An Atlanta-area attorney who took part in a massive scheme allowing investors to claim more than $1 billion in phony tax deductions had his law license suspended as he appeals his federal conviction and lengthy sentence.
James Howard Sinnott, of Suwanee, was sentenced to 23 years for his role in the case, which was described as a shady tax dodge for the wealthy. It was believed to be the nation’s first criminal trial involving a tax shelter known as syndicated conservation easements.
Sinnott was convicted along with Jack Fisher, of Alpharetta, who was described as the mastermind of the scheme and one of its biggest promoters across the country. Fisher was given a 25-year prison sentence, and a federal judge in Atlanta ordered the men to pay about half a billion dollars in restitution.
Sinnott was convicted of 22 charges, including one count of conspiracy to defraud the U.S., one count of conspiracy to commit wire fraud, fifteen counts of aiding and assisting the filing of false tax returns and five counts of subscribing to false tax returns.
Conservation easements are tax deductions given to landowners who agree to permanently limit uses of environmentally sensitive land. But Georgia became the epicenter of what the government called a fraudulent use of the deductions. Various promoters told high-income taxpayers that by buying into an easement, they could get charitable tax deductions worth several times what they paid in.
To ensure that, the syndicators hired appraisers to generate what the government has called grossly inflated appraisals of land values based on their purported development potential. Year after year, that cost the U.S. Treasury billions of dollars in lost revenues, federal officials said.
”It shocks the conscience, the degree of fraud in this case,” U.S. District Judge Timothy Batten said at Fisher’s sentencing, adding later, “At the core of this is a level of greed that is sinister.”
Court documents said Fisher, a CPA, in 2002 began promoting and selling tax shelters he described as “real estate investment funds.” Sinnott, a licensed attorney, partnered with him in 2013 to promote and sell the tax shelters. Their message: for each $100,000 invested, get charitable deductions worth $450,000.
“In total, the defendants and their co-conspirators sold over $1.3 billion in false and fraudulent tax deductions through this syndicated easement scheme,” federal prosecutors charged in a 135-count indictment.
Those deductions resulted in a loss of about half a billion dollars in federal tax revenues. Fisher made close to $60 million from the deals, while Sinnott made $6 million, authorities said.
Key evidence in the trial, which lasted more than two months, came from recordings by an undercover federal agent posing as a potential promoter. In one, Fisher explained that he and others working with him purposefully disguised the tax shelters as real estate investments in case the IRS audited any deals.
Fisher sold the deals through his entity eventually known as Inland Capital Management. He owned and operated numerous other entities affiliated with it and its operation, including Preserve Communities, a purported development company for which Sinnott was president and COO.
The Georgia Supreme Court on Tuesday ordered that Sinnott be suspended from practicing law in the state pending the outcome of his appeal.
About the Author
Keep Reading
The Latest
Featured
