Criminal Defense Lawyers

What is Syndicated Conservation Easement Fraud

You donated land to charity and ended up in federal prison. That’s what syndicated conservation easement fraud looks like from the inside. The charitable contribution was the crime. You thought you were reducing your taxes and protecting the environment. You were committing tax fraud. Jack Fisher got 25 years for selling these arrangements. James Sinnott got 23 years. These weren’t drug dealers or violent criminals. They were a CPA and an attorney who sold $1.3 billion in “charitable donation” deductions. The donations were real. The valuations were fiction. The prison sentences were devastating.

Welcome to Spodek Law Group. We’re putting this information on our website because syndicated conservation easement fraud has destroyed thousands of investors who thought they were being smart about their taxes. Since 2010, the IRS has identified $36 billion in fraudulent deductions from these schemes. They’ve challenged $21 billion in deductions from 28,000 investors. Todd Spodek has represented clients who genuinely believed they were making legitimate charitable contributions. They discovered their “tax planning” was actually industrial-scale fraud. The promoters promised them 4-to-1 deductions. The promoters delivered criminal exposure.

The irony is brutal. Congress created conservation easement deductions to protect the environment. Promoters turned it into a $36 billion fraud industry. The land being “protected” was often worthless scrubland or abandoned golf courses with no conservation value whatsoever. Nobody was protecting anything. The entire point was generating fake deductions. And now the investors who bought these arrangements are discovering that the “sophisticated tax planning” they purchased was actually a federal crime.

The “Charitable Donation” That Sends People to Prison

Heres the paradox that destroys everyone who participated in these schemes. Conservation easements are completly legitimate. Landowners have been donating development rights to land trusts for decades. You own a beautiful piece of property, you decide you want to protect it from development forever, you donate a conservation easement to a qualified charity, you get a tax deduction. Nothing illegal about that.

The problem starts when promoters turned this legitimate charitable vehicle into an industrial deduction factory. They would buy cheap land – often worthless scrubland that nobody wanted. They would hire an appraiser to declare the land had massive “development value” that was many times what they paid for it. Then they would form a partnership to own the property, sell units to high-income investors, donate a conservation easement at the inflated value, and let investors claim deductions far exceeding there investment.

Think about the math. EcoVest generated $4.39 in deductions for every $1 invested. Thats not tax planning. That math only works if the appraisals are fraudulent. You cant legitimately turn a dollar into 4.39 dollars of tax benefit unless someone is lying about value somewhere in the chain.

And heres were people get destroyed. The investors thought they were being both tax-smart AND environmentally conscious. They were told the land was being preserved. They were told the donation was legitimate. They beleived the professionals who designed the scheme. But the charitable purpose was fiction. The conservation value was nonexistent. The entire arrangement existed to generate fake deductions, and everyone who participated is now facing consequences.

How the Scheme Actually Works

Heres the step-by-step breakdown of how these frauds actualy operate. Understanding the mechanics matters becuase the IRS uses each step as evidence of fraud.

Step one: Promoters identify cheap land. Often its scrubland, vacant lots, or properties with minimal actual value. One scheme bought land for $9.5 million. That becomes important in a moment.

Step two: Promoters hire appraisers to create inflated valuations. The same $9.5 million property gets appraised at $187 million. Thats a 1,872% increase. The appraisers use “development value” methodology – claiming the land would be worth massive amounts if someone built a shopping center or housing development on it. The problem is that nobody actualy plans to build anything. The “development value” is purely hypothetical.

Step three: Promoters form a partnership or LLC to hold the property. They sell units to high-income investors who need deductions. The investors pay real money for partnership units.

Step four: The partnership donates a conservation easement to a land trust. The easement restricts future development of the property. The donation is valued at the inflated appraisal amount – in our example, $187 million.

Step five: Investors claim charitable contribution deductions based on there share of the $187 million donation, even though the total cash everyone invested was a fraction of that amount.

The IRS has been systematicaly destroying these arrangements. In recent Tax Court cases, the court has sustained an average of only 7% of the claimed valuations. That means 93% of what taxpayers claimed was fabricated. The appraisals werent just aggressive – they were complete fiction.

The Appraisal Factory

Heres something that reveals how systemic this fraud became. The appraisals werent just wrong. They were manufactured by professionals who knew exactly what they were doing.

Walter Roberts II was an appraiser who prepared 18 false appraisals for Jack Fisher’s tax shelter operation. Eighteen separate properties, each appraised at values that had no connection to reality. When the IRS caught up to him, Roberts cooperated. He testified against the promoters who hired him. He got one year in prison – far less then Fisher and Sinnott’s combined 48 years.

Heres the hidden connection that matters. The appraisers werent making independent professional judgments. They were producing documents that matched what the promoters needed. The promoters would determine how much deduction they wanted to sell, then the appraisers would reverse-engineer valuations to match. This isnt tax planning. This is document fabrication.

The professionals involved in these schemes had licenses. They had credentials. They used standard appraisal methodology. But the “legitimate” process produced fraudulent results becuase the inputs were manufactured. The licensed professionals using standard methodology were actually committing fraud – the credentials made it possible, not legitimate.

Smith and Tomasello were CPAs who participated in similar schemes. In October 2024, they recieved 20 months in prison each for helping generate $14 million in false deductions. The professional credentials that should have protected clients became the mechanism for committing fraud.

The Numbers That Prove the Fraud

Heres the statistical picture that shows the scale of what happened. These arent isolated cases. This was an entire industry.

Since 2010, the IRS estimates $36 billion in fraudulent deductions from syndicated conservation easements. Thirty-six billion. Thats not a typo. The IRS has challenged $21 billion in deductions from 28,000 investors. Twenty-eight thousand people who thought they were making charitable donations are now facing IRS enforcement.

Jack Fisher sold over $1.3 billion in fraudulent deductions. The tax loss to the government was over $450 million. He got 25 years in federal prison – the same sentence some murderers recieve.

James Sinnott was an attorney who joined Fisher’s operation in 2013 and oversaw its massive expansion. He got 23 years.

EcoVest Capital ran 58 separate deals generating nearly $3 billion in deductions. There ratio was $4.39 in deductions for every $1 investors paid. In 2023, EcoVest settled with the Department of Justice for $6 million with no admission of wrongdoing. But the investors who bought there products still face full liability.

In Tax Court, judges have been sustaining an average of only 7% of the claimed valuations. Think about what that means. If you claimed a $1 million deduction, the court is saying only $70,000 was legitimate. The other $930,000 was fraud. You owe the taxes on that $930,000, plus penalties, plus interest.

OK so theres a system revelation here. The IRS dosent have to prove the entire deduction was fraudulent. They just have to show the valuation was inflated. And when your paying $1 for $4.39 in deductions, proving inflation is easy.

The Promoters Who Built Prison Sentences

Lets look at what actualy happens to the people who design and sell these schemes.

Jack Fisher was a certified public accountant who began selling syndicated conservation easement tax shelters at least as early as 2008. He promised investors deductions of 4.5 times what they paid. He used inflated appraisals, backdated documents, and other sham actions. In January 2024, Fisher was sentenced to 25 years in federal prison.

Think about that. Twenty-five years. Fisher will be released in his eighties if he survives that long. This wasnt a slap on the wrist. This was a life sentence disguised as a prison term.

James Sinnott was an attorney who joined Fisher’s scheme in 2013. He oversaw the massive expansion of the operation. He got 23 years. Combined, these two professionals – a CPA and an attorney – recieved 48 years in federal prison for selling “charitable donation” tax shelters.

Heres the uncomfortable truth nobody wants to say. Fisher got 25 years. Thats the same sentence some murderers recieve. The federal government treats large-scale tax fraud as seriously as violent crime. The numbers in these cases – billions in fraudulent deductions, hundreds of millions in tax losses – justify sentences that destroy lives.

The Agee brothers, Stein and Corey, were Georgia promoters who became the first to plead guilty to criminal charges in syndicated conservation easement cases in December 2020. They werent the last. Nine or more additional guilty pleas have followed – appraisers, CPAs, attorneys, all admitting to there role in the fraud.

These arent aberrations. This is what happens to syndicated conservation easement promoters.

When EcoVest Got Caught

Heres a case study in how these schemes collapse. EcoVest Capital was one of the largest syndicated conservation easement promoters in the country.

EcoVest ran 58 separate deals. They generated nearly $3 billion in charitable contribution deductions. There ratio was $4.39 in deductions for every $1 investors paid. The math alone should have been a warning sign – you cant legitimately generate that kind of return without fraud somewhere in the chain.

In 2023, EcoVest settled with the Department of Justice for $6 million. No admission of wrongdoing. The promoter walked away with a financial penalty but no criminal conviction.

But heres the trap. The investors who bought EcoVest products didnt get that deal. The settlement was between the government and EcoVest. The individual investors still face full liability for there claimed deductions. The promoter avoided criminal charges. The investors face disallowance, penalties, and potential criminal referral.

Think about that cascade. You paid money to EcoVest. You claimed deductions based on there valuations. EcoVest settles with the government. Your still on the hook. The promoters exposure is resolved. Yours isnt.

The Investor Trap

Heres the paradox that destroys scheme participants. You relied on the promoters expertise. You filed returns based on there advice. They had CPAs, attorneys, appraisers – all licensed professionals. They assured you it was legal. Now the promoters are facing prosecution – and you still owe every dollar.

The trap is brutaly simple. You can rely on professional representations in good faith. You can genuinely beleive the scheme is legitimate. It dosent matter. Taxpayers remain responsible for the contents of there returns regardless of who advised them.

Heres the consequence cascade. You buy a syndicated conservation easement. You claim your share of the inflated deduction. Years later, the IRS identifies the scheme as abusive. The promoter gets prosecuted. Your name is on there client list – becuase material advisors are legaly required to maintain lists of everyone they advised. The IRS contacts you. You discover your “charitable donation” was fraud.

Now your facing the original taxes you owed. Plus accuracy-related penalties of 20-40%. Plus the 40% gross negligence penalty that applies when property is overvalued by 200% or more. Plus interest thats been accruing for years. By the time resolution comes, the original tax savings may have quadrupled into liability.

And heres the part that creates permanant anxiety. The promoters criminal exposure dosent eliminate yours. There conviction dosent reduce your tax debt. The scheme being declared fraudulent just adds criminal exposure to your civil debt.

The Listed Transaction Problem

Heres something that should terrify anyone whos participated in these arrangements. In October 2024, the IRS issued final regulations designating syndicated conservation easements as “listed transactions.”

What does that mean? It means the IRS has pre-identified these arrangements as abusive. It means disclosure is required. It means your name goes in a database before the IRS even audits you.

The “listed transaction” designation triggers automatic reporting requirements. You have to disclose your participation on Form 8886. Material advisors – the promoters and there accountants – have to maintain lists of everyone they sold to. When the IRS subpoenas those lists, they get every investor’s name.

Heres the inversion that matters. The IRS knows you participated BEFORE they audit you. There not discovering the scheme through your return. There working from lists. Your name was on a database the moment you bought the arrangement. The audit isnt investigation – its collection.

And heres the system revelation. The October 2024 regulations apply to transactions with open statute years even if the transaction occured before 2024. If you havent been audited yet, you may be required to disclose now. The regulations reached back in time to capture everyone who participated while there returns are still open.

The Settlement Dilemma

Heres something that creates impossible choices for investors. The IRS offers settlement programs for syndicated conservation easement participants. But the settlement terms are brutal.

Recent settlements have required substantial concession – meaning you give up most of your claimed deduction. Investors face penalties of 10-20%. Thats in addition to the original taxes plus interest. The settlement dosent give you your money back. It just limits how much worse things get.

But heres the trap within the trap. The IRS requires ALL partners in a syndicated deal to agree and pay BEFORE settlement is finalized. One holdout blocks everyone. If you want to settle but another investor in your deal dosent, you cant.

Think about that dynamic. Your trapped in a partnership with strangers. Your ability to resolve your tax situation depends on there cooperation. They might want to litigate. They might not have the money to settle. They might just be difficult. And you cant move forward without them.

For non-settlers, the consequences are worse. Full disallowance of the deduction. Maximum penalties – the 40% gross negligence penalty applies to almost every SCE case becuase the overvaluations exceed 200%. Interest continuing to accrue. Potential criminal referral.

The settlement is expensive. Not settling is devastating.

The Conviction Reality

IRS Criminal Investigation achieves conviction rates above 90% on cases they accept for prosecution. For syndicated conservation easement cases specificaly, the evidence is often overwhelming. Appraisal documents show inflated valuations. Partnership records show who invested. Tax returns show what was claimed. The gap between what investors paid and what they deducted is obvious on its face.

Heres the consequence cascade that destroys everyone involved. The promoter gets prosecuted. There client lists get subpoenaed. Every investor who bought the scheme is now identified. The IRS works through the list. Some investors face civil audits. Some face criminal referrals. The difference often comes down to timing – investors who addressed the problem proactivly before criminal referral have better options then those who waited.

The entire process can take years. Fisher and Sinnott were selling schemes as early as 2008. There prosecution happened in 2023-2024. Fifteen years of scheme activity before the final sentences. But those sentences – 25 and 23 years – show the government plays the long game. They will wait years to build the case. Then they will destroy everyone who participated.

What This Means For Your Taxes

If youve participated in any syndicated conservation easement arrangement – especialy one that promised deductions significantly larger then your investment – you need to understand the exposure.

Heres the cascade that can destroy you. You invested in an SCE that seemed legitimate. You got professional advice. You claimed your share of the deduction. Years later, the IRS reclassifies the transaction as a listed transaction. Your on the material advisors list. The disclosure you filed – or failed to file – becomes evidence. Now your facing original taxes plus penalties plus interest plus potential criminal charges.

The Tax Court has been sustaining only 7% of claimed valuations in these cases. That means if you claimed $500,000 in deductions, the court might allow $35,000. The other $465,000? Thats fraud. You owe taxes on the income you shouldnt have deducted. Plus 40% penalties. Plus years of interest.

Clients come to Spodek Law Group after discovering there “charitable donation” has been classified as fraud. They genuinely beleived they were protecting land. They genuinely beleived the appraisals were accurate. They discovered they had purchased criminal exposure from licensed professionals who knew exactly what they were selling.

If your involved in any syndicated conservation easement arrangement, whether or not youve recieved IRS correspondence yet, you need to understand the stakes. The October 2024 regulations mean disclosure may be required now even for old transactions. Early intervention can sometimes resolve these matters civily. Waiting until criminal referral means negotiating from the weakest possible position.

Todd Spodek has handled cases exactly like this. We understand how the IRS investigates SCE fraud, what evidence they use, and were the defenses might be. If your facing potential SCE liability, the question is whether to address it now or wait until the consequences multiply.

Call us at 212-300-5196. The consultation is free. Loosing everything becuase you trusted the wrong promoter isnt something you have to accept.