ABINGDON, Va. — A pair of former employees of Kennedy Industrial Electronics and their wives were sentenced this week after previously pleading guilty to defrauding the United States as part of a disability benefits and payroll scheme that dates back at least 15 years.
Gerald Lee Stevens, 45, of Lebanon, Virginia, was sentenced to five months incarceration in U.S. District Court in Abingdon on Wednesday. In July 2019, Stevens pleaded guilty to one count of conspiracy to defraud the United States.
Teena Charlene Stevens, 47, was sentenced to two years 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 in the week, Danny M. Hill, 70, of Lebanon, Virginia, was sentenced to eight months after he pleaded guilty to one count of fraud conspiracy.
His wife, Geneva Hill, 64, was also sentenced to two years’ 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 Hills were ordered to pay $351,239 in joint and several restitution to the Social Security Administration, while Gerald and Teena Stevens were ordered to pay $309,217 in joint and several restitution to the Social Security Administration. Co-defendants Harold Kennedy and Hollie Kennedy will be sentenced in the near future.
According to court documents, between 2001 and 2015 the defendants 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. Those taxes were owed through hours worked by Hill, Stevens and Ricky Matney.
Hill, Stevens and Matney were each receiving disability benefits from the Social Security Administration and therefore unable to earn additional income without reporting. As a result, the conspirators issued checks to their spouses, Geneva Hill and Teena Stevens.
“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,” U.S. Attorney Thomas T. Cullen stated in a press release. “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.”
The investigation of the case was conducted by the Criminal Investigations Division of the Internal Revenue Service, the Social Security Administration Office of Inspector General,and the Russell County Sheriff’s Office.
Assistant U.S. Attorney Lena Busscher is prosecuting the case.