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Fraud

CPA Pleads Guilty to Promoting Fraudulent Tax Shelters to High-Income Clients

Strategic Insights

— 2 min read

A New Jersey-based Certified Public Accountant (CPA) has pleaded guilty to conspiring to defraud the United States by promoting fraudulent tax shelters to his high-income clients. Ofer Gabbay, a CPA from Paramus, New Jersey, conspired with others to promote syndicated conservation easement tax shelters that facilitated high-income taxpayers in claiming unwarranted and inflated charitable contribution tax deductions. Gabbay and his co-conspirators instructed clients to provide backdated checks, agreements, and other documents to support the unwarranted tax deductions, and Gabbay prepared false tax returns for his participating clients.

Key Takeaways:

  • Ofer Gabbay, a CPA from Paramus, New Jersey, pleaded guilty to conspiring to defraud the United States by promoting fraudulent tax shelters to his high-income clients.
  • The tax shelters involved syndicated conservation easement tax shelters that facilitated high-income taxpayers in claiming unwarranted and inflated charitable contribution tax deductions.
  • Gabbay conspired with Jack Fisher, James Sinnott, and Kate Joy to promote the tax shelters, which involved instructing clients to provide backdated checks, agreements, and other documents to support unwarranted tax deductions.
  • Gabbay prepared false tax returns for his participating clients, who claimed unwarranted and inflated charitable contribution tax deductions.
  • Fisher and Sinnott were sentenced to 25 years and 23 years in prison, respectively, for their roles in the scheme.
  • Joy remains a fugitive.
  • Gabbay faces a maximum penalty of five years in prison, a period of supervised release, restitution, and monetary penalties.
  • A federal district court judge will determine Gabbay's sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
  • Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department's Tax Division made the announcement.
  • IRS Criminal Investigation is investigating the case.
  • Senior Litigation Counsel Richard Rolwing and Trial Attorney Parker Tobin of the Tax Division are prosecuting the case.

Statistics:

  • 2018-2019: The period during which Ofer Gabbay conspired to promote the fraudulent tax shelters.
  • 25 years: The prison sentence imposed on Jack Fisher for his role in the scheme.
  • 23 years: The prison sentence imposed on James Sinnott for his role in the scheme.
  • 5 years: The maximum penalty that Ofer Gabbay faces in prison.
  • A period of supervised release, restitution, and monetary penalties: The additional penalties that Ofer Gabbay faces as a result of his guilty plea.

Sources:

  • Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department's Tax Division
  • IRS Criminal Investigation
  • Senior Litigation Counsel Richard Rolwing of the Tax Division
  • Trial Attorney Parker Tobin of the Tax Division

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