MIAMI — Helio Castroneves, a two-time Indianapolis 500 winner and TV “Dancing With the Stars” champion in 2007, was indicted Thursday on tax evasion and tax fraud charges, accused of using offshore accounts to hide millions of dollars in income from the Internal Revenue Service.
Castroneves, 33, is charged with conspiracy and six counts of tax evasion for purportedly failing to report to the IRS about $5.5 million in income between 1999 and 2004, according to court documents. Each count carries a maximum five-year prison sentence.
Also facing charges are Katiucia Castroneves, the driver’s sister and business manager, and attorney Alan R. Miller of Birmingham, Mich. All three are scheduled to make court appearances today. None was under arrest Thursday.
“This case sends a clear message that the IRS is committed to vigorously enforcing the tax laws and stopping offshore tax evasion,” IRS commissioner Doug Shulman said.
The indictment charges Castroneves, a native of Brazil who finished second this year in the IndyCar Series points standings, illegally concealed income from Penske Racing Inc. and the Brazilian firm Coimex International S.A. In Penske’s case, prosecutors said Castroneves was to be paid $5 million in exchange for rights to use his name, likeness and image.
The money was initially supposed to go to a Panamanian shell corporation, but then was diverted to a Dutch entity called Fintage Licensing.
Fintage was set up as a “deferred royalty plan” in which U.S. tax payments can be delayed, which is only legal if Castroneves had no relationship or control over it. Prosecutors said he did have control and that false statements were made to Penske about the relationship.
Coimex paid Castroneves $600,000 between 1999 through 2001 for sponsorship contracts, but he only paid taxes on about $50,000, prosecutors said.
Katiucia Castroneves transferred some of the hidden money to a Swiss bank account she controlled with her brother, court documents show.
