BY STEFANIE JACKSON, Eastern Shore Post —
Two men with close business ties to the Bay Creek resort and community in Cape Charles have been sentenced to a combined 48 years in prison for federal crimes related to the sale of illegal tax deductions worth $1.3 billion, the majority of which must be paid back in restitution.
Jack Fisher, certified professional accountant and founder of Preserve Communities, the company that owns Bay Creek, was sentenced to 25 years in prison for the tax fraud scheme, according to a Jan. 9 press release from the U.S. Department of Justice, Office of Public Affairs.
His partner in the scheme, attorney James Sinnott, was sentenced to 23 years in prison.
“The significant sentences and convictions obtained are the direct result of the skill and tenacity of career prosecutors and agents, whose multiyear investigation pulled back the curtain on this massive criminal scheme,” said Stuart Goldberg, acting deputy assistant attorney general for the DOJ’s tax division.
Fisher began the tax scheme, which involved the sale of conservation easements, as early as 2008. He was assisted by Sinnott starting in 2013.
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.
As part of Fisher’s scheme, a pair of licensed appraisers overinflated the value of the lands that were placed into conservation, allowing him to guarantee his clients a 4:1 return on their investments.
For every $100,000 a wealthy client invested, the client’s taxable income for the year was reduced by $400,000.
The Internal Revenue Service lost more than $450 million in taxes due to the scheme.
Fisher made $60 million and Sinnott made $6 million from selling the illegal tax shelters.
In addition to their prison sentences, U.S. District Chief Judge Timothy Batten, of the Northern District of Georgia, ordered the defendants to pay the United States restitution totaling about $900 million.
Fisher must pay nearly $458 million and Sinnott owes almost $444 million in restitution.
The defendants also must forfeit personal items that they purchased with the money they made from the tax scheme, including a Mercedes SUV, a private jet, and a vacation home in the Caribbean.
The judge also ordered both men to serve three years of supervised release.
Fisher and Sinnott were among seven individuals indicted in February 2022 on a total of 135 federal charges related to making and filing false tax returns, wire fraud, and money laundering in the case.
Of the two appraisers among the indicted, one pleaded guilty and was sentenced in November 2023.
Fisher’s assistant, Kate Joy, also one of the seven individuals indicted, remains a fugitive, according to the DOJ press release.
The development of the Bay Creek resort and community has continued unimpeded by the legal woes of Fisher and his associates.