John Anthony Castro, a 40-year-old resident of Mansfield, has been charged with 33 counts of filing fraudulent tax returns, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.
Castro, the owner and operator of Castro & Company LLC, a virtual tax preparation business with locations in Orlando, Florida, Mansfield, Texas, and Washington, D.C., was indicted on thirty-three counts of aiding and assisting in the preparation and presentation of false and fraudulent returns. He made his initial appearance on Tuesday before U.S. Magistrate Judge Hal R. Ray, Jr.
The alleged crimes involved a scheme where Castro created and submitted false tax returns on behalf of unsuspecting taxpayers starting in 2016. Seeking assistance from Castro for filing personal tax returns, taxpayers were promised significantly higher refunds, with Castro often offering to split the additional refund with them. To achieve larger refunds, he generated false deductions without the taxpayer's knowledge.
An undercover agent, posing as a taxpayer, contacted Castro & Company, LLC in 2018 for assistance. Despite refusing an in-person meeting without a $5,000 retainer, Castro offered virtual assistance. In a recorded conversation, Castro projected the expected refund, claiming he could outperform other tax firms. An employee of Castro's interviewed the agent over the phone, with decisions on deductions left to Castro. The agent denied supporting facts for deductions, yet Castro filed a tax return claiming $29,339 in fraudulent deductions. The IRS issued a refund of $6,007, with Castro receiving $2,999 for his services.
Castro continued this pattern with numerous taxpayers, resulting in hundreds of thousands of improperly paid claims. If convicted on all counts, he could face up to 99 years in federal prison – 3 years per count. An indictment is an allegation, and Mr. Castro is presumed innocent until proven guilty in a court of law.
The Internal Revenue Service, Criminal Investigation conducted the investigation, emphasizing their commitment to deterring abuse of the tax system. U.S. Attorney Simonton stated that the Department of Justice will hold accountable those who steal from the federal government and the American public.