Federal Tax Crimes: Tax Attorneys Indicted for Fraudulent Tax Shelter and Related Conduct (November 18, 2022)

Jack Townsend has made available for download his article, “Tax Attorneys Indicted for Fraudulent Tax Shelter and Related Conduct”, published on his Federal Tax Crimes blog. The abstract is as follows:

DOJ announced indictments in a press release, here, titled as follows: Tax Attorneys and Insurance Agent Indicted for Promoting and Selling Fraudulent Tax Shelter. The indictment is here (CL).

The charges are

  • defraud conspiracy 18 USC 371 (Count One),
  • aiding and assisting 7206(2) (Counts Two through Twelve and Eighteen through Twenty-two),
  • tax perjury via false tax return 7206(1) (Counts Thirteen through Seventeen), and
  • wire fraud 18 USC 1343 (Count Twenty-Three). 

The indictment also alleges a Notice of Forfeiture and Finding of Probable Cause.

The pattern of conduct alleged in the press release as:

According to the indictment, from 2011 to the present Michael Elliott Kohn and Catherine Elizabeth Chollet, both attorneys and residents of St. Louis, Missouri, and David Shane Simmons, a licensed insurance agent and broker based out of Jefferson, North Carolina, conspired to defraud the United States by promoting, marketing, and selling to clients a fraudulent tax scheme known as the Gain Elimination Plan (“GEP”). The defendants allegedly designed the GEP to conceal clients’ income from the IRS by fraudulently inflating business expenses through fictitious royalties and management fees. These fictitious royalties and management fees allegedly were paid, on paper, to a limited partnership largely owned by a charitable organization. In reality, Kohn and Chollet allegedly fabricated the royalties and management fees. In total, the defendants allegedly caused a tax loss to the IRS of tens of millions of dollars.

Click here to view Jack Townsend’s summary of “Tax Attorneys Indicted for Fraudulent Tax Shelter and Related Conduct”

Posted by Marin Larkin, Associate Editor, Wealth Strategies Journal.

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