Man Convicted of Tax Fraud for Falsely Inflating Client Returns in Dallas

The Tax Fraudster: Dallas Man Convicted of Falsely Inflating Client Returns

In a shocking case of tax fraud, 40-year-old John Anthony Castro of Dallas, Texas, has been convicted of 33 counts of tax fraud for falsely inflating numerous client tax returns. Castro, the owner of the online tax preparation business Castro & Company, was indicted in January and found guilty on all charges following a five-day bench trial before Senior U.S. District Judge Terry R Means.

Castro, who failed to pass the bar exam despite graduating from law school, was immediately taken into custody after the verdict. According to U.S. Attorney for the Northern District of Texas, Leigha Simonton, Castro’s actions were driven by greed, as he promised clients significantly higher refunds by claiming deductions that had no basis in fact.

Evidence presented in court revealed that Castro filed over 1,900 tax returns on behalf of individuals worldwide between 2017 and 2019. He falsely claimed to be a West Point graduate and an “international tax expert” and “federal practitioner,” using these credentials to deceive clients into trusting his expertise.

In some cases, Castro filed tax returns without clients’ permission or knowledge, while in others, he claimed deductions based on extreme and unsupported legal theories. For example, he considered any expense related to preventing an illness as an “impairment related work expense,” and claimed the full value of mortgage and utilities as deductions as long as the taxpayer had some type of Schedule C business to claim.

The IRS Criminal Investigation, Newark Field Office, Special Agent in Charge, Jenifer L. Piovesan, condemned Castro’s actions, stating that while most tax preparers are honest, individuals like Castro victimize their clients for personal gain. Castro now faces a lengthy prison sentence as a convicted felon.

In a revealing twist, an undercover IRS – CI agent contacted Castro for assistance in February 2018. The agent was asked for a $5,000 retainer for in-person meetings, but communication was done via email instead. Castro’s employee later discussed deductions with the agent, highlighting Castro’s control over what items would be included in the tax filing.

The case serves as a cautionary tale about the importance of verifying the credentials and integrity of tax preparers, as individuals like Castro can exploit unsuspecting clients for their own financial gain.