FOR IMMEDIATE RELEASE:

August 15, 2003

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

JURY'S VERDICT CONVICTS LAREDO WOMAN OF TAX FRAUD
CONTACT AUSA: Dixie A. Morrow
Phone: 956/723-6523

(LAREDO) United States Attorney Michael Shelby announced today that late today a federal jury returned a verdict finding Sandra Luz Castro of Laredo guilty of all 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. Castro faces a maximum penalty of three years in prison, without parole, a fine of $250,000, and costs of prosecution. Castro was indicted by a federal grand jury in April of this year.

During the eight day trial, the jury learned that Castro, a tax preparer, knowingly and willfully falsified numerous line items in each of her paying clients' U.S. Individual Income Tax Return Forms 1040 and 1040A for the tax years 1997 and 1998. 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 dependent 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.

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

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