SAN DIEGO, CA – Alvin Pates, a San Diego resident, was sentenced to 41 months in federal prison today for orchestrating a brazen scheme to defraud banks and the IRS, fueled by a network of unwitting victims and a thirst for luxury. Pates, through a complex web of shell companies and fabricated income claims, lived a high life funded entirely by deceit.
The scheme, running from July 2014 through at least April 2020, hinged on recruiting “straw borrowers” – individuals whose names, social security numbers, and credit were exploited to secure fraudulent loans and lines of credit. Pates provided these borrowers with falsified documentation, claiming they earned six-figure salaries from his sham businesses. When banks contacted these companies to verify employment, Pates or his associates would confirm the lies, sometimes even posing as the borrowers themselves to pass lender security questions.
The majority of the ill-gotten loan proceeds flowed directly into the accounts of Pates’ shell companies, bankrolling a lavish lifestyle. Sentencing documents reveal Pates splurged on a penthouse apartment, a Corvette, a Mercedes, and a BMW – all purchased with money stolen from banks and, ultimately, from the people he manipulated. In one particularly telling message to an assistant, Pates boasted, “money is raining.”
Perhaps the most disturbing aspect of the case is how Pates preyed on the trust of members of his church. He specifically targeted fellow parishioners, convincing them they were investing in legitimate businesses and promising to cover the loan payments. Instead, he used their credit and financial standing to enrich himself, initially making payments with funds from other fraudulent loans before inevitably defaulting, leaving the borrowers saddled with debt and ruined credit. Some were even forced into bankruptcy. After damaging numerous church members financially, Pates simply moved on, joining another congregation and continuing the scheme under the alias “Al Noble.”
The fraud wasn’t limited to banks. Pates also admitted to preparing false tax returns for two individuals in 2015, falsely claiming one taxpayer received over $538,000 in income and was due a $376,260 refund. Pates supplied fake 1099 forms and even accompanied the taxpayer to the IRS to submit the fraudulent return. Although the IRS ultimately recovered the refund, the attempt to defraud the government underscores the scope of Pates’ criminal activity.
“This case is especially egregious because Mr. Pates didn’t just rely on the faith of his fellow churchgoers, he preyed on it,” stated U.S. Attorney Tara McGrath. “But the direct victims are not the only ones who were hurt; we all pay a price for bank and tax fraud when those costs are passed on.” Pates was ordered to pay $45,500 in restitution to one individual who ultimately repaid the fraudulent loans. The U.S. Secret Service and the IRS Criminal Investigation division led the investigation.
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Key Facts
- Agency: U.S. Secret Service
- Category: Fraud & Financial Crimes
- Source: Official Press Release
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