热点黑料

A federal judge on Wednesday sentenced a North Carolina insurance agent to five years in prison for his role in a decade-long scheme that created fraudulent tax shelters and cheated the U.S. government of more than $22 million in tax revenue.

David Shane Simmons, of Jefferson, North Carolina, made more than $2 million in commissions on the scheme, which he split with his co-conspirators, two St. Louis attorneys. The three were convicted in April. Simmons’ sentence was less than prosecutors had recommended but more than Simmons’ attorney said he deserved, according to court documents.

Simmons had reportedly told undercover officers posing as wealthy clients that he knew the tax shelter scheme was skirting the law, but he was comfortable with taking things up to the point of seeing the jailhouse doors but not going inside.

“It is time for the defendant, David Simmons, to see the inside of the prison doors,” federal prosecutors wrote in their sentencing recommendation last week. “Given the seriousness of Simmons’s conduct, his history and characteristics, and the need for general deterrence, the United States requests the Court impose a sentence of 78 months’ imprisonment, the low end of the Guidelines range.”

Judge Kenneth Bell decided on 60 months for Simmons. Co-defendant Michael Elliott Kohn, an attorney, was sentenced to seven years in prison. Catherine Elizabeth Chollet, also a St. Louis attorney, was sentenced to four years, prosecutors said.

The scheme ran from 2011 to late 2022 and worked like this: The three defendants sold what was known as the Gain Elimination Plan, which inflated clients’ business expenses by concocting fictitious royalties and management fees. These fees were paid to a limited partnership largely owned by a charity. But in reality, Kohn and Chollet fabricated the fees, the U.S. Department of Justice said in a statement.

Kohn and Chollet advised clients that the plan’s limited partnership was required to obtain insurance on the life of the clients to cover the income that was allocated to the charitable organization. The death benefit was directly tied to the anticipated profitability of the clients’ businesses and how much of the clients’ taxable income was intended to be sheltered.

Simmons also filed false personal tax returns that underreported his business income and inflated his business expenses, resulting in a tax loss of more than $480,000, prosecutors said.

The defendants must also repay $22.5 million to the Internal Revenue Service, the judge noted.

Topics Agencies North Carolina