Pennsylvania Man Ordered To Repay More Than $640,000 To Scam Victims

Jul. 13–A Lilly man sentenced to federal prison last month has been ordered to repay more than $640,000 to 12 individuals and the IRS as part of a scheme he conducted under the guise of a financial adviser.

A restitution hearing scheduled for Douglas Simanski on Friday was canceled after a joint stipulation was reached between Assistant United States Attorney Stephanie Haines and Assistant Federal Public Defender Christopher Brown.

That joint stipulation, which was filed Wednesday, directs Simanski to repay 100% of $640,662.34 to 12 individuals and the IRS. Some individuals on the list were owed as much as $67,920, while Simanski has been ordered to repay $207,437 to the IRS.

Federal prosecutors said outside the knowledge of his investment firm employer, Simanski operated a Ponzi-style scheme based on false documents and inflated promises that deceived 31 people, including retirees and war veterans, into more than $4 million worth of fraud over the course of 14 years.

Last month, U.S. District Judge Kim R. Gibson ordered Simanski, 54, to spend six and a half years in federal prison.

Simanski was also ordered to receive three years of court supervision following his release.

Simanski was sentenced on securities and wire fraud as well as filing false federal income tax returns from 2013 through 2015.

Prosecutors said Simanski also used fake investment CDs and pledges of up to 10 percent returns to coerce people he knew into investing their money, oftentimes their retirement savings.

In 2012, Simanski convinced one grieving man to cash in and invest a life insurance policy while his wife was dying at UPMC, prosecutors said.

At sentencing, Ashville VFW Post Commander David Seymore said Simanski was a longtime member, which made it natural for the group’s members to trust him with their investments.

Seymore said Simanski’s actions had a trickle-down effect that impacted the organizations the club supports and the community, which has since hesitated to support the post because of Simanski’s actions.

Simanski told Gibson at sentencing that he fell victim to the same investments, which included a coal mining company that eventually folded, and could not repay people with his own money.

Brown unsuccessfully pleaded for home confinement rather than jail time for Simanski, whom Brown said had few resources to his name and didn’t live a lavish life, aside from his home, which is now in foreclosure.

As of sentencing, Haines said more than $3 million of the $4.5 million Simanski acquired was unaccounted for and suggested he spent a significant amount of investors’ money on his home and family.

Haines said Simanski built a $400,000 home with $18,000 bamboo flooring and garage updates and also invested money into an online E-trade account under his wife’s names so the funds couldn’t be traced to him.

Jocelyn Brumbaugh is a reporter for the Tribune-Democrat. Follow her on Twitter @JBrumbaughTD.

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