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Forsyth Co. man sentenced for filing false tax returns


Defendant stole company money, then reported money as loans to IRS


December 18, 2012
ATLANTA — Jorge A. Castellanos, 49, of Cumming, who filed false federal individual income tax returns for 2006 and 2007 tax years with the Internal Revenue Service, was sentenced Dec. 11 by U.S. District Judge Timothy C. Batten Sr. to serve four years, nine months in federal prison, followed by one year of supervised release.

Castellanos was convicted on Sept. 19 upon his plea of guilty to filing false tax return charges.

Castellanos orchestrated a scheme in which he duped his two partners and the company's investors, and ultimately failed to report on his 2006 and 2007 personal income tax returns over $1.3 million in investment funds that he had stolen.

In 2004, Castellanos and his partners formed an investment business, named GC Trading, LLC ("GCT LLC"), which touted itself as pre-selling overstock golf equipment and providing a return of the profits to its investors.

Castellanos modeled GCT LLC after another totally separate business with a very similar name that he solely owned and operated: GC Trading, Inc. ("GCT INC"). Castellanos did not operate GCT LLC legitimately.

Instead of purchasing golf equipment from vendors with GCT LLC's investors' funds, Castellanos diverted most of the money to his GCT INC bank account, and used the money to pay his own business and personal expenses. Castellanos then tried to hide this stolen income from the IRS by telling his accountants that the stolen money was from loans.

One accountant relied on this false information and unknowingly prepared and filed false income tax returns for tax years 2006 and 2007 on Castellanos' behalf.

The false returns resulted in a tax loss of approximately $1,357,562.

"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," said Veronica Hyman-Pilott, acting special agent in charge of IRS Criminal Investigation. "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."

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