Tax Preparer Known as ‘the Magician’ Bilked I.R.S. Out of $145 Million
The New York Times
A businessman in the Bronx falsified information on thousands of returns, committing one of the largest tax frauds in Department of Justice history, prosecutors said.
A tax preparer in the Bronx spent decades operating a business where he filed returns for thousands of clients, often getting them big refunds. Customers called him “the magician” because it seemed he could make their tax burdens disappear.
But federal prosecutors said that many of the thousands of returns he had filed were part of a “sweeping fraudulent scheme” that used bogus information to bilk the I.R.S. out of $145 million.
It was one of the largest frauds committed by a tax preparer that the Department of Justice had encountered in its history, prosecutors said.
The man, Rafael Alvarez, 61, of Cortlandt Manor, N.Y., appeared before a judge in U.S. District Court in Manhattan on Tuesday and pleaded guilty to one count of conspiracy to defraud and steal government funds and one count of assisting in the preparation of a false and fraudulent U.S. individual income tax return.
As part of his plea deal, Mr. Alvarez, who for about 10 years was the chief executive of a company called ATAX on the edge of the Marble Hill neighborhood, admitted to leading the scheme and attempting to obstruct the federal authorities’ investigation. He also agreed to pay the I.R.S. $145 million in restitution and forfeit $11.84 million in fraudulent proceeds that he had received.
Mr. Alvarez faces a maximum sentence of eight years in prison for the two counts and will be sentenced on April 11. His lawyer, Michael Bachrach, declined to comment.
