Race car driver and Dancing with the Stars champion Helio Castroneves will be facing the music after a judge denied a motion to dismiss some of the counts in his upcoming tax evasion trial.
The two-time Indianapolis 500 winner, along with his sister and an attorney, are facing charges of allegedly scheming to evade taxes on approximately $5.5 million in income between 1999 and 2004.
U.S. District Judge Donald Graham refused to dismiss the charges on Thursday, but a hearing is set for Monday on another motion to dismiss charges in the case. The trial itself is set to start on March 2.
Castroneves told reporters Thursday that he is innocent and confident of an acquittal, according to the Associated Press.
Castroneves, his sister and business manager Katiucia Castroneves, and his attorney Alan R. Miller were charged with using an offshore Panamanian shell corporation known as Seven Promotions to conceal income he received from his racing sponsors, Coimex Internacional and Penske Racing.
According to the Justice Department, the driver entered into sponsorship contracts with Coimex, a Brazilian import and export company, in 1999, 2000 and 2001. Each years contract required Coimex to pay him $2 million. However, they had an unwritten side agreement under which he returned $1.8 million each year to certain Coimex executives and kept $200,000 for himself. Of the $600,000 he retained from the Coimex contracts over the three years, he reported only $50,000 on his federal income tax returns.
Castroneves joined Penske as a race car driver in November 1999, signing a $6 million, three-year contract for 2000, 2001 and 2002. The compensation package was to be split between a $1 million driver agreement and a $5 million licensing agreement. Seven Promotions was to receive the $5 million in exchange for the licensing rights to Castroneves name, likeness and image.
However, the indictment alleges that he, his sister and Miller engaged in a scheme to avoid paying taxes on the $5 million in licensing agreement income by creating a deferred royalty plan that required Penske to send the $5 million payment to a company in the Netherlands, instead of to Seven Promotions.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access