ABINGDON, Va. (WJHL) — The owners of Kennedy Industrial Electronics, as well as four others, have pleaded guilty to a payroll tax scheme that began at least 15 years ago and defrauded the U.S. out of more than $900,000 in disability benefits.
According to a release from the Department of Justice Western District of Virginia, an additional $148,000 in employment taxes were also defrauded.
Harold Kennedy, 64, and Hollie Kennedy, 67, are the owners of Kennedy Industrial Electronics. They pleaded guilty on Monday to one count of conspiracy to defraud the United States and one count of failing to pay over and collect employment taxes.
Danny Hill, 70, also of Lebanon, Va., pleaded guilty to one count of conspiracy to defraud the U.S.
Geneva Hill, 64, pleaded guilty to one count of causing to be made a false representation concerning the requirements of the Social Security Act.
Last week, Gerald Lee Stevens, 45, pleaded guilty to one count of conspiracy to defraud the United States.
Teena Charlene Stevens, 47, pleaded guilty to one count of causing to be made a false representation concerning the requirements of the Social Security Act.
Ricky Allen Matney, 58, of Honaker, Va., was indicted on one count of conspiracy to defraud the United States and two counts of providing false information to the Social Security Administration.
“Disability, payroll, and other types of employment fraud are serious federal crimes and ones that, collectively, put a significant burden on vital government programs,” U.S. Attorney Cullen said. “As this case indicates, the Department of Justice will vigorously investigate and prosecute these types of workplace-fraud schemes and hold those who profit from illegal activities accountable.”
Court documents say between the years of 2001 and 2015, the defendants planned a scheme in which Harold and Hollie Kennedy, the owners of the company, did not report approximately $148,000 in employment taxes.
That amount was owed through the hours worked by Danny Hill, Gerald Stevens and Ricky Matney, who were employees of Kennedy Industrial Electronics.
The Kennedy’s, Danny Hill, Gerald Stevens and Ricky Matney all face a prison sentence of up to five years on the conspiracy charge.
According to the release, the Internal Revenue Service (Criminal Investigations), the Social Security Administration Office of Attorney General and the Russell County Sheriff’s Office.
Assistant United States Attorney Lena Busscher is prosecuting the case for the United States.