Helio Castroneves was acquitted Friday of all five tax evasion charges stemming from his alleged formation of foreign shell corporations to hide certain racing revenue.
ESPN reported that the case really ended up coming down to testimony from Castroneves’s father regarding the original formation of the foreign corporations. He claimed his son never had any control or ownership interest in the corporations and that Helio had no control over their initial formation. The jury obviously believed Helio and his father regarding the tax evasion but was still hung on one conspiracy charge. The Government likely will not pursue the conspiracy issue any further though. Helio could have faced up to six years in prison had he been convicted.
Both Helio’s sister, who is his business manager, and Alan Miller, Helio’s attorney responsible for his financial planning and structuring, were acquitted of their tax evasion charges as well.
The Sports Business Journal reported this week that despite a collective bargaining agreement between NBA players and owners that runs through the end of the 2010-2011 season, a new agreement will likely have to be agreed upon.
Because of the poor economic climate and the expected low business numbers league-wide, a new agreement seems forthcoming. But, collective bargaining agreements, like most normal union labor contracts, rarely are easy to negotiate or agree upon for that matter. On the contrary, they are often difficult to hammer out, and in this economic climate there is little chance players, looking for as many incentives as possible, and owners, looking to save as much as possible, will see eye to eye on anything.
Here’s an update on Helio Castroneves’ tax evasion case. Apparantly Helio is in the hole for more than $2.3 million now. And, according to Joann Levitt, the IRS agent and the Government’s last witness, the case hinges on whether Castroneves actually secretly owned the Panamanian shell corporation, Seven Promotions. According to Levitt he did, and the $2.3 million owed as a result of $5 million “earned” by Seven Promotions was money simply never reported on Castroneves’ tax returns. More news to come in the next few weeks as the case should be put in front of a jury sooner rather than later. Castroneves, in fact, will miss the IndyCar season opener April 5 in St. Petersburg, Florida because of the recent delay in the case proceedings.
Above The Law recently reported on the progress of the new Florida Marlins publicly-financed baseball stadium.
What’s interesting is that it finally seems as though the public has reached a tipping point in terms of what it thinks to be a reasonable public expenditure. It used to be common for taxpayers to shell out millions for their beloved home sports teams to build stadiums and new practice facilities. But now, this spending is just deemed irresponsible and characterized as all that is wrong with the relationship between professional sports and the American city. This new Marlins stadium will be built but not without major opposition from those who inadvertently paid for it.
Sports Illustrated recently reported on Indy Racing star Helio Castroneves’s tax evasion case. The IRS and the U.S. Department of Treasury claim that Castroneves set up foreign shell corporations ran by his family to specifically hide taxable income.
The Government claims that Castroneves hid about $480,000 in taxable income in a Panamanian corporation called Seven Promotions and roughly $5 million in a shell Dutch corporation with the intent to eventually move from the United States to tax-haven countries like Andorra or Monaco with the money.
While Castroneves’s celebrity reputation would normally help him in front of a jury, we need not look too far in the past to see that celebrities are not necessarily immune from serious penalties for tax violations – as evidenced by the recent three year prison sentence handed down to Wesley Snipes for failing to file tax returns.