Damian Williams, U.S. Attorney for the Southern District of New York, speaks during a news conference on September 22, 2023 in New York City.
Barry Williams | New York Daily News | Getty Images
A New York A tax preparer was arrested Monday on charges of causing “substantially” more than $100 million in tax losses by filing false returns, federal prosecutors said, in one of the largest tax frauds ever committed by a tax preparer.
Prosecutors say preparer Rafael Alvarez orchestrated an “extensive scheme” at his Bronx-based firm ATAX New York to “file tens of thousands of federal individual income tax returns form” that includes false information to reduce a filer’s tax liability.
The false information allegedly included false itemized deductions, false capital losses, and false business expenses and tax credits.
“Many of the numbers Alvarez entered were completely fictitious and were not supported by any evidence or documentation,” the indictment against him states.
Damian Williams, the U.S. attorney in Manhattan, said Monday that Alvarez, 60, was known as a “magician” by his clients for his “ability to make his clients’ tax liabilities disappear.” The deadline for most Americans to file their income tax returns.
ATAX New York generated more than $15 million in revenue from 2016 to 2019, according to IRS Criminal Investigations Special Agent in Charge Thomas Fattorusso.
According to prosecutors, Alvarez served as ATAX’s CEO, owner and manager from 2010 to 2020, during which time the company prepared more than 90,000 income tax returns.
2021, Manhattan Federal Court Judge The U.S. Attorney’s Office in Manhattan permanently barred Alvarez and ATAX from preparing federal tax returns for others after alleging in a civil lawsuit that they prepared and filed fraudulent tax returns for others.
Alvarez and ATAX agreed to pay $159,600 in disgorgement to the United States in the case.
Alvarez, who lives in Cortlandt Manor, N.Y., is charged in the new criminal case with one count of conspiracy to defraud the United States and making false statements, which carries a maximum sentence of five years if convicted. Imprisonment, four additional counts.
He was also charged with aggravated identity theft and faces a minimum sentence of two years in prison if convicted.
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