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Friday, November 1, 2024

Georgia CPA sentenced for role in illegal tax shelter scheme

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Lisa O. Monaco Deputy Attorney General | Official Website

A Georgia accountant, Herbert Lewis, has been sentenced to 28 months in prison for his involvement in promoting and selling illegal syndicated conservation easement tax shelters. The sentence was announced following a trial that revealed Lewis's activities from at least 2014 to 2019, during which he facilitated tax deductions for wealthy clients through these shelters.

Court documents indicate that Lewis, while working as a CPA and return preparer at an Atlanta-based firm, sold units in the illegal tax shelters created by co-defendants Jack Fisher, James Sinnott, and others. The scheme involved forming partnerships to purchase land and then donating it as conservation easements to secure tax benefits. Despite appearing legitimate with partnership votes on land usage, the donations were predetermined.

Lewis further engaged in fraudulent practices by instructing clients to backdate documents like subscription agreements and checks to falsely qualify for tax benefits. In 2019 alone, he assisted 15 clients in claiming false deductions on their 2018 returns. This resulted in nearly $14 million in false deductions and a tax loss of approximately $5 million for the IRS.

In return for his role, Lewis earned over $1 million in commissions but concealed this income by not reporting it fully on his personal returns. Instead, he reported the earnings as income on nominee entities under his children's names.

U.S. District Court Judge Timothy C. Batten Sr., presiding over the Northern District of Georgia, also ordered Lewis to serve three years of supervised release and pay restitution amounting to $4,878,990.90.

Nine other defendants have pleaded guilty to related charges in this scheme. These include appraiser Walter Douglas “Terry” Roberts and several accountants such as Stein Agee and Corey Agee.

The case announcement was made by 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 IRS Criminal Investigation Chief Guy Ficco. They acknowledged assistance from U.S. Attorney Dena J. King for the Western District of North Carolina.

The investigation was conducted by IRS Criminal Investigation alongside the U.S. Postal Inspection Service. The prosecution team includes Trial Attorneys Richard M. Rolwing, Parker Tobin, Jessica Kraft, Nicholas J. Schilling Jr., and Assistant U.S. Attorney Christopher Huber from the Complex Frauds Section of the Northern District of Georgia.

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