DOJ Alleges $1.3 Billion in Fraudulent Tax Deductions
According to press release on March 1, 2022, the US Department of Justice announced a superseding indictment of five promoters of syndicated conservation easements (also known as SECs or tax shelter land deals), along with the two real estate appraisers who allegedly gave inflated property valuations to facilitate the scheme.
The DOJ has already obtained guilty pleas from two accountants who were involved with this particular tax shelter land deal scheme last year. (See GA Tax Professionals Plead Guilty To Promoting Syndicated Conservation Easement Fraud Scheme)
Now the Atlanta federal grand jury hearing this matter has issued an indictment against seven defendants, including five promoters and two real estate appraisers.
The defendants allegedly attempted to disguise SCEs as real estate deals, but the indictment alleges that the transactions were simply the illegal sale of inflated tax deductions, according to the DOJ.
According to the press release, the promoters assembled tax shelter land deals that offered a 4:1 deduction to investment ratio, meaning, if an investor invested $100,000 then the investor would take a tax deduction of $400,000.
The two real estate appraisers were accused of steeply overvaluing the real estate properties—sometime as much as ten times the amount of the original purchase price of the property.
The promoters allegedly “helped” investors to backdate documents and prepare others so that the investors could file false tax returns and realize the benefits of the shelter. The DOJ claims that over $1.3 billion in fake deductions was sold through the scheme.
All defendants are charged with conspiring to defraud the United States, for which they face a maximum sentence of five years in prison, in addition to other charges, according to the press release.
Filing a Complaint against your Brokerage Firm
The White Law Group continues to investigate potential securities fraud claims involving the liability that sale agents and broker-dealers may have for improperly recommending syndicated conservation easements (tax shelter land deals) to unsuspecting investors.
For more information on the White Law Group’s syndicated conservation easement (SCE) investigation please see:
Investor Alert: EcoVest Capital, Conservation Easement Investments
Senate Finance Committee Reports Findings in Conservation Easement Investigation
GA Tax Professionals Plead Guilty To Promoting Syndicated Conservation Easement Fraud Scheme
Investors who received charitable contribution deductions of more than 2.5 times their investment could possibly be audited, and potentially even hit with a revised tax bill.
These syndicated conservation easements may be sold through both independent broker-dealers and directly by attorneys and CPAs who create the syndications and tend to have high commissions and fees.
Prior to making recommendations to an individual investor, brokerage firms are required by the Financial Industry Regulatory Authority (FINRA) to disclose all the risks of an investment. Recommendations should only be made if the investment is suitable for an individual investor given their age, investment objections, investment experience and risk tolerance.
Brokerage firms that do not perform adequate due diligence on an investment and/or make unsuitable recommendations can be held accountable for investment losses through FINRA arbitration.
Free Consultation with a National Securities Attorney
If you have invested in a syndicated conservation easement (tax shelter land deal), please call The White Law Group at 1-888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. To learn more about The White Law Group visit www.whitesecuritieslaw.com.
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