ABINGDON, Va. — A pair of former employees of Kennedy Industrial Electronics and their wives have been sentenced for defrauding the United States as part of a disability benefits and payroll scheme that dates back at least 15 years, according to the U.S. attorney’s office.
On Wednesday in U.S. District Court in Abingdon, Gerald Lee Stevens, 45, of Lebanon, Virginia, was sentenced to five months incarceration. Back in July, Stevens pleaded guilty to one count of conspiracy to defraud the United States. Also on Wednesday, Teena Charlene Stevens, 47, was sentenced to two years of probation. She previously pleaded guilty to one count of causing to be made a false representation concerning the requirements of the Social Security Act.
Earlier this week, Danny M. Hill, 70, of Lebanon, Virginia, was sentenced to eight months incarceration. He previously pleaded guilty to one count of conspiracy to defraud the United States. Also this week, Geneva Hill, 64, was sentenced to two years of probation. She previously pleaded guilty to one count of causing to be made a false representation concerning the requirements of the Social Security Act, the U.S. attorney’s office said in a news release.
Danny and Geneva Hill were ordered to pay $351,239 in restitution to the Social Security Administration, while Gerald and Teena Stevens were ordered to pay $309,217 in restitution.
Two additional defendants, Harold Kennedy and Hollie Kennedy, will be sentenced in the near future.
According to court documents, between 2001 and 2015 the individuals conspired to defraud the United States through a scheme in which Harold and Hollie Kennedy, the owners of Kennedy Industrial Electronics, failed to report approximately $148,000 in employment taxes, the release states. Those taxes were owed through hours worked by employees Danny Hill, Gerald Stevens and Ricky Matney.
However, Danny Hill, Gerald Stevens and Ricky Matney were each receiving disability benefits from the Social Security Administration and therefore unable to earn additional income without reporting, the release states. The conspirators issued checks to their spouses, Geneva Hill and Teena Stevens, and others.
“Social Security and employment-tax schemes are serious federal crimes and ones that the U.S. attorney’s office and its federal, state, and local partners have made investigating a priority,” said U.S. Attorney Thomas Cullen. “Small business owners are required to play by the rules in accounting for their employees and risk serious consequences when they try to get around these requirements.”