Following his recent victory in the Helio Castroneves tax evasion trial, Roy Black, famed trial attorney from Miami spent some time with us reflecting on that trial:
Q: Thanks for your time and congratulations on the not guilty verdicts in the Helio Castroneves case. Any indication from the government on whether they will retry the conspiracy count against Castroneves and his sister?
Mr. Black: No, but in our view, the government can’t retry Helio on conspiracy because of collateral estoppel. If the jury found no tax deficiency on the substantive evasion counts, then there was no unlawful plan. An agreement to comply with the tax code is not a crime. Or, if the jury found no willfulness on the evasion counts, then there can be no willfulness on the conspiracy. Either way we win. At a minimum we get interlocutory review in 11th Circuit before we start any litigation on this issue, we will meet with the government and see what their views are. There are civil remedies the government should be satisfied with.
Q: Did the district court permit the use of jury questionnaires specifically tailored to a tax evasion case?
Mr. Black: Yes, the judge allowed a moderately extensive questionnaire, mainly because of Helio’s public image. Ironically few knew him as a driver, but everyone remembered him winning Dancing with the Stars. That tells you a lot about American culture today!
Q: This case presented some interesting issues – the international entities involved, the idea of “constructive receipt” of income and the testimony of attorney witnesses testifying for the government. Did the defense present any expert testimony? Character evidence? Did any defendant testify?
Mr. Black: We presented expert testimony from a tax attorney on all the tax issues in the case. He also testified all the returns were correct, etc. The government called two former tax attorneys of the defendants and also their CPA’s. So, the government used these witnesses to present their claims on the tax issues and then called an IRS summary witness who spent a day on the stand putting it together. As you know a summary witness like this gives the government a big advantage because it is really just their summation. We were able to do the same thing with our tax expert and thus overcame some of the government advantage. The defendants didn’t testify. Unfortunately for us there had been a civil suit on the same issues and the government used parts of that trial and depositions from that as admissions. We called three days worth of witnesses from Brazil about the business and background of the defendants, which was very effective. We needed it to prove the business necessity of some large deductions. For instance, Helio paid his father a large salary for several years and we needed to prove the payments were proper business expenses.
Q: Were you able to argue that the defendant’s actions after the time frame of the conspiracy were relevant? For instance, I read in the news reports that you had argued that Helio was going to pay his taxes in May of this year. How were you able to persuade the trial judge that evidence of the defendant’s conduct 4 years after the conspiracy ended was relevant?
Mr. Black: After my opening statement mentioning this the government filed an in limine motion to exclude this evidence. The court ruled that it could come in only if Helio testified. He didn’t, so it didn’t.
Q: Did the fact that you were dealing with a number of international entities hurt, or help the defense?
Mr. Black: It almost always hurts when a U.S. taxpayer has an offshore corporation and bank accounts. Especially Swiss bank accounts. But Helio’s situation is different than the usual defendant. Helio is a Brazilian citizen and only in the U.S. on an non-immigrant work visa. He has to leave once his racing career here is finished. So, there is a good reason to have bank accounts in Brazil etc.
Q: Attached is a request that the trial judge order the government to produce all interview memoranda for all witnesses. Were you successful in persuading the judge to provide the defense with that information?
Mr. Black: In the Southern District of Florida we rarely get any agent reports. The government takes the position that they are not verbatim statements., etc, under Jencks . And as you know the 11th Circuit is not helpful on this issue. So, we got a couple of paragraphs of Brady, but that’s all. After Stevens and Shaygan this might change. I think any defense lawyer today must push those cases hard and disgorge more agent interviews. The U.S. Attorney here is reeling after Shaygan and Judge Gold’s hard hitting order, so I expect they should be more liberal in discovery. Judge Gold expanded their Brady obligation. Most lawyers have adopted the government’s language that Brady is for exculpatory evidence only, instead it is for any favorable evidence which is a much more liberal and useful concept for us.
Q: Was there a particular issue that you felt was outcome determinative in the context of the case to persuade the jury to return not guilty verdicts on the substantive counts?
Mr. Black: There was a huge battle over constructive receipt. It would take me pages to explain it all, but it was a highly contentious issue and for three days of deliberation the jury kept asking for more instructions and definitions of the concepts. The court had a lot of trouble with that. I think the jury got the idea that no one can give an accurate definition of constructive receipt and concepts like beneficial ownership. So, they probably figured a 22 year old from Brazil who barely spoke English didn’t understand it either.
Q: How was the experience of trying this case with Bob Bennett out of Washington, D.C.?
Anything you gained from observing his courtroom demeanor/preparation?
Mr. Black: I have known and worked with Bob before and he is a wonderful lawyer. Not just that but the has a great sense of humor which really connects with the jury. One of the funnier parts of the trial dealt with Hugo Boss suits. The government claimed Helio should have reported the income from getting free suits from them. Our defense was that Hugo Boss was a sponsor of the racing team and Helio had to wear the suits. The claim was pretty petty. The total retail value of the suits was around $12,000. The summary government expert even admitted the amount was not material to the return. I cross-examined the CEO of Hugo Boss about how wonderful their suits were and that they wanted to show them off by having a slim good looking guy like Helio wear them. Then Bob got up, stuck his stomach out (which I can attest goes pretty far) and asked how would the suits look on his body. The jury got a good laugh out of that.
Q: I know that you continue to be a student of the law and work tirelessly on behalf of your clients – what can you tell us out in the trenches you learned from this trial?
Mr. Black: Tom as you know, we defense lawyers are counter-punchers. The government always goes first and usually gets all the good rulings from the court. We had some tough days during the trial but our team never lost hope and just kept fighting back. So despite how dark things might look we should not give up.
Roy, thanks very much for your time.