New Jersey CPA Sentenced in Syndicated Conservation Easement Tax Scheme

Source: United States Department of Justice

A New Jersey accountant was sentenced today to 24 months in prison for his role in the promotion and sale of abusive syndicated conservation easement tax shelters.

According to court documents and statements made in court, Ralph Anderson was a CPA and return preparer working for accounting firms in New Jersey and New York. From approximately 2013 to 2019, Anderson promoted and sold tax deductions to his high-income clients in the form of units in illegal syndicated conservation easement tax shelters created by convicted co-conspirators Jack Fisher and James Sinnott.

Anderson knew that, contrary to law, the transactions related to these illegal tax shelters lacked economic substance and that his high-income clients purchased units at his recommendation only to obtain a tax deduction on their tax returns. The charitable deductions purchased by clients were derived from the donation of land with a conservation easement or the land itself to a charity, and the deductions were based on fraudulently inflated appraisals for the donated land. Anderson and the promoters promised the clients a so-called ratio of “4.5 to 1” in charitable deductions for every dollar paid into the tax shelter.

In some instances, to make it appear that his clients had joined the partnerships before the date of the conservation easement donation — which was necessary to claim the tax benefits — Anderson and his co-conspirators also instructed and caused clients to falsely backdate documents, including subscription agreements and checks related to the partnerships. Each year from 2013 to 2019, Anderson and his co-conspirators assisted clients with claiming these false deductions on their tax returns.

In total, Anderson assisted in preparing tax returns for clients that claimed over $9.3 million in false charitable deductions based on backdated documents, which caused a tax loss to the United States of nearly $3 million.

Between approximately 2016 and 2019, Anderson earned over $300,000 in commissions for promoting and selling the illegal tax shelters to his clients. Anderson also claimed false tax deductions for charitable contributions generated from the syndicated conservation easement tax shelters he received as “free units” on his own returns and fraudulently reduced his own taxes on the income he earned from the scheme.

In addition to his prison sentence, U.S. District Court Judge Michael A. Shipp for the District of New Jersey ordered Anderson to serve three years of supervised release and to pay $3,543,005.53 in total restitution to the IRS and Small Business Administration.

After being convicted on all counts after a trial in U.S. District Court for the Northern District of Georgia, Anderson’s co-conspirators, Jack Fisher and James Sinnott, were sentenced to 25 and 23 years in prison, respectively. Nine additional defendants pleaded guilty to criminal conduct related to the syndicated conservation easement tax shelter scheme. These other defendants include appraiser Walter Douglas “Terry” Roberts and Certified Public Accountants Stein Agee, Corey Agee, James Benkoil, Victor Smith, Herbert Lewis and William Tomasello. In addition, attorneys Randall Lenz and Vi Bui pleaded guilty to their roles in this scheme. The fraudulent syndicated conservation easement tax shelter scheme created and promoted by Fisher and Sinnott resulted in over $1.3 billion in fraudulent tax deductions and caused over $400 million in total tax loss to the IRS.

Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and Chief Guy Ficco of IRS Criminal Investigation (IRS-CI) made the announcement.

IRS-CI and the U.S. Postal Inspection Service investigated the case.

Senior Litigation Counsel Richard M. Rolwing and Trial Attorneys Parker Tobin and Jessica Kraft of the Tax Division prosecuted the case with assistance from former Tax Division Trial Attorney Nicholas Schilling and support from the U.S. Attorney’s Office for the Northern District of Georgia.

Alabama Man Pleads Guilty in Connection with Securities and Exchange Commission X Account Hack

Source: United States Department of Justice Criminal Division

An Alabama man pleaded guilty today in connection with the January 2024 unauthorized takeover of the U.S. Securities and Exchange Commission (SEC)’s social media account on X, formerly known as Twitter, in which hackers posted a fraudulent message in the name of the then-SEC Chairman, temporarily causing the value of Bitcoin (BTC) to increase by more than $1,000.

According to court documents, Eric Council Jr., 25, of Athens, conspired with others who took unauthorized control of the SEC’s X account and falsely announced that the SEC approved BTC Exchange Traded Funds, a decision highly anticipated by the market. Immediately following the false announcement, the price of BTC increased by more than $1,000 per bitcoin. Shortly after this unauthorized post, the SEC regained control over its X account and confirmed that the announcement was false and the result of a security breach. Following the correction, the value of BTC decreased by more than $2,000 per bitcoin.

The conspirators gained control of the SEC’s X account through an unauthorized Subscriber Identity Module (SIM) swap carried out by Council. A SIM swap refers to the process of fraudulently inducing a cell phone carrier to reassign a cell phone number from the legitimate subscriber or user’s SIM card to a SIM card controlled by a criminal actor. As part of the scheme, Council used an identification card printer to create a fraudulent identification card with a victim’s personally identifiable information obtained from his co-conspirators. Council used the fraudulent identification card to impersonate the victim and gain access to the victim’s cellular phone number for the purpose of accessing the SEC’s account. Council’s co-conspirators then accessed the account and posted in the name of the SEC Chairman. Council received payment in bitcoin from his co-conspirators for his role.   

Council pleaded guilty to conspiracy to commit aggravated identity theft and access device fraud. He is scheduled to be sentenced on May 16 and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division; U.S. Attorney Edward R. Martin Jr. for the District of Columbia; Special Agent in Charge Sean Ryan of the FBI Washington Field Office, Criminal and Cyber Division; and SEC Inspector General Deborah Jeffrey made the announcement.

The FBI Washington Field Office and SEC Office of Inspector General are investigating the case.

Trial Attorney Ashley Pungello of the Criminal Division’s Computer Crime and Intellectual Property Section, Trial Attorney Lauren Archer of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney Kevin Rosenberg for the District of Columbia are prosecuting the case. Substantial assistance was provided by Cyber Fellow Paul M. Zebb III.

For more information on SIM swapping, visit www.ic3.gov/PSA/2024/PSA240411.

Defense News: Simulating the threat, Naval Base Ventura County enhances security through annual exercise

Source: United States Navy

“CS-SC25 is an annual, nationwide force protection exercise,” said Mr. Rob Huether, installation training and readiness officer, NBVC. “It tests the ability of security departments and installations to respond to simulated security incidents throughout the two-week exercise.”

On Tuesday, a scenario presented to the security and installation personnel at NBVC involved an actor notionally opening fire in a work environment. Personnel were required to neutralize the threat, treat the wounded, coordinate with first responders, provide forward communication to the emergency operations center, and manage multiple scenario injects.

“Citadel Shield-Solid Curtain reinforces our commitment to protecting our people and preserving operational readiness by testing our ability to adapt to evolving force protection, security, and mission assurance challenges,” said Adm. Daryl Caudle, commander, U.S. Fleet Forces Command. “This exercise builds resilience and fosters coordination between fleet and shore forces, installation commands, and partner agencies, ensuring we stay prepared to counter modern-day threats with precision and unity of effort.”

According to a Navy Installations Command press release, Citadel Shield, held during the first week, is a field training exercise (FTX) led by CNIC, while Solid Curtain follows in the second week as a command post exercise (CPX) led by USFFC. This two-part training is designed to boost the readiness of U.S. Navy security forces and ensure seamless interoperability among commands, other services, and agency partners to protect life, equipment, and facilities. Both weeks will simulate realistic threat scenarios, including active shooters, unauthorized base access, and improvised explosive devices.

“Citadel Shield-Solid Curtain exercises are vital to ensuring the preparedness and effectiveness of our Navy security forces,” said Vice Adm. Scott Gray, commander, Navy Installations Command. “These comprehensive training scenarios simulate real-world threats to enhance our readiness and interoperability with other services and agency partners. Our commitment is to safeguard life, equipment, and facilities, and these exercises are an essential part of fulfilling that mission.”

CS-SC25 is a regularly scheduled exercise and is not being held in response to any specific threat.

Measures have been taken to minimize disruptions within local communities and to normal base operations, but there may be times when the exercise causes increased traffic around bases or delays in base access. Area residents may also see or hear security activities associated with the exercise. Advanced coordination has taken place with local law enforcement and first responders.

NBVC is major shore warfighting platform; providing sustained ready forces to deploy, fight, and win. Composed of three operating facilities: Point Mugu, Port Hueneme and San Nicolas Island and home of the Pacific Seabees, West Coast E-2D Hawkeyes, 3 warfare centers and 110 tenant commands.

Defense News: USS O’Kane returns home after seven-month deployment to 5th and 7th Fleet

Source: United States Navy

O’Kane departed San Diego with the ABECSG, July 17, 2024, and remained in U.S. 5th Fleet following the departure of ABECSG who returned to their homeport in December 2024.

“I am incredibly proud of the exemplary work this team has invested in themselves and their equipment over the past few months,” said Cmdr. Rich Ray, commanding officer, O’Kane. “We are proud of the work we accomplished this deployment, and we are looking forward to continuing that success into the next challenge.”

Following the departure of the USS Abraham Lincoln (CVN 72) and the Arleigh Burke-class guided-class missile destroyers USS Frank E. Petersen, Jr. (DDG 121), USS Michael Murphy (DDG 112) and USS Spruance (DDG 111) from U.S. 5th Fleet, O’Kane and the USS Stockdale (DDG 106) remained in the U.S. Central Command (USCENTCOM) area of responsibility to support global maritime security operations.

O’Kane and Stockdale successfully escorted U.S. flagged and crewed merchant vessels in the Gulf of Aden. During the escort, the destroyers worked alongside other U.S. Central Command forces in successfully repelling multiple Iranian-backed Houthi attacks during transits of the Bab el-Mandeb strait. During the transit, the destroyers were attacked by one-way attack un-crewed Aerial systems, anti-ship ballistic missiles and anti-ship cruise missiles which were successfully engaged and defeated. The vessels were not damaged, and no personnel were hurt. The ships were well prepared, supported, and the well-trained Sailors successfully defended the ship.

Throughout deployment, O’Kane successfully completed 75 flight quarters, including 84 rotary-wing landings, 26 rotary-wing refueling evolutions, and nine vertical replenishments. In addition, O’Kane conducted 24 replenishments-at-sea, and 22 mooring evolutions.

Additionally, O’Kane visited Karachi, Pakistan to promote the diplomatic relationship between the United States and Pakistan. Following the port visit, O’Kane conducted a maritime exercise to build interoperability with the Pakistan Navy.

ABECSG initially deployed to the Indo-Pacific region to support regional security and stability, and to reassure our allies and partners of the U.S. Navy’s unwavering commitment, highlighted by the first-ever U.S.-Italy multi-large deck event with the Italian Navy’s ITS Cavour Carrier Strike Group held in the Indo-Pacific on Aug. 9, 2024.

The strike group was ordered to the USCENTCOM area of responsibility to bolster U.S. military force posture in the Middle East, deter regional escalation, degrade Houthi capabilities, defend U.S. forces, and again sailed alongside our Italian allies and other partners to promote security, stability and prosperity. Assigned destroyers of the ABECSG, to include O’Kane, were essential to providing a layer of defense to U.S. forces and ensure the safe passage of commercial vessels and partner nations transiting in international waterways like the Red Sea, Bab el-Mandeb Strait and the Gulf of Aden.

As an integral part of U.S. Pacific Fleet, Commander, U.S. 3rd Fleet operates naval forces in the Indo-Pacific and provides the realistic and relevant training to ensure the readiness necessary to execute the U.S. Navy’s timeless role across the full spectrum of military operations. U.S. 3rd Fleet works together with our allies and partners to advance freedom of navigation, the rule of law, and other principles that underpin security for the Indo-Pacific region.

Defense News: Governor, Joint Region Marianas, Joint Task Force-Micronesia Convene Civil-Military Coordination Council

Source: United States Navy

Military officials from the Navy, Marine Corps, Air Force and Guam Army National Guard attended. Additionally, participating on behalf of various government of Guam agencies were representatives from the Guam Department of Agriculture, the Guam Department of Civil Defense and Homeland Security, the Guam Power Authority and the Guam International Airport Authority.

“The CMCC is an opportunity to get together to synchronize and synthesize our efforts on all of the major priorities for our island,” Huffman said. “Our meeting not only signifies the culmination of hard work and planning by our collective teams, but it is a demonstration of the strong partnership and close collaboration that are the hallmarks of our discussions.”

Military and civilian members offered informational briefs and updates on significant topics that require a One-Guam holistic approach including critical civilian infrastructure for the defense of Guam, utilities resiliency specifically for the island’s electrical grid, and the proposed Guam Defense System by the Missile Defense Agency (MDA).

“The Civil-Military Coordination Council continues to be an essential platform for ensuring that Guam’s needs and interests remain at the forefront of the ongoing military buildup. At our latest meeting, we placed a strong emphasis on resiliency—particularly in strengthening our island’s power infrastructure through the Guam Power Authority and the One Guam Power Infrastructure Resiliency & Reliability Projects,” said Leon Guerrero. “The military buildup is an ongoing conversation that requires careful planning, preparation, and the right subject matter experts at the table. It is critical that we have the latest and most relevant information to support our justifications and ensure that progress aligns with the best interests of all who call Guam home. As we continue these discussions, I remain committed to advocating for our people and working with our federal partners to reinforce the importance of Guam in national security and regional stability.”

The CMCC was established in 2010 to foster collaboration among the DoD, local government, and federal agencies to share information, discuss, and provide recommendations for construction activities for the U.S. Marine Corps relocation to Guam. These meetings have expanded to include all DoD items of interest and military construction on Guam. The next CMCC meeting is scheduled in June.