A Real Tax Day Protest

April 17, 2009 3:14 PM by S.M. Oliva (Archive)

A Miami jury heroically acquitted two-time Indianapolis 500 champion Helio Castroneves of federal tax evasion charges. Castroneves, a Brazilian citizen, was charged along with his sister and attorney for having the audacity to hide their money from the armed thugs at the Internal Revenue Service:

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.

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Central to the case was the ownership of a Panamanian company called Seven Promotions. Prosecutors called it a shell corporation set up primarily so Castroneves could dodge U.S. income taxes, but Castroneves' father testified he created Seven to boost his son's image in Brazil. The elder Castroneves said his son never owned it.

Prosecutors called that a lie, showing jurors numerous documents in which Castroneves claimed Seven as his own. If it was, an Internal Revenue Service agent testified that Castroneves owed U.S. taxes on the full $5 million from Penske even though he has never actually received the money.

Instead, the Penske payments were eventually invested in a deferred compensation deal with the Dutch firm Fintage Licensing B.V. Castroneves 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.