How John Castro deceived the US and scammed Australians through tax fraud scheme

John Castro tried to take down Donald Trump and ended up in jail. But there is much more to the fake-it-till-you-make-it story of a man who came to be feared by Aussies in the US.

Aspiring US president John Castro makes it sound like he is living the American dream. He claims to be a lawyer, a veteran, a corruption fighter, a millionaire and even a singer.

But in the infamous words of an adviser to Donald Trump – the former president Castro tried to stop returning to the White House – these are actually alternative facts.

The reality is that the 40-year-old never passed the bar exam and is regarded as a vexatious litigant. He dropped out of a military prep school and never made it to a full academy, let alone active duty. He once pleaded guilty to faking a bomb threat to a government official.

As for Castro’s millions? He made them as an accountant in a years-long tax fraud scheme that targeted Australians living in the US. So when the election comes around, he won’t be on the ballot. He won’t even be allowed to vote – because he will be a felon in jail.

John Castro claims to be a lawyer, a veteran, a corruption fighter, a millionaire and even a singer.

The full fake-it-till-you-make-it story of Castro has never been told in the US. The longshot Republican presidential candidate has instead received widespread publicity for his legal bid to disqualify Mr Trump from running again because of his effort to overturn his 2020 defeat.

“It’s pretty much going to be the end of Trump,” Castro said in an interview, declaring he was “determined to make sure that he was held accountable” for sparking the January 6 riot.

Australian expats, however, have been determined to see Castro held accountable.

For years, he pursued them as clients for his accounting firm, offering a generous but controversial interpretation of how their superannuation should be taxed under US laws.

John Castro received widespread publicity for his legal bid to disqualify Donald Trump from running for president again. Picture: Supplied

Shayne Evans, who runs The Mateship Foundation helping homeless people in Los Angeles, remembers Castro advertising in an Australian expat Facebook group. Picture: Jeff Rayner/Coleman-Rayner

Shayne Evans, who runs The Mateship Foundation helping homeless people in Los Angeles, remembers Castro advertising “non-stop” in an Australian expat Facebook group. When she pointed out his advice was “completely false”, she said Castro called her “all the names under the sun” and sent her a cease-and-desist notice.

But other Australians turned to Castro to help navigate the American complex system.

A decade ago, he signed up a large number of expats working at a major US company in Michigan, having “touted his expertise as an international tax attorney with specific expertise dealing with Australian superannuation tax issues”, according to one of the Australians.

In 2017, however, this Australian discovered Castro claimed tens of thousands of dollars worth of fake deductions in tax returns he never saw before they were filed. He emailed his colleagues to warn them, saying the accountant seemed to be “inflating returns … in order to maximise his fee”, and that he had discovered Castro was “not really a legitimate attorney”.

Castro responded by suing the Australian for $US1.45m in damages. According to court documents, he also emailed his former client to demand he sign a “gag order for life”, warning that if did not: “Pray for the best, but I can assure you it will only get worse.”

The lawsuit was eventually dismissed. But Castro’s pattern continued for years – fraudulent tax returns followed by threats to those who questioned him.

Australians turned to Castro to help navigate the American system.

He would not even let America’s tax office stop him. Last year, after Castro learned he was being investigated for fraud, he sued not only an agent on the case but Mr Trump himself, claiming he “weaponized fanatical supporters who worked within the Internal Revenue Service and US intelligence community to unlawfully monitor, surveil and harass” him.

“The goal of this unauthorised surveillance program was to find evidence of criminal wrongdoing in order to discredit John Anthony Castro,” he said as he sued for $US180m.

“The program ultimately failed because John Anthony Castro is a law-abiding citizen.”

The case was dismissed. And in January, he was charged with filing fraudulent tax returns, alleged crimes US Attorney Leigha Simonton said were “stunning in their brazenness”.

Her brief for a five-day trial in May laid out just how brazen.

An Australian who was attracted to Castro’s purported specialisation on US-Australia tax issues ultimately decided not to hire him, having been concerned by the size of the refund the accountant promised. Months later, when he received a cheque for almost $US8000, he realised Castro filed the return anyway – and kept another $US25,000 from the IRS refund.

When the Australian demanded he cancel the submission, Castro tried to claim he would owe the IRS almost $US32,000 if he tried to amend his return.

Castro identified himself as a veteran on his Texas driver’s licence.

Another Australian received a $US3090 cheque for tax refund on a return he never authorised Castro to file, with the accountant keeping $US2000. Castro refused to respond to his calls and emails, and when the Australian tried to confront him at his office, Castro had security lock him out before claiming he reported him to the police.

That was how Castro dealt with those who challenged him, according to Ms Simonton. He “lashed out vindictively” and caused “financial and emotional pain” to his victims.

And he kept profiting, obtaining criminal proceeds of at least $US15m. He owned a Ferrari, a Bentley and a Mercedes, and even loaned $US20m to his presidential campaign.

“I went from being a broke law school graduate to all of a sudden generating millions,” Castro said on his campaign website.

“I felt like I was living someone else’s life.”

In many ways, he was. Ms Simonton’s trial brief spelled out his many deceptions.

Castro identified himself as a veteran on his Texas driver’s licence, she said, even though he “did not attend a military academy, did not serve in the military, and is not a veteran”. (He has claimed he earned “a Congressional Nomination to attend the United States Military Academy at West Point” but resigned in protest of the “unjustified Iraqi invasion”.)

Ms Simonton said Castro described himself as the managing partner of an international tax law firm, even though he failed the bar exam and was “not an attorney”. He also held himself out to be an enrolled agent with the IRS, despite failing to renew that status for two years.

And the US Attorney also revealed his criminal history of misdemeanour charges for assault in 2000, filing a false report in 2003, and harassment in 2005. (He has claimed he was “unlawfully arrested … on false charges that are later found to be fabricated”.)

In 2005, Castro faced court on a harassment charge while already on probation for faking a bomb threat.

In 2005, when Castro faced court on the harassment charge while already on probation for faking a bomb threat, the judge told him he was a “very, very intelligent person”.

“But you need to direct it in the right way,” the judge cautioned, according to a news report.

“Once you realise that, you will go far in life.”

Almost two decades later, Castro seemed to believe he had taken that advice.

“I could spend the rest of my life building a business empire and even becoming a billionaire if I really set my mind to it,” he said in his pitch to be the next US president.

“But that’s just not who I am. This is who I am. I was born to help people. I was born to serve my country. I was born to lead my country that I love so dearly.”

Last week, however, as he contemplated a lengthy stint behind bars, Castro told the judge overseeing his case: “My only prayer now is to live a quiet life with my wife and children.”

His Australian victims will be following his sentencing this week, as he faces up to 99 years in prison. And yet, even with Castro in prison, many of them remain too fearful to speak against a man who caused so much pain.

Originally published as How John Castro deceived the US and scammed Australians through tax fraud scheme