Polsinelli’s Government Investigations and Tax attorneys continue to follow the well-known Fisher case, the Department of Justice’s (“DOJ”) first criminal indictment related to syndicated conservation easements. The trial is set to start on July 18, 2023, for Jack Fisher, James Sinnot, and Clayton Weibel. To date, five accountants and one appraiser have pled guilty to federal charges related to their involvement with the syndicated conservation easement deals at issue in the case.
According to the government, the professionals who pled guilty promoted syndicated conservation easement deals and/or financially benefited from the transactions. The DOJ has placed emphasis on the fact that professionals, who received payments or commissions for their work on the deals, should have known that the syndicated conservation easement deals were fraudulent. Most recently, James Benkoil, a certified public accountant in New Jersey, pled guilty to conspiring to defraud the United States as part of a syndicated conservation easement tax shelter “scheme.” Regarding Benkoil, the DOJ argued that his “tax training and experience” contributed to his knowledge that “SCE Tax Shelters must have a business purpose or economic substance, or else they would be disregarded under federal tax law” and that investors involved in backdating “were not entitled to claim those deductions” on the previous year returns.
Many of the allegations against Fisher are specific to Inland Capital, but some broadly call into question the validity of all syndicated conservation easements. The DOJ’s strategy and the result of the first trial will have a significant impact on the potential liability of other professionals and investors involved in SCE deals.
Polsinelli will continue to monitor this case closely to understand the impact on our professional and investor clients and provide additional updates as the trial progresses.