FOR IMMEDIATE RELEASE:

January 14, 2004

Kesha Handy               
P. O. Box 61129 Houston, TX 77208
Phone: 713/567-9335 Fax: 713/718-3390
E-Mail: usatty.txs@usdoj.gov

LAREDO WOMAN SENTENCED TO PRISON FOR INCOME TAX FRAUD SCHEMES, AND ORDERED TO PAY COSTS OF PROSECUTING CASE
Arthur R. Jones, Assistant U. S. Attorney
Phone: 956/723-6523

(LAREDO, TX) United States Attorney Michael Shelby announced that SANDRA LUZ CASTRO of Laredo, Texas was sentenced to serve 36 months in federal prison without parole for aiding and assisting in the preparation of false federal income tax returns. In addition to the sentence of imprisonment, Judge Keith P. Ellison sentenced Castro to a one-year term of supervised release after she is released from prison, to pay $1,500.00 in special assessments into the federal crime victim's fund, to pay $11,636.82 as the costs of prosecuting the case against her, and to not assist in the preparation of any income tax returns during her period of supervised release.

On August 15, 2003 a federal jury in Laredo convicted Castro of 15 counts of aiding and assisting in the preparation of false tax returns. The jury returned the verdict in approximately two hours, following an eight-day jury trial.

During the trial, the United States introduced evidence that proved Castro, a tax preparer, falsified numerous line items in each of her unwitting paying clients' U.S. Individual Income Tax Return Forms 1040 and 1040A for the tax years 1997 and1998. The fraud included unlawfully splitting married couples' returns and filing the husband as "married filing separate" and the wife as "head of household. It also included filing false itemized deductions on several 1040 income tax returns, to include filing numerous false itemized deductions on Schedule A worksheets included with those returns, as well as falsely claiming education and child and dependant care credits. Castro prepared all of these false items without the knowledge or assistance of her clients. All of the falsely claimed items resulted in larger than authorized refunds for the clients, of which Castro charged 10 percent in advance as part of her standard fee arrangement.

This case was investigated by the Internal Revenue Service - Austin Service Center Questionable Refund Detection Team, the Internal Revenue Service - Criminal Investigation Division, Internal Revenue Service - Examination Division, and was prosecuted by Assistant United States Attorneys Dixie A. Morrow and Arthur R. Jones of the Laredo Division.

040114-castro