Castroneves: A marketing liability?

April 15, 2009
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helioEntering the fourth day of deliberations in the tax evasion case of Indy Racing League driver Helio Castroneves, series officials now have to be seriously wondering what will become of the month of May if he is cleared. Officials for Team Penske have intimated that they will put the wayward racer back behind the wheel if he is exonerated.

Castroneves is charged with failing to pay taxes on $5.5 million earned between 1999 and 2004. Castroneves is claiming he’s innocent. But with deferred payments and off-shore accounts part of the discussion—fair or not—Castroneves, if exonerated, is going to be seen in certain circles as a guy who beat a tax evasion rap.

So, if Penske puts him in a car this May in Indianapolis, you have to wonder what the main storyline is going to be. I can tell you, it won't be Ryan Hunter-Reay's new Izod deal. While I’m sure there will be happiness within the open-wheel fraternity for the much loved Castroneves, the IRL marketing staff will be left to figure out how to spin this. While they’re likely to get kid-glove treatment from their new broadcast partner Versus, other media won’t be as kind.

And while some think there’s no such thing as bad media exposure, this type of baggage couldn’t come at a worse time. The league has made traction in some sponsorship circles and remains desperate to find a title sponsor by the end of this year. While the IRL will be trying to focus attention on its new sponsors, including Hot Wheels, Apex Brasil, Orbitz and the National Guard, many media outlets are bound to be laser focused on Castroneves and his case.

If somehow the two-time Indy 500 champion end’s up in the winner’s circle—or even on the front row for the start, the media storm is sure to be intense. The way teams pay their drivers will almost certainly be explored by investigative reporters. What should be a glorious kick-off to the Indianapolis Motor Speedway’s centennial celebration, could turn into a bumpy ride.
  • Helio's Career = OVER.

    Thanks roger!
  • If he is exonerated, no one will give a second thought to it. In a world where sports stars are arrested and convicted on attempted murder, assault, dog fighting, etc..., then quickly snatched up by teams upon their release, no one other than the TG/IRL haters will even care.

    Even if convicted, many people will consider him a Robin Hood type hero and someone unfairly persecuted by the government. Look at the tax rally's all over the country today. Taxes and tax collectors are not real popular right now.
  • Helio is a case of trusting an attorney when he didn't have the foggiest of what his implications might be. Just ask yourself, what attorney do you want to trust these days? Washington is full of them and look at the mess they have made. Attorneys wrote the IRS tax code and look at the mess it is. Everytime you turn around, some creative attorney is finding another reason to get someone to sue someone else - case in point - a girl that wanted to wear a tux to a prom - and that's worth a lawsuit against a school??? Who's left to pay the bill, why the public, of course.

    Where's Denny Crane when we need him?
  • Indyman, have you been paying attention to the same case that I have. This guy has lived in Miami for more than a decade, has a mansion in Coral Gables, Fla., and has been having money deliberately and clearly diverted to The Netherlands and likely other places.
    Castroneves received $5 million from the licensing deal with Penske, though it was paid to his annuity in the Netherlands in 2003.
    Castroneves, who owns a Coral Gables mansion, also received $530,000 from a Brazilian trading company that sponsored him just before he hit the big time a decade ago as an IndyCar driver with Penske. So far, Castroneves has paid taxes on only $50,000 of his earnings from the Brazilian sponsor, Coimex Internacional. There has been no mention of Helio or his sister Kat giving anything to the poor! He's no Robin Hood!!! Some might even call him a thief! And by doing so, he shift the tax paying responsibilities (for services all citizens enjoy) to others, many less fortunate than he. This will not be easily forgotten, even if he weasels his way out of this.
  • When he was arrested, it was hot on the heels of winning that dancing thing, and was a more household name for it. Now, he's still a household name either from that or from being arrested. Either way, people are more interested in him than any other driver, and if more media attention flows to the series because of it, then all the better.

    It certainly won't reflect on IRL or the 500 whether he's exonerated or not. As for a media storm, I can only hope.
  • Matt,

    90% of the American public lost interest in the case the day after it was filed. They do not follow it, and know little about it. If Helio stole money like Bernie Maddoff, then they would be upset. If he is accused of stealing from the Government, they could careless. Right or wrong, that is our society.
  • All will be forgotten in a few short months. I agree with Ryan, the media storm will benefit the League.
  • I agree with others that all will be forgotten. There is no story anymore when found innocent. Our society feeds on misdeeds, etc. Shoot even Larry Curry who has served time in jail for his actions while working for John Menard is back in the league working and nobody even remembers.

    Bad advice or whatever, I say our society operates with two different set of laws. Those that make them get one set while the rest of us operate under another. If nominated for a cabinet post with $500K in back unpaid taxes it is ok to just pay up with never a case, etc. hence set of rules #1. But if you pay the experts to help you or guide you then everything you do is criminal and will be prosecuted to the highest intent of the law, set of rules #2.

    Shoot right here in Indiana we had a tax amnesity program for people with back owed taxes. Come in and pay them during that time and there is no repercussion. The IRS is just another bully in the government playground who are allowed to work opposite our constitutional rights innocent until proven guilty.

    This country is rapidly approaching an upheval of people versus the government. They operate a do as I require but not as I will.
  • The State amnesty was a one time event that the Governor said would not be repeated. It did bring in Millions in back taxes that the State was having trouble collecting.
  • Still no verdict today. Castroneves' team asked for a mistrial, but the judge denied that today.
  • Does anyone reading this story or these posts honestly think they would personally comprehend complex tax law? If you are a corporate CEO or self-employed and you claim to fully understand the IRS code that applies to all your business or personal tax issues, you are lying to yourself. Helio didn't file a 1040 EZ. He...and others in similar situations...have to rely on the advice of CPAs, tax attorneys and other experts for correct guidance. TurboTax won't handle this situation.
  • The way teams pay their drivers will almost certainly be explored by investigative reporters.

    I tend to doubt this. Maybe the few that cover the earl, but no one covering nascar is gonna touch it, and the story is not big enough for a 60 Minutes or similar to go digging into it. Though they, and the Feds, should be investigating the shenanigans of Anton H George and his relatives. That would be interesting.
    Nonetheless, the 'league' is simply not popular enough to warrant the attention. The sooner this translates into its complete disappearance from the planet, the better.
  • Helio may or may not have intentionally underpaid his taxes, but his situation is indeed way more complex than most of us can understand. Helio did not deliberately take money from investors and promises them mega buck returns, he did not give out sub-prime loans, he didn't ask the government for a bail-out.
    It is completely reasonable to think that he believed his advisors that he had correctly used a tax loophole.
    Helio is one of several drivers who has made Indy cars exciting again. I do hope he is exonerated and I do hope he returns to Indy--I look forward to seeing his smiling face behind the steering wheel.
    I wish the government would spend more time prosecuting the people they are 'bailing out'!
  • Wow, Stan making unfounded accusations about the TG and the IRL. How unusual.
  • BIGIRLFAN - Big bloviator.

    Yeah, Stan, be careful, you might find yourself being fitted for a new pair of concrete shoes!
  • BiGirl fan: smarter than birdwickguy. :lol:

    sarcasm, ya old codger! try it sometime!
  • Helio is a minor celebrity in in the US due to Dancing with the Stars and is a major celebrity in Indy during the month of May. This is mostly a government witch hunt that has a 50/50 chance of being successful.

    If anyone thinks otherwise, why have so many of our current presidents nominees for his cabinet been found lacking when it comes to paying their taxes, and they were already in the government. Talk about selective enforcement!
  • You're right, DaHooey, staring me right in the face, there it was.....
    Bi-Girl Fan, Duh on me! You're all over it once more. Salute!!!
  • Ambivalence -

    This is hardly a government witch hunt with a 50/50 chance of being successful. The government doesn't indict with only having a 50% chance of winning.
  • This is mostly a government witch hunt that has a 50/50 chance of being succes.

    Nonsense. The conviction rate on these cases is around 97%. Why do you think Helio was offered a plea bargain? Anything can happen but it is not looking good. Obviously if the innocence was clear the jury would be back.
  • Yeah, Stan, be careful, you might find yourself being fitted for a new pair of concrete shoes!

    Is that a threat, tough guy? You all hammered out of your mind on Oval Vodka?
  • Bi-Girl Fan..

    This coming from the hypocrite always crying about name calling and foul language. Not that I am surprised.
  • So far it sounds like the attorney/accountant is in deep doo doo. Only one to have had verdicts returned on all counts. Helio only has counts returned on two minor charges with hung jury on the other counts. Same with his sister. My guess is he will be convicted on two minor counts (no jail time, maybe probation) and the rest will be dropped. His accountant/attorney will go to jail, which makes sense.

    Helio will return to racing and this will be but a speed bump. The problem with these cases is that the tax law is so complex, the average citizen cannot comprehend all of the twists and turns of it. Same thing happens with technology cases etc....
  • Gee, Stan and Brett, no intent to offend, I thought you would appreciate the sarcasm that you and DaHooey are always trumpeting. Regrets......C'mon guys, you're taking things way too seriously for folks that maintain they don't care. Hmmm.........
  • I love Helio and think he's an amazing racecar driver, but I cannot for one minute imagine that he had ANY clue if what his people did with that money was wrong or illegal. I really think that he (albeit mistakenly) had the attitude of, I make the money, I spend the money, but what happens to it in between, someone else can handle. He doesn't strike me as the kind of guy who would do something so deceitful. Just my gut, but I hope HE ends up in the clear. His attorney, on the other hand, might fry, and THAT could cause issues since the man also represents other big-name drivers, such as Jimmie Johnson.
  • Helio only has counts returned on two minor charges with hung jury on the other counts. Same with his sister. My guess is he will be convicted on two minor counts (no jail time, maybe probation) and the rest will be dropped.

    You can guess all you want but there are no minor counts involved. All of the charges are felonies and ANY guilty conviction will fall under federal mandatory sentencing guidelines.Even the plea deal Helio was offered included prison.
  • It appears the attorney is not guilty. Some have even questioned why he was tried to begin with.
  • Well I will admit it, I was wrong, Innocent on all counts. Good for him. So I guess a lot of the TG/IRL hater know it alls need some Oval Vodka to wash down that crow.
  • Hey Brett in Indy and Say Anything...

    Care to read my post and your comments again from yesterday?

    As an experienced tax attorney, most juries can't wait to acquit someone unless the tax crime is so egregious, they can't overlook it.

    The IRS went after him because of his celebrity, nothing more, nothing less, and now they have nothing to show for it except a waste of our tax dollars. They won't pursue the conspiracy charge.
  • Ambivalence,

    These guys are gone on to trying to slam the IRL on some other issue. When proven wrong they jump ship. They cannot admit when wrong.
  • Care to read my post and your comments again from yesterday?

    Not really. I was walking my dog earlier today and stepped in a big pile of tax attorney.

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  2. i too think this is a great idea. I think the vision and need is there as well. But also agree with Wendy that there may be better location in our city to fulfill this vision and help grow the sports of hockey and figure skating in Indy. Also to help further develop other parts of the city that seem often forgotten. Any of the other 6 townships out side of the three northernmost could benefit greatly from a facility and a vision like this. For a vision that sounds philanthropic, the location is appears more about the money. Would really like to see it elsewhere, but still wish the development the best of luck, as we can always use more ice in the city. As for the Ice growth when they return, if schedules can be coordinated with the Fuel, what could be better than to have high level hockey available to go see every weekend of the season? Good luck with the development and the return of the Ice.

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