Laredo Tax Preparer Tells Jury She Made 'mistakes'

Laredo, TX, Morning Times ^ | 08-15-03 | Taylor, Erinn

[Theodore R.]

Tax preparer tells jury she made 'mistakes'

BY ERINN TAYLOR Times staff writer

A Laredo tax preparer accused of assisting in the preparation of fraudulent tax returns continued her second day of testimony Thursday, telling the jury she made "mistakes" while preparing tax returns but "they were not intentional."

U.S. District Judge Keith P. Ellison reminded Sandra Luz Castro she was still under oath as she took the witness stand.

Castro is accused of falsifying tax return information for a total of more than $1.1 million in fictitious claims.

Jurors listened as Assistant U.S. Attorney Arthur Jones questioned Castro about several files given by Castro to an Internal Revenue Service investigative agent during a 1999 audit.

Jones brought out the client files one by one, most from the 1998 tax year, and asked the witness if she remembered the client.

The witness continuously answered "I don't recall," when asked if she prepared the tax return and asked to see a copy of the file.

Castro looked over the files before answering that the returns did contain her signature, although she could still not remember several of the clients.

Jones asked the defendant if she charged the clients 10 percent of their expected return as a fee. Castro denied the 10 percent fee, stating she charged $10 an hour. She later testified that she sometimes would charge clients more or less, depending on the amount of work.

Jones then showed the witness several client receipts showing fees of roughly 10 percent of the total expected return.

"My life is on the line and I don't want to lie to you," Castro replied when Jones asked her if she saw the mentioned amounts in the file. She added she was not finished looking at the file.

Castro said she always charged hourly, and it was coincidental that the fees were within a few dollars of being 10 percent of the refund.

The questioning then turned to the 1999 audit performed by IRS agent Jeanette Elizondo.

Castro testified she could not recall asking for an attorney during any part of the process of the audit.

Castro did say she told Elizondo, "You sit there and abuse your position," during one part of an interview.

She added it was at this point that Elizondo allegedly told her that she was "going to get her."

Jones asked the witness if she then contacted her attorney. Castro said she could not afford an attorney and that she did not call Elizondo the next day, as Elizondo had testified earlier.

Castro said she did not hear from Elizondo again until the day she was arrested.

"I was never told I was under criminal investigation," Castro said.

While most of the jury took a short break, two jurors were asked to stay behind. Ellison asked the jurors if they could "exercise fully independent judgement in this case " after it was discovered the two had a family relationship, meaning they are related to each other.

After both jurors said there was no problem, they too were allowed a short break.

After the break, questioning began with the defendant's own tax returns.

Jones asked Castro why she had not declared her earnings from the tax returns she had prepared. Castro testified she had not declared anything because she had taken a loss.

Castro testified it was her belief since she was only preparing the returns part-time, it was not a business and therefore she did not have to declare a loss.

Castro also said she had sent the IRS several forms to support the loss. Jones asked her if she would be surprised if he told her the IRS had no record of the forms.

"I would be very surprised," she answered.

Castro had testified earlier in the trial she was under the impression the education credit, reserved for college students, applied to all child expenses related to school, no matter the age of the child.

Jones asked Castro why, if she believed this applied to all children, she never listed the credits on her own tax return for her children.

Castro claimed she never made enough money to qualify for the "long form," and therefore could not claim the education credit.

"I accept my errors, but they were not intentionally made," Castro said, still referring to the erroneous education and child care credits she listed on tax returns.

"I'm not making excuses for anyone," she said. "I'm paying for my mistakes by sitting here."

Castro could face up to three years in prison and a $250,000 fine for each of the 15 counts of "aiding and assisting in preparation of the false and fraudulent tax returns" if found guilty.

The trial is scheduled to continue Friday at 9 a.m.

08/15/03

[Theodore R.]

"she could not recall"

No fair defense. Hillary Rodham Clinton has already used that line with Whitewater.