How Did a NJ CPA End Up in a $1.3B Tax Shelter Fraud Scheme

When a “Too Good to Be True” Dedication Turns into a Prison Sentence.

Some tax loopholes are clever… until they cross the line into criminal activity. Ofer Gabbay, a well-established CPA from Paramus, New Jersey, just pleaded guilty for doing exactly that—helping high-income clients cheat Uncle Sam by dressing fake conservation easements as gold-standard charitable deductions. Between 2018 and 2019, Gabbay wasn’t just crunching numbers. He was part of a nationwide scheme that peddled a flashy promise: for every $1 you invest, you get $4 back in tax deductions. Sounds slick, right? Except that the deductions were phony, the appraisals were inflated, and the paperwork was retrofitted after the fact to fool the IRS. Gabbay’s role? Prepping backdated checks, false tax returns, and walking clients through the fraud, one shady deduction at a time.

Where Real Estate Meets Fantasy Accounting

Let’s break it down. Conservation easements are totally legal when done right; they let landowners give up development rights on a piece of land in exchange for a tax break. But here’s the catch: this crew wasn’t just donating land—they were inflating its value through the roof and syndicating the investment across high-net-worth individuals who were looking to lower their tax bills fast.

At the center of the storm? Jack Fisher, a Georgia-based CPA, and James Sinnott, an attorney, took this scheme to new heights. With help from appraisers like Kate Joy, who was still on the run, they inflated land values by 30% to over 100%, sometimes claiming that remote rural plots were worth Beverly Hills prices. Then they wrapped the whole thing in legalese and glossy brochures and passed it around to investors. Their pitch: “Pay $100K, and you might shave $400K off your taxable income.” The IRS calls that fraud. So does the Justice Department.

From CPA to Cell Block

Gabbay’s guilty plea now ties him directly to a scheme that’s been labeled one of the biggest conservation easement frauds in U.S. history. He faces up to five years in federal prison, plus restitution, supervised release, and monetary penalties. Compared to Fisher’s 25-year sentence and Sinnott’s 23 years, Gabbay’s expected punishment is a slap on the wrist, but the damage is done. He’s now part of a who’s-who list of indicted professionals: CPAs, attorneys, financial advisors, and appraisers who got greedy. The Green Group, where Gabbay served as a senior tax manager, has already distanced itself. According to the firm, the crimes were “independent of his duties.” That said, it’s not a good look when one of your top guys pleads guilty to a $1.3 billion tax fraud.

The Scheme’s Loose Ends

This story isn’t over. Kate Joy, the appraiser who played a key role in inflating land values, is still a fugitive. Meanwhile, more professionals continue to face scrutiny. Two Atlanta-area accountants, Victor Smith and William Tomasello, also pleaded guilty this week; Tomasello’s firm even pocketed $2.4 million in commissions for promoting the shelters. These weren’t just a few bad apples. This was a professionally orchestrated kickback machine. The DOJ called it “a legion of professionals corrupted by kickbacks,” and it’s hard to argue otherwise.

So, What’s the Takeaway for the Rest of Us?

Here’s the straight talk: If someone offers you a $4-for-$1 tax write-off that smells fishy, don’t take the bait. These weren’t back-office mistakes; they were willful acts of deception involving fake documents, bad faith appraisals, and knowingly fraudulent tax filings. For CPAs, this case should set off alarms. Know your partners. Scrutinize too-good-to-be-true deals. And if you're dabbling in easement territory, get familiar with the IRS’s Notice 2017-10, it’s not just bedtime reading, it’s survival. The bigger lesson? The IRS is no longer playing nice with syndicated conservation easements. They’ve drawn the line, and if you cross it, you may find yourself in a courtroom instead of a conference room.

Final Thought

What started as a clever tax strategy spiraled into one of the largest fraud cases in tax shelter history. With more convictions rolling in and the feds still digging, this easement saga isn't fading out anytime soon. CPAs, stay sharp—it’s not just your client’s name on the return. Subscribe to MYCPE ONE Insights, your go-to source for curated news, trends, and economic analysis trusted by 250,000+ professionals every week.