Seven people were indicted on charges of conspiracy to defraud the United States and other crimes through promotion of fraudulent tax shelters involving syndicated conservation easements totaling more than $1 billion and going back almost two decades.
A federal grand jury in Atlanta returned the indictments, according to an announcement by the United States Department of Justice.
The indictment listed seven individuals:
- Jack Fisher, an Atlanta certified public accountant (CPA);
- James Sinnott;
- Yekaterina Lopuhina, a.k.a., “Kate Joy,” an Atlanta-area CPA;
- Herbert Lewis
- Victor Smith, an Atlanta-area CPA;
- Clayton Weibel, a licensed appraiser; and,
- Walter D. Roberts II, a.k.a., “Terry Roberts.”
The indictment alleges the accused engaged in “a conspiracy to design, market and sell false and fraudulent charitable contribution tax deductions to high-income clients.” Fisher and Sinnott allegedly caused partnerships to donate conservation easements over land owned by the partnerships. They allegedly used two “hand-picked” appraisers — Weibel and Roberts — to generate fraudulent and inflated appraisals of the easements that frequently valued easements at amounts some 10 times higher than the price that was actually paid for the partnerships, often within months of the appraisals, according to the Department of Justice. Lewis previously was charged in an indictment returned on June 9, 2021.
“This criminal indictment and the allegations contained within it paint a picture of severe abuse of the federal tax incentive for conservation easement donations,” Land Trust Alliance President and CEO Andrew Bowman said via a statement. “For years, the Land Trust Alliance has urged Congress and federal agencies to halt this type of egregious abuse. And while we are heartened to see indictments filed, the most expedient and cost-effective solution is a legislative one,” he said.
Bowman said such criminal prosecutions highlight the need for Congress to pass the Charitable Conservation Easement Program Integrity Act (S. 2256 / H.R. 4164). “This bipartisan, bicameral bill would halt the abuse, protect a critical land conservation incentive and enact safeguards to protect taxpayers from bad actors who have made millions turning conservation easement donations into profit opportunities.”
Fisher, Sinnott, Joy, Lewis, Smith and other co-conspirators allegedly promoted, marketed and sold partnership units for $25,000. They guaranteed at least a 4-to-1 tax deduction ratio for clients, meaning that four units with a total cost of $100,000 would yield a tax dedication of $100,000. Partnerships then claimed a tax deduction in the inflated amount of the easement, resulting in a fraudulent deduction going to clients who purchased units in the partnership.
The indictment also alleges that Fisher, Sinnott, Joy, Lewis and Smith allegedly helped clients claim charitable contribution tax deductions after the close of the tax year by accepting late sales, generating backdated documents and preparing, and causing the preparation of, false and fraudulent tax returns and false documents, among other items. The DOJ alleges that defendants sold more than $1.3 billion in false and fraudulent tax deductions.
Defendants face a period of supervised release, monetary penalties, restitution and forfeiture, in addition to charges that could bring potential prison time, including:
- Conspiring to defraud the U.S., maximum five years per count;
- Conspiracy to commit wire fraud, maximum 20 years per count;
- Wire fraud, maximum 20 years per count;
- Aiding and assisting in the preparation of false returns related to syndicated conservation easement tax shelters, maximum three years per count;
- Filing false personal tax returns, maximum three years per count;
- Money laundering, maximum 10 years per count;
Money laundering charges arise from Fisher’s purchases of multiple luxury vehicles and domestic and foreign properties with proceeds of unlawful activity.