Date: March 14, 2024 Contact: newsroom@ci.irs.gov Alexander M.M. Uballez, United States Attorney for the District of New Mexico, and Carissa Messick, Acting Special Agent in Charge, IRS Criminal Investigation Phoenix Field Office, announced today that Victor Kearney was sentenced to 27 months in prison and ordered to pay $1,188,645.00 in restitution. A federal jury convicted Kearney, of Zephyr Cove, Nevada, for filing false tax returns on March 10, 2023. A federal grand jury indicted Kearney and his co-defendant Robert Fiser, of Albuquerque, on August 29, 2019. According to the evidence at trial and other publicly available court records, from 1997 to 2013, Kearney received about $16 million in trust income as lifetime beneficiary of two testamentary trusts established after the death of his first wife, Mary Pat Abruzzo-Kearney. These trusts were shareholders in Alvarado Realty Company (“ARCO”). At first, Kearney properly reported his trust income on tax returns prepared by a certified public accountant. Then ARCO restructured into a C corporation with subchapter S status. This meant corporate income, losses, deductions, and credits now passed to shareholders for tax purposes. Since the taxes Kearney owed to the government were no longer withheld by ARCO or the trusts, Kearney did not pay them. Instead, Kearney conspired with Fiser, an attorney specializing in tax law and the preparation of federal income tax returns, to submit knowingly false tax returns from 2007 through 2011 showing little or no trust income. As a result, Kearney owes the IRS $1,188,645.00. Kearney came to the attention of the IRS in 2013 when he filed a lawsuit against his former brothers-in-laws, Benjamin and Louis Abruzzo. Kearney claimed that the Abruzzos mismanaged Mary Pat Abruzzo-Kearney’s trusts to Kearney’s financial disadvantage. During the litigation, District Judge Alan M. Malott heard evidence that prompted him to refer Kearney’s case to the IRS for further investigation. The state case was resolved in favor of the Abruzzos. Upon his release from prison, Kearney will be subject to three years of supervised release. Fiser pleaded guilty on July 11, 2022, to one count each of conspiracy and aiding and assisting in preparation of a false and fraudulent return. IRS Criminal Investigation investigated this case with the assistance of the Office of the U.S. Trustee also assisted. Assistant United States Attorneys Sean J. Sullivan and Kimberly A. Brawley prosecuted the case. IRS CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code. The agency’s Phoenix Field Office stretches across Utah, Nevada, Arizona, and New Mexico.
