A North Carolina real estate appraiser pleaded guilty Friday over his role in a tax shelter that prosecutors say helped enable the sale of $1.3 billion in fraudulent deductions.
(Bloomberg) — A North Carolina real estate appraiser pleaded guilty Friday over his role in a tax shelter that prosecutors say helped enable the sale of $1.3 billion in fraudulent deductions.
Terry Roberts admitted in Atlanta federal court he overstated values of easements that preserved land as open space in exchange for inflated charitable deductions. Prosecutors allege promoter Jack Fisher, who faces trial in July, used those appraisals to attract investors seeking lower tax bills.
Roberts is cooperating with prosecutors in their case against Fisher, as are five accountants who helped sell the tax breaks and also pleaded guilty. They admitted guaranteeing investors deductions at least four times higher than the amount they invested in the deals, known as syndicated conservation easements.
In pleading guilty to conspiracy, Roberts admitted inflating appraisals on 18 deals valued at $461 million, leading to a tax loss for the government of $129 million. He faces as many as five years in prison when he is sentenced on Nov. 14. His attorney declined to comment.
Prosecutors say Fisher, who was indicted with another appraiser, arranged a total of $1.3 billion in fraudulent deductions.
The Internal Revenue Service has targeted the syndicated deals for years and has audited at least 28,000 taxpayers who claimed $21 billion in deductions.
While conservation easements are permitted by Congress, the syndicated deals like those promoted by Fisher were banned in late December. President Joe Biden signed legislation limiting charitable deductions to 2.5 times the amount people invested, which supporters of the bill said will remove the economic incentives behind the abusive tax shelters.
Read more: Tax Fraud on Green Land Spurs Crackdown: ‘The IRS Hates These’
Roberts was indicted with Fisher, an accountant-turned-developer, and five others in February 2022. One defendant, Kate Joy, has never appeared in court. Fisher has pleaded not guilty and denies wrongdoing. An attorney for Fisher didn’t immediately respond to a request for comment.
Prosecutors charged Fisher with crimes including wire fraud, wire fraud conspiracy, conspiracy to defraud the US, and aiding in the filing of false tax returns. Fisher’s fraud earned him about $60 million, the US said. He bought multi-million-dollar homes, an airplane, a show jumping horse and a Mercedes GLS 550, while spending $255,000 on a “Super Bowl LIII Hall of Fame Experience,” prosecutors allege.
Heading into the Fisher trial, prosecutors will rely on the six people who pleaded guilty, secretly recorded calls, backdated documents and a whistleblower, records show.
One of the six who pleaded guilty is James Benkoil, an accountant who marketed the easements. Fisher began working in 2009 with Benkoil’s firm to promote the tax shelters, according to records filed with Benkoil’s plea on May 2 in federal court in New Jersey. Between 2014 and 2020, the firm got more than $1.4 million in commissions.
The case is US v. Lewis et al, 21-cr-00231, US District Court, Northern District of Georgia (Atlanta).
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