On March 18, 2009, David Marion Simcho was sentenced by United States Judge Marilyn Patel to 27 months in prison, followed by three years of supervised release and ordered to pay $111,769 in restitution for his role in marketing and promoting a fraudulent trust package to eliminate or reduce tax liability and then preparing a false income tax return. He will begin serving his sentence on July 17, 2009. (Case No. CR-06-0542 MHP)
This sentence follows Mr. Simcho's guilty plea 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. The plea came almost two years after his indictment on August. 3, 2006, when Mr. Simcho of Southlake, Texas, was indicted by a federal grand jury. He was initially charged with 17 counts of aiding or assisting in the preparation of a false income tax return and four counts of income tax evasion.
This case was quite old (the conduct went back almost 10 years) and shows how cases can take years to investigate, prosecute and be resolved. According to the plea agreement, Mr. 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.
Mr. 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.
Mr. 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 admitted that he knowingly and willfully omitted this income from his 2001 federal income tax return.
The investigation was the result of information provided to the IRS by a Certified Public Account who said that Mr. 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 Criminal Investigation Division (IRS-CID).
Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.
Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.
Any questions or comments should be directed to: tgreen@greenassoc.com or call 213-233-2260. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. She has significant experience in defending individuals, licensed professionals and businesses in search warrants and administrative and criminal investigations. The firm website is: http://www.greenassoc.com/
