Judge rejects mistrial in Castroneves case
04/15/09 A federal judge on Wednesday rejected a defense move for a mistrial in the tax evasion case of Indy 500 champ Helio Castroneves, whose fate is being decided by a jury in Miami.
Castroneves, charged with failing to pay taxes on $5.5 million earned between 1999 and 2004, is awaiting the jury's verdict after a six-week trial. Defense lawyers for Castroneves moved for the mistrial late Tuesday after U.S. District Judge Donald Graham clarified his jury instructions on key legal issues. On Wednesday, the judge addressed the defense's concerns by making further changes to his instructions.
The changes dealt with the relationship between Castroneves and Penske Racing, which signed a contract with the Brazilian race car star in late 1999. But his licensing deal was actually between a Panamanian tax shelter and Penske, which is at the heart of the government's conspiracy case against Castroneves, his sister and his lawyer. Other changes dealt with the term ''binding agreement,'' with the judge instructing the jury that it may be “written or oral.''
Graham recognized that the 12-member jury, now in its fourth day of deliberations, was struggling with the case's complex legal issues. He expressed frustration with Castroneves' lawyers as they pushed for more changes in the jury instructions on Wednesday.
''We're complicating matters because we keep raising new terms that require definitions,'' Graham said.
Jurors must decide whether Castroneves owed taxes on income from the Penske contract that was supposed to be paid to the Panamanian company, Seven Promotions, in 2000-02, but instead was sent later on to a Dutch entity for a retirement annuity. Castroneves, a U.S. resident who has lived in Miami for more than a decade, received $5 million from the licensing deal with Penske, though it was paid to his annuity in the Netherlands in 2003. Penske agreed to pay the money to the Dutch entity, Fintage, after Castroneves' lawyer had told them to hold off on making payments to the Panamanian shelter, Seven Promotions. Castroneves, who owns a Coral Gables mansion, also received $530,000 from a Brazilian trading company that sponsored him just before he hit the big time a decade ago as an IndyCar driver with Penske.
So far, Castroneves has paid taxes on only $50,000 of his earnings from the Brazilian sponsor, Coimex Internacional. According to the IRS, Castroneves owes $2.3 million in taxes.
The prosecution's portrayal of Castroneves — who has been sidelined during the current IndyCar season — as a tax cheat could weigh heavily on the 12 federal jurors. Standing trial are Castroneves, 33; his sister/manager, Katiucia Castroneves, 35; and his attorney, Alan R. Miller, 71, of Michigan.
If convicted of any charges in the seven-count indictment, they could face up to five years in prison. MiamiHerald.com