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A St. Louis attorney, Michael Kohn, convicted alongside his daughter and a North Carolina insurance agent, David Shane Simmons, requested acquittal on Tuesday in their $4 million tax fraud case. They argued that the supposedly false statements on tax returns were actually accurate.

Michael Kohn Tax Fraud Case: Legal Motions Filed

In separate motions in the Western District of North Carolina, Michael Kohn and David Shane Simmons sought to overturn their guilty verdicts for conspiring to defraud the federal government and aiding in the filing of false tax returns. Alternatively, they requested a new trial, citing alleged flaws in the prosecution's case that they claim biased the jury.

The core of the case involved the alleged filing of false tax returns. However, Kohn and Simmons argued that the line numbers for total income on these returns, which prosecutors claimed were false, were actually correct.

"The fatal problem for the government's case as to these counts is that the representations on the allegedly false line numbers are literally true," Kohn and Simmons stated in their briefs.

Trial Background and Verdict

Michael Kohn, founding partner of The Kohn Partnership LLC, was found guilty after a nine-day trial in April. He faced one count of conspiring to defraud the government and 16 counts of aiding in the filing of false tax returns. His daughter, Catherine Elizabeth Chollet, a junior partner at the firm, was convicted of the same conspiracy charge and 13 counts of aiding in the filing of false tax returns.

Simmons, an insurance agent from Jefferson, North Carolina, was convicted on the conspiracy charge, 11 counts of aiding in the filing of false returns, and five counts of filing false tax returns for himself between 2016 and 2020.

Michael Kohn Tax Fraud Case: Scheme Details

According to trial testimony, Kohn and Chollet restructured their clients' businesses as limited partnerships with a charitable organization to reduce taxable income, a tactic they termed the "gain elimination plan." Instead of distributing income to the nonprofit, clients were advised to collateralize the debt with a substantial life insurance policy, often facilitated by Simmons, prosecutors alleged.

Kohn, Chollet, and Simmons were accused of attracting clients to this scheme by amending their tax returns with inaccurate deductions, leading to significant tax savings.

Legal Arguments for Acquittal

Kohn and Simmons' recent briefs reiterated their previous arguments for acquittal, claiming the reported financial figures on the disputed tax returns were "literally true" as per IRS instructions.