IRS Hires Additional 200 Attorneys to Prosecute Syndicated Conservation Easement Investors

by Admin Istrator | February 4, 2022 4:31 pm

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On January 21, 2022, the IRS posted[1] an announcement that it was seeking to hire up to 200 attorneys to prosecute fraudulent syndicated conservation easement, or SCET, deals.  The IRS’s announcement comes after a series of aggressive actions by attorneys at the U.S. Department of Justice.  These actions include the high-profile indictments of CPAs.  In the job posting, IRS Commissioner Chuck Rettig is quoted as saying “bogus syndicated conservation easement transactions undermine the public’s trust in private land conservation and defraud the government.”

Problems with Fraudulent Syndicated Conservation Easements Transactions

SCETs, or syndicated conservation easements, are private placement investments[2] in passthrough entities (an LLC or partnership), which “return” profits to investors in the form of tax savings from charitable contributions to land easements.  The deductions that the investor receives serves as the return on investment.  The major problem with these transactions is that the claimed donation value is often four to ten times the price paid for the land.  The IRS and the US Attorneys’ office have expressed concern as to whether syndicated conservation easements are legitimate at all.  Here are the major risks of syndicated conservation easements:

June 2020 IRS Mails Offers of Settlement to Some Syndicated Conservation Easement Investors

On June 25, 2020, the IRS announced[3] that it was mailing offers of settlement to investors in SCET transactions.  The terms of the offer are terrible news for impacted investors.  According to the offer:

June 2021 Syndicated Conservation Easement Fraud Indictment by US Attorney

On June 9, 2021, the United States attorneys’ office announced the indictment of Georgia CPA Herbert E. Lewis for his alleged involvement in fraudulent syndicated conservation easement deals.  According to the indictment (a copy of which is below), CPA Herbert Lewis allegedly conspired to promote large fraudulent tax deductions through overstated syndicated conservation easement transactions.  Here are the key allegations in the case:

Syndicated Conservation Easements Listed in US Attorney’s Indictment

Several syndicated conservation easements are listed in the indictment of Herbert Lewis. Here is a list of the syndicated conservation easements from the US Attorney’s indictment of Georgia CPA Herbert Lewis:

Syndicated Easements Offered by EcoVest Capital

In addition to the syndicated conservation easements listed in the U.S. Attorney’s indictment, EcoVest Capital was also a large issuer of SCET.  According to records filed with the Securities and Exchange Commission and FINRA, the following brokers and financial advisors were eligible to receive commissions for deals that were syndicated by EcoVest Capital:

Advisor/BrokerCRDMember Firm (When Sold)
Russell Blum1276754International Assets Advisory, LLC
Jay Salamone3240435G.A. Repple & Company
David Reiss6591492International Assets Advisory, LLC
Bradley Curtis5422029JRL Capital Advisors  
Warren Prehmus1875927The Strategic Financial Alliance, Inc.
Bryan Hakola4161289Concorde Investment Services
Chad Edwards5437543The Strategic Financial Alliance, Inc.
Jason Griggs4795395Arkadios Capital
Darren Oglesby2480135Money Concepts Capital
Assaf Pinchas2618726The Strategic Financial Alliance, Inc.
Damian Dering2854253Concorde Investment Services
Jim Howard706326International Assets Advisory
Brett Dysart5629988The Strategic Financial Alliance, Inc.
David McInnis4399381Arkadios Capital
Eric Hornyak3021265Aurora Securities
David Curry4506561Arkadios Capital
Shawn Williamson2829022The Strategic Financial Alliance, Inc.
Nathan Oltmans5421975The Strategic Financial Alliance, Inc.
Bryan Repple3200280G.A. Repple & Company
Michael Baker4037933United Planners of America

Next Steps if You Paid Penalties for your “Investment”

If you were forced to pay significant IRS penalties due to the “investment” you made in a syndicated conservation easement, you may be eligible to seek money damages against the parties who marketed the investment to you.  Contact our attorneys at 800-767-8040 for a free and confidential consultation or complete the form below.   We work on contingency and will not earn a fee unless we can collect for our clients.

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