IRS, City Counsel Meet in Probe of Ex-Official
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YORBA LINDA — U.S. Internal Revenue Service officials recently met with a Yorba Linda special counsel to discuss allegations that former City Manager Arthur Simonian had awarded himself tens of thousands of dollars worth of secret bonuses and other compensation, Mayor John Gullixson said.
The meeting occurred last week, shortly after the City Council asked the IRS, state tax regulators and Orange County prosecutors to investigate Simonian for possible criminal wrongdoing.
“All of our reports, legal conclusions and conclusions of our investigation were handed over,” Gullixson said.
City financial records show that some of Simonian’s benefits were not reported as income on recent federal W-2 tax forms. They included a $1-million life insurance policy that cost the city $10,700 a year in premiums.
Also undeclared was Simonian’s leased BMW, which was paid for by the city, officials said. The monthly payment on the BMW, first leased in 1997, was $776.
The tax forms were prepared by the city finance department, which operated under Simonian’s direction, according to Gullixson and other sources.
The city’s special counsel, Tustin attorney Henry Kraft, declined to comment on the meeting with the IRS. Kraft did say the city’s investigation of Simonian, which began in August, is still active.
The IRS also declined to comment on the case.
Simonian has denied any wrongdoing, and is suing the city for wrongful dismissal.
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