Ecovest Reaches Settlement with U.S. Justice Department Over Conservation Easement Offerings
EcoVest, which has been a sponsor of real estate investment programs focused on conservation easements, reached a settlement agreement with the Department of Justice that will indefinitely prohibit the company from future involvement in the sale or promotion of any investment programs with a conservation easement option.
As previously reported by The DI Wire, EcoVest intended to fight the charges of fraud and other misconduct raised against it by the DOJ, which filed a lawsuit in a Georgia federal court in late December 2018 claiming that the firm was running “an allegedly abusive conservation easement syndication tax scheme.” The government claimed that the tax deductions the company passed on to investors were based on “overvalued and improper” conservation contributions.
Specifically, the lawsuit alleged that the company and the other defendants organized, promoted, and sold at least 96 conservation easement syndicates that reported more than $2 billion of tax deductions from “overvalued and improper contributions, and have passed those deductions through to the thousands of customers of defendants’ scheme, resulting in hundreds of millions of dollars of tax harm.”
Ecovest filed a response to the government’s lawsuit “emphatically denying” the allegations, claiming that its programs are in full compliance with the legal requirements for conservation easements.
In January 2020, the DOJ announced the trial would be delayed. As of last week, they made a settlement.
EcoVest did not admit to any allegations contained in the DOJ’s amended complaint. There were also no fines or monetary amounts in the settlement.
As reported by the The Sun News (of Myrtle Beach), Sean Akins, counsel for EcoVest, provided a written statement expressing that the company is pleaed that the Department of Justice accepted the settlement offer and that, “The Department of Justice’s case was premised on false allegations and a failure to understand EcoVest’s business. While EcoVest was confident it would have prevailed at trial, its primary goal is to avoid further costly litigation and focus its resources on behalf of the best interests of its existing investors.”
The counsel for EcoVest says the company repositioned its focus to other real estate investments, including affordable housing.
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