Meanwhile, back at the courtroom

Posted by Iannucci | 3/21/2009 | 21 comments »
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Once again, friends, we return to the Greatest Spectacle in Litigating.

This week the prosecution continued to state their case against Helio Castroneves, introducing evidence that links everyone's favorite fence climber to the infamous Panamanian entity known as Seven Promotions. This entire case is, it seems, all about Seven Promotions and whether or not Helio Castroneves owns the company, and if so whether or not he lied about said ownership.

So here, according to the Miami Herald, is what prosecutor Barry Axelrod dropped on the jurors.

(Helio's representative Alan) Miller consulted with tax lawyers in New York, who proposed that Penske pay Castroneves through a Dutch entity called Fintage Licensing. It would set up a deferred annuity account so that he could receive the money later.

In 2002, the New York lawyers told Miller that sending Castroneves' Penske income to the Netherlands firm would be fine on one condition -- as long as the driver didn't own the Panamanian company, Seven Promotions. If he did, then he would already be responsible for the taxes on the Penske income because it was supposed to be sent to Seven Promotions under his contract.

''The Castroneveses and Alan Miller faced a big choice,'' federal prosecutor Matt Axelrod told jurors. ``They lied.''

They told the New York lawyers that Castroneves didn't own the Panamanian company, he said. Black and other defense lawyers have maintained that the driver's father, who goes by the same name, owned Seven Promotions and set it up to help his son's career.

But earlier this month, Penske's general counsel, Bluth, testified that Miller had told him back then that the Panamanian company was controlled by the younger Castroneves. Prosecutors also produced a 1999 agreement between Castroneves and Seven Promotions saying the driver owns all shares of the Panamanian company.
I seriously doubt "New York lawyers" is an actual law firm. Perhaps these esteemed attorneys are in witness protection, but identifying them anonymously seems, at least to this word butcher, a bit weak. That said, the document from 1999 seems to be the most damning evidence in the case thusfar, although since Helio and his dad go by the same name it may only further the confusion towards a possible conviction.

But wait, there's more. From AccountingWeb's log of the trial:

Further evidence was introduced that suggests that Castroneves did own Seven Promotions, in spite of the fact that he claims his father was the owner. Guido Chipy, a Miami banker who was involved in Castroneves's 2001 mortgage loan, testified that documents provided to the bank at the time the mortgage was initiated show that Castroneves was the sole owner of Seven Promotions. Chipy added that most of the information for the mortgage application was given to him by Castroneves's attorney, Alan Miller, and that Castroneves only signed the application. That supports the defense assertion that Castroneves was detached from his own financial matters and left the details to his attorneys.

As a person with a distinctly Italian surname, I'm going to totally ignore the fact that this witness is named "Guido Chipy". (Holy macaroni!) However, this mortgage application seems to create a serious problem for Helio. If it's accurate then it proves his ownership of Seven Promotions and means he not only owes those taxes but has in fact lied about this. If it's not, then he clearly lied on his mortgage application, and although that isn't exactly a felony it would show that Helio is not above lying about matter related to finance - which at it's most basic level is what this case is about.

Then again, maybe all of this is irrelevant to the people deciding his fate.

During what became an exercise in paperwork tedium (at least two of the 17 jurors dozed off during the morning session), the two-time Indy 500 champion's entire financial life was on display for everyone in Courtroom 13-4, including a group of local high students on a field trip.

(MORE from
Next week the defense should take over.


  1. Jennifer of Dog.Yarn.Knit. // March 21, 2009 9:42 PM  

    I can't even understand it all. What I do understand is this. Seven Promootions...whatever. I wish our country would stop hating the rich and penalizing people for success with exorbitant taxation.

  2. Robert // March 22, 2009 9:41 AM  

    Simple defense: ask the jury one question- "Have any of you bought a home, or buy or lease a car? Did you read EVERY word in the contract? If not then you are the same as Helio, gulity of not understanding contract law, thus you must acquit."

    also- Jenifer- the masses only hate what they are told to hate. Don't hate the stupid- hate the media that leads them on!

  3. llilly // March 22, 2009 9:42 AM  

    Is his lawyer (Miller) falling on his sword?

  4. Frustrated and Irritated Fan // March 22, 2009 2:11 PM  

    It's not a point of reading every word in the contract. It's knowing what documentation is provided to verify your income and resources to get that mortgage. When you sign the mortgage application, you're signing that all the information you provided is true. If he was too lazy to see what financial information was provided, shame on him.

  5. pressdog // March 22, 2009 7:05 PM  

    As someone who pays substantially greater than zero in income taxes, I'm interested in seeing others what they owe as well. That's not hating the rich. That's just asking for fairness.

  6. The American Mutt // March 22, 2009 8:12 PM  


    It's not hating the rich. It's asking them to pay their fair share of taxes. Taxes are the price you pay to live in what is probably the most advanced civilization on this planet. There's nothing exorbitant about forty five percent (I believe that's the highest tax rate). If he was willfully intending to avoid paying his taxes he should go to jail.

    Don't hate the taxes, hate how their spent.

  7. Roy Hobbson // March 22, 2009 8:34 PM  

    I wish our country would stop hating the rich and penalizing people for success with exorbitant taxation.

    I'm with you, Jennifer. I've had it with these lucky poor people, who America showers with love. (And by "love," I mean "no medical insurance and homelessness and so forth.") Why should THEY get all the breaks?

    /kicks a puppy in disgust

  8. The American Mutt // March 22, 2009 9:11 PM  


    Summing up my point more succinctly. Which sounds more exorbitant; 45% of 5,000,000 or 25% of 30,000?

    For the record I'm not picking on you, or trying to condescending. Just stating an opposing viewpoint.

  9. Iannucci // March 22, 2009 11:11 PM  

    Taxes suck but the law is the law. There, that should settle it for everyone, right? Cool.

    Now, pardon me while I help Roy to his sofa so he can sleep off all those jello shots.

  10. AZZO45 // March 23, 2009 7:51 AM  

    Wow Jennifer... you think American taxes are "penalizing"????? I suggest you visit England & ponder why their sports stars live OUTSIDE of their own country when possible.

    David Beckham & Lewis Hamilton come to mind

    Mutt says 45% on 5 mil & my reading has informed me Obama wants to "jack the rich" & their tax rate a whopping 4% (up to 39%) Oh the humanity!!!!!!

    I think the top 2% making 250,000 & up can handle it, plus its no where near what other countries tax their wealthiest citizens.

  11. mmack // March 23, 2009 8:49 AM  

    Guido Chipy, a Miami banker

    Jeff, I know you and the Fabulous Mrs. Mmack are of the same ethnic background, but admit it, if you're doing business with a banker named Guido, there's trouble afoot.


    In all seriousness, are we sure "Guido Chipy" and Floyd "Chip" Ganassi aren't one and the same person? I mean, now it all makes sense. Chip pastes on a fake moustache, fakes a bad EYE-talian accent ("Hey E-Lee-o, como stai, eh?"), sets up a storefront bank, gets him to sign a mortgage, finds out about his tax dodging, and years later turns state's evidence to get Helio knocked off the Penske team, thereby ensuring continued Target Chip Ganassi Reacing domination in the IRL.

    Sneaky, very sneaky. I'd expect no less from a man who cheated at Chicagoland back in 2005 to get Briscoe Inferno the pole postion over sweet, innocent Danica. The cur! And if it wasn't for tech inspection and those meddling kids, he would have gotten away with it too!

    Or I could be wrong. Just sayin'

  12. AZZO45 // March 23, 2009 9:20 AM  

    Ahhh yes! I now have visions of Guido the Killer Pimp from Cole Trickle's Risky Business!!! :) :)

    Chip got help with his Spanish from Felix Sabates?

  13. Joe the Plumber // March 23, 2009 11:34 AM  

    All you socialist race fans, GEEZ!

    I for one welcome Jenn the Seamstress to the My Name is IRL blog. We might be 200K away from that tax bracket, but we can dream the American Dream!

  14. AZZO45 // March 23, 2009 11:46 AM  

    ^^Wow, quasi celebs posting @ MNIIRL.

    From reading Jeff's report & other stuff... looks like Uncle Sam prematurely prosecuted this case!

    Numerous rich people defer their tax bill. It would seem to me that if Helio sends in a nice fat check by April 15th this case is OVER.

    To throw politics into this... these Prosecutors are Bush era appointees who used the Constitution as a loose suggestion guide. I don't trust 'em.

    They busted Tommy Chong, Martha Stewart, & now Helio. I feel so PROTECTED. Good luck Helio!

  15. Frustrated and Irritated Fan and Tired Accountant // March 23, 2009 4:50 PM  

    Martha Stewart went to prison not because of what she did, but that she LIED about it.

    I agree with Mutt - this is a great country. If someone outside our borders wants to come play in our country, they've got to pay the "fees". If they don't want to do that - get out of the sandbox and go home.

  16. Karin // March 23, 2009 6:30 PM  

    Frustrated... Martha Stewart went to jail while the real corporate criminals (like the HUNDREDS not charged at Enron...) escaped justice.

    Stewart's biggest charge INSIDER TRADING was DROPPED by gov prosecutors, so how are you GUILTY of stuff directly related to the main (& dropped) charge(s)???

    Rich people get away with a butt-load of crap that you & I can't... Prosecutors LOVE to bust celebs because more people keep up with them then the Wall St insiders.

    Throw an Enron account in jail or a home decor diva? Bust Mr Smith from Tampa or the dancing race car driver from Miami??

  17. TAIF and Tired Accountant // March 24, 2009 4:05 AM  

    Karen, I recommend, search for "criminal investigation", scroll down to "How Criminal Investigations are Initiated". This explains the total process and all the steps the agents must go through before a case is brought to trial. Search "Criminal Enforcement", you can find what types of criminal actions the IRS investigates. If you then click on "Abusive Tax Shelters" on that page, you will get pages and pages, by year, of the "rich people" who did not get away with "a butt-load of crap". The whole process above takes about 2 minutes - the IRS site is very user-friendly and the information can be very enlightening. And it is definitely not dry and boring.

  18. The American Mutt // March 24, 2009 9:07 AM  


    That's not exactly my point. My point essentially is that I'm tired of people complaining about taxes. You love your country, you want to live here and celebrate your freedoms, you help fund her or shut the eff up and leave. Your country demands two things out of you, taxes and jury duty. Personally I think we got it pretty easy.

  19. FAIF // March 24, 2009 12:13 PM  

    Mutt, I totally agree.

  20. AZZO45 // March 24, 2009 1:45 PM  

    Tired accountant: I will check out the IRS site you mentioned for Karin...

    However, Pressdog just linked an ESPN story on Helio & the trial ... its very informative & well written. I stand by my opinion that the Feds "prematurely ejac... prosecuted" Castroneves.

    The ESPN article sites the many sports stars that ran afoul of the IRS. Its almost a form of "Gotcha" with the IRS. Have seriously "gray" tax code & invite confusion / questionable deductions/ etc.

  21. Jennifer of Dog.Yarn.Knit. // March 27, 2009 9:05 AM  

    So, I made a comment and then kind of walked out of the room. When I came back into that room I found a lot of comments aimed at me. All I really want to say in response is that what I initially said was, yes, a broad and sweeping statement. It came on a day when I was feeling very frustrated by the news I was hearing and comments by public officials suggesting AIG executives commit suicide. No matter how wrong/right/moderate/red/yellow/purple/brown/upsidedown/whatever those people did… an elected official suggesting Hara-kiri? What country are we living in any more??

    BUT, I am not looking to turn this into something political. Let’s enjoy our beloved sport.

    The bottom line is this:

    1)If Helio willingly & knowingly did something wrong he should pay the price.
    2) I am really disheartened to POSSIBLEY be witnessing the career end of my favorite racecar driver.