Alfred Teo, Tax Evasion, Florida 2016

Alfred Teo, 74, of Boca Raton, Florida, is staring down federal prison after being indicted on nine counts tied to a $61 million tax evasion scheme spanning 2016 to 2018. Prosecutors allege Teo, the majority shareholder of multibillion-dollar plastics holding company Alpha Industries Management (Alpha), orchestrated a sophisticated financial shell game to erase his tax liability through falsified corporate filings and phony deductions.

Teo faces three counts of tax evasion and six counts of filing false personal and corporate tax returns. Each tax evasion count carries up to five years in prison and a $250,000 fine. The false return charges each bring a maximum of three years behind bars and the same fine. The indictment follows a June 17, 2020 criminal complaint; U.S. Magistrate Judge Edward S. Kiel previously set bond at $20 million. Arraignment is pending.

According to court filings, Alpha transferred millions directly into brokerage accounts for Teo’s benefit. Instead of reporting that income on his personal returns, Teo routed it through AAST Holding Corp. (AAST), another company he owned but claimed was unrelated to his plastics empire. Alpha recorded $27 million, $53 million, and $89 million as 1099 income to AAST in 2016, 2017, and 2018—totaling $169 million. But AAST never actually received those funds in its bank accounts.

The money was, in reality, Teo’s. He used AAST as a paper shield, fabricating $26 million, $51 million, and $87 million in fake ‘cost of goods sold’ deductions across the three years. AAST had no legitimate operations justifying such expenses. Teo personally scribbled the false figures onto draft tax forms before sending them back to his preparer, who then included them in official filings.

By slashing AAST’s reported net income by approximately $165 million, Teo artificially reduced his own taxable income. His personal IRS Form 1040s for those years pulled in the deflated AAST income, allowing him to underreport by nearly the same amount. The IRS lost roughly $10 million in 2016, $20 million in 2017, and $31 million in 2018—$61 million total.

Teo’s scheme relied on layers of corporate fiction and deliberate misinformation. Now, the feds are peeling them back. ‘This was not an error—it was a calculated assault on the tax system,’ said U.S. Attorney Craig Carpeneto. ‘We’re holding Teo accountable for treating the IRS like an optional expense.’

Related Federal Cases