DOJ Stands by Its Statement of Undisputed Facts in Easement Case

UNITED STATES,
Plaintiff,
v.
ECOVEST CAPITAL, INC., et al.
Defendants.

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

UNITED STATES' REPLY IN SUPPORT OF ITS STATEMENT OF UNDISPUTED MATERIAL FACTS FOR ITS MOTION FOR PARTIAL SUMMARY JUDGMENT
(REPLYING TO ECOVEST'S RESPONSE TO THE UNITED STATES' STATEMENT OF UNDISPUTED MATERIAL FACTS)

Below, the United States replies to responses given to the United States' Statement of Undisputed Material Facts (“US SUMF”) in support of its Motion for Partial Summary Judgment by Defendants EcoVest Capital, Inc. (“EcoVest”), Alan N. Solon (“Solon”), Robert M. McCullough (“McCullough”), and Ralph R. Teal, Jr. (“Teal”). As set forth in Judge Totenberg's Standing Order (ECF No. 8), for each fact set forth in the US SUMF, the United States has reproduced (1) the fact stated and the citations to supporting evidence, (2) the above-listed defendants' response to the fact (“EcoVest's Response”), and (3) the United States' reply to the response (“US Reply”). Defendant Claud Clark III (“Clark”) did not file separate responses to each US SUMF, but stated he joined in EcoVest's Response. See ECF No. 368. As a result, wherever the United States replies to “EcoVest's Response” through this filing such reply is intended to reply to both the EcoVest Parties and to Clark.

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TABLE OF CONTENTS

I. DEFENDANTS ESTABLISHED A REAL ESTATE COMPANY THAT OFFERED PROJECTS WITH CONSERVATION EASEMENT OPTIONS.

II. ECOVEST USED PURCHASE AND REDEMPTION AGREEMENTS TO ACQUIRE AN INTEREST IN THE SUBJECT PROPERTIES FOR THE ECOVEST PROJECT.

III. ECOVEST USED CONSERVATION EASEMENT APPRAISALS THAT CLARK PREPARED TO SUBSTANTIATE THE TAX DEDUCTIONS CLAIMED FROM THE ECOVEST PROJECTS.

IV. THE APPRAISALS AND STATEMENTS REGARDING THOSE APPRAISALS WERE DISTRIBUTED TO BROKER-DEALERS, FINANCIAL ADVISORS AND CUSTOMERS.

V. ECOVEST ALLOCATED TAX BENEFITS TO PARTICIPATING INVESTORS AS A RESULT OF THE ECOVEST PROJECTS.

VI. DEFENDANTS KNEW THE STATEMENTS WERE FALSE.

VII. FACTS RELATED TO DEFENDANTS' AFFIRMATIVE DEFENSES.

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I. DEFENDANTS ESTABLISHED A REAL ESTATE COMPANY THAT OFFERED PROJECTS WITH CONSERVATION EASEMENT OPTIONS.

US Statement No. 1:

1. Defendant EcoVest Capital, Inc. (“EcoVest”) refers to itself as a “real estate company.”¹

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 2:

2. EcoVest consults on, sponsors, and manages real estate projects that include options for conservation easements (“EcoVest Projects”).²

EcoVest's Response: Disputed that the cited material supports that EcoVest continues, following the filing of the Complaint, to consult on, sponsor, and manage real estate projects that include options for conservation easements. Further disputed for the reason that the cited material does not support the proposition that EcoVest consulted on real estate projects, which included options for conservation easements, after 2012. Undisputed that EcoVest previously sponsored and managed real estate projects that included, among other things, the option to place a conservation easement on real property.

US Reply: As evidenced in the response, it is undisputed that EcoVest consulted on real estate projects that included options for conservation easements through 2012 and that it sponsored and managed real estate projects that included options conservation easements between 2013 and 2018.

EcoVest's assertion that the cited materials “do not support that EcoVest continues . . . to consult on, sponsor, and manage real estate projects that include options for conservation easements” is just speculative argument. The materials cited by the United States (i.e., EcoVest's own admissions in its Answer to the Amended Complaint) do not reflect that EcoVest ceased this activity after the Complaint was filed, and EcoVest has failed to identify any specific facts or offer any evidence to support that suggestion. Furthermore, EcoVest's Statement of Additional Facts demonstrates that this is not a genuine or material dispute; EcoVest itself offers a fact EcoVest is still in existence. (EcoVest's Statement of Additional Undisputed Material Facts in Response to United States' Statement of Undisputed Material Facts (“ECV SAF”), ECF No. 365-2, page 5 of 101, ¶ 1).

The above response to the United States' Statement of Undisputed Material Facts (“US SUMF”) is one of many in which EcoVest purports to “dispute” the fact stated, but then fails to cite any evidence in the record refuting the fact or showing that the materials cited do not support it. As such, the fact should be deemed admitted under this Court's Local Rules. See L.R. 56.1(B)(2)(b). Moreover, in this and other instances, EcoVest's so-called “dispute” is not a genuine one for summary judgment purposes, and so the Court should disregard it in ruling on the United States' motion. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (“[T]he issue of fact must be 'genuine.'”).

The purpose of summary judgment is to “'pierce the pleadings and assess the proof in order to see whether there is a genuine need for trial.'” Matsushita, 475 U.S. at 587 (quoting Fed. R. Civ. P. 56(e) advisory committee note (1963)). In response to a properly supported summary judgment motion, it is not sufficient for the nonmoving party “simply [to] show that there is some metaphysical doubt as to the material facts.” Id. at 586. Rather, the party opposing summary judgment must come forward with “competent evidence designating specific facts showing a genuine disputed issue.” Owens v. Georgia, 2021 WL 4286461, at *3 (N.D. Ga. 2021), report and recommendation adopted, 2021 WL 4286460. “An issue is not genuine if it is unsupported by evidence, or if it is created by evidence that is 'merely colorable' or is 'not significantly probative.'” Owens, 2021 WL 4286460, at *3 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50) (1986)). Likewise, speculative or conclusory allegations and arguments by counsel, without more, are insufficient to show the presence of a genuine dispute. See Hester v. Univ. of Ala. Birmingham Hosp., 798 Fed. Appx. 453, 456 (11th Cir. 2020) (“[C]onclusory allegations and speculation are insufficient to create a genuine issue of material fact.”) (quotations omitted); Wiest v. Tyco Electronics Corp., 812 F.3d 319, 330 (3d Cir. 2016) (“[S]ummary judgment is essentially 'put up or shut up' time for the non-moving party who must rebut the motion with facts in the record and cannot rest solely on assertions made in the pleadings, legal memoranda, or oral argument.”) (quotations omitted); Oliver v. Scott, 276 F.3d 736, 744 (5th Cir. 2002) (“Conclusional allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation do not adequately substitute for specific facts showing a genuine issue for trial.”); see also Walker v. United States, IRS, 2009 WL 1241929, at *3 (N.D. Ga. 2009) (“[A party] must remember that a response to a statement of material facts is not an opportunity to write another brief. If the fact stated is true, admit it. If the fact is legitimately disputed, then say why, cite the evidence that supports the denial, and stop.”).

In short, “'[g]enuine' factual issues must have a real basis in the record.” Mosely v. Wade, 2020 WL 7051351, at *4 (N.D. Ga. 2020) (citing Matsushita, 475 U.S. at 586). EcoVest's response to US SUMF ¶ 2 — like many that follow in the succeeding paragraphs — is a conclusory, argumentative assertion that does not set forth any “real basis” for concluding that a genuine dispute exists.

Further, to the extent the Court concludes EcoVest's response to US SUMF ¶ 2 reveals a genuine dispute as to any fact, that dispute is immaterial. Only genuine disputes regarding material facts — i.e., those “that might affect the outcome of the suit under the governing law” — preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see Gorss Motels, Inc. v. Safemark Sys., LP, 931 F.3d 1094, 1102 (11th Cir. 2019). “Factual disputes that are irrelevant or unnecessary will not be counted.” Anderson, 477 U.S. at 248.

Here, any dispute implied by EcoVest's response is entirely irrelevant to resolving the specific issues raised by the United States' summary judgment motion. Whether EcoVest has continued to organize and promote their conservation easement syndicates after the filing of the Complaint is immaterial to deciding whether they have previously made false statements about the tax benefits of such arrangements that may be subject to penalty under 26 U.S.C. § 6700. At most, the existence of ongoing conduct goes to whether an injunction is “necessary or appropriate” under 26 U.S.C. § 7408 — an issue that the United States does not seek to resolve through its summary judgment motion and that has been specifically reserved for trial. See U.S. Br. in Support of Mot. for Partial Summ. J., ECF No. 349-1 at 10 n.1.

US Statement No. 3:

3. EcoVest identifies three potential options for the real properties that are the subject of the EcoVest Projects: (1) develop the property, (2) hold the property for investment, or (3) donate a conservation easement on the property.³

EcoVest's Response: Disputed that the cited material supports the factual contention that EcoVest, subsequent to Plaintiff's filing of its Complaint, continues to identify three potential options for its offerings. The term “EcoVest Offerings” refers to the 70 real estate programs at issue in Plaintiff's Motion for Partial Summary Judgment, see ECF 349-1 at 8, 14, 17-18. Additionally, the cited evidence does not support the stated factual contention for the EcoVest Offerings. Instead, the cited evidence relates to only three of the 70 EcoVest Offerings. Undisputed that the three documents cited by Plaintiff refer to three options for those EcoVest Offerings.

US Reply: This fact is not genuinely disputed, and EcoVest's response suggesting otherwise is frivolous. As EcoVest makes clear in its own Statement of Additional Facts, each of its Projects involved the three options outlined above. ECF No. 365-2 page 13 of 101, ¶ 38.

EcoVest's purported dispute that the evidence cited does not show that EcoVest “continues to identify three potential options,” is unsupported speculation and, in any case, irrelevant. The extent to which EcoVest continues to promote conservation easement transaction goes, at most, to the issue of whether an injunction may be necessary and appropriate under 26 U.S.C. 7408 — an issue that the United States has specifically reserved for trial. See ECF No. 349-1 at 10 n.1.

EcoVest confusingly suggests there is some dispute regarding the use of the term “EcoVest Projects” — but this is a defined term used in the United States' motion. See ECF No. 349-1, at 12-13 & n.2. These Defendants' apparent preference to use a different defined term (“EcoVest Offerings”) is not a dispute for summary judgment purposes. Regardless of the specific moniker used, there is no genuine dispute about the “Projects” or “Offerings” at issue. These include the 10 transactions that Conservation Resources, Inc. (“CRI”) consulted on, the five transactions that EcoVest consulted on in 2012, and the 58 transactions that EcoVest sponsored and managed between 2013 and 2018. Of these 73 total transactions, Clark prepared appraisals for 70 of them. For purposes of this reply, where EcoVest uses the term “EcoVest Offerings,” the United States understands that this refers to the 70 EcoVest transactions for which Clark prepared the conservation easement appraisal and will respond as such. See also, ECV SAF, ECF No. 365-2, page 10 of 101, ¶ 24 and note 1.

US Statement No. 4:

4. Every EcoVest Project resulted in the donation of a conservation easement on the subject real property.⁴

EcoVest's Response: Disputed. It is not the case that every EcoVest project resulted in the donation of a conservation easement. Many EcoVest projects did not successfully complete due diligence, were not offered to investors, or did not result in the donation of a conservation easement. See EcoVest Parties' Statement of Additional Facts (“SAF”), ¶ 33. It is undisputed that the EcoVest Offerings resulted in the donation of a conservation easement.

US Reply: EcoVest's purported “dispute” — which goes strictly to the United States' use of the defined term “EcoVest Project” — is not a genuine dispute of material fact. It is simply counsel's argument about what should constitute a “project,” which totally ignores the meaning of the specific defined term. This is precisely the type of legalistic, argumentative (and frivolous) response that the Court should disregard in reviewing the undisputed facts set forth in support of the United States' motion. See Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of material facts is not an opportunity to write another brief.”).

Additionally, even if the Court views the above response as creating a genuine dispute, any dispute is immaterial to the issues raised in the United States' motion for partial summary judgment. As evidenced in the response, it is undisputed that the 70 EcoVest transactions for which Clark prepared the appraisal resulted in the donation of a conservation easement. See Response & Reply to US SUMF ¶ 3.

US Statement No. 5:

5. Every EcoVest Project resulted in claimed tax deductions for the charitable contribution of the conservation easement under 26 U.S.C. § 170(h).⁵

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that every EcoVest Offering resulted in claimed tax deductions for the charitable contribution of the conservation easement under 26 U.S.C. § 170(h). The cited evidence does not even support the factual contention that the donation of conservation easements resulted in claimed tax deductions by investors in any EcoVest Project. Mr. Lloyd's testimony was that he believed that the result of each EcoVest Project put at issue by Plaintiff in the Amended Complaint was that investors chose to donate a conservation easement. This testimony does not support the factual contention that as a result of the donation of conservation easements in EcoVest Projects, tax deductions were actually claimed by individual investors. Plaintiff has offered no evidence that each investor in an EcoVest Offering actually claimed a tax deduction for the charitable contribution of the donated conservation easement. Furthermore, the cited letters from Mr. McCullough to financial advisors also fail to support the factual contention for two reasons. First, like the testimony of Mr. Lloyd, the letters do not establish that investors actually claimed tax deductions based on the contribution of conservation easements in EcoVest Offerings. The letters only convey the per unit non-cash charitable donation value resulting from the contribution of a conservation easement in four of the seventy EcoVest Offerings. There is a substantial difference between a partnership reporting a non-cash charitable donation of a specific value, and individual investors claiming their pro rata share as a charitable tax deduction on their individual tax returns. Moreover, letters providing the non-cash charitable donation amounts for four EcoVest Offerings cannot support a factual contention related to “every EcoVest Project.”

US Reply: This fact has never been in dispute, because EcoVest admitted the allegation in its Answer to the United States' Amended Complaint. ECF No. 241 at ¶ 5.

Moreover, as evidenced by the response, there is no dispute that the materials cited in support of US SUMF ¶ 5 show that participants elected to donate conservation easements for every EcoVest Project at issue and donations resulted in a “per unit non-cash charitable donation value.” EcoVest argues that there is a “substantial difference” between a partnership “reporting” a tax deduction, and individual taxpayers “claiming” it, but this is merely counsel's attempt to recharacterize what the evidence shows. Counsel's argument is not evidence that refutes the fact set forth in US SUMF ¶ 5. See Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of material facts is not an opportunity to write another brief.”).

Finally, even if the Court concludes that the response to US SUMF ¶ 5 raises a genuine dispute, that dispute is not material for purposes of the United States' partial summary judgment motion. Whether each individual customer in EcoVest's syndicates claimed their pro rata share of the resulting deductions is irrelevant to determining whether Defendants made false statements about tax benefits that would be subject to penalty under 26 U.S.C. § 6700. At most, this “dispute” goes to the issue of whether an injunction is “necessary or appropriate,” an issue that the United States has specifically reserved for trial. See ECF No. 349-1 at 10 n.1.

US Statement No. 6:

6. EcoVest allocated the tax deductions claimed for the charitable contribution of conservation easements to members in the EcoVest Projects based on the number of units each member held in the projects.⁶

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest allocated tax deductions for any EcoVest Offering. EcoVest did not allocate tax deductions to individual partnerships and, if claimed, up-stream partners in those partnerships. The letters from Mr. McCullough to financial advisors merely convey the per unit non-cash charitable donation value resulting from the contribution of a conservation easement in four of the seventy projects put at issue by Plaintiff in this case. EcoVest does not claim or allocate any deduction for any partnership or particular individual. Finally, the cited evidence relates to only four of the 70 EcoVest Offerings. Any inference that the above statement applies to all EcoVest Offerings is unsupported.

US Reply: Counsel's purely legal argument — focused on parsing the meaning of the word “allocate” — is not sufficient to create a genuine dispute of material fact. See Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of material facts is not an opportunity to write another brief.”). That the evidence cited by the United States relates to just four of the 70 EcoVest Projects at issue also fails to show a genuine dispute regarding US SUMF ¶ 6. There is no dispute that each of the 70 Projects that are the subject of the United States' motion resulted in the donation of a conservation easement. See Response & Reply to US SUMF ¶ 4. Any suggestion that the Court should infer from the United States' evidence that deductions were not allocated with respect to any EcoVest Project other than the 4 referenced in the cited materials is just Defendants' speculative argument that has no “real basis in the record.” Mosely, 2020 WL 7051351, at *4.

In addition to the documents specifically cited in the footnote to US SUMF ¶ 6, there is copious evidence in the record establishing that the deductions relating to those donations were allocated to participants in the Projects including EcoVest's own proposed additional facts. See, e.g., ECF No. 365-2, ECV SAF ¶¶ 142, 147, 150; ECF No. 372-26, Ex. 191, Private Placement Memorandum for Azalea Bay Resort at ECOVEST-DOJ_1821046: section entitled “Allocation of Company Profits and Losses” which states that all items of deduction will be allocated among the Members. Under Fed. R. Civ. P. 56(c)(3), this Court may consider this additional evidence in ruling on the United States' partial summary judgment motion.

US Statement No. 7:

7. EcoVest's efforts are led by Defendant Alan N. Solon (“Solon”), Robert M. McCullough (“McCullough”), and Ralph R. Teal, Jr. (“Teal”).⁷

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 8:

8. Defendant Claud Clark III (“Clark”) prepared the conservation easement appraisals used to substantiate the tax deductions claimed for 70 of the EcoVest Projects.⁸

EcoVest's Response: Disputed to the extent the only fact established by the cited evidence is that Mr. Clark received specified funds for conservation easement appraisals for the EcoVest Offerings. Disputed to the extent it implies that the only substantiation for the non-cash charitable donations of the conservation easements were the appraisals prepared by Clark. Also disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. See supra, Response ¶ 5. Undisputed that Claud Clark III prepared qualified appraisals that included an opinion of value for the EcoVest Offerings.

US Reply: This fact is undisputed. See EcoVest Parties' Statement of Additional Undisputed Material Facts (“SAF”), ECF 365-2 at ¶ 24 n.1; Claud Clark III's State of Additional Undisputed Material Fact, ECF No. 370 at ¶ 1.

EcoVest's response to US SUMF ¶ 7 is nonresponsive, seeks to inject a dispute where there is none, and offers an unsupported legal conclusion that Clark was a “qualified appraiser.” See Walker, 2009 WL 1241929, at *3 (concluding that plaintiff's responses to statement of undisputed facts failed to conform with L.R. 56.1 because (in part) “[m]any of the responses do not expressly state whether Plaintiff admits or denies the statements contained in DSMF, but instead simply contain Plaintiff's own version of the facts”). Counsel's irrelevant and unnecessary argument submitted under the guise of a “disputed fact” does not create a genuine issue for trial. See Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3.

A. Conservation Resources, Inc. (“CRI”)

US Statement No. 9:

9. Conservation Resources, Inc. (“CRI”) was formed on December 2, 2010.⁹

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 10:

10. Solon served as CRI's President.¹⁰

EcoVest's Response: Undisputed that Alan Solon served as CRI's President until August 2012. ECF No. 241 ¶ 34 (EcoVest Parties' Answer to Am. Compl.).

US Reply: Undisputed that Alan Solon served as CRI's President until August 2012.

US Statement No. 11:

11. According to an Operational Due Diligence Report regarding EcoVest prepared by FactRight LLC and dated August 15, 2017, Solon represented that the idea for CRI grew out of “the goal of offering tax-planning options”:¹¹

EcoVest's Response: Disputed to the extent this factual assertion suggests that “tax-planning options” were the sole reason Mr. Solon formed CRI. The cited evidence does not support this assertion. Undisputed to the extent that FactRight LLC produced an Operational Due Diligence Report that claims that Mr. Solon's idea for CRI grew out of the goal of offering tax-planning options.

US Reply: EcoVest puts forth no citations to the record to support its argument as to what the evidence “suggests.” Argument by counsel, without more, is insufficient to create a genuine dispute regarding a properly supported fact at the summary judgment stage. See Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3. Regardless, EcoVest's gloss on SUMF ¶ 11 reveals that the substance of the material fact is undisputed — FactRight, LLC created an Operational Due Diligence Report reciting a representation by Solon. See also, United States' Opposition to EcoVest's Statement of Additional Undisputed Material Facts, ¶¶ 1, 11.

US Statement No. 12:

12. Between 2010 and 2012, CRI provided conservation easement consulting services on 10 projects.¹²

EcoVest's Response: Undisputed.

US Reply: Undisputed.

B. EcoVest Capital, Inc.

US Statement No. 13:

13. EcoVest was formed in 2012 and has operated since then.¹³

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 14:

14. In 2012, EcoVest consulted on five projects that included options for conservation easements. Between 2013 and 2018, EcoVest sponsored and managed 58 projects that included options for conservation easements.¹⁴

EcoVest's Response: Undisputed that after 2012 EcoVest did not consult on any projects that included options for conservation easements and between 2013 and 2018 EcoVest sponsored and managed 58 real estate projects, which included options for conservation easements.

US Reply: Undisputed. EcoVest attempts to clarify whether EcoVest “consulted on” projects after 2012, but in substance do not identify any dispute to the fact stated in US SUMF ¶ 14.

US Statement No. 15:

15. Adam Lloyd (EcoVest's Chief Operating Officer) confirmed in his deposition that EcoVest organized projects that included options for conservation easements:¹⁵

EcoVest's Response: Disputed to the extent that this factual assertion seeks to establish the legal conclusion that EcoVest “organized” an entity under 26 U.S.C. § 6700(a)(1)(A). Mr. Lloyd's testimony only confirmed the number of projects involving a conservation easement option that EcoVest had sponsored since Mr. Lloyd joined the organization. Mr. Lloyd cannot render a legal conclusion. Undisputed that Mr. Lloyd stated “In my time with the organization, somewhere around — as a sponsor, I think somewhere between 60 and 65.”

US Reply: EcoVest's response to US SUMF ¶ 15 is improper because it contains bare legal argument about whether the proffered fact establishes that EcoVest “organized” an entity, transaction, or arrangement within the meaning of 26 U.S.C. § 6700. The response violates this Court's Local Rules and also fails demonstrate any genuinely disputed issue for summary judgment purposes. L.R. 56.1(B)(1) (providing that “[t]he Court will not consider any fact . . . (c) stated as an issue or legal conclusion”) see Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of material facts is not an opportunity to write another brief.”).

EcoVest does not dispute the accuracy of the cited testimony — as such, US SUMF ¶ 15 is an undisputed fact. Lloyd's testimony is clear as to EcoVest's role in the conservation easement projects at issue. EcoVest's dispute to US SUMF ¶ 15 is frivolous because in their Answer and Statement of Additional Facts they extensively describe their role with respect to the 70 transactions at issue. See, e.g., ECF Nos. 241 at 2; ECF No. 365-2 at ¶¶ 24-85; ECF No. 372-19, -59.

US Statement No. 16:

16. In a letter agreement that McCullough (EcoVest's Chief Financial Officer) signed on behalf of EcoVest, EcoVest acknowledged that it “will organize and offer” the EcoVest Projects.¹⁶

EcoVest's Response: Disputed to the extent that this factual assertion seeks to establish the legal conclusion that EcoVest “organized” an entity under 26 U.S.C. 6700(a)(1)(A). Mr. McCullough cannot render a legal conclusion. This factual assertion is further disputed because the cited evidence does not support the factual contention that “EcoVest acknowledged that it 'will organize and offer' the EcoVest Projects.” First, the cited letter from Mr. McCullough states that it is only a “preliminary statement” and “does not create any legally binding obligations on the part of EcoVest.” See ECF No. 349-39 at 1 (Declaration of Eric Aberg (“Aberg Decl.”), Ex. 1376, Letter Agreement between EcoVest and Triloma Financial Group, LLC, dated Feb. 19, 2015). Second, nowhere in the letter does it state that the agreement applies to any specific EcoVest Offering, must less all of the EcoVest Offerings. It states only that “EcoVest and Triloma intend to form a strategic relationship in connection with the formation and distribution of a series of private equity funds.” See id. This statement does not support the broad factual assertion that EcoVest acknowledged in the cited letter that it “will organize and offer” the EcoVest offerings.

US Reply: EcoVest's dispute to US SUMF ¶ 16 is frivolous because EcoVest's role with respect to the 70 transactions at issue is established by EcoVest's own pleadings and evidence. See, e.g., ECF No. 241, Answer to Am. Compl. at 2; ECF No. 365-2, ECV SAF at ¶¶ 24-85; ECF No. 372-19, Ex. 184, Private Placement Memorandum of Greenway Holdings, at -59.

Moreover, EcoVest's response to US SUMF ¶ 16 is nonresponsive and simply sets forth their “version of the facts.” Walker, 2009 WL 1241929, at *3 (concluding that plaintiff's responses to statement of undisputed facts failed to conform with L.R. 56.1 because (in part) “[m]any of the responses do not expressly state whether Plaintiff admits or denies the statements contained in DSMF, but instead simply contain Plaintiff's own version of the facts”). The response does not even purport to dispute the fact that is actually stated, which is indisputably shown by the text of the cited document. Instead, EcoVest offers counsel's unvarnished legal argument about how the cited document should be interpreted. See Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of material facts is not an opportunity to write another brief.”)

US Statement No. 17:

17. EcoVest, through its employees and representatives, signed and filed formation documents for entities used in its projects.¹⁷

EcoVest's Response: Disputed as to materiality. That EcoVest employees signed formation documents for entities involved in three of the 70 EcoVest Offerings is not material to Plaintiff's claim that EcoVest knowingly made false statements about or within appraisal reports prepared by Claud Clark. Further disputed because the cited evidence does not support the factual contention that EcoVest signed and filed formation documents for entities used in the EcoVest Offerings. The cited evidence provides only three examples of certificates of formation signed by an EcoVest employee. And the cited evidence does not support the conclusion that EcoVest filed the documents. Any inference that EcoVest signed and filed formation documents for every project at issue in this case is unsupported. To the contrary, further evidence shows that formation documents for entities used in EcoVest Offerings were signed and filed by EcoVest's counsel. For example, lawyers at Sirote prepared, signed and filed certificates of formation for EcoVest projects. See, e.g., Declaration of Amee Frodle (“Frodle Decl.”), Ex. 44, (SACK_0000040), at -040 (“Here are their [sic] names of the new entities, which we have already formed in Delaware”); id. at -042 (Certificate of Formation for RCPH-Teal, LLC, an entity related to the Rocky Creek Preserve Project, signed by EcoVest counsel Don Johnson), id. at -044 (Certificate of Formation for RCPH-Teal, LLC, an entity related to the Hickory Preserve Project, signed by EcoVest counsel Don Johnson); See Frodle Decl., Ex. 11, Levitt Dep. Tr. 64:9-65:9 (testifying that Don Johnson signed the certificates of formation in Ex. 44). And lawyers at Alston & Bird helped EcoVest form entities for its projects. See Frodle Decl., Ex. 6, Kanaly Dep. Tr. 126:15-19 (“Q. And as part of the services that Alston provided EcoVest in connection with the core offerings, did it typically help EcoVest form those entities for each offering? A. Yes, I believe that's correct.”).

US Reply: EcoVest does not dispute that employees of EcoVest signed the formation documents cited in support of US SUMF ¶ 17. Further, the evidence EcoVest cites to support its purported “dispute” actually serves to establish the fact that “EcoVest, through its employees and representatives, signed and filed the formation documents for entities used in its projects.” (Emphasis added.) This fact is also supported by other evidence in the record. See ECF No. 365-2, at ¶¶ 106, 112, 119, 123; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record).

US Statement No. 18:

18. EcoVest, through its employees, signed operating agreements for entities used in its projects.¹⁸

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest, through its employees, signed operating agreements for entities used in all 70 projects at issue in Plaintiff's Motion for Summary Judgment. See Frodle Decl., Ex. 6, Kanaly Dep. Tr. 127:1-4 (“Q: Did Alston also typically assist EcoVest in preparing the operating agreements for those entities that participated in the core offerings? A: Yes.”). Further disputed that this factual contention is immaterial. That EcoVest employees signed operating agreements for entities used in its projects is not material to Plaintiff's allegations in its Amended Complaint or its Motion for Summary Judgment. Further disputed because the cited evidence does not support the factual contention that EcoVest signed and filed formation documents for entities used in the EcoVest Offerings. The cited evidence provides a single example of an operating agreement signed by an EcoVest employee. Any inference that EcoVest signed operating agreements for entities in the EcoVest Offerings is unsupported. It is undisputed that EcoVest signed operating agreements for entities related to Azalea Bay Resort Holdings, LLC.

US Reply: Again, EcoVest does not dispute the truth of the fact asserted but merely argues — without any citation to the record — that it is not true. But based on the response, it is undisputed that employees of EcoVest signed the operating agreements for the Azalea Bay transaction, and it is further undisputed that EcoVest, with the assistance of Alston & Bird, prepared operating agreements for the entities involved in other transactions (which included signing such agreements). EcoVest's purported “dispute” is not a genuine dispute, since they fail to cite any evidence in the record that refutes the fact stated. Nor could they, since this fact is amply supported by the other evidence in the record, including EcoVest's own statements. See ECF 365-2, ECV SAF at ¶¶ 106, 112, 119, 123.

Moreover, contrary to EcoVest's assertion, US SUMF ¶ 18 is material to the United States' partial summary judgment motion. Specifically, it goes to the issue of whether these Defendants organized and sold an entity or other plan or arrangement under 26 U.S.C. § 6700.

US Statement No. 19:

19. In a letter agreement that McCullough (EcoVest's Chief Financial Officer) signed on behalf of EcoVest, EcoVest acknowledged that it “will oversee the preparation of a private placement memorandum and related documents” for each of the EcoVest Projects.¹⁹

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that “EcoVest acknowledged that it 'will oversee the preparation of a private placement memorandum and related documents'” for “each of” the projects in any years other than 2015. The cited letter only applies to 2015. Any inference that this applies to all of the EcoVest Offering is unsupported. This factual contention is undisputed to the extent that in 2015 Mr. McCullough signed a letter with Triloma Financial Group, LLC stating among many other conditions, that it will oversee the preparation of private placement memorandum and related documents in 2015.

US Reply: EcoVest's “dispute” that the evidence cited in support of US SUMF ¶ 19 “only applies to 2015,” is unsupported ipse dixit that fails to demonstrate any genuine dispute of material fact. Nothing in the cited document states that EcoVest's role in preparing private placement memoranda and related documents is limited to 2015 transactions, and EcoVest offers no evidentiary support for that claim. See Khan v. Midwestern University, 879 F.3d 838, 846 (7th Cir. 2018) (“A party seeking or opposing summary judgment must support her factual assertions about disputed facts by using citations to point to specific particular parts of the record. . . . A party cannot create a dispute of material fact simply by spewing 'unsupported ipse dixit [that] is flatly refuted by the hard evidence proffered by' the opposing party.”) (citations omitted).

That EcoVest oversaw the preparation of the documents identified in US SUMF ¶ 19 for each of the 70 projects at issue in the United States' motion cannot be disputed based on EcoVest's own description of the transactions — “EcoVest's Offerings” — and all the evidence in the record. See e.g., ECF No. 365-2, ECV SAF at ¶¶ 37, 40, 45, 63, 64, 65; ECF No. 372-19, -59; ECF Nos. 372-1 through 372-69, Private Placement Memoranda for 69 of the 70 projects at issue in the United States' motion; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record).

US Statement No. 20:

20. Between 2012 and 2018, EcoVest received over $113.9 million in consulting fees and distributions in connection with the EcoVest Projects.²⁰

EcoVest's Response: Disputed to the extent this factual assertion suggests that EcoVest received consulting fees after 2012. In 2012, EcoVest received $2,122,125 in consulting fees, EcoVest did not earn any consulting fees after 2012. From 2013-2018, EcoVest received $111,856,919 in distributions from joint ventures entities and other affiliated subsidiaries that earned fees for services provided in connection with real estate projects. Moreover, neither the consulting fee amount nor the distributions take into consideration any business expenses that EcoVest incurred over this period. See ECF No. 349-48 ¶¶ 1-2 (Aberg Decl., Ex. 1385, EcoVest's Responses to United States' Second Requests for Admission).

US Reply: The above response to US SUMF ¶ 20 is emblematic of the general approach that EcoVest has adopted in responding to the United States' partial summary judgment motion. This simple fact is taken directly from EcoVest's responses to requests for admission. Despite that, EcoVest begins its response by claiming that this fact is “disputed.” And, rather than citing evidence that refutes the fact or the source cited for it, EcoVest offers irrelevant and unnecessary argument about what they think the fact potentially “suggests.” See Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3. EcoVest's parsing of the relevant amount into two separate time periods and amounts ($2,122,125 + $111,856,919 = $113.9 million) only serves to obfuscate this clearly undisputed fact.

US Statement No. 21:

21. Private Placement Memoranda (“PPMs”) prepared and distributed for EcoVest Projects represented that Defendants Solon, McCullough, and Teal were part of a group of individuals “most directly responsible for the management” of entities involved in the projects. For example, the PPM prepared for EcoVest's Azalea Bay Resort project stated:²¹

EcoVest's Response: Disputed. The evidence cited does not support the factual contention that every Private Placement Memoranda (“PPMs”) prepared and distributed for every EcoVest Offering represented that Defendants Solon, McCullough, and Teal were part of a group of individuals “most directly responsible for the management” of entities involved in the projects. The cited evidence is from a single PPM prepared for one EcoVest Offering, Azalea Bay Resort. The cited evidence does not support the factual contention that all PPMs for the EcoVest Offerings contained this statement. For example, the PPM for Birch Equestrian Holdings, LLC contained the following statement in the section titled “Controlling Persons”:

The individuals most directly responsible for the management of the Company and Property Entity on behalf of the Manager are Messrs. Bland, Solon, and Killen. Additionally, Mr. Slovin serves on the Board of the Managers of the Sponsor. The following provides certain biographical information on Messrs. Bland, Solon, Killen and Slovin. See Frodle Decl., Ex. 180, Birch Equestrian Holdings, LLC PPM, (ECOVEST-DOJ_0105655), at -116-117.

It is undisputed that the PPM prepared for Azalea Bay Resort stated that Messrs. Teal, Solon, McCullough, Linsider, Lloyd, and Killen were the individuals most directly responsible for the management of the Company and Property Entity.

US Reply: As evidenced by the response, EcoVest does not dispute that private placement memoranda prepared for EcoVest Projects (including the PPM for Azalea Bay) made the representation identified. At most, EcoVest disputes that every PPM contains the name of every person listed in US SUMF ¶ 21, which is not what the fact states.

EcoVest provides one example for a 2013 transaction, Birch Equestrian, and the United States does not dispute the excerpt for that PPM. The United States admits that the persons “most directly responsible for the management,” as identified in the PPMs, changed slightly between 2012 to 2018. For example, Teal was involved in all projects starting in 2013 and beyond (except for Birch Equestrian), and McCullough did not join EcoVest until 2014. Nevertheless, every PPM prepared for an EcoVest Project contains a statement similar or identical to the one excerpted above. See, ECF Nos. 372-1 through 372-19. Moreover, the record is replete with other evidence showing that Solon, McCullough, and Teal are the persons responsible for the management of EcoVest and the entities involved in each EcoVest project.See, e.g., ECF No. 365-2, ECF SAF, ¶¶ 2,-4, 12, 18]; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record).

C. Alan Solon

US Statement No. 22:

22. Solon is one of the founders of EcoVest.²²

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 23:

23. Solon has served as the President and Chief Executive Officer of EcoVest, and he has also served on EcoVest's Board of Directors.²³

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. Solon continues to serve as the President and Chief Executive Officer of EcoVest, or that he continues to serve on EcoVest's Board of Directors. Undisputed that Mr. Solon served as the President and Chief Executive Officer of EcoVest between 2012 and 2021, and also served on EcoVest's Board of Directors between 2012 and 2021. See Declaration of Alan Solon (“Solon Decl.”) ¶ 2.

US Reply: This dispute is frivolous and violates this Court's Local Rules because, in their Statement of Additional Facts, EcoVest states that Solon is currently the President and Chief Executive Officer of EcoVest and serves on its board of directors. ECF No. 365-2, ECV SAF at ¶¶ 3-4; see Walker, 2009 WL 1241929, at *3 (“If the fact stated is true, admit it. If the fact is legitimately disputed, then say why, cite the evidence that supports the denial, and stop.”)

US Statement No. 24:

24. Prior to 2014, Solon was involved in the development and conservation options for projects offered by CRI and EcoVest.²⁴

EcoVest's Response: Disputed to the extent that this factual contention implies that CRI offered or sponsored investment opportunities. As Plaintiff's own factual contentions assert, “Between 2010 and 2012, CRI provided conservation easement consulting services on 10 projects.” See supra, Response ¶ 12. This fact is further disputed to the extent that it implies that EcoVest offered or sponsored investment opportunities before 2013. As Plaintiff's own factual contentions assert: “in 2012, EcoVest consulted on five projects that included options for conservation easements.” See supra, Response ¶ 14. It is undisputed that prior to 2014, Mr. Solon's role at CRI and later EcoVest included working with individuals responsible for the details of development and conservation options for certain investment opportunities.

US Reply: This dispute is frivolous because US SUMF ¶ 24 is a direct quote from Solon's own interrogatory responses:

ECF 349-49 at 12. See Khan, 879 F.3d at 846 (“A party cannot create a dispute of material fact simply by spewing 'unsupported ipse dixit [that] is flatly refuted by the hard evidence proffered by' the opposing party.”) (citations omitted).

US Statement No. 25:

25. Prior to 2014, Solon's role with respect to the projects offered by CRI and EcoVest included working with individuals who were responsible for details of the offerings, such as the creation of development plans and the evaluation of the conservation values and purposes of the property.²⁵

EcoVest's Response: Disputed as to materiality. The cited evidence nor the factual contention provide any indication as to what “working with individuals” entails or how it has any relevance to the allegations in the Amended Complaint or Plaintiff's Motion for Summary Judgment. Disputed to the extent that this factual contention implies that CRI offered or sponsored investment opportunities. As Plaintiff's own factual contentions assert, “Between 2010 and 2012, CRI provided conservation easement consulting services on 10 projects.” See supra, Response ¶ 12. This fact is further disputed to the extent that it implies that EcoVest offered or sponsored investment opportunities before 2013. As Plaintiff's own factual contentions assert, “in 2012, EcoVest consulted on five projects that included options for conservation easements.” See supra, Response ¶ 14.

US Reply: This fact is not genuinely disputed. Again, US SUMF ¶ 25 is a direct quote from Solon's own interrogatory responses:

ECF 349-49 at 12. See Khan, 879 F.3d at 846 (“A party cannot create a dispute of material fact simply by spewing 'unsupported ipse dixit [that] is flatly refuted by the hard evidence proffered by' the opposing party.”) (citations omitted).

US Statement No. 26:

26. Solon answers questions from broker-dealers about, and provides education and training as to the nature of, EcoVest's investment offerings.²⁶

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Solon continues to answer questions from broker-dealers about, and provides education and training as to the nature of, EcoVest's investment offerings. Undisputed that, with respect to the EcoVest Offerings, Mr. Solon's role at EcoVest involved interacting with independent third-party broker-dealers and financial advisors who have an obligation to complete thorough due diligence of all potential investments. It is in those circumstances that Mr. Solon answered questions about, and provided education and trainings as to the nature of, EcoVest's investment offerings. See ECF No. 349-49 at 15-16 (Aberg Decl., Ex. 1386, Solon's Objections and Responses to the United States' First Set of Interrog.).

US Reply: This dispute is frivolous because US SUMF ¶ 26 is a direct quote from Solon's own interrogatory responses:

ECF 349-49 at 16. See Khan, 879 F.3d at 846 (“A party cannot create a dispute of material fact simply by spewing 'unsupported ipse dixit [that] is flatly refuted by the hard evidence proffered by' the opposing party.”) (citations omitted).

EcoVest's attempt to backtrack on Solon's responses and draw a temporal distinction — i.e., by suggesting the Court should not conclude that Solon “continues” to engage in the described activity — is not supported by any evidence. Mosely, 2020 WL 7051351, at *4 (“'Genuine' factual issues must have a real basis in the record.”) (citations omitted). Indeed, in Solon's most recent declaration filed with this Court in support of EcoVest's opposition, he admits to having a “current role at EcoVest.” ECF No. 365, ECV SAF, ¶ 3.

In any case, the response, even if it creates some dispute, poses no material dispute. As explained, facts about Solon's ongoing conduct only weigh (if at all) on the issue of whether an injunction should issue under 26 U.S.C. § 7408, which is not at issue in the United States' partial summary judgment motion. See ECF No. 349-1 at 10 n.1.

US Statement No. 27:

27. Solon has engaged in discussions about the specific nature of EcoVest's offerings with potential investors and their financial advisors.²⁷

EcoVest's Response: Disputed as to materiality. Without knowing the nature of the discussions Mr. Solon had with potential investors and their financial advisors this factual assertion if of no relevance to the Plaintiff's Amended Complaint or its Motion for Summary Judgment. Disputed, to the extent that this factual contention suggests Mr. Solon communicated directly with potential investors about EcoVest's offerings outside the presence of an investor's financial advisor, or a FINRA-registered broker-dealer. When Mr. Solon received direct communications from potential investors, he referred the potential investor to a broker-dealer or financial advisor for further information. It is undisputed that in rare occasions, and only if their financial advisor was present did Mr. Solon discuss the specific nature of EcoVest's investment offerings with a potential investor. See ECF No. 349-49 at 15-16.

US Reply: This fact is not genuinely disputed. US SUMF ¶ 27 is taken directly from the statements that Solon made in his own interrogatory responses:

ECF 349-49 at 16. See Khan, 879 F.3d at 846 (“A party cannot create a dispute of material fact simply by spewing 'unsupported ipse dixit [that] is flatly refuted by the hard evidence proffered by' the opposing party.”) (citations omitted).

This fact is also material. Solon's role with respect to the conservation easement options, including conversations he has had with potential investors (whether or not a broker-dealer was present), is relevant to show that he engaged in conduct subject to the penalty under 26 U.S.C. § 6700 by (among other things) communicating false statements about the tax benefits of the relevant transactions.

US Statement No. 28:

28. Solon has been involved with every EcoVest Project.²⁸

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. Solon is currently involved with every EcoVest Project. Undisputed that Mr. Solon was involved with the EcoVest Offerings.

US Reply: This fact is not genuinely disputed. US SUMF ¶ 28 is a direct quote from Solon's own interrogatory responses:

ECF 349-49 at 17. See Khan, 879 F.3d at 846 (“A party cannot create a dispute of material fact simply by spewing 'unsupported ipse dixit [that] is flatly refuted by the hard evidence proffered by' the opposing party.”) (citations omitted).

EcoVest's “dispute” focuses on its preference for a different defined term to identify the projects at issue (“Offerings” versus “Projects”) — but, as explained above, this does not present a genuine dispute for purposes of the United States' motion. See Reply to US SUMF ¶ 3. EcoVest also attempts to draw a temporal distinction regarding Solon's role — but this is based solely on counsel's argument and is not supported by any factual evidence and, as such, cannot create a genuine dispute as to this fact. See Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3. Moreover, even if this dispute were genuine (and not frivolous), it is not material, because the issue of whether an injunction may be “necessary or appropriate” (because, among other reasons, Solon is engaged in ongoing conduct) has been specifically reserved for trial. ECF No. 349-1 at 10 n.1.

US Statement No. 29:

29. Between 2012 and 2018, Solon's total net receipts related to the EcoVest Projects exceed $5.7 million.²⁹

EcoVest's Response: Undisputed that Mr. Solon's total net receipts related to the EcoVest Offerings is $5,745,023.90. See ECF No. 288 ¶ 3 (Joint Stipulation Between the United States and the EcoVest Parties Regarding Net Receipts).

US Reply: Undisputed.

D. Robert McCullough

US Statement No. 30:

30. McCullough joined EcoVest in 2014.³⁰

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 31:

31. McCullough has been a senior leader of EcoVest and involved in its operations.³¹

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. McCullough continues to be a senior leader of EcoVest and involved in its operations. Undisputed that between 2014 and 2021 Mr. McCullough was a senior leader of EcoVest and involved in its operations. See Declaration of Robert McCullough (“McCullough Decl.”), at ¶ 2.

US Reply: This fact is not genuinely disputed. As the citated materials show, US SUMF ¶ 31 is an admission from EcoVest's own pleadings.

To the extent EcoVest insinuates that McCullough no longer “continues to be a senior leader of EcoVest,” that suggestion is frivolous. McCullough's own declaration submitted in support of EcoVest's opposition states that he currently fills no less than four (4) senior leadership positions at EcoVest:

ECF No. 365-5, Declaration of Robert McCullough In Support of EcoVest Parties' Opposition to United States' Motion for Partial Summary Judgment, ¶ 2; see also ECF No. 365-2, ECV SAF, ¶¶ 2, 12. See Khan, 879 F.3d at 846 (“A party cannot create a dispute of material fact simply by spewing 'unsupported ipse dixit [that] is flatly refuted by the hard evidence proffered by' the opposing party.”) (citations omitted).

US Statement No. 32:

32. McCullough has served as EcoVest's Senior Vice President, Chief Financial Officer, Treasurer, and Secretary.³²

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. McCullough continues to serve as EcoVest's Senior Vice President, Chief Financial Officer, Treasurer, and Secretary. Undisputed that between 2014 and 2021 Mr. McCullough served as EcoVest's Senior Vice President, Chief Financial Officer, Treasurer, and Secretary. See McCullough Decl. ¶ 2.

US Reply: This dispute is frivolous. McCullough's own declaration submitted in support of EcoVest's opposition states that he currently serves as EcoVest's Senior Vice President, Chief Financial Officer, Treasurer, and Secretary:

ECF No. 365-5, Declaration of Robert McCullough In Support of EcoVest Parties' Opposition to United States' Motion for Partial Summary Judgment, ¶ 2; see also ECF No. 365-2, ECV SAF, ¶¶ 2, 12. See Khan, 879 F.3d at 846 (“A party cannot create a dispute of material fact simply by spewing 'unsupported ipse dixit [that] is flatly refuted by the hard evidence proffered by' the opposing party.”) (citations omitted)

US Statement No. 33:

33. Between 2014 and 2018, McCullough's net receipts related to the EcoVest Projects exceeded $818,000.³³

EcoVest's Response: Undisputed that Mr. McCullough's net receipts related to the EcoVest Offerings are: $818,829.42. See ECF No. 288 ¶ 4 (Joint Stipulation Between the United States and the EcoVest Parties Regarding Net Receipts).

US Reply: Undisputed.

US Statement No. 34:

34. McCullough is responsible for EcoVest's general operations and finances. Additionally, with respect to EcoVest offerings, McCullough participates in due diligence, trains and educates broker-dealers, and participates in investor relations.³⁴

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. McCullough continues to be responsible for EcoVest's general operations and finances, that he continues to participate in due diligence, training, and education of broker-dealers, or that he participates in investor relations. Undisputed that between 2014 and 2021, Mr. McCullough's role was limited to general EcoVest operations and its finances. Mr. McCullough had little involvement in the day-to-day work related to the sponsorship of the EcoVest Offerings. See ECF No. 349-5 at 10-11 (Aberg Decl., Ex. 64, McCullough's Objections and Responses to the United States' First Set of Interrog.).

US Reply: This dispute is frivolous because US SUMF ¶ 34 is a direct quote from McCullough's own interrogatory responses:

ECF 349-5, Defendant Robert McCullough's Objections and Responses to the United States' First Set of Interrogatories, pages 10-11. See Khan, 879 F.3d at 846 (“A party cannot create a dispute of material fact simply by spewing 'unsupported ipse dixit [that] is flatly refuted by the hard evidence proffered by' the opposing party.”) (citations omitted).

Moreover, to the extent EcoVest insinuates that McCullough no longer “continues” in the activities described above, that suggestion is flatly contradicted by McCullough's own declaration submitted in support of EcoVest's opposition. In that declaration — which he signed on March 10, 2022 — McCullough declares under penalty of perjury that he still occupies all of the same positions he previously identified in his interrogatory responses:

ECF No. 365-5, Declaration of Robert McCullough In Support of EcoVest Parties' Opposition to United States' Motion for Partial Summary Judgment, ¶ 2; see also ECF No. 365-2, ECV SAF, ¶¶ 2, 12.

US Statement No. 35:

35. McCullough answers questions from broker-dealers about, and provides education and training as to the nature of, EcoVest's investment offerings.³⁵

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. McCullough continues to answer questions from broker-dealers about, and provides education and training as to the nature of, EcoVest's investment offerings. Undisputed that, with respect to the EcoVest Offerings, Mr. McCullough's role at EcoVest involved interacting with independent third-party broker-dealers and financial advisors who have an obligation to complete thorough due diligence of all potential investments. It is in those circumstances that Mr. McCullough answered questions about, and provided education and training as to the nature of, EcoVest's investment offerings. See SAF ¶¶ 16, 61-63, 66-73; see also McCullough Decl. ¶ ¶ 11, 13-17.

US Reply: This dispute is frivolous because US SUMF ¶ 35 is a direct quote from McCullough's own interrogatory responses:

ECF 349-5, Defendant Robert McCullough's Objections and Responses to the United States' First Set of Interrogatories, page 14. See Khan, 879 F.3d at 846 (“A party cannot create a dispute of material fact simply by spewing 'unsupported ipse dixit [that] is flatly refuted by the hard evidence proffered by' the opposing party.”) (citations omitted).

Moreover, to the extent EcoVest insinuates that McCullough no longer “continues” in the activities described above, that suggestion is belied by McCullough's own declaration submitted in support of EcoVest's opposition. In that declaration — which McCullough signed on March 10, 2022 — he identifies his current role at EcoVest, which includes all of the same job titles that he previously identified in his interrogatory responses:

ECF No. 365-5, Declaration of Robert McCullough In Support of EcoVest Parties' Opposition to United States' Motion for Partial Summary Judgment, ¶ 2; see also ECF No. 365-2, ECV SAF, ¶¶ 2, 12.

US Statement No. 36:

36. McCullough has been involved with every EcoVest Project that has included an option for a conservation easement since he joined EcoVest.³⁶

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. McCullough continues to be involved with EcoVest projects that post-date the filing of the Complaint. Undisputed that Mr. McCullough has been involved with the EcoVest Offerings.

US Reply: This dispute is frivolous because SUMF ¶ 36 is a direct quote from McCullough's own interrogatory responses:

ECF 349-5, Defendant Robert McCullough's Objections and Responses to the United States' First Set of Interrogatories, page 15. To the extent EcoVest insinuates that McCullough no longer “continues to be involved in EcoVest project,” that suggestion is belied by McCullough's own declaration submitted in support of EcoVest's opposition to summary judgment. In that declaration — which McCullough signed on March 10, 2022 — he identifies his current role at EcoVest, which includes all of the same job titles that he previously identified in his interrogatory responses:

ECF No. 365-5, Declaration of Robert McCullough In Support of EcoVest Parties' Opposition to United States' Motion for Partial Summary Judgment, ¶ 2; see also ECF No. 365-2, ECV SAF, ¶¶ 2, 12. Once again, EcoVest attempts to create the appearance of a disputed fact by invoking its preference for the defined term “EcoVest Offerings” (as opposed to “Projects”). As explained, however, whether the 70 transactions at issue in the United States' motion are called “Offerings” or “Projects” does not present a genuine dispute of material fact. See Reply to US SUMF ¶ 3

E. Ralph Teal

US Statement No. 37:

37. Since approximately 2015, Teal has been a co-owner of EcoVest.³⁷

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 38:

38. Teal has also been a member of the board of directors of EcoVest since 2015.³⁸

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 39:

39. Teal receives $100,000 per year to serve on EcoVest's board of directors.³⁹

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. Teal continues to receive $100,000 per year to serve on EcoVest's board of directors. Undisputed that Mr. Teal received $100,000 per year between 2016 and 2021 to serve on EcoVest's board of directors.

US Reply: It is undisputed that Teal received $100,000 per year between 2016 and 2021 to serve on EcoVest's board of directors. There is no genuine dispute that Teal continues to serve on EcoVest's board of directors. In his sworn declaration filed with this Court on March 16, 2022, he stated as much, under penalty of perjury:

ECF 365-4, Declaration of Ralph Teal In Support of EcoVest Parties' Opposition to United States' Motion for Partial Summary Judgment, ¶ 2; see also ECF No. 365-2, ECV SAF, ¶¶ 2, 18. To the extent EcoVest contends there is some dispute about whether Teal still receives $100,000 for his position on the board, that dispute is not a genuine one, because they have cited no evidence to refute the evidence cited in support of US SUMF ¶ 39. See Mosely, 2020 WL 7051351, at *4 (“'Genuine' factual issues must have a real basis in the record.”) (citations omitted). And, in any event, any dispute about the amount of money Teal receives for his role at EcoVest is not material for purposes of the United States' motion. Whether an injunction is necessary or appropriate and the amount and appropriateness of any disgorgement remedy are issues reserved for trial. See ECF 349-1 at 10 n.1.

US Statement No. 40:

40. Teal has been a manager and the Vice Chairman of EcoVest's board of directors.⁴⁰

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. Teal has been the manager and the Vice Chairman of EcoVest's board of directors in any years other than 2018. Undisputed that in 2018 Mr. Teal was the Vice Chairman of EcoVest's board of directors.

US Reply: The United States' fact is stated as follows: “Teal has been a manager and the Vice Chairman of EcoVest's board of directors.” EcoVest responds, in part, that: “Undisputed that in 2018 Mr. Teal was the Vice Chairman of EcoVest's board of directors.” Thus, US SUMF ¶ 40 is undisputed.

The remainder of EcoVest's response reflects only irrelevant, improper, and unsupported argument by EcoVest's counsel. See Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of material facts is not an opportunity to write another brief. If the fact stated is true, admit it. If the fact is legitimately disputed, then say why, cite the evidence that supports the denial, and stop.”).

That Teal has served as manager and the Vice Chairman of EcoVest's board of directors — including for years other than 2018 — is well supported by other evidence in the record. ECF 365-4, Declaration of Ralph Teal In Support of EcoVest Parties' Opposition to United States' Motion for Partial Summary Judgment, ¶ 2; see also ECF No. 365-2, ECV SAF, ¶¶ 2, 18;ECF Nos. 366-261 through 366-378 (due diligence reports) and 372-1 through 372-69 (PPMs for the EcoVest Offerings) describing generally EcoVest's management and board, and in some instances, Teal's role specifically;; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record).

US Statement No. 41:

41. Between 2013 and 2018, Teal's total net receipts related to the EcoVest Projects exceeded $10.7 million.⁴¹

EcoVest's Response: Undisputed that Mr. Teal's total net receipts related to the EcoVest Projects at issue in this case were: $10,730,406.40. See ECF No. 288 ¶ 5 (Joint Stipulation Between the United States and the EcoVest Parties Regarding Net Receipts).

US Reply: Undisputed.

US Statement No. 42:

42. Teal's responsibilities with respect to his work with EcoVest included locating land for EcoVest transactions.⁴²

EcoVest's Response: Undisputed that between 2013 and 2018, Mr. Teal's responsibilities with respect to his work with EcoVest including locating land for EcoVest transactions. See Declaration of Ralph Teal (“Teal Decl.”) ¶¶ 3-4, 7-10.

US Reply: It is undisputed that Teal located land for EcoVest transactions between 2013 and 2018.

The response's citation to Teal's declaration does not contain any support for the notion that his involvement in locating land ceased in 2018. Furthermore, EcoVest offered a fact in its Statement of Additional that suggests that Mr. Teal's role at EcoVest continues to contradict EcoVest's attempted disputed ECF No. 365-2, ECV SAF ¶ 18. Because EcoVest fails to present any factual evidence, they have not created a dispute as to the timeframe. See Mosely, 2020 WL 7051351, at *4 (“'Genuine' factual issues must have a real basis in the record.”) (citations omitted) Regardless, even if there is a genuine dispute with respect to timeframe, that dispute is not material to the United States' motion, because the issue of whether an injunction against Teal is necessary or appropriate has been reserved for trial. ECF No. 349-1 at 10 n.1.

US Statement No. 43:

43. Teal's responsibilities with respect to his work with EcoVest included negotiating the price EcoVest paid to acquire land for EcoVest transactions.⁴³

EcoVest's Response: Disputed. The cited testimony does not support the factual contention that “EcoVest paid to acquire land for EcoVest transactions.” Instead, the cited testimony states that EcoVest “companies” (i.e., the partnerships comprised of investors) served as the acquisition vehicles that made payments. Further, the cited testimony only supports that Mr. Teal was “initially” a price negotiator. Finally, the acquisitions involved in the EcoVest transactions were purchases of membership interests in partnership, not land acquisitions. Frodle Decl., Ex. 95, Membership Interest Purchase (“MIPAs”) Summary Exhibit, Column I.

US Reply: Teal's role as the person primarily responsible for the initial price negotiations is undisputed — his testimony is clear on this issue. EcoVest's response attempts to inject a dispute of fact based on their own characterization of evidence that is not tied to this fact. See Walker, 2009 WL 1241929, at *3 (concluding that plaintiff's responses to statement of undisputed facts failed to conform with L.R. 56.1 because (in part) “[m]any of the responses . . . simply contain Plaintiff's own version of the facts”). This fact does not discuss how the land was acquired or by what vehicle, but rather that Teal served as the price negotiator for whichever vehicle or person acquired the land. EcoVest's argumentative assertions and nonresponsive efforts to tell its “own version of the facts” is not sufficient to create a genuine dispute for purposes of the United States' motion. Id.; see Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744 (“[L]egalistic argumentation do not adequately substitute for specific facts showing a genuine issue for trial.”).

US Statement No. 44:

44. McCullough has identified Teal as EcoVest's “joint-venture development partner.”⁴⁴

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. McCullough identified Mr. Teal as EcoVest's “joint-venture development partner.” ECF No. 349-53 includes a reference to Mr. Teal as a “joint-venture development partner” but it is in an email written by Karen Tupy, not Mr. McCullough. See ECF No. 349-53 at 1 (Aberg Decl., Ex. 1390, Email from McCullough dated May 18, 2015). In fact, Mr. McCullough doesn't appear until a subsequent email and the cited evidence does not support the factual contention that the statement written by Ms. Tupy should be attributed to Mr. McCullough. Additionally, the email does not state that Mr. Teal is EcoVest's “joint-venture development partner” for any of the EcoVest Projects put at issue in this case. Second, ECF No. 349-21 states that in 2013, EcoVest sponsored five projects, four of which were on a “joint-venture basis with Mr. Teal,” see ECF No. 349-21 at 3 (Aberg Decl., Ex. 632B, EcoVest Strategic Business Plan dated June 15, 2015), and that in 2014 EcoVest sponsored six projects, each of which was on a “joint-venture basis with Mr. Teal.” Id. at 5. There is no reference to deals other than in 2013 or 2014 in ECF No. 349-21, nor any statement that Mr. Teal served as the “development partner.” Additionally, ECF No. 349-21 does not state or otherwise make clear that the eleven referenced projects are any of the ones Plaintiff has put at issue in this case.

US Reply: The above fact is not genuinely disputed.

First, EcoVest is incorrect that the statements cited should be attributed to Ms. Tupy because the original questions were authored by Ms. Tupy, but the “all caps” responses are McCullough's. ECF No. 349-53 at 1 (“Some quick responses, with lengthier ones to follow. See below:” followed by ALL CAPS responses to questions posed to Mr. McCullough); see also, U.S. v. Siddiqui, 235 F.3d. 1318 (11th Cir. 20000) (emails can be authenticated by distinctive characteristics).

Second, it is totally disingenuous for EcoVest to dispute this fact, given Teal's own description of his role in a sworn declaration recently filed with this Court. See ECF No. 265-4 at 2-3.

Finally, that Teal was identified as EcoVest's “development partner” is a fact amply supported by other evidence in the record. ECF 365-4, Declaration of Ralph Teal In Support of EcoVest Parties' Opposition to United States' Motion for Partial Summary Judgment, ¶ 2; see also ECF No. 365-2, ECV SAF, ¶¶ 2, 18;ECF Nos. 366-261 through 366-378 (due diligence reports) and 372-1 through 372-69 (PPMs for the EcoVest Offerings) describing generally EcoVest's management and board, and in some instances, Teal's role specifically;see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record).

US Statement No. 45:

45. Teal has worked on every EcoVest Project since 2013 except for one project.⁴⁵

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. Teal continues to work on EcoVest Projects that post-date the filing of the Complaint. Undisputed that Mr. Teal worked on each EcoVest Offering since 2013 and that has included an option for a conservation easement, except for the Birch Equestrian Holdings, LLC offering.

US Reply: As stated in EcoVest's response, it is undisputed that Teal was involved in all of the EcoVest transactions that included options conservation easements since 2013, except for one, Birch Equestrian. As such, US SUMF ¶ 45 is not disputed, contrary to EcoVest's response. Furthermore, EcoVest offered a fact in its Statement of Additional that suggests that Mr. Teal's role at EcoVest continues to contradict EcoVest's attempted disputed ECF No. 365-2, ECV SAF ¶ 18

Once again, EcoVest's purported dispute turns in part on their disagreement with a defined term that the United States defined in its own brief (“EcoVest Projects”) — for the reasons already explained, this is not a genuine dispute of material fact. See Reply to US SUMF ¶3. Moreover, EcoVest's insinuation that Teal may no longer “continue[ ]” to work on EcoVest Projects is simply their argument — unsupported by any factual evidence — and, as such, also fails to demonstrate any genuine dispute as to this fact. See Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3. Finally, even if the Court views any dispute regarding Teal's current involvement in EcoVest Projects as “genuine,” the dispute it not material to the instant motion. Whether an injunction against Teal is necessary or appropriate has been reserved for trial. ECF 349-1 at 10 n.1.

US Statement No. 46:

46. Teal has met with landowners in Myrtle Beach to negotiate real estate deals related to EcoVest Projects.⁴⁶

EcoVest's Response: Disputed to the extent that this implied that Mr. Teal continues to have meetings, or had regular meetings, with landowners in Myrtle Beach to negotiate real estate deals related to EcoVest Projects. To the contrary, the cited evidence specifically states that Mr. Teal “on a few occasions” previously met with landowners in Myrtle Beach to negotiate real estate deals related to EcoVest Projects.

US Reply: It is undisputed that Teal met with landowners in Myrtle Beach on a few occasions. The remainder of EcoVest's purported dispute is legalistic and irrelevant argument and does not reveal any genuine dispute regarding the fact set forth in US SUMF ¶ 46. As such, this fact is undisputed.

US Statement No. 47:

47. Teal referred to EcoVest Projects as “the product we are offering.”⁴⁷

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Teal referred to EcoVest Projects as “the product we are offering.” The cited evidence does not refer to a single EcoVest Offering, nor to the EcoVest Projects in general. The cited evidence is a question posed by Mr. Teal in December 2012, asking a general question about how other investment products “compare to the product we are offering?”

US Reply: EcoVest has not offered any factual evidence to support their purported dispute. And, in fact, the quote excerpted by EcoVest — a question that Teal sent to Solon — demonstrates that this fact is not disputed. EcoVest's counsel offers only argument as to the characterization of the quote and, as such, cannot create a genuine dispute as to this fact. See Walker, 2009 WL 1241929, at *3 (concluding that plaintiff's responses to statement of undisputed facts failed to conform with L.R. 56.1 because (in part) “[m]any of the responses . . . simply contain Plaintiff's own version of the facts”); see also Khan, 879 F.3d at 846 (“A party cannot create a dispute of material fact simply by spewing 'unsupported ipse dixit [that] is flatly refuted by the hard evidence proffered by' the opposing party.”); Mosely, 2020 WL 7051351, at *4 (“'Genuine' factual issues must have a real basis in the record.”) (citations omitted).

US Statement No. 48:

48. Teal participated in “all hands” meetings with EcoVest personnel.⁴⁸

EcoVest's Response: Disputed as to materiality. The cited evidence does not offer an indication as to what an “all hands team” is, nor why it is relevant for Plaintiff's Amended Complaint and their Motion for Summary Judgment.

US Reply: As evidenced by the response, it is undisputed that Teal participated in “all-hands” meetings. See, e.g., ECF No. 371-26, Bowden Dep. Tr. 56:11-65:10; ECF No. 371-9, Brown Dep. Tr. 138:5-12; ECF No. 371-3, Clark Dep. Tr. 255:3-258:14; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record).Moreover, this fact is material. Teal's involvement with EcoVest and its conservation easement transactions is directly relevant to whether he engaged in conduct subject to the penalty under 26 U.S.C. § 6700.

F. Claud Clark

US Statement No. 49:

49. Clark prepared conservation easement appraisals to substantiate tax deductions relating to the following 70 EcoVest Projects:⁴⁹

Arcadian Quay, LLC	Greenway Holdings Acquisitions, LLC	Ocean Grove Resort Holdings, LLC
Azalea Bay Resort Holdings, LLC	Hammersmith Landing Holdings, LLC	Piney Cumberland Holdings, LLC
Azul Bay Resort Holdings, LLC	Harbor Gate at Seadrift Holdings, LLC	Port Quay Resort Holdings, LLC
Beech Springs Resort Holdings, LLC	Hickory Equestrian, LLC	Punta Vista Grande Holdings, LLC
Bellavista Grove Holdings, LLC	Hickory Preserve Holdings, LLC	Queen's Cove Holdings, LLC
Belle Harbour Resort Holdings, LLC	High Rocks, LLC	Red Oak Equestrian, LLC
Birch Equestrian Holdings, LLC	Highway 30, LLC	River Trace Resort Holdings, LLC
Birkdale Landing Holdings, LLC	Indigo Sound Holdings, LLC	Riverside Preserve Holdings, LLC
Brunswick Highlands Holdings, LLC	Lakeshore Resort Holdings, LLC	Rocky Creek Plantation Acquisitions, LLC
Camellia Station Holdings, LLC	Land of the Lakes Holdings, LLC	Sanibel Resort Holdings, LLC
Cane Creek Holdings, LLC	Leland Forest Holdings, LLC	Santo Bay Resort Holdings, LLC
Carolina Bays Resort Holdings, LLC	Long Bay Marina Holdings, LLC	Seavista Resort Holdings, LLC
Cayo Dorado Holdings, LLC	Magnolia Bay Resort Holdings, LLC	Shining Star Properties XI, LLC
Cayo Marsopa Holdings, LLC	Maple Equestrian, LLC	South Bay Cove Holdings, LLC
Coastavista Palms Holdings, LLC	Meadow Creek Holdings, LLC	Tortuga Trace Holdings, LLC
Copano Cove Holdings, LLC	Miramar Pointe Holdings, LLC	Trout Creek, LLC
Cottonwood Cove Holdings, LLC	Montego Pointe Holdings, LLC	Tupelo Grove Holdings, LLC
Cristobal Key Holdings, LLC	Monterrey Cove Holdings, LLC	Turkey Creek Resort Holdings, LLC
Cypress Cove Marina Holdings, LLC	Myers Cove Holdings, LLC	Waterway Grove Holdings, LLC
Diamond Grande Resort Holdings, LLC	Myrtle Cove Resort Holdings, LLC	White Oak Equestrian, LLC
Dumpling Mountain, LLC	Myrtle West Resort Holdings, LLC	White Sands Village Holdings, LLC
Espiritu Shores Holdings, LLC	Neuse Harbor Holdings, LLC	Wilderness Lake Holdings, LLC
Garden Lakes Estates Holdings, LLC	New River Preserve Holdings, LLC
Glade Creek, LLC	North Bay Cove, LLC

EcoVest's Response: Disputed to the extent the only fact established by the cited evidence is that Clark received specified funds for conservation easement appraisals for the EcoVest Offerings. Dispute to the extent this implies that the only substantiation for the non-cash charitable donations of a conservation easements [sic] were the appraisals prepared by Clark. Also disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. See supra, Response ¶ 5. Undisputed that Clark prepared appraisals that included an opinion of value for the EcoVest Offerings.

US Reply: It is undisputed that Clark prepared appraisals that included an opinion of value for 70 of the EcoVest transactions that resulted in conservation easements (i.e., the “EcoVest Offerings” as defined by EcoVest). See Response & Reply to US SUMF ¶ 3; ECF No. 370 at 1. The remaining statements in the above response are argumentative and nonresponsive to the fact stated, and merely recite EcoVest's “own version of the facts” without any citation to the record. Walker, 2009 WL 1241929, at *3. As such, EcoVest has failed to present a genuine issue for trial, and this fact is undisputed. See Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of material facts is not an opportunity to write another brief.”)

US Statement No. 50:

50. Clark was a member of EcoVest's “all hands team:”⁵⁰

EcoVest's Response: Disputed as to materiality. Neither the cited evidence nor any other proposed statement of undisputed fact defines “all hands team”. Accordingly, the fact is irrelevant to the Government's Motion for Summary Judgment.

US Reply: As evidenced by the response, EcoVest does not dispute that Clark was a member of EcoVest's “all-hands” team. Further, there is plenty of evidence discussing the “all-hands” team and what occurred at these meetings. See, e.g., ECF No. 371-26, Bowden Dep. Tr. 56:11-65:10; ECF No. 371-9, Brown Dep. Tr. 138:5-12; ECF No. 371-3 Clark Dep. Tr. 255:3-258:14; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record).This fact is material because Clark's involvement with EcoVest and its conservation easement transactions is directly relevant to whether he engaged in conduct subject to penalty under 26 U.S.C. § 6700.

US Statement No. 51:

51. Clark participated in “pipeline” discussions with EcoVest employees to discuss upcoming projects:⁵¹

EcoVest's Response: Disputed as to materiality. Neither the cited evidence nor any other proposed statement of undisputed fact defines “pipeline discussion.” Accordingly, the fact is irrelevant to the Plaintiff's Amended Complaint and their Motion for Summary Judgment. Further disputed to the extent the cited evidence does not support the factual contention that Clark “participated” in “pipeline “ discussions “with” EcoVest employees to discuss upcoming projects. The cited evidence does not indicate whether EcoVest employees were present in these discussions or what role, if any, Clark had in the discussions. Moreover, the cited evidence references a “Pipeline Discussion” in an email seeking to setup a call to discuss “a number of our upcoming deals,” but there is no evidence offered to support that this call took place or who participated in it.

US Reply: EcoVest does not dispute the substance of the testimony given by Linsider (an EcoVest executive), i.e., that Clark was in the pipeline discussions. EcoVest's own response purporting to dispute the fact identifies the context of the “pipeline discussion” — calls to discuss upcoming deals. Further, there is extensive evidence that confirms that the “pipeline discussions” were calls to discuss upcoming deals. See, e.g., ECF No. 371-26, Bowden Dep. Tr. 56:11-65:10; ECF No. 371-22, Chrystall Dep. Tr. 185:22-186:16; ECF No. 371-3 Clark Dep. Tr. 255:3-258:14; ECF No. 371-6, Kanaly Dep. Tr. 137:13-138:17; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record).Speculative arguments that Clark may not have “participated” in the calls or that the calls may not have taken place does not show any genuine dispute as to the material fact. See Matsushita, 475 U.S. at 586 (explaining that, at summary judgment, “the opponent must do more than simply show that there is some metaphysical doubt as to the material facts.”).

Further, US SUMF ¶ 51 is material to the United States' motion. Clark's involvement with EcoVest and its conservation easement offerings is directly relevant to whether he engaged in conduct subject to penalty under 26 U.S.C. § 6700 and whether he should be enjoined under 26 U.S.C. §§ 7402 and/or 7408.

US Statement No. 52:

52. Clark participated in a March 2017 conference with EcoVest employees as a panelist to discuss “the conservation option” in EcoVest Projects.⁵²

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that the March 2017 conference took place or that Clark “participated” in the March 2017 conference. The cited evidence is an agenda for a “Due Diligence Conference” dated March 15-16, 2017, where Clark is listed as part of a panel alongside five other individuals plus a moderator. These is no evidence offered to support the assertion that the conference took place or that it took place in a manner consistent with the agenda.

US Reply: EcoVest must do more than raise some “metaphysical doubt” to demonstrate a genuine dispute as to a material fact. Matsushita, 475 U.S. at 586. The unsupported speculation set forth in the response above is not sufficient. Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744. As such, US SUMF ¶ 52 is not genuinely disputed.

Other evidence in the record supports the fact that the conference identified in US SUMF ¶ 52 took place, that EcoVest paid for it, and that Clark made a presentation as part of the conference. See ECF No. 371-3 Clark Dep. Tr 275:1-277:13; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record).

US Statement No. 53:

53. Clark referred to EcoVest Projects as “our programs.”⁵³

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Clark referred to all EcoVest Projects as “our programs.” The cited evidence is an email describing “anecdotal information about how our programs do good things.” There is no evidence offered that the reference to “NMB projects” in the email are EcoVest Projects or, more specifically, the EcoVest Offerings.

US Reply: EcoVest's purported dispute to US SUMF ¶ 53 has no “real basis in the record.” It is simply speculative argument that the “projects” referenced in the cited document (which is a document that Defendants produced in this case) may not refer to the EcoVest Projects. But EcoVest cannot rely solely on improbable inferences to show a genuine factual dispute or defeat a properly supported summary judgment motion. Their response utterly fails to identify any genuine dispute regarding this fact.

Moreover, other evidence in the record supports the fact that the projects referenced in the email cited in support of US SUMF ¶ 53 were EcoVest Projects. See ECF No. 371-3, Clark Dep. Tr. 288:8-12; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record As such, this fact is undisputed.

US Statement No. 54:

54. In an email to EcoVest employees, Clark stated that he had received a call from another company and asked, “Am I allowed to work with them?”⁵⁴

EcoVest's Response: Disputed as to materiality. There is no indication as to who Oreinstein [sic] and Schuler are, what relation they have to this case, why this particular email (of the millions of pages of documents exchanged in this case) has any relevance, or any bearing the contentions set forth in Plaintiff's Motion for Summary Judgment.

US Reply: EcoVest has not offered any factual evidence to support their purported dispute; in fact, EcoVest does not even appear to dispute the substance of the fact stated. Rather, EcoVest offers argument, through counsel, about what it believes to be the significance (or lack thereof) of the fact. That is insufficient to create a genuine dispute of fact for summary judgment purposes. Moreover, there is evidence in the record — in the form of Clark's deposition testimony — explaining that Ornstein & Schuler is a firm that promotes syndicated conservation easement transactions. See ECF No. 371-3 Clark Dep. Tr 297:15-298:17; 301:4-10; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record.

In any event, any dispute highlighted in the above response — to the extent it is genuine — is immaterial. It does not matter who Ornstein & Schuler are — instead, it matters that Clark sought permission from EcoVest to work with them. Clark's relationship and role with EcoVest is directly relevant to whether he engaged in conduct subject to penalty under 26 U.S.C. § 6700.

US Statement No. 55:

55. Since 2010, Claud Clark III, P.C., f/k/a Clark-Davis, P.C has earned over $3.3 million in fees as the result of conservation easement appraisals that Clark prepared for EcoVest Projects.⁵⁵

EcoVest's Response: Undisputed that Clark has earned over $3.3 million in fees from preparing conservation easement appraisals. Disputed to the extent the cited evidence does not support the statement that the fees were “the result of conservation easement appraisals that Clark prepared for EcoVest Projects. The cited evidence is Clark's admission that “Claud Clark III, P.C., f/k/a Clark~Davis, P.C. has earned at least $3,345,833 in fees since 2010 as the result of conservation easement appraisals conducted by Clark.” The admission does not reference the EcoVest Projects.

US Reply: It is undisputed that Claud Clark III, P.C., f/k/a Clark-Davis, P.C. has earned over $3.3 million in fees as the result of conservation easement appraisals. EcoVest's dispute as to US SUMF ¶ 55 centers on whether the entire $3.3 million was for appraisals involving only EcoVest transactions or involved compensation from other conservation easement transactions. For purposes of the United States' motion, that distinction is immaterial — especially when coupled with the undisputed fact (set forth in US SUMF ¶ 56 below) that Clark's total net receipts related to appraisals he prepared for EcoVest Projects are $1,125,685.76. Issues relating to the amount and appropriateness of disgorgement are not the subject of the United States' partial motion for summary judgment — rather, these issues are reserved for trial. ECF No. 349-1 at 10 n.1; see also, ECF No. 344, at 1-24.

US Statement No. 56:

56. Clark's total net receipts related to appraisals he prepared for EcoVest Projects are $1,125,685.76.⁵⁶

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 57:

57. On June 28, 2013, Clark started charging a minimum fee of $50,000 “[f]or appraisals used to monetize easements, my fee will be a minimum of $50,000.”⁵⁷

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Clark started charging a minimum fee of $50,000 for any appraisals completed in 2013 or in any subsequent year. The cited evidence, an email, reflects a statement by Clark that he would charge a minimum fee of $50,000 for appraisals used to monetize easements. The email further states that Clark intended to “take on about eight more jobs this year and [then] shut it down.” The cited evidence does not show Clark charged the fees as contemplated.

US Reply: It is undisputed that Clark stated he would charge a minimum fee of $50,000 for appraisals used to monetize easements on the date set forth above. The purported dispute that EcoVest identifies in response to US SUMF ¶ 57 is simply its unsupported, improbable speculation that Clark may not have actually “charged” that amount after he made the statement. That contention — which is not supported by anything shown in the document cited or any other facts or evidence identified by EcoVest — does not establish a genuine dispute for purposes of ruling on the United States' motion. See Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4.

II. ECOVEST USED PURCHASE AND REDEMPTIONAGREEMENTS TO ACQUIRE AN INTEREST IN THE SUBJECT PROPERTIES FOR THE ECOVEST PROJECT.

US Statement No. 58:

58. EcoVest executed a Membership Interest Purchase Agreement (“MIPA”) or Redemption Agreement for 69 of the EcoVest Projects.⁵⁸

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest executed the Membership Interest Purchase Agreements (“MIPA”) or Redemption Agreement for 69 of the EcoVest Offerings. The MIPAs and Redemption Agreements are agreements between a partnership owned by contributing land owners and a partnership comprised of investors in the EcoVest Projects. See Frodle Decl., Ex. 95, MIPAS Summary Exhibit, Column J. The MIPAs and Redemption Agreements were executed by the partnerships comprised of investors in each EcoVest Project and the partnership or partnerships associated with contributing land owners. See id. Undisputed that an EcoVest-related entity, in its role as manager of the partnerships comprised of investors in EcoVest Offerings, executed the MIPAs and Redemption Agreements on behalf of those partnerships. See id.

US Reply: It is undisputed that an EcoVest-related entity, in its role as manager of the entities comprised of investors in EcoVest Offerings, executed the MIPAs and Redemption Agreements on behalf of those entities. EcoVest does not actually dispute the substance of US SUMF ¶ 58. Its response simply quibbles with the United States' identification of the parties to the MIPA: whether EcoVest itself or an entity that EcoVest organized, managed, and controlled executed the MIPA. Any argument or clarification provided by this response — i.e., whether it was EcoVest or another entity acting at EcoVest's direction that executed the MIPAs — does not create a genuine dispute regarding this fact.

US Statement No. 59:

59. EcoVest used the MIPA to acquire an interest in the land used for EcoVest Projects:⁵⁹

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest used the MIPA or that an interest in land was acquired. Rather, the cited evidence demonstrates that the MIPA agreements were used by holding company partnerships comprised of investors and other partnerships owned by contributing land owners. Moreover, the MIPA agreements reflect the acquisition of a membership interest in a partnership entity, not the acquisition of a direct interest in real property. See Frodle Decl., Ex. 95, MIPAs Summary Exhibit, Column K.

US Reply: Here, EcoVest offers a distinction without a difference. The MIPAs were used to implement the transactions by which interests in land were acquired from “contributing land owners” for use in the conservation easement projects. That much is undisputed.

The proposed fact in US SUMF ¶ 59 is a derived from the testimony cited and tracks the exact language used in the deposition. Here, EcoVest's response simply submits its own version of the facts under the guise of a factual dispute. Walker, 2009 WL 1241929, at *3. But legal argument and recharacterizations of the evidence by counsel are insufficient to demonstrate a genuinely disputed of fact for summary judgment purposes.

Moreover, as shown by the following record citations, US SUMF ¶ 59 is well-supported by other evidence. See e.g., ECF No. 378-28, Ex. 198, Private Placement Memorandum for Cypress Cove, at ECOVEST-DOJ_0007989 through ECOVEST-DOJ_0008030, for the Membership Interest Purchase Agreement (MIPA) for Cypress Cove. The MIPA includes and incorporates into the MIPA, Exhibits A, “Description of the Real Property,” Exhibit C, “Form of Deed” as well as many references to the real property underlying the MIPA; see also ECF No. 371-27, Linsider Dep. Tr. 84:13-18.

US Statement No. 60:

60. EcoVest's MIPAs and similar agreements identified a particular piece of real property.⁶⁰

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that all of the MIPAs and similar agreements associated with EcoVest Offerings identified a particular piece of real property. The cited evidence refers to only two of the EcoVest Offerings. The cited evidence does not support the factual contention that every MIPA or similar agreement associated with the EcoVest Offerings identified a particular piece of real property. Further disputed that the MIPAs were “EcoVest's” MIPAs for the reasons discussed above. See supra, Response ¶ 59. Undisputed that the MIPAs for Cypress Cove Marina and Azalea Bay Resort include a reference to a particular piece of real property.

US Reply: It is undisputed that the MIPAs for Cypress Cove Marina and Azalea Bay Resort include a reference to a particular piece of real property. Although EcoVest purports to dispute that the remaining MIPAs similarly identified a particular piece of real property, it provides absolutely no record support for that statement (as there is none). EcoVest's argues, in effect, that this Court should infer the following: even though the documents cited by the United States support this fact, other documents might not. Speculation about what other documents — not cited or referenced — might show does not create a genuine dispute for summary judgment purposes.

More directly: the improbable inference that the EcoVest Parties ask this Court to make is completely undercut by their own evidence. As part of their unhinged “firehose” response to the United States' partial summary judgment motion, the EcoVest Parties have voluntarily (and unnecessarily) filed every MIPA or Redemption Agreement ever executed for an EcoVest Project, each of which identifies a particular piece of property. ECF Nos. 166-235. The fact that EcoVest filed a lengthy pin-cited “summary” for each of these documents ECF No. 365-102 as part of its opposition, but also failed to cite even a single one in support of the above response, demonstrates how frivolous their “dispute” here truly is.

US Statement No. 61:

61. The purchase price set forth in the MIPAs for EcoVest's Projects reflected what EcoVest was willing to pay as the buyer:⁶¹

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that the price in the MIPA was what “EcoVest was willing to pay” or that EcoVest was the “buyer” in the MIPA. The cited evidence states that the MIPAs were prepared by lawyers, that the information contained in the MIPAs was prepared by attorneys, that the price in the MIPA was the price negotiated, and that Mr. Teal did not prepare the MIPAs. Moreover, the buyer explicitly referenced in the MIPAs is a partnership entity comprised of investors, not EcoVest. See supra, Response ¶ 59; Frodle Decl., Ex. 95, MIPAs Summary Exhibit, Column L.

US Reply: The substance of this fact, which is taken from Mr. Teal's own deposition testimony, is undisputed: the price set forth in the MIPAs “was what was negotiated” by EcoVest.

EcoVest's argument that certain partnerships they formed to effectuate their deals were the “buyers” under the MIPAs (rather than EcoVest Capital, Inc., itself) is immaterial, and, in any case, not supported by the evidence. The record is replete with evidence establishing that the EcoVest Parties organized, managed, and controlled these entities and negotiated the MIPAs on these entities' behalf. See, e.g., ECF No. 372-1 through 372-69, PPMs discussing the MIPA transactions, including MIPAs as exhibits showing the management of the whole process by EcoVest; Ex. 1387 (Dep. of Ralph Teal at 182:9-19; ECF No. 371-1, Solon Dep. Tr. 92:13-96:3; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record). To take just one example, the MIPA EcoVest prepared (and filed with the Court) for the Carolina Bays Resort project clearly reflects that Mr. McCullough executed that agreement for the “Buyer.”

ECF No. 189 at 366.

III. ECOVEST USED CONSERVATION EASEMENT APPRAISALS THAT CLARK PREPARED TO SUBSTANTIATE THE TAX DEDUCTIONS CLAIMED FROM THE ECOVEST PROJECTS.

A. Statements regarding “qualified appraisals”

US Statement No. 62:

62. In each of the 70 conservation easement appraisals that Clark prepared to substantiate a tax deduction for an EcoVest Project, he stated that he had prepared a “qualified appraisal” as that term is defined in the Treasury regulations.⁶²

EcoVest's Response: Disputed to the extent that this factual assertion implies that Clark stated he prepared a qualified appraisal “as that term is defined in the Treasury Regulations.” Clark's appraisals state “the attached report is a 'qualified appraisal report' as that term is defined in applicable Internal Revenue Service regulations (§ 1.70A-12(c)(3)).” Further disputed to the extent that this factual assertion implies that the only substantiation for the non-cash charitable donations of conservation easements related to EcoVest Projects were the appraisals prepared by Clark. Further, Clark's appraisals state that their purpose is “estimating the fair market value of an easement,” not to substantiate a tax deduction. See Frodle Decl., Ex. 92, Final Appraisals Summary Chart, Column Q. It is further disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. The cited evidence does not support this assertion. See supra, Response ¶ 5. Undisputed that in the 70 appraisals he prepared in connection with the EcoVest Offerings, Clark stated that he had prepared a “qualified appraisal.”

US Reply: It is undisputed that in the 70 appraisals Clark prepared in connection with EcoVest Offerings, Clark stated that he prepared a “qualified appraisal report” as that term is defined in applicable Internal Revenue Service regulations. Although EcoVest quibbles in this response that Clark said “qualified appraisal report” instead of just “qualified appraisal,” EcoVest routinely refers to Clark's appraisals as “qualified appraisals” including in other places of this same document (i.e., without including the meaningless word “report”), see Response to US SUMF ¶ 8 — but, in any case, the distinction in phrasing is immaterial. It is clear that US SUMF ¶ 62 is undisputed.

Despite the absence of any genuine dispute, EcoVest's response contains a litany of nonresponsive arguments and speculation about, inter alia, what the stated fact “implies,” what other statements contained in the appraisal say, and whether individual investors actually claimed the tax deduction that Mr. Clark purported to value. This type of lengthy narrative response violates this Court's Local Rules and fails to reveal any genuinely disputed material fact for purposes of ruling on the United States' motion. Walker, 2009 WL 1241929, at *3 (“If the fact stated is true, admit it. If the fact is legitimately disputed, then say why, cite the evidence that supports the denial, and stop.”); see also West v. Bartow Cty., Georgia, 2017 WL 5339994, at *1 (N.D. Ga. 2017); see Virtual Studios, Inc. v. Stanton Carpet Corp., 2016 WL 5339360, at *1 (N.D. Ga. 2016).

Among the irrelevant arguments set forth in Response to US SUMF ¶ 62, there is one of particular note, insofar as it is false and EcoVest repeated it numerous times in the paragraphs that follow. Specifically, it contends that: “Clark's appraisals state that their purpose is 'estimating the fair market value of an easement,' not to substantiate a tax deduction.” Clark's appraisals flatly contradict this erroneous statement, noting their “intended use . . . is for estimating the fair market value of a perpetual conservation easement for federal income tax purposes.” See, e.g., ECF No. 373-25 at 3 (emphasis added).

US Statement No. 63:

63. In his conservation easement appraisal for the Azalea Bay Resort project, Clark stated:⁶³

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 64:

64. In each of the 70 conservation easement appraisals that Clark prepared to substantiate a tax deduction for an EcoVest Project, he stated three opinions of fair market value: the value of the subject property before the imposition of a conservation easement, the value of the subject property after the imposition of a conservation easement, and the value of the conservation easement itself.⁶⁴

EcoVest's Response: Disputed to the extent that this factual assertion implies that the only substantiation for the non-cash charitable donations of conservation easements related to EcoVest Offerings were the appraisals prepared by Clark. Further, Clark's appraisals state that their purpose is “estimating the fair market value of an easement,” not to substantiate a tax deduction. It is further disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. The cited evidence does not support this assertion. See supra, Response ¶ 5. Undisputed that in connection with the appraisals he prepared for the EcoVest Offerings at issue in this case, Clark prepared three opinions of fair market value consistent with 26 U.S.C. § 170, and the regulations thereunder, and in particular Treas. Reg. § 1.170A-14: the value of the subject property before the imposition of a conservation easement, the value of the subject property after the imposition of a conservation easement, and the value of the conservation easement itself.

US Reply: It is undisputed that Clark stated three opinions of value in each appraisal he prepared for the EcoVest Offerings. Thus, US SUMF ¶ 64 is undisputed.

The remainder of EcoVest's response is nonresponsive to the narrow fact presented and also offers improper, gratuitous legal argument (e.g., whether there was other substantiation for the tax deductions, whether investors actually claimed tax deductions, and whether “Clark prepared three opinions of fair market value consistent with 26 U.S.C. § 170, and the regulations thereunder”). This violates the Local Rules and, regardless, is insufficient to create a genuine dispute of material fact. See L.R. 56.1(B)(1) (providing that “[t]he Court will not consider any fact . . . (c) stated as an issue or legal conclusion”); Walker, 2009 WL 1241929, at *3 (“If the fact stated is true, admit it. If the fact is legitimately disputed, then say why, cite the evidence that supports the denial, and stop.”)

US Statement No. 65:

65. In each of the 70 conservation easement appraisals that Clark prepared to substantiate a tax deduction for an EcoVest Project, he stated that the definition of value he purported to apply for each of his valuation opinions was “fair market value” as that term is defined in the Treasury regulations.⁶⁵

EcoVest's Response: Disputed to the extent that this factual assertion implies that the only substantiation for the non-cash charitable donations of conservation easements related to EcoVest Offerings were the appraisals prepared by Clark. Further, Clark's appraisals state that their purpose is “estimating the fair market value of an easement,” not to substantiate a tax deduction. It is further disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. The cited evidence does not support this assertion. See supra, Response ¶ 5. This factual assertion is further disputed to the extent that this purported fact implies that the cited appraisal references are the only manner in which fair market value is described in the 70 conservation easement appraisals that Clark prepared. Clark's appraisals cited several Treasury regulations relevant to determining the value of a conservation easement, and the definition of “fair market value” is only one component that must be taken into consideration. Undisputed that, within this context, Clark stated that he applied the definition of “fair market value” as set forth in Treasury Reg. § 1.70A-1(c)(2).

US Reply: It is undisputed that Clark stated in the appraisals prepared for EcoVest Offerings that he applied the definition of “fair market value” as set forth in Treasury Reg. § 1.70A-1(c)(2). Thus, US SUMF ¶ 65 is undisputed.

The remainder of EcoVest's response sets forth only unsupported and irrelevant argument (e.g., whether there was other substantiation for the tax deductions, whether investors actually claimed tax deductions, and whether Clark cited to other Treasury regulations in his appraisals”) that violates this Court's Local Rules and fails to identify any genuine or material dispute regarding this fact.

US Statement No. 66:

66. In his appraisal for the Azalea Bay Resort project, Clark stated that the definition of value for each of his valuation opinions was “fair market value” as that term is defined in the Treasury regulations:⁶⁶

EcoVest's Response: Disputed to the extent that this factual contention implies that this is the only manner in which fair market value is described in the appraisal for the Azalea Bay Resort project. Clark's appraisal of Azalea Bay cites several Treasury regulations relevant to determining the value of a conservation easement, and the definition of “fair market value” is only one component that must be taken into consideration. See Frodle Decl., Ex. 122, Azalea Bay Appraisal, (ECOVEST-DOJ_0001619), at -619-621, -646. Undisputed that, within this context, Clark stated that the definition of fair market value was the one set forth in Treasury Regulation Treasury Reg § 1.70A-1(c)(2).

US Reply: As evidenced by the response, it is undisputed that in Clark's appraisal for the Azalea Bay Resort project, Clark stated the definition of fair market value for his valuation was the one set forth in Treasury Regulation § 1.70A-1(c)(2). Thus, US SUMF ¶ 66 is undisputed.

EcoVest's now thrice-repeated construct of purporting to “dispute” the stated fact, reciting several lines of nonresponsive, unsupported, pre-packaged argument, and then finally admitting the stated fact almost verbatim is not proper under this Court's Local Rules. Compare Responses to US SUMF ¶¶ 64-66; see Walker, 2009 WL 1241929, at *3 (“If the fact stated is true, admit it. If the fact is legitimately disputed, then say why, cite the evidence that supports the denial, and stop.”) Of course, it also fails to demonstrate any dispute that is genuine for summary judgment purposes.

US Statement No. 67:

67. According to Clark, the definition of “fair market value” as set forth in the Treasury regulations is flawed:⁶⁷

EcoVest's Response: Disputed to the extent that this implies that Clark did not apply the definition of “fair market value” as set forth in the Treasury regulations in the 70 appraisals he performed for the EcoVest Offerings. Indeed, in testimony not cited by Plaintiff, but which appears directly before the cited evidence, Clark testified that he applied the Treasury Regulation definition of fair market value in the Waterway Grove appraisal about which he was being questioned. See Frodle Decl., Ex. 3, Clark Dep. Tr. 55:18-56:1. Also disputed as to materiality. Clark's personal views as to the definition of fair market value set forth in the Treasury Regulations have no relevance as to whether he appropriately applied that definition. Also disputed to the extent that 26 U.S.C. § 170(h) and Treasury Regulation § 1.170A-14 set forth other requirements that must be followed when valuing a conservation easement, none of which the cited material addresses. Finally, disputed to the extent that Clark's testimony, in context, demonstrates that the “fair market value” as set forth in Treasury Regulation § 1.170A-1 must be interpreted in the broader context of 26 U.S.C. § 170(h) and the more specific valuation criteria for donations of conservation easements set forth in Treasury Regulation § 1.170A-14. See Frodle Decl., Ex. 3, Clark Tr. 326:5-18, 385:8-386:5 (“Q: How does the before and after methodology, as you state, conflict with the definition of fair market value in the treasury regulations? A: The treasury regulations state that absent any sales of comparable conservation easements, then to use the before and after value to determine the fair market value of the easement. This definition says the fair market value of the property, which is substantially different than the fair market value of the easement.”)

US Reply: As evidenced by the Response's use of the phrase “disputed to the extent,” EcoVest does not actually dispute the narrow fact presented. Rather, it supplies a nonresponsive narrative response riddled with argument about how the Treasury regulations should be interpreted and speculation about what it thinks Clark must have meant when he testified “the definition [of FMV] is flawed.” Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of statement of material facts is not an opportunity to write another brief.”); see also West, 2017 WL 5339994, at *1. It fails to present any evidence demonstrating a genuine dispute of material fact. See Wiest, 812 F.3d at 330; Oliver, 276 F.3d at 744.

EcoVest's attempt to dispute the materiality of Clark's “personal views” also fails because Clark's understanding of the term “fair market value” is squarely at issue in this motion.

US Statement No. 68:

68. Clark would not value the property “as is” in the before-value of his conservation easement appraisals:⁶⁸

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Clark would not value the property in its “as is” condition for the before-value of his conservation easement appraisals. First, the cited testimony is vague and unclear. It does not describe which property Clark is testifying about, and does not specify which step of the valuation process he is being questioned about. Furthermore, the cited testimony does not make clear that Clark is being asked about an EcoVest Project, must less the EcoVest Offerings. Consequently, the factual assertion that Clark did not value the property “as is” in his conservation easement appraisal fails. Moreover, Clark's appraisals, rather than his out-of-context statement about a single appraisal, are the best evidence of how he appraised the properties at issue in this case. Finally, the cited testimony fails to include context provided by Clark in his deposition. As Clark subsequently explained, relevant Treasury Regulations directed him to value a property after considering its highest and best use, a state of property that is often (though not always) distinct from its “as-is” state. See Frodle Decl., Ex. 3, Clark Tr. 356:16-357:3; see also EcoVest Parties' Opposition to the United States' Motion for Partial Summary Judgment (“Opp'n”), at 23-25.

US Reply: US SUMF ¶ 68 is not genuinely disputed. EcoVest (once again) sets forth only conclusory, unsubstantiated allegations and legal arguments in support of their purported dispute (e.g., that the testimony is “vague and unclear” and that Clark's appraisals are the “best evidence”). These are totally inadequate to establish a genuine dispute regarding a fact that the United States properly supported with citations to the record. See Hester, 798 Fed. Appx. at 456; Wiest, 812 F.3d at 330; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4. Tellingly, EcoVest does not provide a shred of record support for its speculation that Clark may not have been referring to an EcoVest Project or that this statement was taken out of context.

EcoVest does point to the appraisals, which of course, establish that Clark valued the vacant properties as if they contained fully-constructed residential developments. See US SUMF ¶¶ 76, 78,

B. Statements regarding sales involving the properties

US Statement No. 69:

69. In 46 conservation easement appraisals that Clark prepared to substantiate a tax deduction for an EcoVest Project, Clark stated the following with respect to the subject property:⁶⁹

EcoVest's Response: Disputed to the extent that this factual assertion implies that the only substantiation for the non-cash charitable donations of conservation easements related to the EcoVest Offerings were the appraisals prepared by Clark. Further, Clark's appraisals state that their purpose is “estimating the fair market value of an easement,” not to substantiate a tax deduction. It is further disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. The cited evidence does not support this assertion. See supra, Response ¶ 5. Undisputed that 46 of the 70 appraisals that Clark prepared for the EcoVest Offerings contain the language in the accompanying image.

US Reply: As evidenced by the response, it is undisputed that the quoted language is in 46 of the 70 appraisals that Clark prepared for the EcoVest Offerings. Thus, US SUMF ¶ 69 is undisputed.

EcoVest's common practice of injecting irrelevant qualifiers and narrative response before ultimately admitting the stated fact (e.g., whether there was other substantiation for the tax deductions and whether investors actually claimed tax deductions) violates this Court's Local Rules. See Walker, 2009 WL 1241929, at *3.

US Statement No. 70:

70. EcoVest executed a MIPA or similar agreement in connection with the 46 EcoVest Projects for which Clark stated “there is no sale involving the tract within the last three years.”⁷⁰

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest executed the Membership Interest Purchase Agreements (“MIPA”) or Redemption Agreements for the 46 of the EcoVest Offerings. It did not. The MIPAs and Redemption Agreements are agreements between a partnership owned by contributing land owners and a partnership comprised of investors in the EcoVest Offerings. See Frodle Decl., Ex. 95, MIPAs Summary Exhibit, Column M. The MIPAs and Redemption Agreements were executed by the partnerships comprised of investors in each EcoVest Offering and the partnership or partnerships associated with contributing land owners.

US Reply: It is undisputed that the MIPAs were used to implement the transactions by which interests in land were acquired from “contributing land owners” for use in the conservation easement projects. See Response & Reply to US SUMF ¶ 59. It is also undisputed that an EcoVest-related entity, in its role as manager of the partnerships comprised of investors in EcoVest Offerings, executed the MIPAs and Redemption Agreements on behalf of those partnerships. See Response & Reply to US SUMF ¶ 58.

EcoVest disputes this response only because it quibbles with the United States' identification of the parties to the MIPA. Indeed, the MIPA and appraisal summary charts EcoVest submitted (ECF Nos. 365-99 and 365-102) conclusively establish that it executed a MIPA in connection with the 46 projects where Clark stated “there is no sale involving the tract within the last three years.” Any argument or clarification provided by this response — i.e., whether it was EcoVest or another entity acting at EcoVest's direction that executed the MIPAs — does not create a genuine dispute regarding this fact.

US Statement No. 71:

71. With respect to the 46 conservation easement appraisals that Clark prepared containing the statement “there is no sale involving the tract within the last three years,” EcoVest executed a MIPA or similar agreement between 10 and 391 days (with an average time of approximately 129 days) prior to the date of those appraisals.⁷¹

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest executed the Membership Interest Purchase Agreements (“MIPA”) or Redemption Agreements for 46 of the EcoVest Offerings between 10 and 391 days prior to the date of those appraisals. The MIPAs and Redemption Agreements are agreements between a partnership owned by contributing land owners and a partnership comprised of investors in the EcoVest Offerings. See Frodle Decl., Ex. 95, MIPAs Summary Exhibit, Column N. The MIPAs and Redemption Agreements were executed by the partnerships comprised of investors in each EcoVest Offering and the partnership or partnerships associated with contributing land owners. See id. Further disputed on the grounds of materiality. The existence of a MIPA is immaterial because a MIPA transaction is not a sale of land. See SAF ¶ 261.

US Reply: EcoVest first purports to dispute this fact because it quibbles with the United States' identification of the parties to the MIPA. Any argument or clarification provided by this response — i.e., whether it was EcoVest or another entity acting at EcoVest's direction that executed the MIPAs — does not create a genuine dispute regarding this fact. The remainder of EcoVest's narrative response is improper and (again) nonresponsive to the narrow fact at issue: that the MIPAs were executed between 10 and 391 days prior to the date of the appraisals. Notably, they do not refute the relevant information cited, i.e., the dates the MIPAs were executed for the transactions and the dates of the appraisals. Indeed, the MIPA and appraisal summary charts EcoVest submitted (ECF Nos. 365-99 and 365-102) conclusively establish that a MIPA was executed between 10 and 391 days (with an average time of approximately 129 days) prior to the date of those appraisals.

Finally, EcoVest argues that “[t]he existence of a MIPA is immaterial” which, of course, is wrong given that this motion is about, in part, whether the so-called “Sales Statements” were false because they omitted reference to the MIPA. EcoVest suggests that the MIPA “is not a sale of land” but the only question is whether the MIPA “involves” land. That is a legal argument addressed in the parties' briefs.

C. Clark determined before-values for each unimproved property by applying assumptions and hypothetical conditions

US Statement No. 72:

72. In each of the 70 conservation easement appraisals that Clark prepared to substantiate a tax deduction for an EcoVest Project, the real property at issue in that appraisal was vacant land.⁷²

EcoVest's Response: Disputed to the extent that this factual assertion implies that the only substantiation for the non-cash charitable donations of conservation easements related to the EcoVest Offerings were the appraisals prepared by Clark. Further, Clark's appraisals state that their purpose is “estimating the fair market value of an easement,” not to substantiate a tax deduction. See ECF No. 349-87, Aberg Decl., Ex. 1399, at ii, Column H. It is further disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. The cited evidence does not support this assertion. See supra, Response ¶ 5. Undisputed that the 70 appraisals that Clark prepared for the EcoVest Offerings involved vacant land.

US Reply: It is undisputed that the 70 appraisals that Clark prepared for the EcoVest Offerings involved vacant land. Thus, US SUMF ¶ 72 is undisputed. The remainder of EcoVest's response sets forth only unsupported and irrelevant argument (e.g., whether there was other substantiation for the tax deductions, whether investors actually claimed tax deductions, and whether Clark said he was estimating fair market value or substantiating a deduction) that violates this Court's Local Rules and fails to identify any genuine or material dispute regarding this fact.

US Statement No. 73:

73. On the date of Clark's appraisal for the Azalea Bay Resort project, the subject property was vacant land and did not contain any on-site improvements:⁷³

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 74:

74. In each of the 70 conservation easement appraisals that Clark prepared to substantiate a tax deduction for an EcoVest Project, Clark determined that the “highest and best use” of the real property at issue in the appraisal (before encumbering the property with a conservation easement) was residential development.⁷⁴

EcoVest's Response: Disputed to the extent that this factual assertion implies that the only substantiation for the non-cash charitable donations of conservation easements related to the EcoVest Offerings were the appraisals prepared by Clark. Further, Clark's appraisals state that their purpose is “estimating the fair market value of an easement,” not to substantiate a tax deduction. See ECF No. 349-87, Aberg Decl., Ex. 1399, at ii, Column H. It is further disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. The cited evidence does not support this assertion. See supra, Response ¶ 5. Undisputed that Clark, after considering market conditions and demand, available inventory, and the legally permissible, physically possible, financially feasible, and maximally productive uses, determined that the highest and best use for the properties involved in the EcoVest Offerings was a type of residential development, such as multi-family, single family, resort residential, single-family condominium, or multi-family condominium.

US Reply: It is undisputed that Clark determined the “highest and best use” of the real property in the 70 appraisals for the EcoVest Offerings was a form of residential development. The remainder of EcoVest's response sets forth only unsupported and irrelevant argument (e.g., whether there was other substantiation for the tax deductions, whether investors actually claimed tax deductions, and whether Clark properly analyzed the HBU of the properties) that violates this Court's Local Rules and fails to identify any genuine or material dispute regarding this fact. Moreover, EcoVest does not cite any support for its assertion regarding whether Clark considered “market conditions and demand, available inventory, and the legally permissible, physically possible, financially feasible, and maximally productive uses”).

US Statement No. 75:

75. In Clark's appraisal for the Azalea Bay Resort project, Clark stated that his highest and use conclusion in the before-value was “residential development:⁷⁵

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 76:

76. In determining a before-value for each of the 70 conservation easement appraisals that Clark prepared to substantiate a tax deduction for an EcoVest Project, Clark he assumed that the subject property contained improvements that did not exist.⁷⁶

EcoVest's Response: Disputed. The cited testimony does not support the factual contention that in developing the estimates of value for the conservation easements at issue in the EcoVest Offerings, Clark assumed that the subject property contained improvements that did not exist. The factual contention and the cited testimony ignore the valuation method that Clark performed in reaching his before-value conclusion, which he described in his appraisals. Clark's appraisals reflect that he employed the subdivision development appraisal method, also referred to as the discounted cash flow method. See Frodle Decl., Ex. 92, Final Appraisals Summary Exhibit, Column R. To properly perform this method, an appraiser is required to follow several steps. As an initial matter, an appraiser determines the highest and best use of the property. If the appraiser determines that the highest and best use of the property is development, the appraiser then assumes, hypothetically, the potential development of the property in order to determine the anticipated gross sales from that highest and best use. Then, the appraiser deducts costs and entrepreneurial incentive from the gross sales, and discounts the resultant net sales proceeds to their present value using a market-derived discount rate applied over a reasonable development and sales absorption period. The resulting figure is the value of the property as of the date of the appraisal. Engaging in this exercise required Clark to identify the revenue that could be generated from the properties in their “assumed” highest and best use state. However, because Clark also deducted the costs necessary to complete those improvements, and accounted for reasonable absorption criteria and development risk, as a matter of fact, Clark did not assume that the subject property contained improvements that did not exist. Clark applied this method consistent with USPAP, the Appraisal of Real Estate 15th edition, the IRS's own Audit Technique Guide on Conservation Easements, and the manner in which the IRS Appraisers appraise conservation easements. See Frodle Decl., Ex. 14, Flynn Tr. 78:6-16 & 153:6-156:2; Frodle Decl., Ex. 31, IRS Audit Technique Guide (2020 Ed.) (ECOVEST-DOJ_1676562), at -629; Frodle Decl., Ex. 31, The Appraisal of Real Estate, 15th Edition, The Appraisal Institute, Chicago, Ill., 2020, at 340. Finally, this factual contention is further disputed to the extent it implies that the only substantiation for the non-cash charitable donations of conservation easements related to EcoVest Offerings were the appraisals prepared by Clark. Further, Clark's appraisals state that their purpose is “estimating the fair market value of an easement,” not to substantiate a tax deduction. It is further disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. The cited evidence does not support this assertion. See supra, Response ¶ 5.

US Reply: EcoVest has failed to show that US SUMF ¶ 76 is genuinely disputed.

EcoVest is wrong that the cited material “does not support the factual contention.” The cited language set forth in each of the relevant appraisals is clear. For example, in the appraisal prepared for the Carolina Bays project Clark assumes that nonexistent improvements had been made to the subject property. ECF No. 349-87 at 212.

Other evidence in the record also supports US SUMF ¶ 76, including Clark's own testimony. See US SUMF ¶¶ 82, 83, 87.

EcoVest asserts that the United States “ignore[s] the valuation method that Clark performed,” but what follows is simply EcoVest's “own version of the facts.” Walker, 2009 WL 1241929, at *3. It is also rank speculation. None of the evidence cited in support of counsel's argument about the “methodology” applied has any personal knowledge about what Clark did. Notably, EcoVest has not cited any of Clark's testimony on this point. Counsel's unsupported ipse dixit — which, at best, reflects their preferred reading of the Clark's appraisal — is not sufficient to demonstrate a genuine dispute of material fact. As shown above, the unqualified language in Clark's appraisals and his deposition testimony is clear, and EcoVest's attorneys' belated attempt to add “context” to that fact does not change it or demonstrate a genuine dispute. Id. (“[A] response to a statement of material facts is not an opportunity to write another brief.”)

Further, EcoVest's lengthy narrative about its views regarding how in general an appraiser should perform a DCF analysis is immaterial to this motion. Whether Clark performed a proper DCF analysis is simply irrelevant; all that matters is whether Clark assumed the vacant properties had fully-constructed developments and whether he used the required definition of fair market value. As such, the dissertation by counsel about the inner workings and alleged propriety of a DCF model in these circumstances is simply beside the point and does not reveal a material dispute that should preclude summary judgment. See Anderson, 477 U.S. at 248 (“Factual disputes that are irrelevant or unnecessary will not be counted.”).

US Statement No. 77:

77. In developing the estimate of value for the Azalea Bay Resort project, Clark stated that he assumed that the subject property contained improvements that did not exist:⁷⁷

EcoVest's Response: Disputed. See supra, Response ¶ 76. See also Frodle Decl., Ex. 122, Azalea Bay Resort Holdings, LLC Final Appraisal (ECOVEST-DOJ_0001619), at -629 (explaining that Clark valued Azalea Bay Resort through the use of a subdivision development method).

US Reply: EcoVest does not address the proposed fact. It offers only a bare denial, and then cross-reference its response to a different fact.

The cross-referenced response, however, does not reveal any genuine or material dispute regarding US SUMF ¶ 77. As explained in the United States' Reply to US SUMF ¶ 76 above, the fact that Clark valued the properties at issue in this case using a “fully developed” hypothetical condition cannot be genuinely disputed, based on Clark's statements in the appraisals themselves and his accompanying testimony. Also, EcoVest's counsel's speculative argument about what it believes Clark did is not evidence that creates a genuine dispute for summary judgment purposes. Finally, any dispute about Clark's purported use of a DCF model is not material, since the issue raised by the United States' motion does not require the Court to decide whether a DCF methodology is proper in these circumstance (or even whether Clark used the DCF method at all). The United States' motion only asks this Court to conclude that Clark's choice to employ a hypothetical condition — i.e., that the vacant properties were already fully developed — was wrong, and that as a result he reached valuations that all Defendants knew did not conform to the definition of fair market value required under the Treasury Regulations.

US Statement No. 78:

78. In determining a before-value for 50 of the conservation easement appraisals that Clark prepared to substantiate a tax deduction for an EcoVest Project, Clark imposed a hypothetical condition that certain improvements had been made to the subject property that did not exist as of his valuation date.⁷⁸

EcoVest's Response: Disputed. See supra, Response ¶ 76.

US Reply: EcoVest again tries to sidestep the proposed fact and the uncontroverted statements identified in Clark's appraisals by cross-referencing its response to a different fact. But the cross-referenced response does not reveal any genuine or material dispute regarding US SUMF ¶ 78. As explained in the United States' Reply to US SUMF ¶ 76 above, the fact that Clark valued the vacant properties at issue in this case using a “fully developed” hypothetical condition cannot be genuinely disputed, based on Clark's statements in the appraisals themselves and his accompanying testimony. Also, EcoVest's counsel's speculative argument about what it believes Clark did is not evidence that creates a genuine dispute for summary judgment purposes. Finally, any dispute about Clark's purported use of a DCF model is not material, since the issue raised by the United States' motion does not require the Court to decide whether a DCF methodology is proper in these circumstance (or even whether Clark used the DCF method at all). The United States' motion only asks this Court to conclude that Clark's choice to employ a hypothetical condition — i.e., that the vacant properties were already fully developed — was wrong, and that as a result he reached valuations that all Defendants knew did not conform to the definition of fair market value required under the Treasury Regulations.

US Statement No. 79:

79. Regarding the Belle Harbor project, Clark stated:⁷⁹

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 80:

80. On the date of Clark's appraisal for the Belle Harbor project, the subject property was vacant land and contained no on-site improvements.⁸⁰

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 81:

81. In the appraisal he prepared for the Belle Harbor project, Clark stated that the before-value of the subject property was approximately $59 million.⁸¹

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 82:

82. In reaching his before-value set forth in the appraisal for the Belle Harbor project, Clark assumed that a proposed development was fully built out and sold out:⁸²

EcoVest's Response: Disputed. See supra, Response ¶ 76. See also Frodle Decl., Ex. 126, Belle Harbor Resort Holdings, LLC Final Appraisal (ECOVEST-DOJ_0017582), at -638-707 (detailing the subdivision development appraisal analysis performed by Clark for Belle Harbor Resort).

US Reply: EcoVest does not respond to the narrow fact stated in this paragraph, but instead offers a bare denial and cross-references its Response to US SUMF ¶ 76.

The cross-referenced response does not reveal any genuine or material dispute regarding the fact stated in US SUMF ¶ 82. As explained in the United States' Reply to US SUMF ¶ 76 above, the fact that Clark valued the properties at issue in this case using a “fully developed” hypothetical condition cannot be genuinely disputed, based on Clark's statements in the appraisals themselves and his accompanying testimony. Also, EcoVest's counsel's speculative argument about what it believes Clark did is not evidence that creates a genuine dispute for summary judgment purposes. Finally, any dispute about Clark's purported use of a DCF model is not material, since the issue raised by the United States' motion does not require the Court to decide whether a DCF methodology is proper in these circumstance (or even whether Clark used the DCF method at all). The United States' motion only asks this Court to conclude that Clark's choice to employ a hypothetical condition — i.e., that the vacant properties were already fully developed — was wrong, and that as a result he reached valuations that all Defendants knew did not conform to the definition of fair market value required under the Treasury Regulations.

US Statement No. 83:

83. Clark explained that a willing buyer would pay the before-value he determined for the Belle Harbor Resort project ($59 million) only if the subject property were developed:⁸³

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Clark explained that a willing buyer would pay the before-value he determined for the Belle Harbor Resort project only if the subject property were developed. In the cited testimony, Clark does not state that a willing buyer would pay the before-value he determined for the Belle Harbor Resort project only if the subject property were developed. Instead, understood in the context of his Belle Harbor Resort appraisal report and the balance of his testimony, Clark explained that a willing buyer would pay approximately $69 [sic] million for the unencumbered Belle Harbor property as of December 15, 2015 if one were appropriately applying Treasury Regulation section 1.170A-14, which directs an appraiser of a conservation easement to calculate the before value of a subject property at its highest and best use, which, for the Belle Harbor property, Clark determined was residential development. Furthermore, the cited testimony ignores Clark's actual appraisal of Belle Harbor Resort, which makes clear that he has appropriately and correctly arrived at the fair market value of property using the subdivision development method of appraisal. See supra, Response ¶ 76. See also Frodle Decl., Ex. 126, Belle Harbor Resort Holdings, LLC Final Appraisal (ECOVEST-DOJ_0017582), at -638-707 (detailing the subdivision development appraisal analysis performed by Clark for Belle Harbor Resort).

US Reply: EcoVest offers argument and naked assertions about the “context” of Clark's testimony, but does not identify a genuine dispute of material fact. Clark testified that a willing buyer would only pay $59 million for the Belle Harbor property if it was “developed.” The additional gloss offered by EcoVest is argument and unsupported by any factual evidence. A party opposing summary judgment cannot show a genuine dispute by simply ignoring the fact stated and offering their own version of events. See Khan, 879 F.3d at 846; Walker, 2009 WL 1241929, at *3. Nothing in Clark's testimony refers to one “appropriately applying Treasury Regulation section 1.170A-14.”

Finally, EcoVest has offered argument in the nature of expert opinion testimony regarding Clark's appraisal — namely, that the appraisal “makes clear that he has appropriately and correctly arrived at the fair market value of property using the subdivision development method of appraisal.” Ms. Frodle — EcoVest's counsel and the declarant cited as providing evidence in support of this assertion — does not have personal knowledge of that fact, and there is nothing else offered to support it other than counsel's legal argument and a citation to the appraisal itself. In order to refute a fact, the EcoVest Parties can cite to what Clark did, but they cannot give their opinion as to whether what he did was right or wrong. The EcoVest Parties did not disclose during discovery any expert opinion testimony on the appropriateness of Clark's methodology, and (moreover) they have agreed not to proffer Mr. Clark as an expert in any capacity in this litigation. See ECF No. 359. The opinion of EcoVest's counsel set forth in the above response is not a fact, and it cannot be cited to create any genuine dispute for summary judgment purposes.

US Statement No. 84:

84. On the date of Clark's appraisal for the Waterway Grove project, the subject property was vacant land and contained no on-site improvements.⁸⁴

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 85:

85. In the appraisal prepared for the Waterway Grove project, Clark stated that the before-value of the subject property was approximately $61 million.⁸⁵

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 86:

86. In reaching his before-value set forth in the appraisal prepared for the Waterway Grove project, Clark assumed that the subject property was developed:⁸⁶

EcoVest's Response: Disputed. See supra, Response ¶ 76. See also Frodle Decl., Ex. 145, Waterway Resort Holdings, LLC Final Appraisal (ECOVEST-DOJ_0095500), at -555-630 (detailing the subdivision development appraisal analysis performed by Clark for Waterway Grove).

US Reply: Here, again, the EcoVest Parties simply offer a bare denial and cross-reference their Response to US SUMF ¶ 76, which fails to create any genuine dispute regarding the material fact stated in US SUMF ¶ 86.

As explained in the United States' Reply to US SUMF ¶ 76 above, the fact that Clark valued the properties at issue in this case using a “fully developed” hypothetical condition cannot be genuinely disputed, based on all the evidence including statements in the appraisals and Clark's own testimony. Also, EcoVest's counsel's speculative argument about what it believes Clark did is not evidence that creates a genuine dispute for summary judgment purposes. Finally, any dispute about Clark's purported use of a DCF model is not material, since the issue raised by the United States' motion does not require the Court to decide whether a DCF methodology is proper in these circumstance (or even whether Clark used the DCF method at all). The United States' motion only asks this Court to conclude that Clark's choice to employ a hypothetical condition — i.e., that the properties were already fully developed to their so-called highest-and-best use — was wrong, and that as a result he reached valuations that all Defendants knew did not conform to the definition of fair market value required under the Treasury Regulations.

US Statement No. 87:

87. Clark explained that the $61 million before-value he determined for the Waterway Grove project was the value of the subject property if the proposed development were built out, and that it was not the value of unimproved land:⁸⁷

EcoVest's Response: Disputed. See supra, Response ¶ 76. See also Frodle Decl., Ex. 145, Waterway Resort Holdings, LLC Final Appraisal (ECOVEST-DOJ_0095500), at -555-630 (detailing the subdivision development appraisal analysis performed by Clark for Waterway Grove).

US Reply: The EcoVest Parties' bare denial and cross-reference to their Response to US SUMF ¶ 76 fails to respond to fact stated here and also fails to demonstrate any genuine dispute as to any material fact.

As explained in the United States' Reply to US SUMF ¶ 76 above, the fact that Clark valued the properties at issue in this case using a “fully developed” hypothetical condition cannot be genuinely disputed, based on all the evidence including statements in the appraisals and Clark's own testimony. Also, EcoVest's counsel's speculative argument about what it believes Clark did is not evidence that creates a genuine dispute for summary judgment purposes. Finally, any dispute about Clark's purported use of a DCF model is not material, since the issue raised by the United States' motion does not require the Court to decide whether a DCF methodology is proper in these circumstance (or even whether Clark used the DCF method at all). The United States' motion only asks this Court to conclude that Clark's choice to employ a hypothetical condition — i.e., that the properties were already fully developed to their so-called highest-and-best use — was wrong, and that as a result he reached valuations that all Defendants knew did not conform to the definition of fair market value required under the Treasury Regulations.

US Statement No. 88:

88. Clark explained that a willing buyer would only pay $61 million for the Waterway Grove property if it were fully developed:⁸⁸

EcoVest's Response: Disputed. The evidence does not support the factual contention that Clark explained that a willing buyer would only pay $61 million for the Waterway Grove property if it were fully developed. The cited evidence states that a willing buyer would pay $61 million for Waterway Grove if it were appraised under its hypothetically assumed highest and best use, as required by the Treasury Regulations. The factual contention is inconsistent with the cited testimony and the valuation method that Clark performed and described in his appraisals. See supra, Response ¶¶ 76, 83.

US Reply: The substance of US SUMF ¶ 87 is not genuinely disputed. The testimony demonstrates that Clark concluded a willing buyer would pay $61 million for the Waterway Grove property if it were “developed to its fullest highest and best use.” The so-called “dispute” here is simply EcoVest's gloss on Clark's uncontradicted testimony, which is based strictly on a legal argument (i.e., that $61 million was the value of the property “if it were appraised . . . as required by the Treasury Regulations”) and not evidence. See Wiest, 812 F.3d at 330; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of material facts is not an opportunity to write another brief.”).

US Statement No. 89:

89. On the date of the appraisal that Clark prepared for the Birkdale Landing project, the subject property was vacant land and contained no on-site improvements.⁸⁹

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 90:

90. In the appraisal that he prepared for the Birkdale Landing project, Clark stated that the before-value of the subject property was approximately $39 million.⁹⁰

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 91:

91. Clark admitted that the unimproved land that was the subject of the Birkdale Landing project was not worth $39 million on the date of his appraisal:⁹¹

EcoVest's Response: Disputed. The cited evidence does not support the assertion that Clark admitted that the unimproved land that was the subject of the Birkdale Landing project was not worth $39 million on the date of his appraisal. The cited testimony refers to land only not the highest and best use of the land. Clark's appraisals correctly applied the highest and best use analysis required by Treasury Regulation section 1.170A-14 in order to determine the value of the development rights that accompanied the vacant land, which taken together were valued, according to Clark, at $39 million. See Frodle Decl., Ex. 3, Clark Dep. Tr. 358:1-13 (“If before and after valuation is used, the fair market value of the property before contribution of the conservation restriction must take into account not only the current use of the property but also an objective assessment of how immediate or remote the likelihood is that the property, absent the restriction, would in fact be developed, as well as any effect from zoning, conservation, or historic preservation laws that already restrict the property's potential highest and best use. That is from income tax regulations 1.170A-14 26 C.F.R. Chapter I, 4-1-03 edition.”)

US Reply: What Clark admitted is plain from the excerpted deposition testimony. EcoVest simply ignores the sworn testimony and “disputes” this fact based on nothing but their speculative legal argument, which is improper under the Court's Local Rules, see L.R. 56(B)(1), and cannot be used to create a genuine dispute of material fact at summary judgment, see, Khan, 879 F.3d at 838; Wiest, 812 F.3d at 330; Oliver, 276 F.3d at 744.

US Statement No. 92:

92. On the date of the appraisal that Clark prepared for the Espiritu Shores project, the subject property was vacant land and contained no on-site improvements.⁹²

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 93:

93. In the appraisal that he prepared for the Espiritu Shores project, Clark stated that the before-value of the subject property was approximately $78 million.⁹³

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 94:

94. Clark did not identify the profile of a market participant that would actually pay $78 million for the Espiritu Shoes property as of his valuation date:⁹⁴

EcoVest's Response: Disputed as to materiality. The fact that Clark did not identify a profile of a market participant that would pay $78 million for the subject property is immaterial to the allegations set forth in the Amended Complaint and Plaintiff's Motion for Summary Judgment. There is no evidence that Clark was required to identify a “profile” or that his failure to do so impacted the accuracy of his conclusions. Indeed, it is not typical practice for an appraiser to identify the profile of a buyer when appraising a property similar to that of the subject. See Frodle Decl., Ex. 3, Clark Dep. Tr. 418:6-16.

US Reply: EcoVest does not dispute the substance of the fact, only its materiality to the allegations in the Amended Complaint and Plaintiff's Motion for Summary Judgment and offers argument to support its purported dispute. This testimony is material to the United States' motion because the definition of “fair market value” in Treas. Reg. § 1.170A-1(c) is “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.” In this excerpt, Clark was asked whether he found a market participant that would pay $78 million for the subject property on December 17, 2018. Clark's inability to identify a market participant “willing” to pay his appraised value is relevant to whether he correctly applied the definition of fair market value set forth in the Treasury regulations, and whether Clark knew or should have known that his statements about qualified appraisal practice were false. Because EcoVest failed to provide any record citations to admissible evidence to support its dispute, does not dispute the substance, and because this fact is material, US SUMF ¶ 94 is undisputed.

US Statement No. 95:

95. The MIPA executed for the Cypress Cove Marina project dated June 8, 2015, explicitly stated that the value of the real property was $1,092,000.⁹⁵

EcoVest's Response: Disputed as to materiality. The referenced language from the MIPA identifies how the relevant parties will capitalize the MIPA purchase price into an identified asset. The referenced language does not purport to, nor does it, ascertain the fair market value of the real property at issue in the Cypress Cove Marina project. It is further disputed that the MIPA price reflects the fair market value of the assets of the partnership acquired as part of the MIPA transaction. See SAF ¶ ¶ 261-263, 268; see also, Opp'n, at 30-34.

US Reply: EcoVest does not dispute the substance of the fact, nor could it, as the referenced MIPA clearly identifies a price for the real estate at issue in the Cypress Cove transaction. Instead, EcoVest purports to “dispute” the materiality of this proposed fact. But whether the MIPA price reflects the fair market value of that real estate is nothing more than counsel's legal argument that fails to create a genuine dispute for purposes of summary judgment. Moreover, as explained in the United States' reply brief, the MIPA price does indicate the value of the real estate at issue. See TOT Prop. Holdings, LLC, 1 F.4th at 1371 n.23 (“When the partial interest is a 99% ownership interest and complete control, as here, and when the property is the only asset of the entity (besides $100 cash), it is clear that the parties considered the price paid to be the fair market value of the property.”).

In addition, this motion is about, in part, whether the so-called “Sales Statements” were false because they omitted reference to the MIPA. Facts showing that the MIPAs were transactions “involving” property bear directly on the falsity of those Sales Statements.

US Statement No. 96:

96. In the conservation easement appraisal that Clark prepared for the Cypress Cove Marina project dated December 15, 2015, he stated that the before-value of the subject real property was $39,960,013.⁹⁶

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 97:

97. Teal would not have paid the before-value that Clark set forth in his appraisal for the Cypress Cove Marina project — $39.9 million — because “you have to make money with the land, and the land is just a component. So, you know, there would be no room in there to develop and make any money on.”⁹⁷

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. Teal would not have paid the before-value that Clark set forth in his appraisal for the Cypress Cove Marina project: $39.9 million. Further disputed to the extent that the factual assertion implies that Mr. Teal did not believe that Clark's appraised value for the Cypress Cove Marina project was accurate or appropriate. In fact, in the same testimony cited by Plaintiff, Mr. Teal thought that $39.9 was an appropriate value because he believed that it was not the value attributable solely to the land, but rather it is the value of extinguishing all development rights and all the entitlements that go with the property. See Frodle Decl., Ex. 24, Teal Dep. Tr. 262:4-10, 264:3-265:6 (“Q: You are saying the value of taking those away, which you said includes the value of entitlements and other, I guess, parts of this development plan, taking that away is going to, in your mind, justify this number? A: It does in my mind.”) Furthermore, in testimony directly after the statement cited by Plaintiff, Mr. Teal explained the basis for his belief that the valuation reached by Clark in the Cypress Cove appraisal was accurate: “You know, Claud is an expert, has been doing that for a long time. He understands what, I believe, and my attorneys believe he understands the process to value these conservation easements and the extinguishing of all the development rights.” Id. 263:15-264:2.

US Reply: EcoVest does not genuinely dispute this fact because the quoted language is verbatim from Teal's deposition where he stated:

(ECF 371-24 at 262:22-263:7,) EcoVest's attempt to dispute it by adding gloss or “context” is not a proper response and violates this Court's Local Rules. See Walker, 2009 WL 1241929, at *3. In addition, the additional statements set forth in the above response only further demonstrate that US SUMF ¶ 97 is not genuinely disputed — see, e.g., the statement that Teal “believed that [$39.9 million] was not the value attributable solely to the land.” The remainder of the response contains irrelevant narrative (e.g., Teal's basis for relying on Clark's valuation) that violates this Court's Local Rules and does not demonstrate a genuinely disputed of fact for summary judgment purposes. See Walker, 2009 WL 1241929, at *3.

US Statement No. 98:

98. When asked about the before-value that Clark determined in the appraisal he prepared for the Cypress Cove Marina project, Teal testified that “my understanding from my attorneys through this process is the land value is what you pay for the land. But what he is appraising here is not the land.”⁹⁸

EcoVest's Response: Disputed. To the extent that there is any implication that Clark did not appraise the conservation easements consistent with the Treasury Regulation section 1.170A-14. Undisputed that Teal testified that he relied on counsel to inform his understanding of accepted appraisal methodology and the requirements of the treasury regulations and tax code. Consistent with that, Teal's complete response states that, “You know, Claud is an expert, has been doing that for a long time. He understands what, I believe, and my attorneys believe he understands the process to value these conservation easements and the extinguishing of all the development rights.” See Frodle Decl., Ex. 24, Teal Dep. Tr. 263:15-264:2.

US Reply: EcoVest does not genuinely dispute this fact because the quoted language is verbatim from Teal's deposition. EcoVest's effort to add gloss or “context” is not a proper response and violates this Court's Local Rules. See Walker, 2009 WL 1241929, at *3. (concluding that plaintiff's responses to statement of undisputed facts failed to conform with L.R. 56.1 because (in part) “[m]any of the responses do not expressly state whether Plaintiff admits or denies the statements contained in DSMF, but instead simply contain Plaintiff's own version of the facts”). In addition, the remainder of the response contains irrelevant narrative and improper argument (e.g., whether Clark complied with Treasury regulations, whether Teal relied on counsel to inform his understanding of the tax law, and Teal's basis for relying on Clark's valuation) that violates this Court's Local Rules. See Walker, 2009 WL 1241929, at *3. Such legal argument and recharacterizations of the evidence by counsel are insufficient to demonstrate a genuinely disputed of fact for summary judgment purposes.

US Statement No. 99:

99. The MIPA for the Carolina Bays project is dated September 4, 2014, and sets forth a purchase price of $4,638,000. On December 30, 2014, Clark prepared a conservation easement appraisal for the Carolina Bays project and reported a before-value of $53,180,304.⁹⁹

EcoVest's Response: Disputed as to materiality. The MIPA price for Carolina Bays has no relevance or relation to the appraised before-value. Instead, the MIPA agreements reflect the acquisition of a membership interest in a partnership entity, not the acquisition of a direct interest in real property. See SAF ¶¶ 261-263, 268; see also Opp'n, at 31-32.

US Reply: EcoVest does not dispute the substance of the fact, nor could it, as the fact accurately reports the date and purchase price of the Carolina Bays MIPA, and accurately reports Clark's before-value from his Carolina Bays appraisal. Instead, EcoVest purports to dispute the materiality of this proposed fact. But this motion is about, in part, whether the so-called “Sales Statements” were false because they omitted reference to the MIPA, and whether such omission might affect a prudent investor. As explained in the United States' briefs, facts showing that the MIPAs were transactions “involving” property and the relationship between the MIPA and property's value bear directly on the falsity and materiality of those Sales Statements. See TOT Prop. Holdings, LLC, 1 F.4th at 1371 n.23 (“When the partial interest is a 99% ownership interest and complete control, as here, and when the property is the only asset of the entity (besides $100 cash), it is clear that the parties considered the price paid to be the fair market value of the property.”).

US Statement No. 100:

100. Jed Linsider, EcoVest's Chief Investment Officer, did not believe that $50 million would be a fair price to acquire an interest in the property at issue in the Carolina Bays project:¹⁰⁰

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. Linsider did not believe that $50 million would be a fair price to acquire an interest in the property at issue in the Carolina Bays project. Mr. Linsider was not asked whether it was a fair price to pay to acquire an interest in the property at issue in the Carolina Bays project. Rather, he was asked only whether $50 million was a fair price to pay in connection with the MIPA. The MIPA price for Carolina Bays has no relevance or relation to the fair market value of the property at issue in the Carolina Bays Project. See supra, Response ¶ 91.

US Reply: EcoVest does not genuinely dispute this fact because the quoted language is verbatim from Linsider's deposition. EcoVest's effort to add gloss or “context” is not a proper response and violates this Court's Local Rules. See Walker, 2009 WL 1241929, at *3. (concluding that plaintiff's responses to statement of undisputed facts failed to conform with L.R. 56.1 because (in part) “[m]any of the responses do not expressly state whether Plaintiff admits or denies the statements contained in DSMF, but instead simply contain Plaintiff's own version of the facts”).

In addition, EcoVest purport to dispute this fact because of an immaterial distinction between the price paid “to acquire an interest in the property” and the price paid “in connection with the MIPA.” But, as EcoVest's CEO testified and as set forth above in US SUMF ¶ 59, the MIPA was executed to acquire an interest in real property. The EcoVest Parties' remaining contention that the MIPA price “has no relevance to relation to the fair market value of the property” is just unsupported (and nonresponsive) legal argument and contrary to 11th Circuit precedent (as set forth in the United States' briefs).

D. In the sales comparison analysis Clark attempted to apply in reaching his before-values, Clark searched for sales of fully developed properties

US Statement No. 101:

101. In each of the 70 conservation easement appraisals that Clark prepared to substantiate a tax deduction for an EcoVest Project, he acknowledged that the sales comparison approach is a method for valuing vacant land.¹⁰¹

EcoVest's Response: Disputed to the extent that this factual assertion implies that the only substantiation for the non-cash charitable donations of conservation easements were the appraisals prepared by Clark. Further, Clark's appraisals state that their purpose is “estimating the fair market value of an easement,” not to substantiate a tax deduction. See ECF No. 349-87, Aberg Decl., Ex. 1399, at ii, Column H. It is further disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. The cited evidence does not support this factual assertion. See supra, Response ¶ 5. Disputed as to materiality. The existence of the sales comparison approach does not impact the accuracy of the Subdivision Development Method/DCF analysis used by Clark in his appraisals. Undisputed, that in the 70 appraisals that Clark prepared for the EcoVest Offerings he acknowledged that the sales comparison approach is a method for valuing vacant land.

US Reply: Undisputed that in the 70 appraisals Clark prepared for the EcoVest Offerings, Clark acknowledged that the sale comparison approach is a method for valuing vacant land.

The remainder of EcoVest's response is nonresponsive to the narrow fact presented and also offers improper, gratuitous legal argument (e.g., whether there was other substantiation for the tax deductions, whether investors actually claimed tax deductions, and whether the sales comparison approach affected the accuracy of Clark's appraisals). This violates the Local Rules and, regardless, is insufficient to create a genuine dispute of material fact. See L.R. 56.1(B)(1) (providing that “[t]he Court will not consider any fact . . . (c) stated as an issue or legal conclusion”); Walker, 2009 WL 1241929, at *3 (“If the fact stated is true, admit it. If the fact is legitimately disputed, then say why, cite the evidence that supports the denial, and stop.”)

EcoVest also disputes the materiality of this fact based solely on counsel's unsupported legal argument that “the sales comparison approach does not impact the accuracy of the Subdivision Development Method/DCF analysis.” A response to a statement of fact is not the place for EcoVest's counsel to present their legal theories. Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of material facts is not an opportunity to write another brief.”). Moreover, Clark's knowledge and application of the sales comparison approach bears directly on whether he applied the correct definition of fair market value, which is the heart of this motion. This is because in his appraisals, Clark repeatedly concluded, “no comparable development parcels existed.” See US SUMF ¶¶ 102, 103. Clark's effort to look for fully-developed parcels instead of vacant land with similar development potential bears directly on whether he valued the properties as if they were fully constructed, and whether he correctly applied the definition of fair market value in the Treasury regulations.

US Statement No. 102:

102. In 42 of the conservation easement appraisals that Clark prepared to substantiate a tax deduction for an EcoVest Project, he stated that he was unable to find development parcels similar to the real property at issue in the appraisal.¹⁰²

EcoVest's Response: Disputed to the extent that this factual assertion implies that the only substantiation for the non-cash charitable donations of conservation easements were the appraisals prepared by Clark. Further, Clark's appraisals state that their purpose is “estimating the fair market value of an easement,” not to substantiate a tax deduction. See ECF No. 349-87, Aberg Decl., Ex. 1399, at ii, Column H. It is further disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. The cited evidence does not support this factual assertion. See supra, Response ¶ 5. Disputed as to materiality. The existence of comparable sales does not impact the accuracy of the Subdivision Development Method/DCF analysis used by Clark in his appraisals.

US Reply: EcoVest failed to genuinely dispute this fact because it completely failed to address it. Instead, EcoVest (1) argued unnecessarily about what the fact may “imply,” (2) put forward their oft repeated (and false) contention that the appraisals were not prepared for tax purposes (see Reply to US SUMF ¶ 62), and (3) advanced the speculative and nonsensical argument that its transaction may not have resulted in tax deductions claimed by investors. This unresponsive, meandering content violates this Court's Local Rules, and utterly fails to show any genuine dispute of material fact. Moreover, Clark's application of the sales comparison approach bears directly on whether he applied the correct definition of fair market value, which is the heart of this motion. This is because in his appraisals, Clark repeatedly concluded, “no comparable development parcels existed.” See US SUMF ¶¶ 102, 103. Clark's effort to look for fully-developed parcels instead of vacant land with similar development potential bears directly on whether he valued the properties as if they were fully constructed, and whether he correctly applied the definition of fair market value in the Treasury regulations.

US Statement No. 103:

103. In the appraisal he prepared for the Birkdale Landing project, Clark stated that he “made a search for development parcels similar to the Subject Property” and that he “was not able to find any in the normal course of business:”¹⁰³

EcoVest's Response: Disputed as to materiality. The existence of comparable sales does not impact the accuracy of the Subdivision Development Method/DCF analysis used by Clark in his appraisals.

US Reply: EcoVest does not dispute the substance of this fact; it is undisputed. Regarding materiality, Clark's application of the sales comparison approach bears directly on whether he applied the correct definition of fair market value, which is the heart of this motion. This is because in his appraisals, Clark repeatedly concluded, “no comparable development parcels existed.” See US SUMF ¶¶ 102, 103. Clark's effort to look for fully-developed parcels instead of vacant land with similar development potential bears directly on whether he valued the properties as if they were fully constructed, and whether he correctly applied the definition of fair market value in the Treasury regulations.

US Statement No. 104:

104. On the date of the appraisal that Clark prepared for the Birkdale Landing project, the subject property was vacant land and contained no on-site improvements.¹⁰⁴

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 105:

105. In attempting to locate sales of property comparable to the Birkdale Landing property, Clark did not look for sales of vacant land with similar development potential but, instead, he looked for sales of fully developed properties:¹⁰⁵

EcoVest's Response: Disputed as to materiality. The application of the Subdivision Development Method that Clark applied in connection with the EcoVest Offerings does not rely on and does not require the identification of comparable properties to the subject property. See supra, Response ¶ 76.

US Reply: EcoVest does not dispute the substance of this fact; it is undisputed.

Regarding materiality, Clark's application of the sales comparison approach bears directly on whether he applied the correct definition of fair market value, which is the heart of this motion. This is because in his appraisals, Clark repeatedly concluded, “no comparable development parcels existed.” See US SUMF ¶¶ 102, 103. Clark's effort to look for fully-developed parcels instead of vacant land with similar development potential bears directly on whether he valued the properties as if they were fully constructed, and whether he correctly applied the definition of fair market value in the Treasury regulations.

US Statement No. 106:

106. On the date of the appraisal that Clark prepared for the Waterway Grove project, the subject property was vacant land and contained no on-site improvements.¹⁰⁶

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 107:

107. In attempting to locate sales of property comparable to the Waterway Grove property, Clark did not look for sales of vacant land with similar development potential but, instead, he looked for sales of fully developed properties:¹⁰⁷

EcoVest's Response: Disputed as to materiality. The application of the Subdivision Development Method that Clark applied in connection with the EcoVest Offerings does not rely on and does not require the identification of comparable properties to the subject property. See supra, Response ¶ 76.

US Reply: EcoVest does not dispute the substance of this fact; it is undisputed.

Regarding materiality, Clark's application of the sales comparison approach bears directly on whether he applied the correct definition of fair market value, which is the heart of this motion. This is because in his appraisals, Clark repeatedly concluded, “no comparable development parcels existed.” See US SUMF ¶¶ 102, 103. Clark's effort to look for fully-developed parcels instead of vacant land with similar development potential bears directly on whether he valued the properties as if they were fully constructed, and whether he correctly applied the definition of fair market value in the Treasury regulations.

US Statement No. 108:

108. On the date of the appraisal that Clark prepared for the Belle Harbor project, the subject property was vacant land and contained no on-site improvements.¹⁰⁸

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 109:

109. In attempting to locate sales of property comparable to the Belle Harbor property, Clark did not look for sales of vacant land with similar development potential but instead, he looked for sales of fully developed resort-style multi-family developments:¹⁰⁹

EcoVest's Response: Disputed as to materiality. The application of the Subdivision Development Method that Clark applied in connection with the EcoVest Offerings does not rely on and does not require the identification of comparable properties to the subject property. See supra, Response ¶ 76.

US Reply: EcoVest does not dispute the substance of this fact; it is undisputed.

Regarding materiality, Clark's application of the sales comparison approach bears directly on whether he applied the correct definition of fair market value, which is the heart of this motion. This is because in his appraisals, Clark repeatedly concluded, “no comparable development parcels existed.” See US SUMF ¶¶ 102, 103. Clark's effort to look for fully-developed parcels instead of vacant land with similar development potential bears directly on whether he valued the properties as if they were fully constructed, and whether he correctly applied the definition of fair market value in the Treasury regulations.

US Statement No. 110:

110. On the date of the appraisal that Clark prepared for the Myrtle West project, the subject property was vacant land and contained no on-site improvements.¹¹⁰

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 111:

111. In attempting to locate sales of property comparable to the Myrtle West property, Clark looked for sales of developed properties:¹¹¹

EcoVest's Response: Disputed as to materiality. The application of the Subdivision Development Method that Clark applied in connection with the EcoVest Offerings does not rely on and does not require the identification of comparable properties to the subject property. See supra, Response ¶ 76.

US Reply: EcoVest does not dispute the substance of this fact; it is undisputed.

Regarding materiality, Clark's application of the sales comparison approach bears directly on whether he applied the correct definition of fair market value, which is the heart of this motion. This is because in his appraisals, Clark repeatedly concluded, “no comparable development parcels existed.” See US SUMF ¶¶ 102, 103. Clark's effort to look for fully-developed parcels instead of vacant land with similar development potential bears directly on whether he valued the properties as if they were fully constructed, and whether he correctly applied the definition of fair market value in the Treasury regulations.

E. The EcoVest Defendants endorse and explain Clark's before-value methodology

US Statement No. 112:

112. EcoVest's consultant Larry Kohler wrote a memo to Solon, Teal, and McCullough (among others) stating that the “before value” for EcoVest Projects was supported by an “'as built' Development Model.”¹¹²

EcoVest's Response: Disputed as to materiality. First, there is no foundation provided for the cited memorandum. Kohler's memorandum states that he is “express[ing] his thoughts,” but there is no foundation in the document — and Plaintiff has provided no other foundation — that Kohler's thoughts were solicited by EcoVest, that his thoughts were adopted by EcoVest or its officers, or that Kohler was qualified to opine on appraisal methodology. Indeed, Plaintiff has not established that Kohler has relevant experience or expertise in conservation easement appraisal methodology. Moreover, the cited evidence was drafted in 2014 and does not refer to a specific EcoVest Offering. Any suggestion that Kohler's statement applies to all the EcoVest Offerings is unsupported by the evidence. Moreover, this factual assertion is further disputed as to materiality because an “as built” development model is consistent with the subdivision development method applied by Clark to value the EcoVest Offerings. See supra, Response ¶ 76. Undisputed that Mr. Kohler wrote a memo to Mr. Solon, Mr. Teal, and Mr. McCullough stating that the “before value” is “supported” by “Supply and Demand Research, Feasibility, Land Planning, Hard Costs Estimates, IRS and Appraisal institute Standards & Practices, and an actual 'as built' Development Model.”

US Reply: As evidenced by the response, it is undisputed that Kohler wrote the memorandum cited in support of US SUMF ¶ 112, that it was directed to Solon, Teal, and McCullough, and that it included the language quoted in the above fact. Thus, US SUMF ¶ 112 is undisputed.

EcoVest's injection of a lengthy and argumentative narrative before ultimately admitting the stated fact does not show a genuine dispute and violates this Court's Local Rules. See Walker, 2009 WL 1241929, at *3; West, 2017 WL 5339994, at *1. EcoVest speculatively asserts that the cited document does not show that Kohler has a “foundation” for speaking about EcoVest's business. This assertion is frivolous, as Kohler's role as a consultant with EcoVest is well-established by other documents in the record. See Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record). For example, Adam Lloyd (EcoVest's Chief Financial Officer) explained Kohler's role at his deposition:

ECF No. 371-29 at 165:7-23.

EcoVest's dispute regarding this fact's materiality is tied to their counsel's unsupported argument that “an 'as built' development model is consistent with the subdivision development method applied by Clark.” But EcoVest's counsel is missing the point. The memorandum described in US SUMF ¶ 112 is material because it goes directly to whether EcoVest's executives and employees (including, among other, Solon, Teal, and McCullough) knew or should have known that Clark applied the “as built” hypothetical condition in his appraisals. That is, the memo (along with other evidence submitted in support of the United States' motion) reveals that EcoVest knew Clark's appraisals valued something other than the unimproved land that was the subject of their transactions.

US Statement No. 113:

113. EcoVest, through its attorneys, takes the position that the before-value determined for a conservation easement appraisal is “what the value of the land would be if it were in its highest and best use state” before the easement is placed:¹¹³

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest, through its attorneys, takes the position that a determination of the before-value for a conservation easement appraisal is “what the value of the land would be in its highest and best use state.” First, the cited document is part of a submission made to the IRS on behalf of Arcadian Quay, LLC, not EcoVest. Second, the cited passage is a high level description of the subdivision development method which Clark applied in his appraisals of the EcoVest Offerings. See supra, Response ¶ 76.

US Reply: This fact is not genuinely disputed. EcoVest's first point is frivolous. Arcadian Quay, LLC, is one of the many partnership entities that EcoVest organized to facilitate its conservation easement deals. EcoVest indirectly serves as the tax matters partner for Arcadian Quay, LLC (i.e., a representative of Arcadian Quay for tax purposes) as shown in the below “Power of Attorney” document, which is signed by McCullough.

ECF No. 349-62, Ex. 1401 at 116-117; see also ECF No. 349-38, Ex. 1375 at 6; ECF No. 372-44.

EcoVest's second point is simply counsel's argument, which fails to demonstrate any genuine dispute regarding this properly supported fact. See Hester, 798 Fed. Appx. at 456; Khan, 879 F.3d at 846; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3. Indeed, by equating the statement in the IRS submission with the method that Clark applied, EcoVest merely confirms that Clark's methodology values the vacant properties as if each had achieved its proposed highest and best use. In other words, as the United States argues in its motion, Clark valued the properties as if they were fully constructed, and he incorrectly applied the definition of fair market value in the Treasury regulations.

US Statement No. 114:

114. EcoVest, through its attorneys, takes the position that a determination of the before-value for a conservation easement appraisal “must assume the property is in its highest and best use state:”¹¹⁴

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest, through its attorneys, takes the position that a determination of the before-value for a conservation easement appraisal “must assume the property in its highest and best use state.” First, the cited document is part of a submission made to the IRS on behalf of Arcadian Quay, LLC, not EcoVest. Second, the cited passage is a high level description of the subdivision development method which Clark applied in his appraisals of the EcoVest Offerings. See supra, Response ¶ 76.

US Reply: This fact is not genuinely disputed. As explained in the United States' Reply to US SUMF ¶ 113 above, EcoVest's first point here is frivolous. Arcadian Quay, LLC, is one of the partnership entities that EcoVest organized to facilitate its conservation easement deals. EcoVest indirectly serves as the tax matters partner for Arcadian Quay, LLC (i.e., a representative of Arcadian Quay for tax purposes) as shown in the below “Power of Attorney” document, which is signed by McCullough.

ECF No. 349-62, Ex. 1401 at 116-117; see also ECF No. 349-38, Ex. 1375 at 6; ECF No. 372-44.

EcoVest's second point is simply counsel's argument, which fails to demonstrate any genuine dispute regarding this properly supported fact. See Hester, 798 Fed. Appx. at 456; Khan, 879 F.3d at 846; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3. Indeed, by equating the statement in the IRS submission with the method that Clark applied, EcoVest merely confirms that Clark's methodology values the vacant properties as if each had achieved its proposed highest and best use. In other words, as the United States argues in its motion, Clark valued the properties as if they were fully constructed, and he incorrectly applied the definition of fair market value in the Treasury regulations.

US Statement No. 115:

115. McCullough explained that he believed the before-value for a conservation easement appraisal is different than a “traditional fair market value appraisal.” He gave the following example to illustrate this point: if a landowner had a “traditional fair market value appraisal” stating his land was worth $1 million, and a developer believed he could buy the land for $1 million and build the product for $4 million and sell the product for $15 million, then the before-value would be $10 million ($15 million sales price minus $5 million in costs).¹¹⁵

EcoVest's Response: Disputed as to materiality. Mr. McCullough's description is entirely consistent with the Subdivision Development Method applied by Clark in his appraisals of the conservation easements at issue in the EcoVest Offerings. See supra, Response ¶ 76. Further, in the full transcript cited by Plaintiff, Mr. McCullough explained that a second qualified appraiser and counsel for EcoVest reviewed and approved the use of this method in Clark's appraisals. See Frodle Decl., Ex. 56, at 29:7-30:19.

US Reply: EcoVest also fails to show the fact is immaterial. Nor could they, since this fact goes directly to McCullough's knowledge that Clark's appraisals did not actually value the unimproved land involved in EcoVest's transactions and, thus, failed to comply with the required definition of fair market value (i.e., the willing buyer-willing seller standard). Whether Mr. McCullough knew or should have known that statements made in Clark's appraisals (and statements that he made to others about Clark's appraisals) were false or fraudulent is directly relevant in deciding whether he engaged in conduct subject to penalty under 26 U.S.C. § 6700, which is the subject of the United States' motion.

Moreover, by equating McCullough's explanation with the method that Clark applied, EcoVest merely confirms that Clark's methodology values the vacant properties as if each had achieved its proposed highest and best use. In other words, as the United States argues in its motion, Clark valued the properties as if they were fully constructed, and he incorrectly applied the definition of fair market value in the Treasury regulations.

IV. THE APPRAISALS AND STATEMENTS REGARDING THOSE APPRAISALS WERE DISTRIBUTED TO BROKER-DEALERS, FINANCIAL ADVISORS AND CUSTOMERS.

US Statement No. 116:

116. The conservation easement appraisals that Clark prepared to substantiate tax deductions for EcoVest Projects were addressed to EcoVest or its subsidiaries or agents.¹¹⁶

EcoVest's Response: Disputed. The existence of an agency relationship is a legal conclusion and not a fact. Also, the cited evidence does not support the factual contention that most of the appraisals Clark prepared for the EcoVest Offerings at issue in this case were addressed to EcoVest or its subsidiaries or agents. Instead the majority of Clark's appraisals were addressed to the joint venture entities that owned the properties at issue in the EcoVest Offerings. These entities were not subsidiaries of EcoVest. Further disputed to the extent that this factual assertion implies that the only substantiation for the non-cash charitable donations of conservation easements related to EcoVest Offerings were the appraisals prepared by Clark. Further, Clark's appraisals state that their purpose is “estimating the fair market value of an easement,” not to substantiate a tax deduction. It is further disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. The cited evidence does not support this factual assertion. See supra, Response ¶ 5. Undisputed that for Carolina Bays, Long Bay Marina, Brunswick County, Hickory Preserve, Leland Forest, Dumpling Mountain, Meadow Creek, Rocky Creek Plantation, New River Preserve, Garden Lakes Estates, Coastavista Palms, Bellavista Grove, and Piney Cumberland were addressed to EcoVest's counsel. Further undisputed that Greenway Landing was addressed to Ralph Teal.

US Reply: It is undisputed that the 13 enumerated appraisals were addressed to EcoVest's counsel and that the Greenway Landing appraisal was addressed to Ralph Teal.

The remainder of EcoVest's response does not reveal any genuine dispute regarding US SUMF ¶ 116. While the United States has cited numerous pages in the record to support the asserted fact, EcoVest responds with nothing more than a naked denial and argument. Without more, this is insufficient to demonstrate any genuine dispute for summary judgment purposes. See Matsushita, 475 U.S. at 586 (explaining that, at summary judgment, “the opponent must do more than simply show that there is some metaphysical doubt as to the material facts.”); Hester, 798 Fed. Appx. at 456 (“[C]onclusory allegations and speculation are insufficient to create a genuine issue of material fact.”) (quotations omitted); Owens, 2021 WL 4286460, at *3 (“An issue is not genuine if it is unsupported by evidence.”).

Further, the trove of documents that EcoVest unilaterally submitted in response to the United States' motion directly contradicts their dispute. Specifically, EcoVest's filed a copy of each appraisal along with its opposition, and those appraisals show, in every case, that they are addressed to EcoVest, one of its employees, or another person or entity involved in implementing an EcoVest Project. See, e.g., ECF No. 373-29 at 2; ECF No. 373-41 at 2; CF No. 374-19 at 2. And EcoVest admits in its own Additional Statement of Facts in opposition to this motion that it retained the appraiser (i.e., Clark) to prepare the relevant appraisals:

ECF No. 365-2, ECV SAF, at ¶ 57.

US Statement No. 117:

117. EcoVest made Clark's appraisals available to the broker-dealers and to financial advisors that helped sell the transactions to customers:¹¹⁷

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that the financial advisors “helped” sell transactions to customers. Rather, the cited evidence demonstrates that the financial advisors “are the ones that are selling the deals to customers.” Undisputed that EcoVest made Clark's appraisals available to the broker-dealers and to financial advisors.

US Reply: As evidenced by the response, it is undisputed that EcoVest made Clark's appraisals available to broker-dealers and financial advisors who sold the EcoVest deals to customers. EcoVest's purported dispute focuses on the word “helped,” which it apparently argues should not be read to imply that EcoVest sells its transactions directly to customers. But the fact that EcoVest was responsible for organizing and offering these transactions to customers (as their preferred terminology “EcoVest Offerings” suggests) is not seriously in dispute, see, e.g., US SUMF ¶¶ 15, 16; ECF No. 241 at 2; ECF No. 365-2 at ¶¶ 24-85; ECF No. 372-19, -59, and so the distinction that EcoVest's counsel attempts to draw by this argument is meaningless. Regardless of whether EcoVest directly sold interests in the projects that they organized to individual customers, they can be found to have engaged in penalty conduct under 26 U.S.C. § 6700. As such, any dispute raised here (if not frivolous) is not material for purposes of the United States' motion.

US Statement No. 118:

118. EcoVest made Clark's appraisals available to customers that invested in the transactions:¹¹⁸

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 119:

119. In communications sent to financial advisors and members, EcoVest identified Clark's appraisals as “Qualified Appraisal[s]:”¹¹⁹

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest identified Clark's conservation easement appraisals as “Qualified Appraisals” for the EcoVest Offerings. The cited evidence relates to only two of the 70 EcoVest Offerings, any inference that the purported fact applies to all EcoVest Offerings is unsupported. Further disputed to the extent this factual contention suggests that it was EcoVest that made the determination that Clark's appraisals were “Qualified Appraisals.” In the instances that EcoVest provided the statement that Clark's appraisals were “Qualified Appraisals” it was only after legal counsel reviewed Clark's appraisals and determined that they met the requirements under § 1.170A-16(d)(1)(ii) and (e)(1)(ii), to be “Qualified Appraisal.” See generally SAF § III.

US Reply: It is undisputed that for the two EcoVest projects referenced in the cited materials EcoVest referred to Clark's conservation easement appraisals as “Qualified Appraisals” in communications to customers and financial advisors. The improbable inference that EcoVest wishes this Court to draw — that it may not have made similar statements regarding the remaining 68 projects at issue — is not supported by even a single citation to the record. EcoVest's speculation and other efforts to inject “metaphysical doubt” about the material facts is not sufficient to demonstrate a genuine dispute where the United States has put forth a fact properly supported by evidence. Matsushita, 475 U.S. at 58; see Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Owens, 2021 WL 4286460, at *3 (“An issue is not genuine if it is unsupported by evidence.”) (citations omitted); Mosely, 2020 WL 7051351, at *4 (“'[G]enuine' factual issues must have a real basis in the record.”).

EcoVest's remaining purported “dispute” as to this fact — which centers on its false claim that EcoVest's counsel decided the appraisals were “qualified appraisals” — is nonresponsive. It simply sets forth EcoVest's “own version” of the facts, as well as improper legal argument, which is not sufficient to show a genuinely disputed fact and is also not permitted under this Court's Local Rules. Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of material facts is not an opportunity to write another brief.”).

As explained in the United States' Responses to EcoVest's Statement of Additional Facts, this assertion is unsupported by the factual evidence. See, e.g., Responses to SAF ¶¶ 59, 78, 105-136.

US Statement No. 120:

120. EcoVest prepared memoranda titled “Manager's Analysis” that were addressed to members in EcoVest Projects and identified Clark's conservation easement appraisals as “Qualified Appraisals.¹²⁰

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest identified Clark's conservation easement appraisals as “Qualified Appraisals” for the EcoVest Offerings. The cited evidence refers to four of the 70 EcoVest Offerings. Any inference that this applies to the EcoVest Offerings is not supported by the cited evidence.

US Reply: This fact is undisputed for four of the 70 EcoVest projects that are the subject of United States' motion. And EcoVest has not provided a shred of evidence to support the inference that it did not make similar statements regarding the remaining 66 projects at issue. EcoVest's improbable speculation on this point is not sufficient to demonstrate a genuine dispute. Where the moving party has properly supported its summary judgment motion with citations to evidence in the record, the nonmovant must do more than simply cast some “metaphysical doubt” as to the material facts. Matsushita, 475 U.S. at 58; see Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Owens, 2021 WL 4286460, at *3 (“An issue is not genuine if it is unsupported by evidence.”) (citations omitted); Mosely, 2020 WL 7051351, at *4 (“'[G]enuine' factual issues must have a real basis in the record.”).

Further, EcoVest consistently referred to Clark's appraisals as “qualified appraisals.” See, e.g., ECV SAF 301, 302 (showing that EcoVest admits — for its own purposes — that it repeatedly called Clark's appraisals “qualified appraisals” in the PPMs); ECF Nos. 372-1 through -69; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record).

US Statement No. 121:

121. EcoVest's Manager's Analyses identified “Conservation Option Return Calculators” as an “Additional Resource” available to members in the project.¹²¹

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest's Manager's Analyses identified “Conservation Option Return Calculators” as an “Additional Resource” available to members in the EcoVest Offerings. Specifically, the cited evidence refers only to four of the 70 EcoVest Offerings, any inference that the above statement applies to all EcoVest Offerings is unsupported. Undisputed that the four exhibits referenced are documents titled “Manager's Analyses” that include a section titled “Additional Resources,” within which is a reference to a Conservation Option Return Calculator.

US Reply: This fact is undisputed for four of the 70 EcoVest projects that are the subject of United States' motion. Again, EcoVest has not provided a shred of evidence to support the inference that it did not make similar statements regarding the remaining 66 projects at issue. EcoVest's speculation on this point is not sufficient to demonstrate a genuine dispute. Where the moving party has properly supported its summary judgment motion with citations to evidence in the record, the nonmovant must do more than simply cast some “metaphysical doubt” as to the material facts. Matsushita, 475 U.S. at 58; see Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Owens, 2021 WL 4286460, at *3 (“An issue is not genuine if it is unsupported by evidence.”) (citations omitted); Mosely, 2020 WL 7051351, at *4 (“'[G]enuine' factual issues must have a real basis in the record.”).

Further, EcoVest consistently referred to Clark's appraisals as “qualified appraisals.” See, e.g., ECV SAF 301, 302 (showing that EcoVest admits — for its own purposes — that it repeatedly called Clark's appraisals “qualified appraisals” in the PPMs); ECF Nos. 372-1 through -69; see also Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record).

US Statement No. 122:

122. EcoVest's “Conservation Option Return Calculators” identified Clark's appraisals as “Qualified Appraisals.”¹²²

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest's “Conservation Option Return Calculators” identified Clark's appraisals as “Qualified Appraisals.” The cited relevance relates to only five of the 70 EcoVest Offerings, any inference that the purported fact applies to all 70 EcoVest Offerings is unsupported. Further disputed to the extent this factual contention suggests that it was EcoVest that made the determination that Clark's appraisals were “Qualified Appraisals.” In the instances that EcoVest provided the statement that Clark's appraisals were “Qualified Appraisals” it was only after legal counsel reviewed Clark's appraisals and determined that they met the requirements under § 1.170A-16(d)(1)(ii) and (e)(1)(ii), to be “Qualified Appraisal.” See generally SAF § III.

US Reply: It is undisputed that for five of the 70 EcoVest projects at issue in the United States' partial summary judgment motion, EcoVest referred to Clark's conservation easement appraisals as “Qualified Appraisals” in the Conservation Option Return Calculators. The improbable inference that EcoVest wishes this Court to draw — that it may not have made similar statements regarding the remaining 65 projects at issue — is not supported by any evidence. EcoVest's speculation and other efforts to inject “metaphysical doubt” about the material facts is not sufficient to demonstrate a genuine dispute for summary judgment purposes. Matsushita, 475 U.S. at 58; see Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Owens, 2021 WL 4286460, at *3 (“An issue is not genuine if it is unsupported by evidence.”) (citations omitted); Mosely, 2020 WL 7051351, at *4 (“'[G]enuine' factual issues must have a real basis in the record.”).

EcoVest's remaining purported “dispute” as to this fact — which centers on its false claim that EcoVest's counsel decided the appraisals were “qualified appraisals” — is nonresponsive (and irrelevant). It only sets forth EcoVest's “own version” of the facts, as well as improper legal argument, which is not sufficient to show a genuinely disputed fact and is also not permitted under this Court's Local Rules. Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of material facts is not an opportunity to write another brief.”).

US Statement No. 123:

123. EcoVest prepared offering memoranda (such as a PPM) for 69 of the 70 EcoVest Projects for which Clark prepared conservation easement appraisals.¹²³

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest prepared offering memoranda (such as a PPM) for 69 of the 70 EcoVest Offerings for which Clark prepared conservation easement appraisals. The cited evidence does not contain an identification of the party preparing the document. Moreover, the PPMs were largely prepared by EcoVest's legal advisors. See, e.g., SAF ¶¶ 106, 112, 119, 123.

US Reply: EcoVest's response does not set forth any genuine or material dispute of fact. Regardless of whether an EcoVest employee or an attorney acting at EcoVest's direction physically typed the PPMs, it is undisputed that EcoVest caused those documents to be prepared for projects that it sponsored and managed.

Further, the plethora of documents that EcoVest unilaterally submitted in response to the United States' motion directly contradicts its dispute. Contrary to EcoVest's assertion that the cited documents “do[ ] not contain an identification of the party preparing them,” EcoVest's name is displayed prominently on the front page of each the offering memoranda. See, e.g., ECF No. 372-24, Ex. 189, Private Placement Memorandum for Carolina Bays Resort, at 1; ECF No. 372-25, Ex. 190 Private Placement Memorandum for Long Bay Marina, at 1; ECF No. 372-26, Ex. 191, Private Placement Memorandum for Azalea Bay Resort, at 1. “[S]ome metaphysical doubt” as to which EcoVest employee or agent prepared the PPM is not sufficient to demonstrate a genuine dispute for summary judgment purposes. Matsushita, 475 U.S. at 586.

US Statement No. 124:

124. EcoVest's PPMs contained disclosures regarding the EcoVest Projects.¹²⁴

EcoVest's Response: Undisputed. See generally SAF § XI (detailing disclosures).

US Reply: Undisputed.

US Statement No. 125:

125. EcoVest provided PPMs to broker-dealers, and the PPMs were distributed to financial advisors and customers:¹²⁵

EcoVest's Response: Disputed. The cited evidence does not support the purported fact that EcoVest provided PPMs to broker-dealers. First, the cited Declaration of Virginia Brown (“Brown Decl. I”), addresses projects on which CRI consulted, but did not sponsor. See ECF No. 333-3, ¶ 6. The cited paragraph therefore does not relate to EcoVest. Second, Brown Decl. I addresses projects for which EcoVest served in only a consulting role. See id. ¶¶ 36-37. Paragraph 37 states that a “PPM was released to SFA, the broker dealer for such offerings.” The paragraph does not assign responsibility for distribution of the PPM to EcoVest as EcoVest was a consultant during that time period, not a sponsor. Third, Brown Decl. I states that for projects in which EcoVest served as a sponsor, “EcoVest Capital released the PPM to its managing broker dealer, who would in the managing broker dealer's own discretion, provide the PPM to broker dealers with whom the managing broker dealer had a selling agreement.” Id. ¶ 55. Thus, at most, EcoVest “released” PPMs to a managing broker dealer” but not to the downstream broker-dealers or financial advisors. Fourth, the deposition testimony of Adam Lloyd does not identify EcoVest as providing the PPMs to broker dealers or financial advisors, only that those parties received them. Lastly, ECF No. 349-75 is an example of how a PPM was released to the managing broker dealer (Arque Capital). See ECF No. 349-75, Aberg Decl., Ex. 1414, Email from Pat McQueen dated December 10, 2014). It does not demonstrate that EcoVest provided the PPM to downstream broker dealers.

US Reply: US SUMF ¶ 125 is not genuinely disputed, and any dispute that may be shown by the above response is not material. Imbedded within EcoVest's lengthy narrative response is an admission that EcoVest provided (“released”) PPMs to managing broker-dealers, who provided them to other broker-dealers, and that financial advisors and customers ultimately received them. EcoVest's parsimonious reading of its own employee's declaration, without more, is not sufficient to demonstrate any genuine dispute with respect to the United States' fact, which is supported by evidence. Matsushita, 475 U.S. at 586 (explaining that, at summary judgment, “the opponent must do more than simply show that there is some metaphysical doubt as to the material facts.”); Owens, 2021 WL 4286460, at *3 (“An issue is not genuine if it is unsupported by evidence.”) (citations omitted); Mosely, 2020 WL 7051351, at *4 (“'[G]enuine' factual issues must have a real basis in the record.”).

Moreover, it is not material whether EcoVest directly or indirectly provided those PPMs to downstream broker-dealers, financial advisors, and customers. Section 6700 penalty conduct may encompass statements that EcoVest made, statements that EcoVest caused others to make, statements that EcoVest furnished, and statements that EcoVest caused others to furnish. At bottom then, any dispute about the exact chain of distribution after EcoVest “released” the PPMs for its sponsored projects (if it is not frivolous) is irrelevant for purposes of ruling on the United States' partial summary judgment motion.

US Statement No. 126:

126. EcoVest employees sent PPMs.¹²⁶

EcoVest's Response: Disputed as to materiality. It is immaterial to the allegations set forth in the Amended Complaint and Plaintiff's Motion for Summary Judgment whether EcoVest “employees sent PPMs.” Further disputed because the cited evidence does not support the assertion that for the EcoVest Offerings, EcoVest employees sent PPMs. To the contrary, EcoVest did not routinely provide PPMs. PPMs were provided by EcoVest's broker-dealers. See ECF No. 349-27 at 1 (Aberg Decl., Ex. 1363, Email from McCullough dated Dec. 15, 2017) (PPMs “will come from Triloma Securities” not EcoVest); see also supra, Response ¶ 25. Undisputed that EcoVest employees drafted emails in which PPMs were attached.

US Reply: EcoVest does not actually dispute the substance of US SUMF ¶ 126 — it is undisputed that EcoVest employees “drafted emails in which PPMs were attached.” The evidence cited in support of the fact also shows those emails were sent. Thus, US SUMF ¶ 126 is undisputed.

EcoVest is wrong that this fact is not material. Whether EcoVest made statements, furnished statements, or caused another person to make or furnish statements is directly relevant to whether EcoVest engaged in conduct subject to penalty under 26 U.S.C. § 6700.

Finaly, EcoVest's argument about the regularity with which EcoVest employees emailed PPMs is nonresponsive improper argument, which violates this Court's Local Rules. See Walker, 2009 WL 1241929, at *3 (concluding that plaintiff's responses to statement of undisputed facts failed to conform with L.R. 56.1 because (in part) “[m]any of the responses do not expressly state whether Plaintiff admits or denies the statements contained in DSMF, but instead simply contain Plaintiff's own version of the facts”)

US Statement No. 127:

127. The PPMs prepared and distributed for EcoVest projects stated that a “qualified appraisal” would be obtained prior to the donation of the conservation easement. For example, the PPM for the Azalea Bay Resort project stated:¹²⁷

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that for all EcoVest Offerings the PPMs prepared and distributed stated that a “qualified appraisal” would be obtained prior to the donation of the conservation easement. To the contrary, the cited evidence is only a single example of a PPM in which this language is reflected. Moreover, each of the PPMs for the EcoVest Offerings contained language stating that, “The determination of whether an appraisal or an appraiser are 'qualified' for purposes of the Code . . . involve subjective determinations which pose risks to the Property entity and the Company. . . . Accordingly, there can be no assurance that a valuation penalty will not be applied to tan investor in connection with any valuation adjustment that may be made by the IRS against the Property Entity and the Company.” See Frodle Decl., Ex. 91, PPM Summary Exhibit, Column E.

US Reply: EcoVest does not dispute that the language supporting US SUMF ¶ 127 appears in the PPM cited. EcoVest's speculative argument that this fact is “disputed” because the cited language may not appear in other PPMs fails to raise a genuine dispute, because it is flatly refuted by EcoVest's own evidence. The same language appears in other PPMs, which EcoVest has filed with the Court. See, e.g., ECF No. 372-24, Ex. 189, Private Placement Memorandum for Carolina Bays Resort, at 1; ECF No. 372-25, Ex. 190 Private Placement Memorandum for Long Bay Marina, at 1; ECF No. 372-26, Ex. 191, Private Placement Memorandum for Azalea Bay Resort, at 1. See Khan, 879 F.3d at 846 (“A party cannot create a dispute of material fact simply by spewing 'unsupported ipse dixit [that] is flatly refuted by the hard evidence proffered by' the opposing party.”); Mosely, 2020 WL 7051351, at *4 (“'[G]enuine' factual issues must have a real basis in the record.”).

EcoVest gratuitously inserts certain “disclaimer” language set forth in the PPMs into its response. This information is nonresponsive to the fact stated. It is also completely immaterial to the issues presented by the United States' partial summary judgment motion. Disclaimers like the one EcoVest has cited here — i.e., that the advertised tax benefits might not ultimately materialize or could be taken away under IRS scrutiny — do not excuse the promoter from conduct subject to the penalty under 26 U.S.C. § 6700. See United States v. Schulz, 529 F. Supp. 2d 341, 351 (N.D.N.Y. 2007) (finding promoter's disclaimer regarding tax risk “irrelevant” for purposes of § 6700 liability); United States v. Alexander, 2010 WL 1643425, at *6 (D.S.C. 2010) (“As to the Defendant's disclaimer that his customers should conduct their own research, courts have long rejected such disclaimers when the materials claim to be based on legal content and directly cite legal authority.”) Here, moreover, these types of disclaimers — and other prophylactic measures that the EcoVest Defendants apparently took in promoting their conservation easement transactions — only go to show that they knew or should have known that Clark's appraisals contained material false statements.

V. ECOVEST ALLOCATED TAX BENEFITS TO PARTICIPATING INVESTORS AS A RESULT OF THE ECOVEST PROJECTS.

US Statement No. 128:

128. Manager's Analyses prepared for EcoVest Projects stated the expected tax benefit members would receive from the donation of a conservation easement “based on the Appraisal:”¹²⁸

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that there is an “expected tax benefit.” Such language it not sued in the cited evidence nor can it be inferred. Moreover, the cited evidence explicitly states that, “Each member should consult with his, her, or its financial advisor and/or tax professional in order to determine the potential return on his, her, or its investment resulting from the charitable contribution deduction should the conservation option be selected. The manager is not a tax advisor and nothing contained within this document should be considered as tax advice.” See ECF No. 349-25 at 5 (Aberg Decl., Ex. 1182, Manager's Analysis for Myrtle West Resort project). Further, the PPMs provided to investors stated that “no tax advice is being provided herein. Tax consequences associated with an investment in the units will vary with your individual circumstances, and you are urged to consult with your own tax advisor with respect to an investment in the units and various risk factors associated therewith.” See Frodle Decl., Ex. 203, Myrtle West Resort PPM (ECOVEST-DOJ_0045812), at -826. The PPMs further disclose that “there are significant changes in the federal tax laws governing conservation easements that in recent years have been under discussion in Congress that, if enacted, could significantly reduce or eliminated the expected tax benefit of a conservation easement. In the event that the conservation easement is donated, there can be no assurance that such new tax laws adversely affecting the Property Entity and the Company will not be enacted with an effective date prior to the date of such donation.” Id. at -840. Finally, the PPMs also stated that “you should assume that the IRS will audit the company's tax return, and that such an audit could result in the loss of some or all of the tax benefits anticipated to be derived form [sic] an investment in the company . . . Accordingly, you should review carefully the tax risks described in this PPM and you are urged to consult with and rely upon your own personal tax advisors with respect to the tax consequences arising from the purchase of the units before making a decision to invest in the company.” Id. at -880. The Manager's Analyses must be interpreted in the context of these disclosures. Finally, the cited evidence relates to only four of the 70 EcoVest Offerings, there is no indication or cited evidence that similar language is present in all EcoVest Offerings.

US Reply: There is no dispute that the Managers Analyses cited in support of the above fact stated that “based on the appraisal, it is expected that Members would receive a charitable contribution deduction in an amount approximately 4.11 times their gross investment.” Thus, US SUMF ¶ 128 is not genuinely disputed, since EcoVest's response only sets forth arguments about, inter alia, how the Court should parse that statement, and how the statement “must be interpreted in context.” See Hester, 798 Fed. Appx. at 456; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4; Walker, 2009 WL 1241929, at *3 (“[A] response to a statement of material facts is not an opportunity to write another brief.”). The now well-worn assertion that the cited evidence relates to only some (but not all) EcoVest Offerings likewise fails to demonstrate a genuine dispute. At best, it is EcoVest's unvarnished speculation that there may be some “metaphysical doubt” about the facts, but this is insufficient to rebut a properly supported fact set forth in support of a summary judgment motion. Matsushita, 475 U.S. at 586; Mosely, 2020 WL 7051351, at *4 (“'[G]enuine' factual issues must have a real basis in the record.”).

EcoVest's lengthy recitation of the disclaimer language in its offering documents is immaterial to the issues presented by the United States' partial summary judgment motion. Disclaimers like the ones that EcoVest has cited here — i.e., that the advertised tax benefits might not ultimately materialize or could be taken away under IRS scrutiny — do not excuse the promoter from conduct subject to the penalty under 26 U.S.C. § 6700. See United States v. Schulz, 529 F. Supp. 2d 341, 351 (N.D.N.Y. 2007) (finding promoter's disclaimer regarding tax risk “irrelevant” for purposes of § 6700 liability); United States v. Alexander, 2010 WL 1643425, at *6 (D.S.C. 2010) (“As to the Defendant's disclaimer that his customers should conduct their own research, courts have long rejected such disclaimers when the materials claim to be based on legal content and directly cite legal authority.”). Here, moreover, these type of disclaimers — and other extreme prophylactic measures that the EcoVest Defendants apparently took in promoting their conservation easement transactions — only go to show that they knew or should have known that Clark's appraisals contained material false statements.

US Statement No. 129:

129. EcoVest's Conservation Option Return Calculators calculated the “Charitable Deduction Value per Unit” based on the deduction value set forth in Clark's appraisals:¹²⁹

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that EcoVest's Conservation Option Return Calculators calculated the “Charitable Deduction Value per Unit” based on the deduction value set forth in Clark's appraisals. In letters sent to Financial Advisor's EcoVest explicitly disclosed the purpose of the conservation option return calculators and their significance. For example, in connection with Azalea Bay Resort, EcoVest stated, “This attachment is being provided to illustrate the Conservation and Cash Donation Values per PPM unit utilizing information included on both the Partnership tax returns and other documentation provided by independent third parties. Neither EcoVest Capitol [sic], Inc., Azalea Bay Management, LLC, nor Azalea Bay Resort Holdings, LLC are certified public accountants and therefore do not render tax counsel or advice. No assurances can be given that the conclusions reached herein will be sustained by judicial review, and the Attachment has no binding effect or official status. As the general treatment of this investment and resulting tax attributes may vary depending on the individual investor's tax situation, each Member should seek advice from an independent tax advisor.” See ECF No. 249-34, Attachment A (Aberg Decl., Ex. 1371, Letter from McCullough dated March 17, 2016). Finally, the cited evidence relates to only five of the 70 EcoVest Offerings, any inference that the same language is present in the EcoVest Offerings is unsupported by the cited evidence.

US Reply: US SUMF ¶ 129 is not genuinely disputed. In effect, the response contains only EcoVest's naked denial unsupported by citation to record evidence, plus certain arguments that do not relate to the fact stated. EcoVest's assertion that the cited evidence relates to only some (but not all) EcoVest Offerings does no more that raise some “metaphysical doubt,” which is insufficient to refute a properly supported fact set forth in support of a summary judgment motion. Matsushita, 475 U.S. at 586; Mosely, 2020 WL 7051351, at *4 (“'[G]enuine' factual issues must have a real basis in the record.”).

EcoVest's lengthy recitation of the disclaimer language in its offering documents is immaterial to the issues presented by the United States' partial summary judgment motion. Disclaimers like the ones that EcoVest has cited here — e.g., that the advertised tax benefits might not ultimately materialize or could be taken away under IRS scrutiny — do not excuse the promoter from conduct subject to the penalty under 26 U.S.C. § 6700. See United States v. Schulz, 529 F. Supp. 2d 341, 351 (N.D.N.Y. 2007) (finding promoter's disclaimer regarding tax risk “irrelevant” for purposes of § 6700 liability); United States v. Alexander, 2010 WL 1643425, at *6 (D.S.C. 2010) (“As to the Defendant's disclaimer that his customers should conduct their own research, courts have long rejected such disclaimers when the materials claim to be based on legal content and directly cite legal authority.”). Here, moreover, these type of disclaimers — and other prophylactic measures that the EcoVest Defendants claim they took in promoting their conservation easement transactions — only go to show that they knew or should have known that Clark's appraisals contained material false statements.

US Statement No. 130:

130. In an email dated September 26, 2018, Solon stated “a max of 60%” offset to AGI was the most an investor could achieve from one of the EcoVest Projects:¹³⁰

EcoVest's Response: Disputed. The cited evidence does not support the factual contention that Mr. Solon was claiming that 60% was the maximum offset to AGI that an investor could achieve from one of the EcoVest Offerings. Rather, the cited evidence refers to an email in which Mr. Solon states “50% for non-cash charitable deduction plus an additional 10% for cash donations to a max of 60%.” It is not clear how this language supports the purported fact that Mr. Solon was claiming that 60% was the maximum offset to AGI that an investor could achieve from one of the EcoVest Offerings. Moreover, the subject line of the referenced email identifies a particular investor, whereas the purported fact suggests that this amount is the maximum that any investor in any EcoVest Offering could achieve.

US Reply: EcoVest does not deny the authenticity of the Solon's email or its contents — it simply argues about what the email might mean. Tellingly, EcoVest has not offered a shred of evidence to support its interpretation. Quibbling that “it is not clear how” the cited materials support the fact is no substitute for evidence or specific facts rebutting it. In short, the response does not offer a genuine dispute as to this fact. See Hester, 798 Fed. Appx. at 456; Wiest, 812 F.3d at 330; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4.

Even assuming for purposes of this Reply that the email only pertains to a specific investor, that limitation is immaterial. The email highlights one example of EcoVest's communications to investors about the tax benefits associated with its transactions. Other examples abound in the record, including similar representations about the amount and availability of tax deductions (50% AGI limitation on non-cash contributions) set forth in the PPMs. See ECF Nos. 372-1 through 372-69, Private Placement Memoranda for EcoVest Offerings.

US Statement No. 131:

131. On August 1, 2018, Michael Sievert of Exclusive Advisors LLC sent an email to his client Lester Jackson with the subject line “Ecovest Conservation Easement Deduction”:¹³¹

EcoVest's Response: Disputed as to materiality. There is no indication as to who Michael Sivert [sic] or Lester Jackson are, what relation they have to this case, who the “guy” referenced in the body of the email is, why this particular email (of the millions of pages of documents exchange in this case) has any relevance, or why the subject line in an email has any bearing on the nature of the allegations in the Amended Complaint, or the contentions set forth in Plaintiff's Motion for Summary Judgment. Undisputed that an email bearing the subject line “EcoVest Conservation Easement Deduction” was sent by Michael Sievert to Lester Jackson on August 1, 2018.

US Reply: It is undisputed that Michael Sievert sent this email on August 1, 2018. Thus, US SUMF ¶ 132 is undisputed. The context surrounding this email is shown in other evidence that has been filed with the Court. See Fed. R. Civ. P. 56(c)(3) (explaining that, for purposes of ruling on summary judgment, a district court need consider only the materials cited by the parties, but it may also consider other materials in the record). Specifically, Sievert was a financial advisor who sold EcoVest's Offerings, and he arranged these types of meetings to discuss the deals with clients (including Lester Jackson) and their CPAs. See ECF No. 371-31 at 128:14-136:5.

Contrary to EcoVest's purported dispute, US SUMF ¶ 131 is material. It highlights how EcoVest's transactions were marketed and sold to potential customers for their purported tax benefits (i.e., as creating “[e]ssentially a 4 to 1 write off”), and those promoted tax benefits were tied to Clark's so-called “qualified appraisals.” Thus, this fact (and other facts about how EcoVest's transactions were marketed to and understood by customers) are relevant to establish that the false statements at issue in the United States' motion relate to a “material matter” within the meaning of 26 U.S.C. § 6700, i.e., one that “would have a substantial impact on the decision-making process of a reasonably prudent investor and include matters relevant to the availability of a tax benefit.” United States v. Campbell, 897 F.2d 1317, 1320 (5th Cir. 1990); see United States v. Estate Preservation Servs., 38 F. Supp. 2d 846, 855 (E.D. Cal. 1998), aff'd, 202 F.3d 1093 (9th Cir. 2000) (explaining that statements pertaining to the “availability of tax deductions, credits, or other mechanisms for reducing tax liability . . . clearly qualify as 'material'” under § 6700).

US Statement No. 132:

132. On November 4, 2016, Adam Lloyd (EcoVest's Chief Operating Officer) received an email from his accountant stating that, “After factoring in your other itemized deductions and assuming a 6 to 1 ratio for the conservation easement, the minimum amount you will want to invest in order to eliminate your remaining federal tax liability (liability after federal withholding), will be $50,000 which would generate a noncash charitable contribution of $300,000.”¹³²

EcoVest's Response: Disputed as to materiality. There is no indication as to what relationship Mr. Lloyd's accountant has to this case, why this particular email (of the millions of pages of documents exchanged in this case) has any relevance, or how the contents of this email has any bearing on the nature of the allegations in the Amended Complaint or the contentions set forth in Plaintiff's Motion for Summary Judgment. There is no indication that the reference to a “conservation easement” in this email is a EcoVest Project, or one of the EcoVest Offerings. Undisputed that an email, containing the above statement from Mr. Lloyd's accountant was sent to Mr. Lloyd on November 4, 2016.

US Reply: As evidenced by the response, it is undisputed that an email containing the above statement from Adam Lloyd's accountant was sent to Adam Lloyd on November 4, 2016. EcoVest's improbable speculation that the “conservation easement” referenced in the email may relate to something other than an EcoVest conservation easement transaction is unsupported by any specific facts or evidence in the record. See Hester, 798 Fed. Appx. at 456; Wiest, 812 F.3d at 330; Oliver, 276 F.3d at 744; Mosely, 2020 WL 7051351, at *4.

EcoVest disputes the materiality of US SUMF ¶ 132 but, again, this fact demonstrates that the false statements at issue in the United States' motion relate to a “material matter” under 26 U.S.C. § 6700. Here, the materiality of the false statements — which led customers to believe they would be entitled to receive a substantial tax deduction (here, at a ratio of “6 to 1” for each dollar invested) — is plain to see. See Estate Preservation Servs., 38 F. Supp. 2d at 855 (explaining that statements pertaining to the “availability of tax deductions, credits, or other mechanisms for reducing tax liability . . . clearly qualify as 'material'” under § 6700.).

US Statement No. 133:

133. On July 18, 2014, Clark sent an email to Solon with the subject line “Do you have any deals that I am not the appraiser?” and stating he “Need[s] to offset some income:”¹³³

EcoVest's Response: Disputed as to materiality. There is no indication how this email has any bearing on the nature of the allegations in the Amended Complaint or the contentions set forth in Plaintiff's Motion for Summary Judgment. Undisputed that Clark sent an email to Mr. Solon with the subject line “Do you have any deals that I am not the appraiser,” on July 18, 2014.

US Reply: It is undisputed that Clark sent an email to Mr. Solon with the subject line “Do you have any deals that I am not the appraiser,” on July 18, 2014. EcoVest disputes the materiality of this fact, but the email demonstrates that Clark knew EcoVest's Offerings were designed around a tax benefit and the role his appraisals played in them. Specifically, Clark sought to purchase an EcoVest Offering to “offset [his] income.” Further, this email demonstrates that Clark was EcoVest's primary appraiser for its conservation easement transactions. Indeed, in the email Clark is inquiring if there is even one EcoVest transaction for which he is not the appraiser.

VI. DEFENDANTS KNEW THE STATEMENTS WERE FALSE.

US Statement No. 134:

134. EcoVest (directly or indirectly) engaged Clark to prepare a “qualified appraisal” for 70 of the EcoVest Projects:¹³⁴

EcoVest's Response: Undisputed that Clark was an appraiser and was engaged by counsel to prepare qualified appraisals for the EcoVest Offerings.

US Reply: It is undisputed that Clark was engaged to prepare qualified appraisals for the EcoVest Offerings. EcoVest offers an additional gloss on this — by trying to interpose the “engaged by counsel” but EcoVest has failed to support that assertion with any factual evidence. Mosely, 2020 WL 7051351, at *4 (“'[G]enuine' factual issues must have a real basis in the record.”). Regardless, such a distinction is immaterial for purposes of this motion.

US Statement No. 135:

135. On December 10, 2014, Sirote & Permutt issued a legal opinion letter regarding the Dumpling Mountain project.¹³⁵

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 136:

136. The legal opinion letter that Sirote & Permutt issued for the Dumpling Mountain project stated that, if approved by a majority of the members in Dumpling Mountain, LLC, the proposed transaction structure would result in the company claiming “a Contribution Deduction pursuant to Code Sections 170(a) and (h) in an amount equal to the fair market value of the Conservation Easement” and that the deduction value “must be established and documented by a 'qualified appraisal.'”¹³⁶

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 137:

137. The legal opinion letter that Sirote & Permutt issued for the Dumpling Mountain project explained that “the fair market value of the perpetual conservation restriction represented by the Conservation Easement is the difference between the fair market value of the Company Property before granting the Conservation Easement and its fair market value after the Conservation Easement is granted, and after subtracting the value of any enhancement to the value of certain other property.”¹³⁷

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 138:

138. On October 10, 2014, Alston & Bird issued a legal opinion letter regarding the New River Preserve project.¹³⁸

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 139:

139. The legal opinion letter that Alston & Bird issued for the New River Preserve project cited Treas. Reg. § 1.170A-1(c)(2) for the rule that the amount of a tax deduction for the charitable contribution of property is “usually determined by the fair market value of the property donated, that is, the price at which the property would change between a willing buyer and a willing seller on the date of the gift.”¹³⁹

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 140:

140. The legal opinion letter that Alston & Bird issued for the New River Preserve project stated that, under “a methodology for valuing conservation easements,” “[t]he court will compare the fair market value of the property before the conveyance of the easement with the fair market value of the property after the easement is conveyed.”¹⁴⁰

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 141:

141. In each of the 70 conservation easement appraisals that he prepared to substantiate a tax deduction for an EcoVest Project, Clark was required to apply the definition of “fair market value” as that phrase is defined in the Treasury regulations:¹⁴¹

EcoVest's Response: Disputed. This is a legal conclusion and not a fact. Furthermore, the cited testimony does not support the factual contention that Clark was required to apply the definition of “fair market value” as that phrase is defined in the Treasury regulations for the EcoVest Offerings. Further disputed to the extent that 26 U.S.C. § 170(h) and Treasury Regulation § 1.170A-14 set forth other requirements that must be followed when valuing a conservation easement, none of which the cited material addresses. Treasury Regulation § 1.170A-14 directs an appraiser of a conservation easement to calculate the before value of a subject property taking into consideration its highest and best use. Disputed to the extent that this factual assertion implies that the only substantiation for the non-cash charitable donations of conservation easements were the appraisals prepared by Clark. Further, Clark's appraisals state that their purpose is “estimating the fair market value of an easement,” not to substantiate a tax deduction. It is further disputed that the non-cash charitable donations of conservation easements resulted in tax deductions claimed by investors. See supra, Response ¶ 5.

US Reply: EcoVest does not actually dispute Clark's testimony or refute it with any evidence. EcoVest argues US SUMF ¶141 is a legal conclusion, but it simply sets forth Clark's own understanding of the definition of value he was bound to apply. As part of its opposition to the United States' summary judgment motion, EcoVest has filed all of Clark's appraisals for the transactions at issue. ECF Nos. 373, 374. In each appraisal, Clark recites the definition of fair market value set forth in the Treasury regulations. See, e.g., ECF No. 373-25 at 3; ECF No. 373-26 at 3; ECF No. 373-27 at 3. If any doubt remained, Clark testified that he knew this was the definition that he was required to apply at his deposition.

The remainder of EcoVest's response merely sets forth legal argument about additional and different standards it believes Clark was required to apply and other argumentative assertions that are not supported by any citations to the record. This narrative response merely confirms EcoVest's patently incorrect view that the routine determination of a property's “highest and best use” replaces or modifies the required definition of “fair market value” (i.e., what a willing buyer would pay and what a willing seller would accept). In any event, this content is not responsive to the fact stated in US SUMF ¶ 141, violates the Local Rules, and insufficient to create a genuine dispute of material. See Walker, 2009 WL 1241929, at *3 (“If the fact stated is true, admit it. If the fact is legitimately disputed, then say why, cite the evidence that supports the denial, and stop.”)

US Statement No. 142:

142. The definition of “fair market value” requires Clark to determine what a willing buyer would pay as of his valuation date:¹⁴²

EcoVest's Response: Disputed to the extent that this factual assertion seeks to establish a legal conclusion (i.e., what the definition of fair market value in the Treasury Regulations requires). Clark cannot render a legal conclusion.

US Reply: EcoVest does not dispute the content of Clark's testimony or refute it with any evidence. There is no genuine dispute as to US SUMF ¶ 143, which simply reflects that Clark understood the definition of fair market value set forth in the Treasury Regulations. Clark's knowledge of the willing buyer-willing seller standard set forth in the regulations is well-documented in his own appraisals. See, e.g., ECF No. 373-25 at 3; ECF No. 373-26 at 3; ECF No. 373-27 at 3.

In addition, EcoVest's attempt to dispute this straightforward testimony merely confirms its patently incorrect view that the routine determination of a property's “highest and best use” replaces or modifies the required definition of “fair market value” (i.e., what a willing buyer would pay and what a willing seller would accept).

US Statement No. 143:

143. Clark knew that EcoVest had executed a MIPA or similar agreement in connection with the EcoVest Projects:¹⁴³

EcoVest's Response: Disputed. The cited evidence does not support the assertion that Clark knew that EcoVest had executed a MIPA or similar agreement in connection with the EcoVest Offerings. The referenced testimony states only that for Waterway Grove Clark stated that he “knew there was a MIPA.” Any inference that Clark knew that EcoVest had executed a MIPA or similar agreement in connection with the EcoVest Offerings is unsupported by the cited evidence.

US Reply: EcoVest's narrative response does not demonstrate any genuinely disputed issue regarding US SUMF ¶ 143. EcoVest simply argues about how Clark's testimony should be interpreted, but fails to cite any specific facts or offer any evidence that refutes the fact stated here. Even accepting EcoVest's gloss on Clark's testimony that, in this instance, he was referring only to the MIPA for Waterway Grove, there is no reason to adopt the inference that, therefore, Clark did not know about the MIPAs for other EcoVest Projects. That is simply EcoVest's speculation, which is unsupported by the record.

To properly dispute this fact, EcoVest must cite to particular parts of the record, such as a deposition transcript, document, or other material that demonstrates Clark was unaware of the MIPA transactions. This it has not done, nor could it. Indeed, other evidence in the record strongly supports the notion that Clark knew about EcoVest's general practice of executing MIPAs for the projects for which he prepared an appraisal. This includes, inter alia, his membership in the EcoVest “all hands team” (US SUMF ¶ 50), his involvement in “pipeline discussions” regarding upcoming EcoVest deals (US SUMF ¶ 51), and his participation as a panelist at an EcoVest “due diligence conference” (US SUMF ¶ 52). Moreover, in its very next response below, EcoVest describes in painstaking detail a discussion that Clark had with EcoVest's attorneys about the “MIPA Purchase Prices” — plural. See US SUMF ¶ 144. It is disingenuous, then, for EcoVest to assert that the fact set forth above is disputed.

US Statement No. 144:

144. On April 11, 2014, Clark discussed with an attorney that represented EcoVest the need “to have a logical and explainable basis which accounts for the 'spread' between the MIPA Purchase Prices and the anticipated highest and best use appraisal values.”¹⁴⁴

EcoVest's Response: Disputed, to the extent Plaintiff seeks to imply that there is no logical, explainable basis between MIPA prices and the highest and best use appraisal values. To the contrary, Plaintiff's cited evidence demonstrates that Clark and attorneys for EcoVest concluded, after reviewing the transaction, the Tax Code, and applicable case law, that the MIPA price did not reflect the fair market value of the conservation easements. The cited evidence is an email from May 22, 2014 to Ralph Teal, Alan Solon, and several other EcoVest officers and employees. In it, Bill Sylvester of the law firm Baker Donelson describes how understanding this issue “is a very important piece of our own due diligence, and directly relates to the overall comfort that we have with these proposed transactions.” See ECF No. 349-9 at 1 (Aberg Decl., Ex. 271, Email from Bill Sylvester dated May 22, 2014). Mr. Sylvester then describes how it was reasonable for there to exist a “spread” between the MIPA and highest and best use values, stating that “For this fact pattern, we believe the answer has to do with the advantageous pricing that the JV took advantage of in 2010, tied together with a realistic and conservative Business Plan by the JV which targeted a return of and on the JV's investment.” Id. Further, Mr. Sylvester identified a Tax Court case in which the court acknowledged that the appropriate value for a conservation easement was one that departed favorable from a very recent and actual land sale. And, ultimately, Baker Donelson did, in fact, feel comfortable enough with the proposed transaction and its value merits such that they issued a tax opinion that stated “it is our opinion that, if the Easement is donated to NALT, each Member of the Investment Company at the time of the donation should be entitled to a charitable contribution deduction equal to that Member's pro rata share, based on percentage ownership in the Investment Company, of the fair market value of the Easement and that, in turn each Member should be entitled to a charitable contribution deduction equal to that Member's pro rata share, based on percentage ownership in the Company, of the Company's share of the charitable contribution deduction.” See e.g., Frodle Decl., Ex. 271, Bellavista Tax Opinion (ECOVEST-DOJ_0044534), at -563; Frodle Decl., Ex. 257, Garden Lakes Estates Tax Opinion (ECOVEST-DOJ_0127780), at -809; Frodle Decl., Ex. 270, Coastavista Palms Tax Opinion (ECOVEST-DOJ_0040332), at -361; Frodle Decl., Ex. 256, New River Preserve Tax Opinion (ECOVEST-DOJ_0125035), at -064; Frodle Decl., Ex. 293, Punta Vista Grande Tax Opinion (ECOVEST-DOJ_0177746), at -775.

US Reply: EcoVest does not actually dispute the fact stated above. Rather than simply admit the narrow fact set forth in US SUMF ¶ 144, EcoVest responds with a one-and-a-half-page narrative setting forth its “own version of the facts.” Walker, 2009 WL 1241929, at *3. The entire colloquy is nonresponsive, argumentative, and immaterial. The material fact to be drawn from the cited materials in US SUMF ¶ 144 is that Clark knew about the MIPAs and he discussed EcoVest's need “to have a logical and explainable basis which accounts for the 'spread' between” the MIPAs and his appraisals with the Defendants included on this email (Solon and Teal). As evidenced by EcoVest's response, that fact is not genuinely disputed.

VII. FACTS RELATED TO DEFENDANTS' AFFIRMATIVE DEFENSES.

US Statement No. 145:

145. Defendants collectively took the depositions of 18 IRS employees and six expert witnesses.¹⁴⁵

EcoVest's Response: Undisputed; however, Plaintiff instructed these IRS employees not to respond to hundreds of questions related to the EcoVest Offerings that Plaintiff put at issue in this case on the basis of objections under 26 U.S.C. section 6103 and deliberative process privileges. See e.g., Frodle Decl., Ex. 21, White Dep. Tr. 111:22-118:6, 136:21-139:17, 140:17-142:2, 144:17-145:23, 150:18-152:21, 210:18-257:10, 260:1. These objections are under consideration by the Court pursuant to ECF Nos. 277, 277-1 (Special Master's R&R and EcoVest Parties' letter brief), and ECF No. 310 (Am. and Corrected R&R), and the Court has deferred a ruling on that until prior to trial, see ECF No. 350.

US Reply: This is undisputed. Any reference to documents withheld on the basis of privilege is irrelevant. Estoppel against the government requires detrimental reliance. United States v. McCorkle, 321 F.3d 1292, 1297 (11th Cir. 2003).

US Statement No. 146:

146. Defendants participated in an additional 32 depositions of nonparty witnesses (including 26 nonparty fact depositions and 6 expert depositions).¹⁴⁶

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 147:

147. In this case, Clark has produced 13,312 documents that consist of 424,957 imaged pages.¹⁴⁷

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 148:

148. In this case, the EcoVest Defendants have produced 196,001 documents that consist of 1,867,481 imaged pages, excluding documents they received in response to subpoenas issued to nonparties.¹⁴⁸

EcoVest's Response: Undisputed.

US Reply: Undisputed.

US Statement No. 149:

149. In this case, the United States has produced IRS-sourced documents, as well as documents collected during the investigation that led to this suit and the pendency of this suit, which total 51,274 documents consisting of 966,912 imaged pages.¹⁴⁹

EcoVest's Response: Undisputed, however, Plaintiff has withheld over 7000 documents on the basis of objections lodged with respect to 26 U.S.C. section 6103 and the deliberative process privilege. These objections are under consideration by the Court pursuant to ECF No. 277, 277-1 (Special Master's R&R and EcoVest Parties' letter brief), and ECF No. 310 (Am. and Corrected R&R) and the Court has deferred a ruling on that until prior to trial, see ECF No. 350.

US Reply: This is undisputed. Any reference to documents withheld on the basis of privilege is irrelevant. Estoppel against the government requires detrimental reliance. United States v. McCorkle, 321 F.3d 1292, 1297 (11th Cir. 2003).

US Statement No. 150:

150. In this case, the United States has produced 676,001 documents that consist of consisting of 5,765,423 imaged pages that it received from nonparties.¹⁵⁰

EcoVest's Response: Undisputed.

US Reply: Undisputed.

Dated: March 31, 2022

Respectfully submitted,

DAVID A. HUBBERT
Deputy Assistant Attorney General

ERIN R. HINES
Florida Bar No. 44175
GREGORY VAN HOEY
Maryland Bar
RICHARD G. ROSE
District of Columbia Bar No. 493454
HARRIS J. PHILLIPS
Massachusetts Bar No. 675603
JAMES F. BRESNAHAN II
Virginia Bar #: 80164
ERIC M. ABERG
District of Columbia Bar No. 1044111
LAUREN A. DARWIT
Illinois Bar No. 6323788
Trial Attorneys, Tax Division
U.S. Department of Justice
P.O. Box 7238, Ben Franklin Station
Washington, D.C. 20044
Telephone: (202) 514-2901

Local Counsel:
KURT ERSKINE
United States Attorney
NEELI BEN-DAVID
Assistant U.S. Attorney
Georgia Bar No. 049788
Office of the United States Attorney
Northern District of Georgia
600 U.S. Courthouse
75 Ted Turner Drive, SW, Suite 600
Atlanta, GA 30303
Telephone: (404) 581-6303