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News

March 23, 2009

FORMER MORGAN HILL MAN SENTENCED TO 27 MONTHS IN PRISON FOR TAX FRAUD

Ordered to Pay Restitution of $111,769

SAN FRANCISCO -- David Marion Simcho was sentenced Monday to 27 months in prison, followed by three years of supervised release and ordered to pay restitution in the amount of $111,769 for his role in marketing and promoting a fraudulent trust package to eliminate or reduce tax liability, United States Attorney Joseph P. Russoniello and Special Agent in Charge, IRS-Criminal Investigation, Scott O’Briant announced.

Simcho pleaded guilty on June 2, 2008 to one count of aiding or assisting in the preparation of a false income tax return and one count of income tax evasion. According to the plea agreement, Simcho admitted that in 1999 he marketed and sold a trust package to a client and represented it as a legitimate means to eliminate or reduce tax liability when he knew otherwise. The trust package transferred the title of the client’s personal assets into the name of the trust. The client then became the “manager” of that trust. The client remained in control over all assets that were in the name of the trust. Simcho then prepared an amended 1999 federal income tax return for the client which contained false items including a false Schedule C claiming $166,249 in personal expenses as deductible business expenses, a false Schedule A which claimed a charitable gift in the amount of $120,000 when there was no such charitable gift, and a false Form 4797, which represented that a $205,120 loss resulted from an exchange of like-kind property when no property had been exchanged.

Simcho also admitted that during the 2001 tax year he received taxable income from the sales of trusts and a salary from his employment with Property Protection Services, LLC. He knowingly and willfully omitted this income from his 2001 federal income tax return.

Simcho, 51, of Southlake, Texas, was indicted by a federal grand jury on Aug. 3, 2006. He was charged with 17 counts of aiding or assisting in the preparation of a false income tax return and four counts of income tax evasion.

Simcho was sentenced by United States Judge Marilyn Patel. He will begin serving his sentence on July 17, 2009.

The investigation was the result of information provided to IRS – Criminal Investigation by a Certified Public Account who said that Simcho prepared an inaccurate amended tax return for one of his clients. At the same time, an IRS Revenue Agent was performing an audit on those same clients. The Revenue Agent confirmed the allegations and referred the case on Simcho to IRS-CI.

Cynthia Stier is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kathy Tat. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation, Special Agent Tracy Wong.

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For more information on federal criminal defense law, contact the Law Offices of Joseph Shemaria of Los Angeles, California.