Penske official says Castroneves conviction would hurt racing

MIAMI -- It would be terrible for Penske Racing and the sport if Helio Castroneves, the popular Indy racer and "Dancing with the Stars" champion, were convicted of tax evasion, a top Penske official testified yesterday.

Lawrence Bluth, Penske's general counsel, was asked yesterday by prosecutor Matt Axelrod what impact a guilty verdict against the two-time Indianapolis 500 winner might have. Bluth, a prosecution witness, provided earlier testimony that could be damaging to Castroneves, who signed with Penske in late 1999.

"It would be a terrible thing to lose one of the great drivers in the world, and probably our most popular driver," Bluth said.

"Would it be bad for business if Mr. Castroneves were to be convicted?" Axelrod asked.

"It would not be a good thing," Bluth said.

Castroneves, a 33-year-old Brazilian citizen; his sister and manager, Katiucia Castroneves, 35; and Michigan attorney Alan Miller, 71, each face more than six years behind bars if convicted of conspiracy and tax evasion charges involving some $5.5 million. The trial ended its second week Friday.

Penske Racing has temporarily replaced Castroneves on its Indy Racing League team with Australian driver Will Power -- pending the outcome of the case. The new racing season begins April 5.

Much of the case revolves around a Panamanian entity called Seven Promotions where $5 million in Penske payments to Castroneves were originally to be deposited. Prosecutors say Seen Promotions was secretly owned by Castroneves -- an assertion the driver denies.

Bluth testified he had no doubt that Castroneves owned Seven Promotions because "that's what Alan Miller told me."

The money never went to Panama and eventually was transferred in 2003 to a Dutch licensing firm, where it remains. Castroneves has not received any of that money, but prosecutors and the IRS say Castroneves is still liable for income tax on the entire $5 million because he owned Seven Promotions and Penske was ready to pay it money.

More evidence on that issue came Friday from Miami banker Guido Chipy, who was involved in a 2001 mortgage taken out by Castroneves. In documents provided by Miller, Castroneves is identified as being the sole owner of a company in which the $5 million in Penske money will be deposited.

But Chipy also acknowledged that nearly all the mortgage application information came from Miller and that he had no contact with Castroneves during the process.

"The only thing he did was sign it?" asked Castroneves attorney David Garvin.

"That's correct," Chipy said.

Part of Castroneves' defense is that he focused on racing cars and relied on tax professionals and lawyers to handle his business affairs.

Castroneves also won TV's "Dancing With The Stars" competition in 2007, but that's not part of his tax trial.

Quick laps

Watkins Glen International officials say Heluva Good!, a dips and cheeses company, will sponsor the Aug. 9 Sprint Cup Series race at the road course in upstate New York. The race will be titled the Heluva Good! Sour Cream Dips at The Glen.

Heluva Good! is headquartered in Sodus, N.Y., about an hour drive north of the track. Company officials say they wanted to promote an event in the area.

Scott Blake, senior vice president of operations for Heluva Good!, says the deal is for one year and will be evaluated at the end of the season. Terms were not released, but the value of a Sprint Cup title sponsorship can exceed $1 million.

Track officials also say grandstand ticket prices are being reduced.