BY STEFANIE JACKSON, Eastern Shore Post —
Jack Fisher, founder of Preserve Communities, the real estate development company that owns Bay Creek in Cape Charles, has been convicted of federal charges related to selling more than $1.3 billion in fraudulent tax deductions.
Fisher’s associate, James Sinnott, also was convicted of federal charges relating to the fraud.
“The government proved that Fisher and Sinnott made millions from their scheme,” stated an Internal Revenue Service press release on Sept. 22.
The charges on which the two certified professional accountants were convicted included conspiracy to defraud the United States, conspiracy to commit wire fraud, and aiding and assisting the filing of false tax returns. Fisher also was convicted of money laundering.
The scheme dated back to 2002, when Fisher began selling his clients illegal tax shelters in the form of conservation easements.
Tax shelters are used to reduce the amount of income tax a person owes, and many of them are legal.
For example, a 401(k) retirement account is a legal tax shelter. The account holder doesn’t pay taxes on the funds until retirement, when the amount of taxes owed is reduced because the retiree has less income and is in a lower tax bracket.
But Fisher was selling illegal tax shelters, syndicated conservation easements — so called because the cooperation of a syndicate, or group of people, was necessary to conduct the illegal activity.
A conservation easement is a legal agreement that deeds an interest in real property to a charity for the purpose of protecting the land from development. The benefit to the property owner is a tax deduction.
Clay Weibel, a co-defendant who was acquitted, was a licensed appraiser who overinflated the value of the lands sold and placed in conservation easements to benefit high-income taxpayers.
For every $100,000 invested in the real estate, the taxpayer was guaranteed at least a $400,000 tax deduction.
From 2002 to 2012, the scheme involved placing conservation easements on land within two Preserve Communities projects in North Carolina, near the Tennessee border.
By 2013, Fisher had expanded the operation beyond his own developments.
Between tax years 2013 and 2020, Fisher received $60 million from the fraudulent scheme and Sinnott received $6 million.
Some of the money was spent on personal items which the defendants must now forfeit, such as a Mercedes SUV, a private jet, and a vacation home in the Caribbean.
Fisher and Sinnott face maximum prison sentences of three to 20 years for each count on which they were convicted.
