Tax Fraud Scheme Results in Five Convictions
PENSACOLA, FLORIDA – At the conclusion of a twelve-day trial in Pensacola before Senior United States District Judge Roger Vinson, five defendants were convicted yesterday of a federal tax fraud scheme. A federal jury convicted John David Castleberry, 64, and Teresa Haggerty, 61, both formerly of Pensacola Beach, Florida, Mark Douglas Stokes, 61, and Melinda K. Stokes, 60, of Colleyville, Texas, and Christopher Stephen Baum, 57, of Arlington, Texas, of conspiracy to file and assist in the filing of fraudulent tax returns and conspiracy to defraud the United States by making fraudulent tax refund claims and impeding the IRS in the assessment and collection of federal income taxes. Castleberry and Haggerty were also found guilty on two additional counts of aiding the filing of false federal income tax returns in which they fraudulently claimed tax refunds. Castleberry was also convicted of filing a false income tax return in his own name. Prior to the trial, Barbara Denise Stephens, 52, of Arlington, Texas, Sheila Lin Castleberry, 63, of Portland, Oregon, and Deborah Tenney, 61, of Sarasota, Florida, each pled guilty to conspiracy to file and assist in the filing of fraudulent tax returns and conspiracy to defraud the United States by making fraudulent tax refund claims and impeding the IRS in the assessment and collection of federal income taxes. The verdicts and guilty pleas were announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
At trial, the government presented evidence that between 2008 and 2010, the defendants helped to prepare and file fraudulent tax returns seeking more than $9 million in refunds. The defendants perpetrated the scheme by falsely reporting to the IRS, using an IRS form, that defendants’ or their clients’ creditors had paid large amounts of interest, withheld equally large amounts of federal income taxes, and paid this money over to the IRS. As a result of the fraudulently overstated income tax withholdings, the tax returns that were filed on behalf of the defendants, or their clients, claimed large refunds to which they were not entitled. The defendants used this method in an attempt to pay off their debts with fraudulent tax refunds.
In announcing the verdicts and the guilty pleas, United States Attorney Marsh said, “I commend the Treasury Inspector General for Tax Administration and the IRS for their hard work in this case. The United States Attorney’s Office is committed to aggressively pursuing and bringing to justice those who steal tax dollars and willfully undermine the tax system.”
Special Agent in Charge James D. Robnett stated, “Tax fraud against the government takes many forms, but the most egregious is the blatant theft of government funds under the pretense of make-believe earnings and tax withholdings. The IRS will continue to vigorously enforce the tax laws and for those who think that far-fetched ideas for quick cash from the government using false information is a good idea, they should take note that there are dire consequences to be faced should they decide to follow internet myths and fallacies.”
Defendants Mark Douglas Stokes, Melinda K. Stokes, and Christopher Baum are all scheduled to be sentenced on April 15, 2015. Defendants John David Castleberry and Teresa Haggerty are scheduled for sentencing the following day. All sentences will be held before Senior United States District Judge Roger Vinson.
The case was investigated by agents of the Internal Revenue Service – Criminal Investigation and the Treasury Inspector General for Tax Administration (TIGTA) Dallas Field Division. The case was prosecuted by Assistant United States Attorneys Randall J. Hensel and J. Ryan Love.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access available public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.