According to a press release by the Department of Justice, Kenneth Dale Stainback, 62, of Burlington, North Carolina, and Stephen Ray Smith, 60, of Mebane, North Carolina were sentenced to federal prison terms and ordered to pay restitution and fines. Stainback, the former President of McClure Funeral Service, and Smith, McClure’s current president, were sentenced to serve fourteen and six months in a federal prison, respectively. The tax fraud charges that were levied against the pair stemmed from their theft of corporate funds from McClure.
According to prosecutors, Stainback and Smith skimmed nearly $420,000 from the coffers of McClure, the funeral home business where they had both served as president. Stainback and Smith were able to divert corporate funds away from McClure into their own account that was established specifically for embezzling funds. In the process of stripping money away from McClure, the duo altered or destroyed invoices to cover their tracks. The actions taken by Stainback and Smith had the effect of reducing the taxable income of the corporation. The pair continued this scheme even in the midst of an IRS examination of McClure. Meanwhile, Stainback opened an account at yet another bank for the purpose of diverting additional money away from McClure without the knowledge of Smith. According to prosecutors, the theft of McClureincome occurred between the 2009 and 2012 fiscal years.
In addition to serving time in federal prison, each of the defendants was ordered to pay more than $158,000 in restitution to the IRS for the corporate tax that would have been due had the corporate funds not been diverted away from McClure. Furthermore, Stainback and Smith were ordered to pay $12,213 and $116, respectively for the individual income tax that is due because the pair did not include the embezzled money on their personal income taxes.
Although it is too late for Stainback and Smith, other taxpayers who are under examination or being investigated for tax evasion or tax fraud can benefit by an experienced tax attorney. Only a tax attorney has received the necessary training in Constitutional law, criminal law, and criminal tax procedure to effectively develop an effective defense strategy for a tax client. Many taxpayers who find themselves in deep trouble with the Service or Department of Justice decide to either represent themselves or wait until criminal charges have been levied to retain a tax attorney. It is in the best interest of any taxpayer who is suspected of tax fraud or evasion to seek the advice of an experienced tax defense attorney. A seasoned tax lawyer will get to know you and your situation in order to formulate an effective defense strategy.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have represented a myriad of clients in varying stages of tax examination, investigation, and litigation. Although no case is the same, the valuable experience of our zealous advocates being put to use can mean the difference between federal prison time and walking away from a volatile situation, unscathed. Don’t go up against the IRS or a state taxing authority alone. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation. For more valuable information, be sure to check out our YouTube channel.