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Tax Shelter Promoters Sentenced to 25 Years and 23 Years in Billion-Dollar Syndicated Conservation Easement Tax Scheme

Tax Shelter Promoters Sentenced to 25 Years and 23 Years in Billion-Dollar Syndicated Conservation Easement Tax Scheme

An accountant blamed by federal prosecutors for pioneering the use of conservation easements as illegal tax shelters was sentenced to 25 years in prison January 9, 2024 following his conviction on all counts of a $1.3 billion tax fraud scheme that drew the first criminal prosecution of its kind.

Jack Fisher, a 71-year-old certified public accountant who once worked for the Internal Revenue Service and PwC, would be 96 by the time he is released under the sentence announced by the U.S. Department of Justice. Fisher's co-conspirator, attorney James Sinnott, 52, was also sentenced Tuesday and will serve 23 years in prison, the DOJ said.

The sentencing judge, U.S. District Judge Timothy C. Batten Sr., gave each man five years less than federal prosecutors asked for, but far more than Fisher and Sinnott requested. Fisher who told the court that his health was so poor any sentence meant life in prison said he deserved no more than five years behind bars.

Judge Batten ordered Fisher to pay $458 million in restitution to the U.S. and Sinnott $444 million, the DOJ said.

“Today’s Message Should Be A Clear One: IRS CI Special Agents Will Use Their Financial Investigative Expertise To Hold Those Involved In Abusive Tax Shelter Schemes Accountable,”
Said Chief Jim Lee Of IRS Criminal Investigation (IRS CI).

Fisher and Sinnott were convicted of conspiracy and filing false returns in September following a nine-week trial, after which Fisher was additionally convicted of money laundering. 

Fisher Illegally Sheltered $450 Million In Taxes
While Eluding Numerous IRS Civil Audits And A Senate
Finance Committee Investigation Into So-Called
Syndicated Conservation Easement Tax Schemes.

"He was the face of these tax shelters and spearheaded the growth of an industry saturated with fraud," prosecutors said Friday in their sentencing memo for Fisher.

For more than a decade starting in 2007, Fisher used his training as a CPA to create and sell tax deductions for conservation easement donations, netting wealthy clients $4 in deductions for every $1 they invested in partnerships he created to donate the easements, mostly to environmental charities, prosecutors said.

He aggressively marketed the shelters and hand-picked real estate appraisers who inflated values to drive up the amount of the deductions, prosecutors said. 

In an audio recording presented at trial, Fisher said the property values were typically inflated by 30%, according to court documents. An appraiser who testified at the trial said some values were inflated by more than 100%, prosecutors said.

Fisher hired Sinnott to help him in 2013, and in their first year the deductions soared higher than the previous 10 rounds of donations combined, prosecutors said.

 Fisher began recruiting financial advisers and accountants and paying them commissions to sell the illegal shelters to their clients, according to prosecutors.

Fisher said that his flaw was surrounding himself with experts in land value, finance and taxes, he said, all of whom advised him that his shelters were not illegal.

Walter Roberts II, an appraiser who was accused of helping Fisher prepare 18 false appraisals, was sentenced in November to a year in prison after he pled guilty and then testified against Fisher and Sinnott for more than two days at trial. Another appraiser accused of falsifying his work in the deductions scheme, Clay Weibel, went to trial alongside Fisher and Sinnott and was exonerated.

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Read more at: Tax Times blog

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