Anderson Pointe Investments: Conservation Easement Concerns?

Anderson Pointe Investments is a conservation easement that filed a Form D with the Securities and Exchange Commission to raise funds from investors in 2018. According to the form, the offering totaled $6,909,000, with a minimum investment of $70,500 accepted from outside investors. As it raised funds for the offering, it worked with broker-dealer firms Dempsey Lord Smith, Dalmore Group, Cabin Securities, Center Street Securities, and Sandlapper Securities.

As ProPublica describes, a conservation easement is an entity created when a landowner protects a parcel of land from development. This entity supposedly provides a benefit to the public by protecting the undeveloped land, offering a “pristine” tract for the general public to enjoy. At the same time, the landowner enjoys a charitable deduction. The problem with conservation easements, according to ProPublica, is that “profit-seeking middlemen known as ‘promoters’” purchase undeveloped land, get an appraiser to attest that it has “huge development value and thus is worth many times the purchase price,” and proceed to sell interests in this land to investors. As the investigation describes, these investors reap deductions that may total five times or more their investments.

While this seems like a promising investment, the land appraisals may in fact be fraudulent, rendering their deductions “bogus.” In fact, that ProPublica report details a company that oversaw “an allegedly abusive conservation easement tax scheme,” according to the Department of Justice, in which it offered investors tax deductions based on “overvalued and improper contributions.” The company in question was allegedly involved in 51 conservation easements since 2009, “generating $1.7 billion in federal tax deductions.”

In 2019, the IRS added conservation easements to its “Dirty Dozen” list of tax scams. Meanwhile, the Senate Finance Committee initiated investigations of conservation easement promoters, with lawmakers drafting bills that would stop landowners from creating them altogether.

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