Owner And Chief Executive Officer Of Tax Preparation Firm Pleads Guilty To Federal Tax Offenses

United States Attorney for the Southern District of New York, Jamie McDonald, and Assistant Attorney General of the National Fraud Enforcement Division, Colin M. McDonald, announced today that STEVEN HOLTZ, ISRAEL PELLOT, and ALTON SCOTT have pled guilty in connection with their operation of a tax preparation firm owned and controlled by HOLTZ and known as the Holtz Group. Tax preparers at the Holtz Group, including HOLTZ, PELLOT, and SCOTT, falsified information on Holtz Group clients' federal income tax returns in order to fraudulently reduce the tax liability of the clients and improperly increase the tax refunds they claimed from the Internal Revenue Service ("IRS"). This, in turn, allowed HOLTZ to charge tax preparation fees that were, at times, tens of thousands of dollars and, in some instances, more than one hundred thousand dollars for certain clients. HOLTZ and PELLOT pled guilty on Monday, October 5, 2026, before Magistrate Judge Henry J. Ricardo. SCOTT pled guilty on Friday, October 2, 2026, before Magistrate Judge Valerie Figueredo. As part of the guilty pleas, HOLTZ agreed to pay $8,793,805 in restitution, and PELLOT and SCOTT each agreed to pay $7,129,378 in restitution. The defendants will be sentenced by United States District Judge Mary Kay Vyskocil.

"This Office will hold those who steal from the American taxpayers accountable," said U.S. Attorney Jamie McDonald. "Steven Holtz led a massive tax fraud scheme through his control and operation of the Holtz Group. Holtz and other tax preparers at his firm willfully placed false information on tax returns for their clients in order to generate substantial refunds to which the clients were not entitled and enormous fees for the Holtz Group. As the owner of the Holtz Group, Holtz was the primary beneficiary of the scheme, and enjoyed a lavish lifestyle unwittingly paid for by honest American taxpayers."

According to the Indictment and public court filings:

From at least in or about 2014 through at least in or about 2025, STEVEN HOLTZ, ISRAEL PELLOT, and ALTON SCOTT, and other co-conspirators, executed a fraudulent scheme led by HOLTZ in which they falsified information on Holtz Group clients' federal income tax returns. Each year, Holtz Group clients - at least some of whom have professional degrees and annual income of hundreds of thousands of dollars - met with Holtz Group personnel at one of the Holtz Group's offices (or, at times, remotely by videoconference and/or telephone). At these meetings, and during the course of any necessary follow-up discussions, HOLTZ, PELLOT, SCOTT, or other Holtz Group personnel, prepared the clients' tax returns.

HOLTZ, PELLOT, SCOTT, and others included materially false and fraudulent information on the Holtz Group clients' tax returns in order to reduce the clients' tax liabilities or increase their refunds. The false items included on income tax returns for Holtz Group clients included inflated and fictitious deductions, including but not limited to: itemized deductions, such as charitable contributions and unreimbursed employee expenses; business expense deductions; capital losses, such as deductions for bad debt; losses and expenses from rental real estate businesses and unreimbursed partnership expenses; casualty and theft losses; losses from sales of business property; and losses from sales and other dispositions of capital assets. These false items were reported on Schedules A, C, D, and E as well as other tax forms. At times, the defendants also inflated and falsified clients' income in order to improperly qualify clients for refundable Earned Income Tax Credits and/or fraudulently elected "head of household" filing status for married clients and other clients who did not qualify for that filing status, among other things.

As the owner of the Holtz Group and its affiliated entities, HOLTZ trained PELLOT, SCOTT, and others on how to falsify tax returns to carry out the scheme. For example, HOLTZ instructed PELLOT, SCOTT, and others to urge clients to set up business entities, such as partnerships and S Corporations, through the Holtz Group, for which clients paid additional fees. HOLTZ then directed the return preparers to use these business entities to fraudulently claim additional tax deductions, such as deductions for unreimbursed partnership expenses, meals, travel, gifts, and other expenses.

The Holtz Group based the fees charged to the clients on the amount of purported "tax savings" the firm supposedly generated for clients. HOLTZ used these purported "tax savings" to justify the Holtz Group's fees, which were as high as tens of thousands or even more than one hundred thousand dollars for certain clients. For example, after billing a fee of $175,000 for preparing a client's 2021 return, HOLTZ emailed the client explaining that the fee charged "is 25% of the tax savings. Always has been . . . I realize the bill is very high but honestly you sou [sic] should be happy to pay me that rather than paying the government what you owed them . . . [T]he fee is determined by the tax savings, not by your earnings." In the same exchange, HOLTZ later went on to state: "You really aren't paying my fee. The IRS is."

By filing fraudulent returns on behalf of numerous Holtz Group clients, HOLTZ, PELLOT, SCOTT, and others defrauded the IRS of tax revenue and generated significant revenue for the Holtz Group. This significant revenue facilitated HOLTZ's lavish lifestyle, including use of homes in Manhattan and East Hampton.

* * *

HOLTZ, 63, of New York and East Hampton, New York, pled guilty to one count of conspiracy to defraud the United States, which carries a maximum sentence of five years in prison, and one count of aiding and assisting in the preparation of a false and fraudulent U.S. individual income tax return, which carries a maximum sentence of three years in prison, for a total maximum sentence of eight years. PELLOT, 51, of Ormond Beach, Florida, and SCOTT, 33, of Brooklyn, New York, each pled guilty to one count of aiding and assisting in the preparation of a false and fraudulent U.S. individual income tax return, which carries a maximum sentence of three years in prison. HOLTZ further agreed to pay $8,793,805 in restitution, including $7,129,389 relating to the tax conspiracy charged in the indictment and $1,664,427 owed for HOLTZ's personal tax returns between 2020 and 2024. PELLOT and SCOTT each agreed to pay $7,129,389 in restitution.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. McDonald and Mr. McDonald praised the outstanding investigative work of the IRS-CI.

The case is being prosecuted by the Office's Complex Frauds and Cybercrime Unit and the Department of Justice, National Fraud Enforcement Division, Tax Section. Assistant U.S. Attorneys Brandon D. Harper and Matthew Weinberg, Southern District of New York, and Deputy Chief Jorge Almonte and Trial Attorney Likhitha Butchireddygari of the National Fraud Enforcement Division's Tax Section are in charge of the prosecution.