A New York art dealer has been arrested on tax fraud charges levied by federal prosecutors on Tuesday in relation to the sale of paintings that she said were by famed Abstract Expressionists, but some turned out to be fakes.

The Long Island-based Glafira Rosales, 52, who supplied Manhattan's once-renowned Knoedler & Co. gallery, and others, with artworks supposedly by Rothko, de Kooning, Pollock and Motherwell, is charged with three counts of filing false tax returns and five counts of concealing a Spanish bank account from the U.S. Internal Revenue Service.

A native of Mexico, Rosales reportedly hid $12.5 million of income between 2006 and 2008 from the IRS. She faces up to five years in prison on each charge related to the bank account.

"Rosales gave new meaning to the phrase 'artful dodger' by avoiding taxes on millions of dollars in income from dealing in fake art works for fake clients," U.S. Attorney Preet Bharara said in a statement.

Rosales' dealings with the fake art dates back to the 1990s, say prosecutors. She off-loaded dozens of previously unknown artworks by major American artists; many of these works have been deemed forgeries by art experts.

Her lawyers maintain that Rosales never knowingly sold fakes. (She always gave provenance as an unnamed Swiss client or Spanish collector.)

Knoedler & Co. closed in 2011 after 165 years in business. A string of lawsuits had erupted over the artworks Rosales supplied to the gallery.

Among the more recent and unusual claims against the defunct gallery, Canadian theater producer David Mirvish says he invested millions of dollars in genuine Pollocks sourced from Rosales at Knoedler. He now wants possession of the Pollocks. His lawyers note that Rosales is charged with tax fraud, not selling counterfeit paintings.

In her indictment, Rosales was said to have made $14.7 million selling artworks to Knoedler and another gallery.

Rosales has been detained and is set to appear again in court on June 20.