Mansfield Man Charged in Fraudulent Tax Return Scam

A Mansfield man has been charged with 33-counts of filing fraudulent tax returns, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.

John Anthony Castro, 40, was indicted on thirty-three counts of aiding and assisting in the preparation and presentation of a false and fraudulent return. He made his initial appearance Tuesday before U.S. Magistrate Judge Hal R. Ray, Jr.

“Mr. Castro’s alleged crimes are stunning in their brazenness,” said U.S. Attorney Simonton.  “The Department of Justice will continue to hold people accountable who steal from the federal government’s—and the American public’s—pockets.”

"This is precisely the type of conduct IRS Criminal Investigation and our law enforcement partners are committed to deterring,” said Tammy Tomlins, Special Agent in Charge of the Newark Field Office. “Today’s indictment sends a clear message, you will be held accountable, if you abuse our tax system for your personal financial gain.”

According to the indictment, Mr. Castro owned and operated Castro & Company LLC. a virtual tax preparation business with locations in Orlando, Florida, Mansfield, Texas, and Washington, D.C. Starting in 2016, Mr. Castro devised a scheme to falsely create and submit false tax returns on behalf of unsuspecting taxpayers. Taxpayers would seek out Castro’s assistance in filing personal tax returns and Mr. Castro would promise a significantly higher refund than taxpayers could receive from other prepares and on many occasions offered to split the additional refund with taxpayers. In order to achieve these larger refunds, Mr. Castro generated false deductions without the taxpayer’s knowledge.

In 2018, an undercover agent, posing as a taxpayer, contacted Castro & Company, LLC for assistance. Castro refused to meet in person unless a $5,000 retainer was paid but offered to assist the undercover agent virtually.  During a recorded telephone conversation, Mr. Castro stated that he could project the amount of the tax refund the undercover agent would likely receive from another firm and then compare that figure with the refund that Mr. Castro would obtain.

According to the indictment, an employee of Mr. Castro’s interviewed the agent over the telephone regarding deductions. The employee stated that Mr. Castro would make any decisions regarding what items would be included on the tax filing. The employee did not identify any deductions that would apply to the agent and in the course of the interview, the undercover agent denied any facts that would support deductions. On March 14, 2018, Mr. Castro filed the agent’s tax return claiming $29,339 in fraudulent deductions. The IRS issued a refund of $6,007, Mr. Castro received $2,999 for his services and the agent received the remaining amount of $3,008.  As Castro told the taxpayer, he would have received only a $300 deduction had he used another tax preparer.

Mr. Castro continued in a similar pattern with dozens of other taxpayers, resulting in hundreds of thousands of improperly paid claims. 

An indictment is merely an allegation of criminal conduct, not evidence. Mr. Castro is presumed innocent until proven guilty in a court of law.

If convicted on all counts, he faces up to 99 years in federal prison – 3 years per count.

The Internal Revenue Service, Criminal Investigation conducted the investigation. Assistant U.S. Attorney P.J. Meitl is prosecuting the case.