A North Carolina appraiser will face trouble after conspiring in a massive $1.3 billion tax fraud scheme.
Last week, Walter Roberts II pleaded guilty to conspiring to defraud the DOJ Announce. Roberts faces up to five years in prison and will be sentenced in six months.
The fraud began in 2008, a year after Roberts became a licensed appraiser, according to court documents and statements. In 2007, he began evaluating conservation easements, specific areas of land designated for environmental protection. Property owners with conservation easements can claim income tax relief.
From 2008 to 2019, Roberts fraudulently inflated the value of at least 18 different easements by violating industry codes and making false statements. He also manipulated or used manipulated data through unnamed co-conspirators to achieve the goal of assessing the value of communications in order to achieve certain tax breaks.
The impact of the fraud is staggering, especially when Roberts inflated the value of certain assessments by at least 70%. The 18 easements identified resulted in nearly $467 million in tax relief. As a result, the IRS recorded a tax loss of more than $129 million.
However, such a plan is not unprecedented. Several years ago, two brothers who worked for an Atlanta accounting firm pleaded guilty to a federal tax fraud conspiracy charge for running an operation that allegedly involved greenfield conservation deductions that defrauded the IRS of $250 million.
read more
Regulation of the appraisal industry is tricky because the work of appraisers is often associated with subjective factors. In residential real estate, there is a persistent appraisal gap between home values in white neighborhoods and communities of color that has worsened during the pandemic.
The Biden administration has called for clearer guidance to evaluators on anti-discrimination laws and stronger enforcement of violations.
