Pastor Sentenced to 27 Months in Income Tax Fraud Scheme

A South Gate pastor who pleaded guilty to filing 21 fraudulent tax returns--some of them for members of his Los Angeles congregation--was sentenced Wednesday to 27 months in federal prison.

James Smith, minister of New Mount Olive Church of God in Christ, also must repay more than $15,000 in earned income credit that he received from the Internal Revenue Service between 1993 and 1994.

Before handing down the ruling, U.S. District Court Judge John G. Davies described Smith’s actions as “predatory behavior that cannot go unpunished.”

Smith, 44, told reporters outside court that he was feeling “a little shellshocked” and declined further comment. Several months ago he denied that the returns were intended for personal profit, but refused to elaborate.

Smith was convicted of similar charges in 1983, and served six months in a halfway house and three years’ probation. In that case, Smith had filed false tax returns on behalf of friends, relatives and people he met while working at a bail bond company, according to the IRS.

Many of the false returns that Smith admitted to in June, however, cited tax credits due people who supposedly held church positions, including assistant pastor and evangelist, said Assistant U.S. Atty. Lisa E. Feldman. She added that some of these people may have attended the church but did not work there.

The rest of the returns Smith filed on behalf of fictitious individuals such as Jadee C. Smith, James D. Smith, IV and Jamie D. Smith, Feldman said.

According to an IRS agent who investigated the case, Smith may have received kickbacks of up to $500 per return filed on someone else’s behalf.

Smith’s aunt, 60-year-old Zettie Lee Qualls of Corona, also pleaded guilty earlier this year to cashing a $2,200 refund check from a return her nephew had filed. Last month Davies sentenced her to four months home stay and ordered her to repay the sum.