A Bronx tax preparer known as "the Magician" was arrested by IRS Criminal Investigations agents in an alleged $100 million dollar tax rip-off scheme.
Rafael Alvarez was charged Monday morning on federal tax and conspiracy counts. Federal prosecutors said the 60-year-old engaged in a scheme to submit thousands of false tax returns for more than 10 years, stealing more than $100 million. Alvarez grossed more than $15 million for his Atax New York firm, according to the feds.
"While Alvarez may have been known as 'the Magician,' he can’t say abracadabra and make these charges disappear," said IRS-CI Special Agent in Charge Thomas Fattorusso. "ATAX grossed over $15 million in revenue in just three years. Today’s arrest was no magical illusion, and Alvarez now faces the reality of his actions."
A representative with ATAX New York said Alvarez had "retired" and no longer worked at the firm. She hung up when asked about the tax fraud allegations.
Prosecutors called the alleged scheme one of the single biggest tax rip-offs ever committed by a single tax preparer. FBI New York Director James Smith called it "a deliberate slight against the integrity of our country’s tax system."
Investigators said Alvarez oversaw the scheme that involved recruiting customers where he and his employees would falsely itemize business deductions and make up capital losses to increase refunds.
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Alvarez, of Cortland Manor, New York, faces charges including include tax fraud, identity theft, making false statements and conspiracy. He was expected to appear in court Monday afternoon on the charges.
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"Alvarez's sleight of hand was criminal tax fraud, a serious federal tax crime...depriving the IRS of more than $100 million," said U.S. Attorney Damian Williams. "Today’s charges, on Tax Day, should serve as an important reminder to tax professionals that when they try to cheat the public fisc they will face grave consequences.”
Attorney information for Alvarez was not immediately available.
