Los Angeles, California – LAWFUEL – Legal Newswire – On Thursday, February 7, 2008, IRS – Criminal Investigation Special Agents arrested the owner of Payless Tax Services, located on Centinela Boulevard in Inglewood, for his participation in a conspiracy with two others to defraud the Internal Revenue Service by filing false tax returns, in violation of United States Code section 286 – Conspiracy to defraud the Government with respect to claims.
Anthony Pendleton, 58, of Los Angeles was taken into custody without incident based upon arrest warrants issued on a criminal complaint filed in United States District Court in Los Angeles. Two additional persons named in the complaint, identified as Christopher Michael Edwards, Sr., 38, of Gardena, and Asha Delilah Lenard, 27, of Los Angeles, both of whom worked for Payless Tax Services, were not apprehended. IRS – Criminal Investigation agents are actively looking for Edwards and Lenard at this time.
According to the criminal complaint, Pendleton, a former IRS Revenue Officer, along with Edwards and Lenard, would submit false claims for income tax refunds to the IRS through Pendleton’s business, Payless Tax Services. Edwards and Lenard were employed by Pendleton to perform and to assist with the preparation and filing of Forms 1040 and to solicit clients.
The complaint asserts that, either with or without the knowing involvement of a client, Pendleton, Edwards, and Lenard would increase the amount of a tax refund that could be received by a client. The trio would do this by preparing and submitting false documents and making fictitious claims as part of an electronically filed tax return submitted to the IRS. Some of the false claims submitted to the IRS by the co-conspirators included tax returns using fictitious income or dependents to claim the Earned Income Tax Credit as well as returns claiming fabricated educational expenses used in an effort to claim education tax credits. In addition to their work with Payless Tax Services’ clients, both Edwards and Lenard filed personal tax returns claiming fraudulent wages and credits for themselves.
The affidavit filed in support of the criminal complaint details that, for the 1999, 2000, 2001, and 2002 tax years, Payless Tax Services filed 185 false returns with the IRS, claiming over $609,000 in refunds. Included in the claimed refunds were $136,578 in Earned Income Tax Credits and $95,972 in HOPE Education Credits that were based upon false claims made on the filed tax returns. Twenty-one witnesses contacted in this investigation stated that they never worked for the employers listed on the Forms W-2 filed on their behalf by Payless Tax Services. Additionally, eight witnesses disclaimed any knowledge that Payless Tax Services and defendants Pendleton, Edwards, and Lenard were filing tax returns on their behalf with the IRS and stated that did not sign any of the documents relevant to the investigation, indicating that the defendants had stolen their identities.
If convicted of the charges specified in the criminal complaint, Pendleton, Edwards, and Lenard face a statutory maximum of 10 years in federal prison.
The investigation of Pendleton, Edwards, and Lenard was conducted by IRS – Criminal Investigation in Los Angeles.
An criminal complaint is a charging document which contains allegations of violations committed by defendants. All defendants are presumed innocent until and unless proven guilty before the court.
