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America June 11, 2024 4 mins read

Michael Kohn Tax Fraud Case: Attorney and Insurance Agent Seek Acquittal

America ı By Rihem Akkouche

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Michael Kohn Tax Fraud Case

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.

For instance, in Form 1040s prepared by The Kohn Partnership for clients, Kohn stated he followed the form's instructions to calculate total income as defined by the IRS.

Kohn also argued that the alleged criminal activities occurred in the Eastern District of Missouri, not North Carolina, challenging the venue's appropriateness. Additionally, he contended that mentioning his 20-year-old prior tax fraud conviction was prejudicial and unconstitutional.

"Because the jury heard about Kohn's prior conviction, an unacceptable risk was created that the jury convicted him in this case not based on the evidence, but due to his past conviction," he argued.

Simmons argued that prosecutors provided no evidence of his involvement in filing the false tax returns and criticized the court's exclusion of his defense that he relied on legal advice.

"Simmons is just an insurance broker," Tuesday's brief stated. "He is not now, and has never been, a CPA or tax attorney or a person who prepares tax returns for others."

Final Arguments and Representation

Both Kohn and Simmons argued that prosecutors improperly modified the indictment at the close of evidence, which should not have been allowed.

Defense counsel for Kohn and Simmons and a spokesperson for the U.S. Attorney's office did not immediately respond to requests for comment on Tuesday.

Kohn is represented by Justin K. Gelfand, Joseph A. DiRuzzo III, and Gregory P. Bailey of Margulis Gelfand LLC, and Mark Patrick Foster Jr. of Foster Law Offices. Simmons is represented by Amiel J. Rossabi of Rossabi Law PLLC. Chollet is represented by Joseph H. Low IV of the Law Firm of Joseph H. Low IV and Phillip Stackhouse of Stackhouse Law Firm Ltd.

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Rihem Akkouche

Rihem Akkouche is a passionate journalist dedicated to shedding light on compelling stories, sparking conversations, and fostering a more informed world.

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