Suffolk woman pleads guilty to $1.6 million tax fraud

A 17-page federal indictment accuses Brenda Benn, Kevin Towns and Stephanie Towns of conspiring to defraud the U.S. government.

NORFOLK, Va. (WAVY) — A Suffolk woman pleaded guilty Wednesday to her part in a fraud scheme that prepared hundreds of false tax returns and resulted in a loss of about $1.6 million to the United States.

Court documents say Stephanie Towns, 43, was one of the principal tax preparers at A Plus Tax Services, LLC and NN Financial, which operated as tax preparation businesses at different periods between July 2009 and February 2014.

The paperwork claims that between 2009 and 2014, the defendants would charge a fee and prepare false income tax returns for their clients to get higher refunds than they were entitled to. This led to repeat business and the three profited, the documents say.

Three accused of preparing false tax returns for clients

The defendants 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, according to court documents. 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 up to eight years in prison when sentenced on Sept. 27.