John David Castleberry, Tax Fraud, Florida 2015

Five individuals, including a couple from Pensacola Beach, Florida, have been sentenced to federal prison for their roles in a tax fraud scheme that defrauded the IRS of over $9 million.

John David Castleberry, 64, and Teresa Haggerty, 61, both formerly of Pensacola Beach, joined Mark Douglas Stokes, 61, and Melinda K. Stokes, 60, of Colleyville, Texas, and Christopher Stephen Baum, 57, of Arlington, Texas, in a scheme to prepare and file fraudulent tax returns.

The group used an obscure IRS Form 1099-OID to falsely report that they and/or their clients' creditors had withheld large amounts of federal income taxes and had paid this money over to the IRS.

As a result of the fraudulently-overstated income tax withholding, the tax returns that were filed on behalf of the defendants and/or their clients claimed large refunds to which the defendants and their clients were not entitled.

The defendants were sentenced as follows: Castleberry received 126 months in prison and $328,143.90 in restitution to the IRS, Haggerty received 18 months in prison and $129,762.85 in restitution to the IRS, Mark Stokes received 24 months in prison and $162,608.23 in restitution to the IRS, Melinda Stokes received 12 months and 1 day in prison and $162,608.23 in restitution to the IRS, and Baum received 51 months in prison and $162,608.23 in restitution to the IRS.

United States Attorney Pamela C. Marsh said, 'This week, millions of Americans submitted accurate and timely tax returns. The individuals who defraud the United States Treasury are also stealing from each honest American taxpayer.'

Special Agent in Charge James D. Robnett added, 'Tough sentences like the one handed down to John Castleberry should be a stark reminder to those out there contemplating theft of taxpayer dollars. Even lessor participants pay a heavy price for their participation in tax fraud schemes.'

The case was investigated by 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.

Source: https://www.justice.gov/usao-ndfl/pr/five-sentenced-tax-fraud-scheme