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Phillip Fry
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Famous Brazilian driver Castroneves indicted October 2, 2008, by USA for offshore tax evasionRace driver Castroneves charged in US tax caseBy CURT ANDERSON AP Legal Affairs Writer
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, 35, the race car driver's sister and business manager, and attorney Alan R. Miller, 71, of Birmingham, Mich. All three are scheduled to make court appearances Friday and it wasn't immediately clear if they had hired defense lawyers. None were under arrest as of October 2, 2008.. "This case sends a clear message that the IRS is committed to vigorously enforcing the tax laws and stopping offshore tax evasion," said IRS Commissioner Doug Shulman. 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 on ABC. The indictment charges that Castroneves illegally concealed income from Penske Racing Inc. and the Brazilian firm Coimex International S.A. Neither company is charged with any wrongdoing. In Penske's case, prosecutors say 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 say 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. Katuicia Castroneves transferred some of the hidden money to a Swiss bank account she controlled with her brother, court documents show. Working telephone number for Castroneves and his sister could not be located Thursday. Miller did not immediately return a call to his office in Michigan. Castroneves recently signed on with "Entertainment Tonight" to be a correspondent for some episodes of this year's "Dancing With the Stars" show. He did a similar stint last year. He has raced for Team Penske since 2000, capturing Indy 500 victories in 2000 and 2001, becoming the youngest driver, 27, to win the famous race twice. Castroneves has recorded a total of 18 victories and 43 top-three finishes, according to Penske's Web site. Miami-Dade County records show that Castroneves, who is single, lives in a six-bedroom, six-bath home in Coral Gables valued at about $2.3 million.
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