A 49-year-old Cumming businessman was sentenced Tuesday to nearly five years in federal prison for filing false tax return charges in 2006 and 2007 with the Internal Revenue Service.
According to the U.S. Attorney’s office for the Northern District of Georgia, Jorge A. Castellanos pleaded guilty to the charges in September.
U.S. District Judge Timothy C. Batten Sr. sentenced him to serve four years and nine months in prison, followed by a year of supervised release.
According to U.S. Attorney Sally Quillian Yates, the charges and other information presented in court, Castellanos devised a scheme in which he duped his two partners in an investment company that pre-sold overstock golf equipment, as well as their investors.
He then failed to report the nearly $1.4 million in investment funds that he had stolen on his 2006 and ’07 personal income tax returns.
He tried to hide the stolen income from the IRS by telling his accountants it came from loans.
One accountant reportedly relied on the false information and unknowingly prepared and filed the false returns on Castellanos’ behalf.
In a statement, Yates heralded the sentence and vowed to “aggressively prosecute individuals who knowingly and willfully defy their tax obligations by lying and cheating.”
Veronica Hyman-Pilott, acting special agent in charge of the IRS criminal investigation, noted that the law is “clear on the issue of taxable income and who is required to file and pay taxes, there is no gray area on the subject.”
“This sentence hopefully sends a message that the IRS is working to make sure that all taxpayers file and pay their fair share of taxes,” she said in a statement.
According to the U.S. Attorney’s office and other information presented in court, Castellanos modeled the company involved in the tax case after another totally separate business with a similar name that he solely owned and operated.
However, instead of buying golf equipment from vendors with investors’ funds, he diverted most of the money to his other company’s bank account, and used the funds to pay business and personal expenses.