Local News

One-time head of NC funeral board gets prison time for tax fraud

Posted March 30, 2016


Stephen Ray Smith, 60, of Mebane, and a business partner, Kenneth Dale Stainback, 61, of Burlington, were sentenced Tuesday to federal prison on charges they worked together to file false tax returns and hide income from the IRS, according to federal prosecutors.

Smith was president of the North Carolina Board of Funeral Service and former president of McClure Funeral Service in Mebane. Stainback worked for Stainback at McClure.

Stainback got 14 months in prison and three years of supervised release, while Smith got six months in prison and three years of supervised release.

Both defendants were ordered to repay $158,530.11 to the IRS in corporate taxes and $8,000 apiece in fines. Stainback will also pay the IRS $12,213 in individual taxes; Smith will pay $116.

According to court documents and statements in court, Stainback and Smith filed false corporate tax returns for McClure and diverted money from the funeral home into a checking account from which they wrote checks to themselves.

IRS investigators found that Stainback, Smith and one other co-conspirator diverted more than $419,000 from funeral home receipts over a course of three years.


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