PARAMUS, NJ.On Monday, a Paramus certified public accountant entered a guilty plea to conspiracy to defraud the United States by endorsing fictitious tax shelters that enabled affluent clients to claim exorbitant deductions.
Ofer Gabbay, a certified public accountant from New Jersey, acknowledged in federal court that he was a member of a conspiracy to peddle syndicated conservation easement tax shelters between 2018 and 2019. The plan, which allowed clients to file fake tax returns using backdated documents and exaggerated appraisals, was developed by Gabbay, Jack Fisher, James Sinnott, and their assistant Kate Joy, according to court filings.
The conservation easement approach overvalued land gifts in order to fraudulently claim charitable deductions. According to the prosecution, Gabbay assisted customers in creating backdated cheques, agreements, and supporting documentation to validate the deductions. The clients subsequently submitted tax returns that included the fraudulent claims.
Prior prison terms for Fisher and Sinnott were 25 and 23 years, respectively. Joy is still elusive.
Gabbay may be subject to supervised release, restitution, and financial penalties in addition to a maximum sentence of five years in jail. A federal judge will decide the appropriate sentence after taking into account the U.S. Sentencing Guidelines and additional statutory considerations.
Federal authorities are still targeting phony tax shelters.
The plea deal was announced by the Justice Department’s Tax Division’s Acting Deputy Assistant Attorney General Karen E. Kelly, who also highlighted the department’s continued enforcement actions against deceptive tax shelter advertising.
The case is still being investigated, with the IRS Criminal Investigation branch at the forefront.
According to federal officials, the scam was designed to unlawfully lower tax obligations for high-income Americans nationwide by using fictitious gifts to conservation easements.
The court has not yet set a date for Gabbay’s sentencing.
