A convicted murderer known as “Diablo” is walking free after a federal judge tossed the case against him — even after Los Angeles taxpayers paid him $58,156 to work as a taxpayer-funded “Peace Ambassador.”

Michael Angel Alvarez, 41, was ordered released Wednesday after US District Judge Anne Hwang, a Democrat appointed by former President Joe Biden, dismissed the federal indictment against him.

Hwang ruled that Alvarez’s 2002 murder conviction no longer qualified as a felony under California’s Proposition 57.

Alvarez was 15 years old when he was convicted of first-degree murder.

He was sentenced to 50 years to life and ultimately served 24 years behind bars.

Now that murder conviction can no longer provide the felony status prosecutors needed for the federal body-armor case.

The US Attorney’s Office delivered a blistering assessment of the outcome.

“Alvarez is a convicted murderer and a documented member of the 18th Street gang … he has no legitimate role serving as a ‘peace ambassador’ in a public park or receiving taxpayer-funded compensation,” the office said Wednesday. “These facts are not in dispute. It is unfortunate that he now benefits from a California law that effectively allows him to erase his murder conviction, something his victim cannot do.”

The taxpayer-funded connection makes the case even more striking.

After prison, Alvarez went to work for Healing Urban Barrios, a nonprofit contracted by Los Angeles to provide Peace Ambassador services in the First City Council District, which includes MacArthur Park.

The city agreed to put $450,000 from its general fund toward the program between June 2024 and May 2027.

Alvarez personally received $58,156 in 2025.

Federal authorities alleged Alvarez was living a double life — presenting himself as a violence-prevention worker while remaining involved with the 18th Street gang.

Investigators cited jailhouse calls in which Alvarez allegedly discussed assaulting people who broke gang rules.

And then police found body armor.

On May 18, officers near MacArthur Park detained Alvarez after believing he might be a wanted person.

A search of his vehicle uncovered two body armor plates in the trunk.

The plates were marketed as “the highest protection level available on the civilian market,” according to the federal affidavit.

Alvarez was charged with possession of body armor by a violent felon.

He also had an April 2025 felony conviction for being a prisoner in possession of a weapon.

First Assistant US Attorney Bill Essayli tore into the taxpayer-funded arrangement after Alvarez’s arrest.

“The hardworking tax payers of Los Angeles deserve better than to see their money shelled out to a convicted gang murderer,” Essayli said in May.

The Peace Ambassador program was supposed to use workers with experience in the justice or gang systems to help prevent violence and intervene in crises.

Federal authorities alleged Alvarez was instead maintaining gang ties while collecting a public paycheck.

The case is dismissed, and Alvarez has been released.