Woman Pleads Guilty to $1.6 Million Tax Fraud

NORFOLK, Va. – A Suffolk woman pleaded guilty today to her role in a fraud scheme that prepared hundreds of false tax returns that resulted in a loss of approximately $1.6 million to the United States.

According to the statement of facts filed with the plea agreement, Stephanie Towns, 43, 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 Brenda Benn and Kevin Towns, 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. 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 tax preparers to generate the false returns.

Towns pleaded guilty to conspiracy to defraud the United States and aiding the preparation of a false tax return. She faces a maximum penalty of 8 years in prison when sentenced on September 27. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Kimberly Lappin, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after U.S. District Judge Raymond A. Jackson accepted the plea. Assistant U.S. Attorney Randy Stoker is prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:17-cr-30.