Man sentenced for fraud scheme
A Suffolk man was sentenced Thursday to 40 months in prison for his role in a tax-fraud scheme.
Kevin Towns, 44, pleaded guilty in June to conspiracy and preparing false tax returns, according to a press release from the U.S. Attorney’s Office for the Eastern District of Virginia.
Throughout the scheme, hundreds of false tax returns were prepared that resulted in a loss of approximately $1.6 million to the United States, the release stated.
According to court documents, Towns was one of the principal tax preparers at A Plus Tax Service and NN Financial, which operated as tax preparation businesses at different periods between July 2009 and February 2014.
“Towns, along with co-defendants Stephanie Towns and Brenda Benn, conspired to operate a business based on creating false tax returns that generated inflated refunds for their clients in order to cultivate good will and generate repeat business,” the press release stated. “They used methods such as claiming false education-related expenses, stating excessively high amounts of charitable contributions and manipulating the amount of income to take advantage of certain tax credits.”
The customers did not persuade or instruct the preparers to generate the false returns, the release stated.
The defendants, as part of the conspiracy, did not receive proper documentation or authorization from their clients and did not review the completed tax returns with their clients, according to the indictment issued in February. They also trained subordinate employees in how to state the false claims on their clients’ tax returns, according to the indictment.
The businesses had a Suffolk location at 340 Lakeside St., as well as a location in Portsmouth on Airline Boulevard.
Benn, the owner of the business, has pleaded guilty to two counts and is set for sentencing on Dec. 6.
Stephanie Towns, another principal tax preparer, has pleaded guilty to two counts and is set for sentencing on Sept. 27.