Houston Man Pleaded Guilty to Tax Fraud

Levi Casildo Castro admitted to withholding employee taxes and filing false returns that cost the U.S. Treasury $400,000.

Updated on Sept. 29, 2026 in Taxes

Bold flat-color editorial illustration of a stark architectural corner, evoking the gravity of federal tax enforcement. — Levi Casildo Castro of Houston pleaded guilty to tax fraud after withholding $400,000 in employee taxes and filing false federal returns. AI Illustration. Upload story photo >

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Levi Casildo Castro, a 40-year-old Houston man, has pleaded guilty to charges involving tax fraud. The scheme resulted in a loss of approximately $400,000 to the U.S. Treasury.

Why it matters

The case highlights the federal government's ongoing enforcement efforts against payroll tax evasion and fraudulent tax return preparation. These illegal activities undermine tax system integrity and deprive the government of essential public funds.

Castro faces a maximum potential prison sentence of eight years and a fine of up to $110,000. These penalties follow an IRS investigation into his actions involving two remodeling and cleaning businesses.

The players

Levi Casildo Castro

He is a 40-year-old Houston man who pleaded guilty to tax fraud for withholding employee taxes and filing false client returns.

Lee H. Rosenthal

She is the U.S. District Judge overseeing the case who scheduled the sentencing hearing for December 16.

IRS

This is the federal agency that conducted the investigation into the tax fraud committed by Castro.

The details

Castro withheld federal taxes from employees of two home remodeling and cleaning companies but failed to pay them to the government. Additionally, he prepared false tax returns for clients that inflated wages and credits to illegitimately secure higher earned income tax credits.

December 16, 2026: The sentencing hearing for Castro is scheduled.

Market Dynamics

This case follows the enforcement patterns established by the IRS's tax fraud protocols. It reflects broader federal efforts to curb tax evasion within the small business and tax preparation sectors.

This case serves as a reminder of the strict federal requirements for business owners regarding payroll tax withholding. Employers must ensure all employee tax withholdings are fully paid to the U.S. Treasury to avoid severe legal and financial consequences.

The takeaway

Taxpayers should be aware that utilizing preparers who falsely inflate credits can lead to significant legal liability for the client. Always ensure your tax filings accurately reflect your financial information to maintain compliance with federal law.