A Bronx tax preparer known as “the Magician” has received a four-year prison sentence for concocting a $145 million tax fraud scam. The United States Attorney’s Office for the Southern District of New York stated that Rafael Alvarez, CEO of ATAX, pleaded guilty to charges of conspiracy to defraud the United States and was sentenced by U.S. District Judge J. Paul Oetken.
From 2010 to 2020, Alvarez’s business submitted tens of thousands of phony federal individual income tax returns to reduce his clients’ tax payments and exaggerate their refunds. During this time, he was able to defraud the Internal Revenue Service (IRS) of $145 million in tax revenue. United States Attorney Jay Clayton referred to Alvarez as “an elaborate fraudster,” underlining the tax cost that all Americans bear as a result of such scams. “All Americans bear the burden of tax fraud, and we want scammers like this brought to justice,” Clayton noted in the press release.
Related posts
During his time at ATAX, Alvarez hired and personally educated people, selecting those who were impressionable and easily intimidated to carry out his dishonest tax preparation tactics. According to court documents, he bullied and threatened any employees who ventured to challenge his tactics to keep them from reporting his fraudulent actions to the authorities.
In addition to his prison sentence, the 61-year-old from Cortland Manor, New York, will serve three years on supervised release. He was ordered to pay $145 million in reparations and forfeit more than $11.84 million in unlawful income. Mr. Clayton applauded the effectiveness of the investigation, citing the work of the IRS, Criminal Investigation, the Federal Bureau of Investigation, and the Treasury Inspector General for Tax Administration. The case was handled by the office’s Illicit Finance and Money Laundering Unit, with Assistant United States Attorney David R. Felton in charge of the prosecution.
