Paramus CPA Pleads Guilty In $1.3B Tax Scam That Helped Rich Clients Cheat IRS: Feds

According to federal officials, a New Jersey accountant who admitted to participating in a large tax shelter scam that cheated the U.S. government of hundreds of millions of dollars might spend up to five years in federal prison.

Gavel.

On Wednesday, June 25, the U.S. Department of Justice announced that Ofer Gabbay, a Paramus-based Certified Public Accountant, has entered a guilty plea to conspiracy to defraud the United States by offering high-income clients phony syndicated conservation easement tax shelters between 2018 and 2019.

Gabbay collaborated with other defendants, such as James Sinnott, Jack Fisher, and their assistant Kate Joy, to aid clients in fraudulently donating land through conservation easements in order to obtain inflated charity tax deductions. According to court filings, Gabbay created fictitious tax returns to justify the deductions after directing clients to backdate cheques and documents.

The plan was much larger than Gabbay’s part in it. This Monday, prosecutors sentenced Fisher and Sinnott to 25 and 23 years in jail, respectively, for leading a scheme that cost the IRS over $450 million in losses and produced over $1.3 billion in fictitious tax deductions.

According to the IRS, the guys offered their clients charitable deductions that were four and a half times the amount they paid to enter the shelters. According to the Justice Department, Fisher and Sinnott purchased a Mercedes, a private plane, and opulent houses with their illicit proceeds by using shell corporations, backdated paperwork, and phony land appraisals.

Kate Joy, their assistant, is still at large.

CPAs, lawyers, and appraisers from all throughout the nation were part of Fisher’s network. This week, two accountants from the Atlanta region, Victor Smith and William Tomasello, also entered guilty pleas to conspiracy charges.

A federal judge will thereafter impose Gabbay’s sentence. Officials said he faces supervised release, restitution, and financial penalties in addition to jail time.

The IRS Criminal Investigation is looking into the case, and the U.S. Department of Justice Tax Division is prosecuting it.