Bloomberg reported today about the criminal prosecutions of two promoters of syndicated conservation easements. The article details the guilty pleas of two brothers, Stein Agee and Corey Agee, to federal tax-fraud conspiracy charges. Their scheme involved classic syndication collaboration with lawyers, accountants and appraisers to sell shares in entities donating conservations easements and then overvaluing the conservation easements to take federal tax deductions in excess of the price paid to buy in to the entities. The article reports that the two brothers are cooperating with prosecutors in their investigation of promoters, and that grand juries in Georgia, Missouri and North Carolina are currently considering charges against other promoters.
The Land Trust Alliance and attorney Steve Small have been instrumental in shining a bright light on these fraudulent syndicated transactions utilized to create tax shelters. A legitimate conservation easement donation is not a tax shelter, but is instead a valuable tool to accomplish land preservation for a landowner with true charitable and donative intent to preserve land in perpetuity. It is critical for the Internal Revenue Service (IRS) to halt fraudulent syndicated transactions by going after the overvaluations that are integral to these transactions, but the IRS needs to be careful not to view legitimate conservation easement donations with the same dirty lens.