A Bronx-based tax preparer known to clients as “The Magician” spent decades filing returns for clients, as part of what federal prosecutors say was a “sweeping fraudulent scheme” that robbed $145m from the IRS. It was one of the largest frauds committed by a tax preparer that the Department of Justice had encountered in its history, they added. Rafael Alvarez, chief executive of a company called APAX, 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. He faces a maximum sentence of eight years in prison for the two counts and will be sentenced on April 11th next year. Mr. Alvarez, who had been preparing tax returns since at least 1990 at several ATAX locations, regularly falsified figures by submitting fictitious deductions, business expenses, capital losses and tax credits to get clients higher refunds, court documents show. Prosecutors said that Mr. Alvarez had recruited employees who did not have legal status in the country and intimidated them into participating.
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