The criminal case is the DOJ’s first involving syndicated conservation easements, which the federal government has cracked down on over the last four years amid growing public scrutiny. Last year, the IRS included such transactions among its “dirty dozen” list of tax scams to avoid, and this summer the agency offered settlements to investors facing litigation to recover some lost tax revenue.
Conservation easements are tax deductions given to landowners who agree to permanently ban development on their environmentally sensitive land. Syndicated easements take the concept to another level: Promoters sell shares of properties to investors, who together decide whether to develop or conserve the land.
But what’s become increasingly common, according to the Senate Finance Committee, are crooked appraisals that inflate land valuations, jacking up the conservation easement deductions investors receive. And many land deals have become smokescreens for wealthy investors on the hunt for massive tax deductions, congressional investigators previously noted.
Supporters of syndicated easements, including Robert Ramsay, the former head of the Georgia Conservancy who now leads the Partnership for Conservation, have said reports of abuse are overblown and that easements have led to the conservation of tens of millions of acres of land. (A spokesman for the Conservancy said the organization is “wholly opposed” to syndicated easements.)
Stein and Corey Agee did not immediately respond to requests for comment Monday evening, nor did the Justice Department.
DOJ also alleged that the Agees advised clients to backdate payments and documents to skirt year-end deadlines, and prepared and assisted in the preparation of false tax returns.
The popularity of syndicated easements has exploded over the last decade, generating $6.8 billion in tax deductions in 2017 and $9.2 billion in 2018, according to the Senate Finance Committee.
Georgia has been a hotbed of such activity, and a cottage industry of promoters has emerged in metro Atlanta and Rome. The Justice Department sued the Atlanta-based firm EcoVest Capital in 2018 to shut down an allegedly abusive syndicated easement scheme. EcoVest has denied wrongdoing.