Guatemalan national sentenced for $600K tax refund fraud

Juan Castro-Castro, 37, formerly a resident of Shelbyville, Ky., was sentenced last week to serve 37 months in prison for engaging in a fraudulent tax refund conspiracy, according to David Rivera, U.S. attorney for the Middle District of Tennessee.
May 20, 2014

Juan Castro-Castro, 37, formerly a resident of Shelbyville, Ky., was sentenced last week to serve 37 months in prison for engaging in a fraudulent tax refund conspiracy, according to David Rivera, U.S. attorney for the Middle District of Tennessee.

Castro-Castro is an undocumented alien and citizen of Guatemala and acknowledged in court he will likely be deported upon completion of his prison sentence. 

Castro-Castro pleaded guilty to conspiring with others to bring fraudulently acquired tax refund checks to Nashville, and with stealing about $649,000 in tax refunds, between January 2012 and August.

“Castro-Castro and others are using these tax fraud schemes to steal millions of dollars from honest United States taxpayers,” said Rivera. “Our federal law enforcement agencies are actively and aggressively on the hunt for such violations. They are working together to identify and disrupt these schemes, arrest the participants, and bring thieves of public money like Mr. Castro-Castro to federal court where they will be held accountable.”  

Testimony at sentencing established that Castro-Castro and others had used false names to submit more than 100 fraudulent federal tax returns in Kentucky. These false returns claimed that tax refunds were owed, and most listed one of four Kentucky addresses to which multiple refund checks were mailed by the IRS as a result of the scheme. These addresses included empty apartments on which Castro-Castro was the leaseholder and paid rent, as well as his own residence.

Castro-Castro received these refund checks and brought them to Nashville several times each week to be cashed by an accomplice.  Federal investigators discovered the scheme and identified the location where the checks were being cashed as Cash City on Nolensville Rd. Castro-Castro was arrested by federal agents in May 2013 and has been held in custody since that time. During the past year, 21 other individuals involved in the scheme were charged in other indictments, and 16 who pleaded guilty.

“The defendants who perpetrated this scheme systematically defrauded the government and the taxpaying public,” said Christopher A. Henry, Special Agent in Charge, IRS-Criminal Investigation.  “At the IRS, protecting taxpayer money is a matter we take very seriously.  IRS Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves by preparing false claims for refunds.”

“Tax fraud is an outrage to honest citizens everywhere who fulfill their obligation to society by paying their fair share,” said Special Agent in Charge of HSI New Orleans Raymond R. Parmer Jr. “Criminals who attempt to cheat the system and steal from law-abiding Americans will continue to be a major priority for HSI investigators.”

Parmer oversees a five-state area of operations to include Tennessee, Alabama, Arkansas, Louisiana and Mississippi.

The Internal Revenue Service’s Criminal Investigation division, Homeland Security Investigations and the U.S. Postal Inspection Service investigated the case. Assistant U.S. attorney Hilliard Hester served as prosecutor.

An indictment is merely an accusation.  With respect to the remaining defendants, all are presumed innocent until proven guilty, Rivera said.

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