Friday.

Miller's attorney, Michael Tein, said prosecutors acted "recklessly" in bringing the charges and said Miller has always had "an absolutely stellar" legal reputation.

"He acted at all times completely lawfully. He is 1,000 percent innocent," Tein said. "This case is pure harassment by the government in order to try to indict a famous person and get press."

Katiucia Castroneves' attorney did not respond to an e-mail seeking comment.

The famed Brazilian driver, who owns a Coral Gables, Fla., mansion valued at $2.3 million and races for Team Penske, won the Indianapolis 500 in both 2001 and 2002.

Part of the indictment alleges that Castroneves concealed income he received from Penske and Coimex International, a Brazilian firm.

Prosecutors said money Castroneves received from Penske was supposed to go to a Panamanian shell corporation but was diverted to a Dutch entity called Fintage Licensing.

Fintage was set up as a "deferred royalty plan" in which U.S. tax payments can be delayed, which is only legal if Castroneves had no relationship or control over it. Prosecutors say he did have control and that false statements were made to Penske about the relationship.

Coimex paid Castroneves $600,000 between 1999 through 2001 for sponsorship contracts, but he only paid taxes on about $50,000, prosecutors said.

Kati Castroneves transferred some of the hidden money to a Swiss bank account she controlled with her brother, court documents show.

He reached celebrity status last year by winning the fifth season of ABC's reality TV show "Dancing With The Stars" with partner Julianne Hough.

Castroneves recently signed on with "Entertainment Tonight" to be a correspondent for some episodes of this year's "Dancing With The Stars" show. He did a similar stint last year and worked for RTV6 as a racing analyst before this year's Indianapolis 500.

Each of the counts against the racecar driver carries a maximum five-year prison sentence.

6News will be live in Miami beginning on Friday at 5 p.m.

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