Los Angeles, California – LawFuel – Legal Newswire Service – Henry W. Johnson, 70, a resident of Hesperia, California, and Jesse A. Felix, 54, a resident of Monterey Park, California, pleaded guilty to one count of willfully assisting or advising another person in the preparation of an income tax return that was false, in violation of Title 26 U.S.C. Code section 7206(2). Johnson pleaded guilty on January 27, 2009, and Felix pleaded guilty on January 28, 2009, before U.S. District Court Judge George H. King in the Central District of California.
According to Johnson’s plea agreement, during the years 2001 to 2006, Johnson was a pastor and reverend at the Corinthian Baptist Church in Los Angeles, and during such time possessed stationary for the Church, documents for the preparation of financial receipts for the Church, and a stamp and seal for the Church to officiate documents.
As early as 2001, Johnson provided a number of individuals with false and grossly inflated fictitious receipts for purported charitable donations to the Church. Johnson knew during the entire time, that these individuals would use the “false receipts” to substantiate false charitable deductions on their tax returns. Johnson received payment for the “false receipts” he made and provided to these individuals. The “false receipts” indicating the charitable donations were several times the amount that the individuals had paid Johnson. Johnson used a portion of the payments he received from these individuals for his own personal expenditures, and also used a portion for the church.
During 2001 through 2006, Johnson created and provided “false receipts” for charitable contributions that were used for over forty false tax returns filed with the IRS. The tax losses generated from Johnson’s “false receipts” scheme was approximately $110,000.00.
According to Felix’ plea agreement, during the years 2001 to 2006, Felix prepared individual income tax returns on a part-time basis, for at least twelve individual clients. During this time, Felix was acquainted with Reverend Henry W. Johnson of Corinthian Baptist Church in Los Angeles. Also during this time period, Felix arranged for a number of his tax preparation clients to obtain “false receipts” for tax deductible charitable contribution from Johnson, that were then used by Felix in the preparation of his clients’ false income tax returns, which claimed the fraudulent charitable contributions amount. During the years 2001 to 2006, Felix prepared false returns that amounted to losses of approximately $110,000.00.
According to both Johnson’s and Felix’ plea agreements, one of the false tax returns filed with IRS was the 2003 federal income tax return for an individual referred to in the filed information as “A.L.” The return for “A.L.” was filed with the IRS on or about February 28, 2005, and the tax return for “A.L.” falsely reported that “A.L.” had made tax deductible charitable contributions of $19,912.00 during 2003, when in truth; “A.L.” had made no such charitable contributions during 2003.
“The guilty pleas for Reverend Johnson and tax preparer Jesse Felix shines a light on individuals who abuse their trusted positions and exploit tax deductions and tax credits that many individuals are legally entitled to,” said Acting Special Agent in Charge Susan M. Dukes. “IRS Special Agents will continue to diligently work tax fraud investigations and filter out those individuals who circumvent the integrity of our tax system for their own financial benefit.”
Johnson is scheduled to be sentenced on April 27, 2009 and Felix is scheduled to be sentenced on May 4, 2009. Both Johnson and Felix will be sentenced before U.S. District Court Judge George H. King in the Central District of California. Each defendant faces up to 3 years in prison and a fine of $100,000.00 or twice the gross gain or gross loss resulting from the offense.
This investigation is being worked by IRS-Criminal Investigation, Los Angeles Field Office and prosecuted by Assistant United States Attorney Angela Davis, Central District of California.
For more information on return preparer fraud, please go to www.irs.gov.