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Bronx Tax Preparer Created False Tax Returns for Orange County Residents
Without their Knowledge
Orange County District Attorney David M. Hoovler announced today that on Thursday, April 11, 2019, Michael G. Magnaldi, 54, of Pelham, a paid tax preparer, and the owner of MGM Tax Solutions, located at 1978 Williamsburg Road, Bronx, New York, was arrested and charged with multiple felonies related to the filing of eight sets false tax returns for Orange County residents. Magnaldi was arraigned before Town of New Windsor Justice Noreen Calderin on felony charges of Grand Larceny in the Third Degree, Criminal Tax Fraud in the Fourth Degree, and eight counts of Offering a False Instrument for Filing in the First Degree. Felony complaints filed in the action allege that in 2016, and 2017, Magnaldi created New York State Personal Income Tax Returns containing false information for a number of Orange County residents who were clients of his tax preparation business. The false information, which is alleged to have been placed on the returns without the knowledge of the clients, made it appear that Magnaldi’s clients were entitled to greater tax refunds than they should have received. As a result, $6,091 in refunds were improperly sent to these clients. Under New York State law, paid tax preparers must register with the New York State Department of Taxation and Finance, sign the returns they prepare and file them electronically. It is alleged that Magnaldi had his clients mail the fraudulent tax returns directly to the New York State Department of Taxation and Finance and failed to indicate on the tax returns that he prepared them as required.
The charges were the result of an investigation conducted by the New York State Department of Taxation and Finance’s Criminal Investigations Unit. Magnaldi was arrested on April 11, 2019, by Criminal Investigators of the New York State Department of Taxation and Finance’s Criminal Investigations Division. Magnaldi is next scheduled to appear in court on June 13, 2019.
The case is being prosecuted by Chief Assistant District Attorney Christopher Borek.
District Attorney Hoovler thanked the New York State Department of Taxation and Finance for their investigation and referral of the case.
“No one likes to pay taxes, but those who go to professional tax preparers have the right to know that their tax returns are being prepared properly and without fraud,” said District Attorney Hoovler. “My office is prepared to prosecute anyone who uses unsuspecting Orange County residents to engage in fraud, regardless of where they live or work. This case is only one example of the close working relationship which my office has developed with the Criminal Investigations Division of the New York State Tax Department. I am grateful that this close coordination has resulted in Orange County regularly having among the largest returns on investment of any county in New York State under the Crimes Against Revenue Program [CARP] Program.”
“We’ll continue to crackdown on criminal ‘ghost preparers’—those paid preparers who fail to sign their clients’ returns, register, e-file, or comply with other requirements intended to protect taxpayers from unethical tax preparers,” said John Harford, who leads the NYS Tax Department’s Criminal Investigations Division. “I commend our fantastic investigators and auditors and thank the Orange County District Attorney for prosecuting this case.”
A criminal charge is merely an allegation that a defendant has committed a violation of the criminal law, and it is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the State’s burden to prove guilt beyond a reasonable doubt.