Castroneves, sister, attorney indicted on tax charges

Updated: October 3, 2008, 8:58 AM ET
ESPN.com news services

MIAMI -- Race car driver and "Dancing With The Stars" champion Helio Castroneves is facing federal tax charges in Miami.

Helio Castroneves

Castroneves

A grand jury on Thursday returned a tax evasion indictment against the 33-year-old, who lives in a Coral Gables mansion. It was not immediately clear when Castroneves would appear in court.

Castroneves is charged with conspiracy and six counts of tax evasion from 1999 through 2004. The driver's sister, business manager and attorney were also indicted.

Castroneves, a native of Sao Paulo, Brazil, has won the Indianapolis 500 twice and is currently second in the IndyCar Series points standings. He and partner Julianne Hough won the 2007 "Dancing With The Stars" TV reality show competition.

"Whether you make a living parking cars or racing them, paying taxes is a responsibility that everyone shares," U.S. Attorney Alex Acosta told a news conference.

Castroneves' attorney, Mark Seiden, called the charges disappointing and said the auto racer had done nothing wrong.

"Helio relied on the advice of competent professionals, accountants and tax lawyers, in preparing his returns. He followed their advice in good faith," Seiden said. "We believe that once the facts are presented to a jury he will be exonerated."

The indictment alleged the Castroneves siblings and attorney Alan Miller used a Panamanian shell corporation to fraudulently conceal from the Internal Revenue Service income that Castroneves earned as a racer.

Miller, 71, was charged with conspiracy and three counts of tax evasion.

The indictment said Castroneves received $6 million over three years under a driving and licensing agreement with Penske Racing but reported only $1 million on his tax returns.

Castroneves, his sister and Miller allegedly schemed to divert the $5 million from a Panamanian shell corporation called Seven Promotions to a "deferred royalty plan" that required Penske to send the payment to a company in the Netherlands.

Katiucia Castroneves allegedly helped prepare false income tax returns and transferred money to a Swiss bank account.

The indictment also alleged Castroneves collected $600,000 over three years from a sponsorship contract with the Brazilian import-export company Coimex Internacional SA, but reported only $50,000 on his tax returns.

All three defendants were to appear before a magistrate on Friday.

Prosecutors said Castroneves and his sister faced a statutory maximum of up to 35 years in prison if convicted on all charges, while Miller could face a maximum of 20 years. However, actual penalties were expected to be much less and were tied to the amount of unpaid tax.

Information from The Associated Press and Reuters was used in this report.