Pelham Tax Preparer Faces Felony Charges In Orange County

Michael G. Magnaldi, 54, of Pelham, has been charged with multiple felonies related to the filing of false tax returns for Orange County residents. Magnaldi owns MGM Tax Solutions in the Bronx.

Magnaldi faces 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.

“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.”

Prosecutors 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.

They also 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. 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.

After an investigation, Magnaldi was arrested on April 11 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.

The case is being prosecuted by Chief Assistant District Attorney Christopher Borek.

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,” Hoovler said. “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.”

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.

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