QUEENSBURY -- Warren County Judge John Hall has dismissed a six-count indictment filed against a local business owner who was accused of not paying his state taxes and filing false tax returns.
The charges against David J. Monsour were dropped after a review of the evidence found that the state Department of Taxation & Finance’s claims that Monsour owed tens of thousands of dollars in income tax were “incorrect,” court records show.
Monsour’s lawyer, former state deputy commissioner for tax enforcement William Comiskey, called the case “troubling” and “perplexing,” because the state agency didn’t give his client a chance to explain his situation before having him charged.
Had investigators done so, they would have learned Monsour had done nothing wrong and his books were above board, he said.
“They never contacted him with respect to this issue,” Comiskey said.
Monsour, a Queensbury resident, owns Concepts in Fitness stores in Saratoga Springs and Albany.
An indictment filed in Warren County Court last fall charged him with six felony charges of criminal tax fraud and offering a false instrument for filing based on allegations he evaded about $70,000 in taxes on $950,000 in income between 2006 and 2009.
The charges did not pertain to sales tax receipts, as police who arrested Monsour initially reported.
Comiskey said the state had incorrectly calculated what Monsour owed. Basically, income from sales of property, proceeds from mortgages and other income that was exempt was counted against Monsour’s tax liability, Comiskey said.
The Warren County District Attorney’s Office reviewed information provided by Comiskey, presented it to the Tax Department and the prosecutor’s office concurred with Comiskey’s finding.
“The charges brought against Mr. Monsour were based on an inaccurate calculation of unreported income and that proof of criminal intent is lacking given Mr. Monsour’s reliance on the professional advice of his accountant,” Warren County Assistant District Attorney Marc Kokosa wrote to Hall.
In the letter, Kokosa consented to dismissal of the charges “in the interest of justice.”
Monsour agreed to pay $7,408 to the state for unpaid taxes, although Comiskey said whether he owed that money was questionable.
“When they whittled it all down, it came down to a small liability. To bring this to a resolution, he decided to pay it,” Comiskey said.
Comiskey said it is disturbing that Monsour could be “put through the wringer” and criminally charged without anyone from the Department of Taxation and Finance contacting him first for an explanation.
A spokesman for the state agency referred comment to the district attorney’s office.
Warren County District Attorney Kate Hogan said Friday that Monsour had a "very aggressive accountant" and that a "mistake" was made that deprived the state of taxes it should have received.
"Our obligation is to always review the evidence in every case we prosecute. The defense attorney presented evidence to us that we reviewed. That evidence showed that no crime was committed," Hogan said. "A mistake was made. But that mistake did not rise to the level of a crime. Mr. Monsour has paid almost $7,500.00 back to the Tax Department for his mistake."
Monsour’s arrest was one of several of area business owners last fall after Tax Department investigations showed they owed sales tax or income tax.
One of the businessmen, local artist Frankie Flores, pleaded guilty to a misdemeanor charge of criminal tax fraud in February and is awaiting sentencing. He likely faces probation and restitution.
Kingsbury resident Chad Nims, who was charged last November, is scheduled for trial April 16 in Washington County Court.
Nims owns Nims Outdoor Services and a number of other real estate ventures in the region, and was accused of failing to pay $134,000 in sales tax.