Monthly Bronx Metro-North Study Update
January 2024
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Sold Over $1.3 Billion in Fraudulent Tax Deductions
Two men were sentenced for crimes arising from their organization, promotion and sale of abusive syndicated conservation easement tax shelters.
Jack Fisher, a certified public accountant (CPA) who began selling units in his abusive tax shelters at least as early as 2008, was sentenced to 25 years in prison. James Sinnott, an attorney who joined Fisher’s scheme in 2013 and oversaw the massive expansion of the tax shelters’ fraudulent deduction amounts claimed from the IRS, was sentenced to 23 years in prison. Also today, Victor Smith and William Tomasello, both Atlanta-area CPAs, pleaded guilty to conspiracy to defraud the United States.
“Using inflated appraisals, backdated documents and other sham actions, these conspirators generated more than $1.3 billion in fraudulent syndicated conservation easement tax deductions, causing hundreds of millions of dollars in losses to the U.S. Treasury,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “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.”
“This message should be a clear one: IRS CI Special Agents will use their financial investigative expertise to hold those involved in abusive tax shelter schemes accountable,” said Chief Jim Lee of IRS Criminal Investigation (IRS CI). “As this complex investigation continues to evolve, today’s judicial actions illustrate our resolve to hold responsible every individual involved in tax evasion schemes.”
Jack Fisher and James Sinnott
According to court documents and evidence presented at trial, Fisher, Sinnott and their co-conspirators sold over $1.3 billion in fraudulent tax deductions, leading to a tax loss to the IRS of over $450 million. Five other tax professionals involved in Fisher’s scheme previously pleaded guilty. Fisher was not only a pioneer in the conservation easement industry, but also one of its biggest promoters across the country. Fisher and Sinnott each made millions of dollars promoting and selling their tax shelters to wealthy taxpayers. The two men also used fraudulent deductions generated by their tax shelters on their own personal income tax returns to reduce the taxes they owed on the millions earned.
A federal jury sitting in Atlanta convicted Fisher and Sinnott on Sept. 22, 2023, of conspiracy to defraud the United States, conspiracy to commit wire fraud, aiding and assisting the filing of false tax returns and subscribing to false tax returns arising out of their fraudulent tax shelter scheme involving syndicated conservation easements dating back nearly two decades. Fisher was also separately found guilty of money laundering. One of the appraisers who was charged with Fisher and Sinnott pleaded guilty and was sentenced in November 2023. Fisher’s primary assistant, Kate Joy, who was also indicted, remains a fugitive.
The evidence proved that Fisher and Sinnott designed, marketed and sold to high-income clients abusive syndicated conservation easement tax shelters based on fraudulently inflated charitable contribution tax deductions, promising them deductions 4.5 times the amount the taxpayer clients paid to buy the deductions.
Fisher and Sinnott used the funds raised from their taxpayer clients to buy land through their property holding companies and then had the tax shelters cause those companies to donate the land or a conservation easement over the land – often within days or weeks of the land’s purchase. To reach the inflated fair market value of the donations, Fisher and Sinnott primarily used appraisals of the conservation easements and fee simple land donations at valuations often more than 10 times higher than the price Fisher and Sinnott actually paid to acquire the property.
The evidence further showed that Fisher and Sinnott backdated and instructed others to falsely backdate documents to be presented to the IRS, including subscription agreements, payment documents, engagement letters and other records. Fisher’s accountant, a partner at the accounting firm Fisher started, testified at trial and previously pleaded guilty for his role in the scheme. Along with Fisher and Sinnott, he oversaw the preparation of false tax returns, which claimed charitable contribution tax deductions based upon the false appraisals. The evidence demonstrated that Fisher, Sinnott and others received more than $41 million in payments from the sale of units in these tax shelters that involved backdated documents or untimely payments, which were paid to claim fraudulent and inflated tax deductions.
The government proved that Fisher and Sinnott personally made millions from their scheme. Fisher, specifically, used the illegal proceeds to purchase luxury items, including a Mercedes Benz car, a Recreational Vehicle and trailer and a private jet. Fisher also used proceeds of the scheme to purchase homes and condos in the United States and on the Caribbean Island of Bonaire, which the jury found to be forfeitable.
In total, the defendants sold over $1.3 billion in fraudulent tax deductions to wealthy taxpayers through this scheme.
In addition to the terms of imprisonment, U.S. District Chief Judge Timothy C. Batten for the Northern District of Georgia ordered both Fisher and Sinnott to serve three years of supervised release. He also ordered Fisher to pay approximately $457,855,755 in restitution to the United States and Sinnott to pay approximately $443,760,035 in restitution to the United States.
Victor Smith and William Tomasello
According to court documents and statements made in court, Smith served as a CPA and founding partner of an Atlanta-based accounting firm. Beginning at least in 2014 and through at least 2019, Smith promoted and sold tax deductions to his wealthy clients in the forms of units in illegal syndicated conservation easement tax shelters organized and created by co-defendants Fisher, Sinnott and Joy. For his part, beginning at least in 2015 and through at least 2019, Tomasello also promoted and sold units in the Jack Fisher syndicated conservation easement tax shelters to his wealthy clients at another firm.
Tomasello earned approximately $525,072 in commissions from Fisher and Sinnott for his role in promoting and selling the illegal tax shelters to clients, and his accounting firm received approximately $2,430,301 in commissions. Smith earned approximately $491,400 in commissions from Fisher and Sinnott for his role in promoting and selling the illegal tax shelters to clients.
Smith and Tomasello each face a maximum sentence of five years in prison. They also face a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
To date, in addition to the convictions of Fisher and Sinnott and guilty pleas of Smith and Tomasello, six additional defendants have pleaded guilty to criminal conduct related to Fisher and Sinnott’s syndicated conservation easement tax shelters, including appraiser Walter Douglas “Terry” Roberts, CPAs Stein and Corey Agee, CPA Ralph Anderson, CPA James Benkoil and CPA and Attorney Randall Lenz.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia and Chief Jim Lee of IRS Criminal Investigation made the announcement. They thanked U.S. Attorney Dena J. King for the Western District of North Carolina for her office’s assistance.
IRS Criminal Investigation and the U.S. Postal Inspection Service investigated the case.
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Join The Bronx Chamber of Commerce, Councilmember Pierina Sanchez District 14, TD Banks, and the NYC Department of Small Business Services for an evening on financial literacy and tips on how you can make smart decisions to benefit your bottom line
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Dear Neighbor,
Thank you for joining us for another week in review.
The New York City Emergency Management Department has updated its Travel Advisory for the evening of Tuesday, January 9 into Wednesday morning, January 10, 2024, as a strong storm impacts the region.
We also advise you to please exercise caution if you are traveling outside and follow Notify NYC for updates on the storm. Our office will continue to provide updates as we receive them.
If you have any questions or concerns, please do not hesitate to contact our office at 718-590-3500 or email us at webmail@bronxbp.nyc.gov.
In partnership,
Bronx Borough President Vanessa L. Gibson
REMEMBERING TWIN PARKS
It`s been 2 years since the horrific fire at Twin Parks North West, and our borough continues to mourn. We will never forget the 17 lives lost on this day, the families of those who were impacted by this tragedy, the bravery of our first responders, and the support from our city agencies, community organizations, colleagues in government, hip-hop artists and others who showed up for our neighbors during our borough`s greatest time of need.
Twin Parks was a painful reminder of the work needed to invest in fire safety education and our city`s housing infrastructure so families are provided with safe and quality housing, and we prevent a tragedy of this magnitude from ever happening again.
On this day, two years later, we honor, we reflect, and we remember. Let us keep the families of Twin Parks in our prayers and never forget those we lost.
IN THE COMMUNITY
Thank you to our sponsors who helped to make our Annual Three Kings event a huge success! With their support, we were able to distribute over 100 toys and supplies to our families at the Justice Sonia Sotomayor Cornerstone.
Thank you to Validus Preparatory Academy for inviting me to a student-led presentation on how we can reimagine the Cross Bronx Expressway and reduce our environmental footprint. Our students are leading the way with their creativity and real-world solutions to issues impacting our communities.
UPCOMING EVENTS
RESOURCES
Public Safety Initiatives Will Combat Hate Crimes, Domestic Violence and Retail Theft; Legislation Will Crack Down on Illicit Cannabis Storefronts
Treatment for Serious Mental Illness Will Improve With 200 New Psychiatric Inpatient Beds, Improved Hospital Discharge Procedures, Funding to Expand Mental Health Court
With Kids and Teens Facing Mental Health Crisis, Governor Proposes a School-Based Mental Health Clinic for Every School That Wants One
Next Phase of Long-Term Housing Agenda Will Focus on Increasing Supply In New York City; Thousands of New Housing Units to be Constructed on State-Owned Land
Continue New York’s Nation-Leading Climate Policies While Ensuring the Clean Energy Revolution is Affordable for All New Yorkers; Set Bold Goal to Plant 25 Million Trees Over Next Decade
SUNY and CUNY Schools Will Offer Direct Admission to Top 10% Of Students at New York High Schools
Second Avenue Subway Planned to Extend to Broadway, Interborough Express Moves Forward
Over Past Week, Governor Unveiled Consumer Protection & Affordability Agenda, “Back to Basics” Reading Plan, Maternal and Infant Health Plan, NY SWIMS, Empire AI Consortium and Office of Service and Civic Engagement
204 Groundbreaking Proposals Will Make New York More Affordable, More Livable and Safer
2024 State of the State “Our New York, Our Future” Available Here
Governor Kathy Hochul today delivered the 2024 State of the State Address and released her “Our New York, Our Future” agenda. The State of the State includes 204 bold initiatives to make New York more affordable, more livable and safer.
“The State of New York is stronger, healthier, safer and more affordable than it was two years ago when I became Governor, but there is more work to do,” Governor Hochul said. “Every proposal announced today serves to improve our state and ensure our communities are not just surviving, but that they are thriving. Our New York is our future, and the future is brighter than ever.”
Fighting Crime and Keeping New Yorkers Safe
Since Governor Hochul took office two years ago, shootings and murders have declined by double digits. To build on that progress, Governor Hochul proposes:
Treating Serious Mental Illness That Threatens Public Safety
Decades of disinvestment in mental health are having a devastating effect on our State, and as a result too many vulnerable New Yorkers are slipping through the cracks. Governor Hochul proposes:
Addressing The Youth Mental Health Crisis
After convening New York’s first-ever Youth Mental Health Summit in 2023, Governor Hochul is recommitting her efforts to help struggling kids and teenagers by:
Transforming and Strengthening New York’s Health Care System
To stabilize and transform the state’s health care system, Governor Hochul announced a bold health care agenda that includes:
The Consumer Protection and Affordability Agenda
As part of last year’s Budget, Governor Hochul secured a historic minimum wage increase to raise wages through 2027 and then index it to inflation – a change that began taking effect earlier this month. To build on her mission of protecting New York consumers and keeping money in New Yorkers’ pockets, Governor Hochul will:
Addressing the Housing Crisis by Increasing Supply
Governor Hochul is committed to addressing New York’s housing crisis, and will focus in 2024 on giving New York City the tools they need to construct more housing. Proposals include:
Strengthening New York’s Economy
Governor Hochul remains committed to making New York the most business-friendly and worker-friendly state in the nation. To build on her progress toward building a 21st century economy in New York State, Governor Hochul will:
Ensuring New York’s Clean Energy Future Is Affordable
Governor Hochul’s commitment to energy affordability has resulted in an average savings of $1,400 for each eligible utility customer. Governor Hochul is taking steps to expand those savings by:
Protecting New Yorkers from Extreme Weather
As extreme weather becomes a more frequent occurrence across the state, Governor Hochul has developed a comprehensive resiliency plan to keep New Yorkers safe, including by:
Conserving New York’s Extraordinary Natural Resources
To build on the success of the $4.2 billion Clean Water, Clean Air and Green Jobs Environmental Bond Act and water funding programs, Governor Hochul is moving forward with transformative environmental protection plans including:
Governor Hochul has made transformative infrastructure investments that will transform the way New Yorkers live, work and get around. As part of the State of the State, she is proposing:
Expanding Access to Affordable, High-Quality Higher Education
Governor Hochul is committed to supporting public higher education and helping students access a high-quality, affordable education. In the 2024 State of the State Governor Hochul is proposing:
"Back to Basics" Plan to Improve Reading Proficiency
The reading curriculum taught in many schools for the past two decades has been proven to be ineffective -- especially for students with dyslexia or who are learning English as a second language. Governor Hochul is proposing:
Supporting New York’s Children and Families
As New York's first mom governor, Governor Hochul is proposing a comprehensive approach to protect New York’s children and families. This includes:
Fostering an Inclusive New York
At a time where hate and bias crimes are increasing, New Yorkers must stand together. Governor Hochul is proposing:
Strengthening New York’s Agricultural Industry
Proposals to boost New York’s dairy and agricultural industry will promote a more resilient future for the state’s agriculture, food and forestry sectors. These proposals include:
The brand-new Office of Service and Civic Engagement within the Lieutenant Governor's office will preside over a statewide strategy to create accessible public service opportunities. The Office will launch an Empire State Service Corps Program in partnership with SUNY, modeled after the California College Corps, to connect students with opportunities to serve their communities. Service opportunities could include tutoring school-aged children, distributing meals to those in need, and taking climate action.
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New York City Mayor Eric Adams today released the following statement after New York Governor Kathy Hochul delivered her 2024 State of the State Address:
“Governor Hochul and I have been true partners throughout our time in office, and in her State of the State Address today, she laid out a clear vision that will make New York City a stronger, safer, and more affordable city. Her proposals on housing, public safety, mental health, education, our economy, and more will help us deliver on our commitments to working-class New Yorkers.
“Here in New York City, we’ve established a moonshot goal of building 500,000 new homes by 2033, and we’ve made or introduced nearly every change in our power to ‘Get Stuff Built’ and ensure that all New Yorkers can afford to live in the five boroughs. We’re becoming a ‘City of Yes’ — yes to building on my block, yes to building in my neighborhood, yes to building in my community — but we can’t do it alone. With the governor’s support, we’re confident that our lawmakers will also say yes to the legislation that our city needs to address our housing crisis with the urgency New Yorkers demand.
“There is no question that our partnership has been centered around public safety, and the governor and I agree that public safety and justice are the prerequisites to prosperity. Governor Hochul has continued to prioritize keeping New Yorkers safe, and by investing in our criminal justice system, we will break the logjams and simultaneously deliver both safety and justice to New Yorkers. With the additional authority that the governor has proposed, we’ll also have new tools to tackle the illegal smoke shops that have popped up on too many corners in our city, giving us the opportunity to get cannabis right in the five boroughs.
“We’re also proud that Governor Hochul is bringing the reading revolution we started in New York City public schools to schools across New York state. We’re thrilled to have her support in giving our teachers the training they need to teach the science of reading to young New Yorkers.
“Finally, by zeroing in on medical debt, Governor Hochul continues to prove that she is a champion for working-class New Yorkers — particularly Black and Brown New Yorkers who are burdened by a disproportionate amount of medical debt.
“We eagerly await Governor Hochul’s budget address next week, where we’re hoping to hear details on how New York state will offer additional financial support to its largest city and the heart of the nation’s economy as we continue to manage the asylum seeker crisis.”
