Virginia Beach woman pleads guilty to tax fraud

Lived ‘lavish’ life while dodging $2.7M in IRS payments, prosecutors say

A Virginia Beach businesswoman pleaded guilty Tuesday to charges that she failed to pay more than $2.7 million in payroll taxes to the Internal Revenue Service over eight years — while dropping hundreds of thousands of dollars on luxury purchases.

Wendy Brockenbrough, 53, is charged with three felony counts of willful failure to collect or pay taxes deducted from her employees’ paychecks, and faces a maximum of 15 years in prison.

The charges stem from three instances in 2019 in which she is accused of “failing to truthfully account for and pay to the IRS” the federal income taxes and Federal Insurance Contributions Act taxes withheld from her three businesses: East West Construction, Sea Trader Marine and Coastal Pipeline Services — according court records.

“Brockenbrough attempted to conceal her actions by lying to her accountants and stating that she made the payments,” the U.S. Attorney’s Office for the Eastern District of Virginia said in a statement. “To support her claims, she forged IRS records and Quickbook entries showing the taxes had been paid.”

In court documents, prosecutors pointed to three purchases that demonstrate the “lavish” lifestyle Brockenbrough lived while dodging payments to the IRS. She bought a Regulator center console boat valued at $126,000, a Hatteras 60-foot yacht valued at $820,000, and a Jeep Wrangler for her daughter valued at $41,000, according to court records. All values are estimates.

Each charge carries a maximum penalty of five years in prison, a $250,000 fine and a maximum supervised release term of three years.

In total, Brockenbrough is accused of faAiling to pay $2,721,268 in payroll taxes to the

IRS.

As part of her guilty plea, Brockenbrough could be ordered to pay back the full amount to the IRS.

Though the maximum penalty she faces for these charges is 15 years in prison, the sentences for federal crimes typically come in lower than that, the prosecutors explained in the statement.

Brockenbrough is scheduled to be sentenced Sept. 8.