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Friday, October 13, 2017

Maryland Real Estate Flipper Sentenced To Prison for Obstructing IRS and Failing to File Tax Returns

A Maryland man who bought, improved and sold residential real estate was sentenced to 36 months in prison announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Stephen M. Schenning for the District of Maryland.


According to the indictment and evidence presented for sentencing, David J. Simard, 58, purchased and sold real estate in Maryland and the Washington, D.C. metropolitan area since the mid-1980s.  In January 2008, Simard received notice that the Internal Revenue Service (IRS), in connection with an audit of his personal income taxes, had requested documents and information from third parties regarding his real estate transactions.  Less than one month after receiving this notice, Simard created Pegasus Home Corporation and began buying and selling properties in its name instead of his own.  From 2009 through 2010, Simard purchased and sold 96 properties in the name of Pegasus.  Simard attempted to conceal his ownership and control of Pegasus by falsely representing that his relative was the owner.  Simard had the same relative apply with the IRS for an employer identification number for Pegasus and used that number when buying and selling properties.  This caused the IRS to receive information falsely indicating that the relative owned Pegasus.  Simard also instructed the relative to open a bank account for Pegasus.  Simard did not file timely personal tax returns for tax years 2009 and 2010, despite earning income requiring him to file.  He also did not file timely corporate tax returns for Pegasus for the same years despite having an obligation to do so.  Simard last filed a timely personal income tax return in 1995.  The court found that Simard caused a tax loss of $1.5 million.


In addition to the term of prison imposed, U.S. District Judge Roger W. Titus ordered Simard to serve one year of supervised release and to pay a $10,000 fine.  Simard previously pleaded guilty on July 10 to obstructing the lawful functions of the IRS and failing to file personal and corporate income tax returns. 


Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Schenning thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys Michael C. Vasiliadis and Kenneth C. Vert of the Tax Division, who prosecuted the case.


Additional information about the Tax Division and its enforcement efforts may be found on the division’s website

Press Release Number: 
Updated October 13, 2017