Background
John Anthony Castro founded Castro and Company LLC, which offered tax-planning and tax-preparation services. Although Castro was an IRS-enrolled agent and had law degrees, he was not licensed by any state bar. The government alleged that he used fabricated Schedule A deductions and Schedule C business losses to obtain inflated refunds for clients, often taking approximately half of each anticipated refund as his fee. Castro alone was permitted to file returns through the firm’s software, and clients generally did not review the completed returns before filing.
After a five-day bench trial, Castro was convicted on 33 counts of aiding and assisting in the preparation and presentation of false and fraudulent tax returns under 26 U.S.C. § 7206(2). The district court calculated a Guidelines range that included a four-level organizer-or-leader enhancement and a two-level obstruction-of-justice enhancement, then sentenced Castro to 188 months in prison and one year of supervised release. Castro appealed his convictions, the denial of post-trial motions, and the two enhancements. A separately docketed appeal challenged the denial of bail pending appeal.
The Court’s Holding
The Fifth Circuit granted panel rehearing, withdrew its July 10, 2026 opinion, and substituted a new opinion; it denied rehearing en banc. In the substituted opinion, the court dismissed for lack of jurisdiction Castro’s challenge to the denial of his post-judgment motion to correct the trial transcripts because he had not filed a notice of appeal encompassing that later order. It nevertheless had jurisdiction to review the denial of his new-trial motion because the government forfeited its non-jurisdictional timeliness objection. On the merits, the court found no Brady violation: Castro already knew one witness was married, evidence concerning her husband’s tax lien would have been cumulative impeachment, and the asserted immunity agreement was unsupported. The district court also acted within its discretion by denying an evidentiary hearing.
The court held that Castro validly waived his Confrontation Clause rights concerning stipulated evidence because he agreed to the stipulations in writing, did not dissent when counsel affirmed them at trial, and used them as part of a legitimate strategy focused on willfulness. It also upheld the organizer-or-leader enhancement because the scheme was otherwise extensive, used numerous employees and outsiders, and plausibly included at least one criminally culpable employee whom Castro led. The obstruction enhancement was supported by evidence that Castro used lawsuits and threatening communications to intimidate or influence investigators and potential witnesses. The court affirmed in all other respects and dismissed the bail appeal as moot because the Fifth Circuit had already denied the requested bail.
Key Takeaways
- A notice of appeal generally does not encompass a post-judgment order entered afterward; reviewing that order ordinarily requires a separate notice of appeal.
- The government may forfeit objections based on the non-jurisdictional time limits governing criminal new-trial motions and notices of appeal.
- A defendant may waive confrontation rights through counsel’s evidentiary stipulation when the defendant does not dissent and the stipulation serves a legitimate trial strategy.
- An organizer-or-leader enhancement may rest on an “otherwise extensive” scheme that uses numerous unknowing participants, so long as the defendant led at least one criminally responsible participant.
Why It Matters
The opinion clarifies the jurisdictional consequences of post-trial motions in criminal cases and distinguishes jurisdictional requirements from forfeitable claim-processing rules. It also illustrates why cumulative impeachment evidence generally will not establish Brady materiality.
For sentencing practitioners, the decision shows the breadth of the “otherwise extensive” prong of U.S.S.G. § 3B1.1(a) and confirms that litigation-related threats intended to impede an investigation or deter witnesses can support an obstruction enhancement under U.S.S.G. § 3C1.1.