Turk v. Morris, Manning & Martin, LLP

Full title: William N. TURK, et al., Plaintiffs, v. MORRIS, MANNING & MARTIN, LLP, et…

Court: United States District Court, N.D. Georgia, Atlanta Division.

Date published: Mar 24, 2022

593 F. Supp. 3d 1258 (N.D. Ga. 2022)

Opinion

CIVIL ACTION NO. 1:20-cv-2815-AT

2022-03-24

William N. TURK, et al., Plaintiffs, v. MORRIS, MANNING & MARTIN, LLP, et al., Defendants.

ATTORNEYS FOR PLAINTIFFS: David R. Deary, Donna Lee, Jeven R. Sloan, John William McKenzie, III, William Ralph Canada, Jr., Wilson Edward Wray, Jr., Loewinsohn Deary Simon Ray LLP, Dallas, TX, Edward Jon Rappaport, Saylor Law Firm LLP, Atlanta, GA, Tyler McLean Simpson, Loewinsohn Flegle Deary Simon LLP, Dallas, TX. ATTORNEYS FOR DEFENDANTS MORRIS, MANNING & MARTIN, LLP, TIMOTHY POLLOCK : Jennifer Peterson, John Earl Floyd, John H. Rains, IV, Bondurant Mixson & Elmore LLP, Atlanta, GA. ATTORNEYS FOR DEFENDANTS LARGE & GILBERT, INC., CONSERVATION PAYS, LLC: Brent David Hitson, Burr & Forman LLP, Birmingham, AL, Tala Amirfazli, Burr & Forman, LLP, Atlanta, GA. ATTORNEYS FOR DEFENDANT JOSEPH SKALSKI : Samuel Fenn Little, Jr., S. Fenn Little, Jr. P.C., Atlanta, GA. ATTORNEYS FOR DEFENDANTS ATLANTIC COAST CONSERVANCY, INC., ATLANTIC COAST CONSERVANCY PROPERTIES, LLC, ENVIRONMENTAL RESEARCH AND MAPPING FACILITY, LLC, ROBERT D. KELLER : Anthony Joseph Rollins, Colin Dang Delaney, Gregory Keith Smith, Jason S. Bell, Smith, Gambrell & Russell, LLP, Atlanta, GA. ATTORNEYS FOR DEFENDANT BENNETT THRASHER, LLC: Dana Kristin Maine, Travis Martin Cashbaugh, Freeman Mathis & Gary, LLP, Atlanta, GA. ATTORNEYS FOR DEFENDANTS ORNSTEIN-SCHULER INVESTMENTS LLC, ORNSTEIN-SCHULER CAPITAL PARTNERS LLC: Brandon Parrish, David M. Pernini, Vernon M. Strickland, Wargo, French & Singer LLP, Atlanta, GA. ATTORNEYS FOR DEFENDANTS CLAY WEIBEL, WEIBEL AND ASSOCIATES, INC.: Carl Edward Volz, Pontem Law LLC, Chicago, IL, Jill Warner, Michael E. Brooks, Brooks & Warner, LLC, Atlanta, GA. ATTORNEYS FOR DEFENDANTS LUCAS MASON, INC., LUCAS VON ESH: Kevin James McDonough, Lauren C. Giles, Miles Hansford & Tallant, LLC, Cumming, GA. ATTORNEYS FOR DEFENDANTS BLETHEN MINE CONSULTANTS, LLC, MARVIN BLETHEN: Frank Agostino, Jeffrey Dirmann, Agostino & Associates PC, Hackensack, NJ, Elizabeth M. Newton, Warren R. Hall, Jr., Hall, Arbery, Gilligan, Roberts & Shanlever, LLP, Atlanta, GA. ATTORNEYS FOR DEFENDANTS DONALD R. SKLAR, PARTNERSHIP TAX SOLUTIONS, INC.: D. Michael Williams, Donald Brown, William Dowdy White, Hall Booth Smith, P.C., Atlanta, GA. ATTORNEYS FOR DEFENDANTS AARON KOWAN, THE PRIVATE CLIENT LAW GROUP: Christine L. Mast, Joseph Hall Wieseman, Hawkins Parnell & Young, LLP, Atlanta, GA.

AMY TOTENBERG, UNITED STATES DISTRICT JUDGE

ATTORNEYS FOR PLAINTIFFS: David R. Deary, Donna Lee, Jeven R. Sloan, John William McKenzie, III, William Ralph Canada, Jr., Wilson Edward Wray, Jr., Loewinsohn Deary Simon Ray LLP, Dallas, TX, Edward Jon Rappaport, Saylor Law Firm LLP, Atlanta, GA, Tyler McLean Simpson, Loewinsohn Flegle Deary Simon LLP, Dallas, TX.

ATTORNEYS FOR DEFENDANTS MORRIS, MANNING & MARTIN, LLP, TIMOTHY POLLOCK : Jennifer Peterson, John Earl Floyd, John H. Rains, IV, Bondurant Mixson & Elmore LLP, Atlanta, GA.

ATTORNEYS FOR DEFENDANTS LARGE & GILBERT, INC., CONSERVATION PAYS, LLC: Brent David Hitson, Burr & Forman LLP, Birmingham, AL, Tala Amirfazli, Burr & Forman, LLP, Atlanta, GA.

ATTORNEYS FOR DEFENDANT JOSEPH SKALSKI : Samuel Fenn Little, Jr., S. Fenn Little, Jr. P.C., Atlanta, GA.

ATTORNEYS FOR DEFENDANTS ATLANTIC COAST CONSERVANCY, INC., ATLANTIC COAST CONSERVANCY PROPERTIES, LLC, ENVIRONMENTAL RESEARCH AND MAPPING FACILITY, LLC, ROBERT D. KELLER : Anthony Joseph Rollins, Colin Dang Delaney, Gregory Keith Smith, Jason S. Bell, Smith, Gambrell & Russell, LLP, Atlanta, GA.

ATTORNEYS FOR DEFENDANT BENNETT THRASHER, LLC: Dana Kristin Maine, Travis Martin Cashbaugh, Freeman Mathis & Gary, LLP, Atlanta, GA.

ATTORNEYS FOR DEFENDANTS ORNSTEIN-SCHULER INVESTMENTS LLC, ORNSTEIN-SCHULER CAPITAL PARTNERS LLC: Brandon Parrish, David M. Pernini, Vernon M. Strickland, Wargo, French & Singer LLP, Atlanta, GA.

ATTORNEYS FOR DEFENDANTS CLAY WEIBEL, WEIBEL AND ASSOCIATES, INC.: Carl Edward Volz, Pontem Law LLC, Chicago, IL, Jill Warner, Michael E. Brooks, Brooks & Warner, LLC, Atlanta, GA.

ATTORNEYS FOR DEFENDANTS LUCAS MASON, INC., LUCAS VON ESH: Kevin James McDonough, Lauren C. Giles, Miles Hansford & Tallant, LLC, Cumming, GA.

ATTORNEYS FOR DEFENDANTS BLETHEN MINE CONSULTANTS, LLC, MARVIN BLETHEN: Frank Agostino, Jeffrey Dirmann, Agostino & Associates PC, Hackensack, NJ, Elizabeth M. Newton, Warren R. Hall, Jr., Hall, Arbery, Gilligan, Roberts & Shanlever, LLP, Atlanta, GA.

ATTORNEYS FOR DEFENDANTS DONALD R. SKLAR, PARTNERSHIP TAX SOLUTIONS, INC.: D. Michael Williams, Donald Brown, William Dowdy White, Hall Booth Smith, P.C., Atlanta, GA.

ATTORNEYS FOR DEFENDANTS AARON KOWAN, THE PRIVATE CLIENT LAW GROUP: Christine L. Mast, Joseph Hall Wieseman, Hawkins Parnell & Young, LLP, Atlanta, GA.

OPINION AND ORDER

AMY TOTENBERG, UNITED STATES DISTRICT JUDGE I. Introduction

Last fall, this Court issued an order resolving various motions to dismiss in a related case, Lechter v. Aprio, LLP , 565 F.Supp.3d 1279 (N.D. Ga. 2021). Like the plaintiffs in Lechter , Plaintiffs in this case claim to have been fraudulently induced into purchasing interests in various LLCs for the purpose of engaging in syndicated conservation easement transactions. At its core, Plaintiffs’ argument is that Defendants — a group of various lawyers, accountants, consultants, and appraisers — fraudulently represented that these transactions were a legitimate tax savings strategy, when in fact the transactions were a scam, and as a consequence of buying into that scam Plaintiffs have been subjected to intense scrutiny from the IRS. Clearly unhappy with this turn of events, Plaintiffs brought suit in federal court, alleging a multitude of tort-based claims against Defendants and asserting that Defendants engaged in a pattern of racketeering activity in violation of federal and Georgia law. Currently pending before the Court are ten motions to Dismiss Plaintiffs’ Second Amended Complaint [Docs. 233, 234, 236, 237, 238, 240, 242, 244, 248, 249], and Plaintiffs’ Motion to Strike or Disregard Extrinsic Evidence [Doc. 251].

Plaintiffs here bring what may be best described as a fraternal twin case to Lechter — similar in many ways, but by no means identical. These Plaintiffs present a familiar story, and their claims face similar hurdles to those raised by the Plaintiffs in Lechter. But this story involves a different set of facts, and in some respects the Court reaches different conclusions of law as well.

II. Background¹

1 The relevant facts are drawn from Plaintiffs’ Second Amended Complaint ("SAC"). For purposes of resolving the pending motions to dismiss, the Court must accept the facts alleged in the SAC as true and construe these facts in the light most favorable to Plaintiffs. Hill v. White , 321 F.3d 1334, 1335 (11th Cir. 2003).

A. Overview of the SCE Strategy

Like the plaintiffs in Lechter , Plaintiffs here contend that a distinct group of Defendants advanced a fraudulent scheme to induce them and other investors to buy into a flawed tax saving strategy. Plaintiffs refer to this strategy as the Syndicated Conservation Easement Strategy, or "the SCE Strategy." (Second Am. Compl. ("SAC"), Doc. 218 ¶ 1.)

The SCE Strategy revolved around the donation of conservation easements to land trusts. As Plaintiffs explain in the SAC, a conservation easement is an encumbrance placed on a property to preserve the property for conservation purposes. (Id. ¶ 2.) The conservation easement is formalized in a written agreement between the landowner and another party, typically a land trust or government entity, that permanently restricts the use or development of the land for the purpose of achieving certain conservation or preservation goals. (Id. ¶ 46.)

Although tax deductions generally are not permitted for donations of a partial interest in property, the Tax Code contains an exception for a "qualified conservation contribution." (Id. ¶ 47.) A "qualified conservation contribution" is defined as a donation of (1) "a qualified real property interest," (2) "to a qualified organization," (3) "made exclusively for conservation purposes." (Id. ¶ 48); see 26 U.S.C. § 170(h). As Plaintiffs explain in the SAC, when done properly "conservation easements can and do confer legitimate tax advantages to the donor in additional to environmental benefits to the public," and donors of conservation easements "may realize a noncash charitable contribution deduction for the value by which the easement impairs the fair market value of the property." (SAC, Doc. 218 ¶ 2.)

The SCE Strategy involved one specific type of conservation easement transactions — syndicated conservation easement transactions. (Id. ¶ 4.) These transactions involved the donation of easements through land owned collectively by the members of an LLC — or "Syndicate" — instead of by any one individual. This mechanism enabled multiple investors to participate in certain high-value transactions that they would otherwise be unable to pursue individually. (Id. ) Notably, the Syndicates are taxed as partnerships and therefore are not liable for income tax; instead, the individual partners are liable for income tax for the partnership's income, losses, deductions, and credits that "flow through to the partners" based on their proportionate shares in the partnership. (Id. ¶ 50.) The Syndicates are, however, required to file an annual partnership tax return stating the partnership's overall income and losses and to provide both the IRS and individual partnership members with statements called "K-1s" reporting the individual members’ respective shares of the partnership income and losses. (Id. ¶ 51.) The individual members are then required to report their shares of the partnership's income and losses on their individual tax returns as they are stated in the K-1s. (Id. ¶ 52.)

In the SAC, Plaintiffs describe four representative transactions performed by Defendants for four different Syndicates. Plaintiffs allege that the steps Defendants followed to complete these transactions "were uniform ... in every material way." (Id. ¶ 53.) First, the "Sponsors" would create the LLCs and acquire the subject property. (Id. ¶ 53(a).) Next, the Sponsors would perform a "due diligence" period during which they would obtain an initial appraisal of the land; the initial appraisal would provide an estimate of the value of the land based on the "Highest and Best Use" — or "HBU" — of the property. (Id. ¶ 53(b).) The Sponsors would then send "Promotional Materials" to potential investors. The Promotional Materials would present the potential investors with several options for what to do with the land, including the option to place a conservation easement on the land. (Id. ¶ 53(e).) The Promotional Materials would include the initial appraisal and "tout the tax benefits of a conservation easement for potential participants ... promising them a legal return of more than 2.5 times the amounts paid into the Syndicate(s)." (Id. ) Sometime thereafter, the Sponsors would obtain a second appraisal for the property. (Id. ¶ 53(g).) Defendants would also prepare a "Conservation Easement Deed" for the transaction, (id. ¶ 53(h)), and prepare a Baseline Documentation Report — or "BDR" — that "ascertains the conservation values, substantiates the purported conservation purpose, and establishes the condition of the property at the time of the gift," (id. ¶ 53(i)). The Syndicate would then donate the conservation easement to a land trust and donate the remaining fee simple interest in the subject property to one of the land trust's affiliates. (Id. ¶ 53(j).) The donation of the conservation easement would then be reported to the IRS as a charitable contribution in an amount based on the value of the appraisal. (Id. ¶ 54.) Finally, each of the Syndicates’ members would report their shares of the charitable contribution as charitable deductions on their individual tax returns as reflected in the K-1s provided to them by the Syndicates’ tax return preparers. (Id. )

Plaintiffs contend that since as early as 1984 the IRS has taken the position that overvaluation of charitable contributions in conservation easement transactions "was improper and would not be tolerated." (Id. ¶ 122) (citing IRS News Release, IR-81-122). One particular concern was the idea that the promoters of conservation easement transactions could pitch conservation easement transactions with inflated valuations to potential investors and attempt to conceal the inflated charitable deductions from the IRS by relying on an "audit lottery." (Id. ) If the partnership's tax returns did not get audited, then the promoters would not get caught. Perhaps in response to this concern, in 2016 the IRS issued Notice 2017-10, which designated certain kinds of syndicated conservation easements as "listed transactions." (Id. ¶ 129.) Under Treasury regulations, a listed transaction is "a transaction that is the same as or substantially similar to one of the types of transactions that the [IRS] has determined to be a tax avoidance transaction and identified by notice, regulation, or other form of published guidance as a listed transaction." 26 C.F.R. § 1.6011-4(b)(2). Notice 2017-10 specifically designated as listed transactions any transaction in which the Promotional Materials offered potential investors the possibility of claiming a charitable contribution deduction worth at least 2.5 times their initial investments in the syndicate. (SAC, Doc. 218 ¶ 129.) However, a transaction's status as a listed transaction does not automatically mean the transaction is unlawful. 26 C.F.R. § 1.6011-4(a). According to Plaintiffs, "Although the MMM Defendants did not advise Plaintiffs that they anticipated the IRS would designate the SCE Strategy as a listed transaction, in December of 2016, after the Notice was issued, the MMM Defendants, and specifically Tim Pollock, indicated that the ‘listed transaction announcement was always anticipated.’ " (SAC, Doc. 218 ¶ 129.)

B. Plaintiffs’ Transactions

Like the plaintiffs in Lechter , Plaintiffs here point to several representative transactions to show how Defendants implemented the SCE Strategy. At least one named plaintiff participated in each of these representative transactions. However, unlike in Lechter , a distinctive feature of the transactions at issue here was the strategy of assessing the potential to use the properties for mining as the basis for the valuation of the appraisals. Plaintiffs describe this aspect of the strategy as "[t]he most critical element" of the appraisals that were the "lynchpin" of the entire scheme. (Id. ¶ 7.)

According to the SAC, sometime in early 2014 Defendant Bennett Thrasher, LLC came up with the idea to target properties with underlying mineral assets for the SCE Strategy and met with the OSI Defendants² to discuss this plan. (Id. ¶ 107.) Around that time, Bennett Thrasher introduced the OSI Defendants to the Greencone Consultants³ for the purpose of exploring this proposal. (Id. ) Bennett Thrasher and the Greencone Consultants advised the OSI Defendants that the HBU for properties with underlying mineral assets "provided a much greater valuation than the property currently being used," and that using these properties instead "would generate substantially more revenue for all of the Defendants." (Id. ) Bennett Thrasher added that the Greencone Consultants already possessed properties that could be used for these transactions and they also had a mining expert, Blethen Mine Consultants, LLC,⁴ that could be used as a consultant for the transactions. (Id. ) The other Defendants accepted this proposal and began exclusively using properties with underlying mineral assets for all of their SCE Strategy transactions from 2014 through 2018. (Id. ) The Syndicates also began paying consulting fees to both the Greencone Consultants and the Blethen Defendants in connection with these transactions.⁵ (Id. ) Plaintiffs allege that Bennet Thrasher would review the Blethen Defendants’ mining reports during the due diligence period for each of the transactions. (Id. ¶ 108.) In addition, Plaintiffs allege that the Appraisers would incorporate the findings from the Blethen Defendants’ mining reports into the appraisals for the properties even though all Defendants knew that performing mining activities on those sites was not economically feasible. (Id. ¶ 7.)

2 Plaintiffs refer to Defendants Ornstein-Schuler Investments LLC and Ornstein-Schuler Capital Partner LLC collectively as "the OSI Defendants." (SAC, Doc. 218 ¶¶ 33–34.)

3 The Greencone Consultants are not named as Defendants in this case.

4 Plaintiffs generally refer to Defendants Blethen Mine Consultants, LLC and Marvin Blethen as "the Blethen Defendants." See, e.g. , (id. ¶ 7).

5 Plaintiffs also allege that the OSI Defendants and the Greencone Consultant formed a partnership for the purpose of splitting profits. (Id. ¶ 107.)

Another distinctive feature of the transactions at issue here was the strategy of using two sets of Appraisers for each transaction. As explained in more detail below, each of the representative transactions included an initial appraisal from the Weibel Defendants and a secondary appraisal from the Lucas Defendants, the latter of which was always slightly higher than the appraisal provided by the Weibel Defendants. The Appraisers also included multiple different types of appraisals. Some of the appraisals assessed the value of the land prior to being encumbered by a conservation easement, others assessed the value of the land if a conservation easement were subsequently placed on the property, and still others assessed the value of the easement itself.

In the SAC, Plaintiffs discuss a number of different baselines for determining the accuracy of the appraisals, all of which they claim were significantly inflated. For example, Plaintiffs allege that the Weibel Defendants appraised one of the properties in Polk County, Florida — the FG River property — at a value of approximately $126,000 per acre even though the property had previously been appraised at a value of only $26,000 per acre when the Syndicate purchased the property, and the Syndicate had purchased it for a price of only $6,200 per acre. (Id. ¶ 154.) Additionally, Plaintiffs claim that in an effort to obscure the inflated nature of their appraisals, the Weibel Defendants misrepresented the dates in which the land had been acquired. Plaintiffs claim that in the case of the FG River property, which Plaintiffs allege the Syndicate had acquired in November 2015, the Weibel Defendants represented that the property had actually been acquired back in November 2005 to give the appearance that the significant increase in the value of the property since its acquisition had occurred in the span of a decade instead of in just a matter of weeks. (Id. ¶ 160.) For purposes of the pending motions to dismiss, the Court must accept these allegations as true.

With that background in mind, the Court now turns to the specific representative transactions at issue. For ease of reference, the Court has provided a chart summarizing each Defendant's alleged role and in which transactions they allegedly participated. The Court also indicates how Defendants are grouped together and how each Defendant will generally be referred to throughout this Opinion.

Defendant Alleged Role Transactions The MMM The alleged "architects" of the • Lakepoint Defendants SCE Strategy. Handpicked the • Industrial (Morris, Manning Appraisers and reviewed and • FG River & Martin, LLP and approved all documents for all • Gulf Land Timothy Pollock) four transactions. The OSI The "Sponsors" and "Managers" • Lakepoint Defendants of the Syndicates. Sent the • Industrial (Ornstein-Schuler Promotional Materials for the • FG River Investments LLC LLCs to Plaintiffs. • Gulf Land and Ornstein-Schuler Capital Partners LLC) The Weibel Performed the primary • Lakepoint Defendants (Clay appraisals for all four LLCs, • Industrial Weibel and Weibel which were included in the • FG River & Associates, Inc.) Promotional Materials and • Gulf Land ultimately relied on for the valuation of the conservation easements. The Lucas Performed secondary appraisals • Lakepoint Defendants (Lucas for all four LLCs. These • Industrial Von Esh and Lucas appraisals were not included in • FG River Mason, Inc.) the LLCs' tax returns. • Gulf Land The L & G Prepared the tax returns and K-is • Lakepoint Defendants (Large for the Lakepoint and • Industrial & Gilbert, Inc., Industrial LLCs. Conservation Pays, LLC, and Joseph C. Skalski) The Sklar Prepared the tax returns and K-is • FG River Defendants for the FG River and Gulf • Gulf Land (Donald R. Sklar Land LLCs. and Partnership Tax Solutions, Inc.) The PCLG Provided legal opinion letters, • Lakepoint Defendants (The selected appraisals for the LLCs, • Gulf Land Private Client Law and reviewed documents for the Group and Aaron transactions. Kowan)

The ACC Accepted the donation of the • Lakepoint Defendants ⁶ easements, provided Baseline • FG River (Atlantic Coast Documentation Reports, • Gulf Land Conservancy, Inc., prepared the conservation Atlantic Coast easement deeds, signed the Conservancy Appraisal Summary (Form Properties, LLC, 8283), and sent letters to Robert D. Keller, Syndicate members and acknowledging acceptance of Environmental the donations. Research and Mapping Facility, LLC) The Blethen Mining consultants based in • Industrial Defendants New Jersey. Performed • FG River (Marvin Blethen research to determine the • Gulf Land and Blethen feasibility of operating a mine Mining and developed a business plan Consultants, LLC) for that purpose, which was incorporated into the appraisals. Bennett Thrasher, Came up with plan to use • Industrial LLC mining reports to determine the • FG River fair market value of the • Gulf Land properties to be used in the appraisals. Also referred clients to the LLCs as potential participants and performed due diligence and consulting services.

[Editor's Note: The preceding image contains the reference for footnote⁶ ].

6 Another land trust, Wild Turkey Federation, accepted the easement for Industrial, but Wild Turkey is not named as a Defendant.

A more detailed summary of each transaction is included below.

1. Lakepoint Land Group LLC ("Lakepoint")

Plaintiff Norman Radow was a participant in the Lakepoint transaction in Fall 2013. (Id. ¶ 173.) The Promotional Materials for Lakepoint were sent by the OSI Defendants, and Radow received them by email on or around August 5, 2013 and again on October 22, 2013. (Id. ¶ 167.)

The Promotional Materials presented three options to potential investors: (1) market the property for sale or development; (2) hold the property for long-term investment; or (3) contribute a conservation easement. (Id. ¶ 168.) They also listed a "Conservation Easement Team" for the Syndicate. For example, they listed Matt Ornstein from OSI as the Principal and Manager, Matt Kaynard of Large & Gilbert as an accounting and tax consultant, Tim Pollock of MMM as Special Tax Counsel, ACC as the Land Trust, and Clay Weibel and Luke Von Esh as the Appraisers. (Id. ¶ 169.) The Promotional Materials also included an initial appraisal letter sent by the Weibel Defendants dated August 3, 2013, which stated that the easement had a Fair Market Value of $21,780,000. (Id. ¶ 171.) After reviewing these materials, Radow paid $150,000 into the Lakepoint Syndicate. (Id. ¶ 173.)

The Weibel Defendants sent another letter on or around November 17, 2013, including the full appraisal.⁷ This letter stated once again that the fair market value of the easement was $21,780,000. (Id. ¶ 174.) The Lucas Defendants then sent a separate appraisal on or around November 19, 2013, stating that as of November 18, 2013 the fair market value of the conservation easement was $22,250,000. (Id. ¶ 175.)

7 According to the SAC, the initial appraisal letter that was included in the Promotional Materials was only a summary. (SAC, Doc. 218 ¶ 174.) The full appraisal was not included in the Promotional Materials.

Sometime that fall, the Lakepoint Syndicate voted to place a conservation easement on the property, donate the easement to ACC, and donate the fee simple to the Georgia Tuition Assistance Program ("GTAP").⁸ (Id. ¶ 178.) The ACC Defendants prepared the BDR for the property on or around December 12, 2013 and concluded that donating the easement was in the best interest of the Syndicate. (Id. ¶ 180.) The Conservation Easement Deed for the property was dated December 13, 2013 and was jointly prepared and approved by the MMM, L & G, OSI, and ACC Defendants. (Id. ¶ 179.) Both Weibel and Robert D. Keller of ACC signed and verified the Conservation Easement Deed, as well as the Appraisal Summary (Form 8283).⁹ (Id. ¶¶ 179, 186.) The Lakepoint Syndicate officially conveyed the conservation easement to ACC on December 16, 2013 and the fee simple to GTAP on December 19, 2013. (Id. ¶ 181.) ACC sent a letter to the Lakepoint Syndicate on December 12, 2013 acknowledging the conveyance of the easement and stating that it was "fully tax deductible." (Id. ¶ 182.)

8 Georgia Tuition Assistance Program is not named as a Defendant in this matter.

9 According to the SAC, a Form 8283 is a document that is signed by the Appraiser under penalty of perjury and attached to the LLC's tax return to substantiate the claimed deduction. (Id. ¶ 8.)

On or around March 13, 2014, the L & G Defendants prepared the Lakepoint Syndicate's tax return and included ACC's letter, the BDR, and Form 8283. (Id. ¶¶ 182, 188.) The L & G Defendants also attached Weibel's appraisal to the Syndicate's tax return. (Id. ¶ 185.) The return reported a charitable contribution deduction of $21,750,000. (Id. ¶ 188.) The L & G Defendants also prepared the K-1s for the Syndicate. (Id. ¶ 189.) The K-1 they prepared for Radow included a $394,194 deduction, and they advised Radow to report that deduction on his individual tax return for 2013. (Id. ) Radow followed that advice and reported the $394,194 deduction on his tax return. (Id. ¶ 190.)

On or around March 16, 2016, Lakepoint received an audit notice from the IRS for its 2013 tax return. (Id. ¶ 191.) The IRS issued a Final Partnership Administrative Adjustment ("FPAA") disallowing the deduction on or around March 27, 2017. (Id. ¶ 192.) The grounds for the disallowance were (1) "lack of a valid conservation purpose," (2) "failure to properly substantiate a conservation purpose in the Conservation Easement Deed and/or the Baseline Documentation Report," (3) "an improper extinguishment proceeds clause causing the gift to not be in perpetuity," (4) "an improper appraisal method resulting in a grossly inflated valuation of the charitable gift," and (5) "failure to submit qualified appraisal from a qualified appraiser." (Id. ) The Lakepoint Syndicate filed a challenge to the disallowance with the United States Tax Court on June 22, 2017, where the case remains pending. (Id. ¶ 193); see Lakepoint Land II, LLC, v. Comm'r of Internal Revenue , No. 13925-17 (T.C.).

2. Industrial S&G Partners LLC ("Industrial")

Plaintiffs William and Carlita Turk participated in the Industrial transaction in Fall 2014. The Turks received the Promotional Materials for Industrial through an accounting firm by way of OSI in an email dated December 3, 2014. (SAC, Doc. 218 ¶ 221.) The Promotional Materials presented potential investors with six options for how to use the property, one of which was to contribute a contribution easement. (Id. ¶ 222.)

Although it did not use the phrase "Conservation Easement Team," like the Promotional Materials for some of the other transactions at issue, the Industrial Promotional Materials included a similar list of advisors. Specifically, it listed Matt Ornstein and Frank Schuler of OSI as the Managers, Matt Kaynard of L & G as an accounting and tax consultant, Tim Pollock of MMM as Special Tax Counsel, National Wild Turkey Foundation as the Land Trust, and Weibel and Lucas as the Appraisers. (Id. ¶ 222.) The Promotional Materials included an initial appraisal from Weibel that was sent on or around November 12, 2014. (Id. ¶ 226.) The initial appraisal stated that the fair market value of the property was $15,900,000, the value of the easement was $11,925,00, and the value of the property after the easement was placed was $3,975,000. (Id. ) After receiving these materials, the Turks paid $75,031 into the Industrial Syndicate. (Id. ¶ 228.)

The Lucas Defendants sent secondary appraisals for the property on or around October 30, 2014. (Id. ¶ 233.) Those appraisals stated that the value of the conservation easement was $12,300,000, and the value of the property before encumbrance with the easement was $16,400,000. (Id. ) In addition, the Blethen Defendants performed an analysis about the feasibility of performing mining on the Industrial property on or around November 20, 2014, (id. ¶ 229), and the Weibel Defendants then sent a full appraisal on or around December 16, 2014, (id. ¶ 230). That appraisal stated that the fair market value of the Industrial property was $15,900,000, the value of the easement was $11,925,00, and the value of the property after the easement was placed was $3,975,000. (Id. ) That fall, the Industrial Syndicate voted to place a conservation easement on the property, donate the easement to Wild Turkey Federation, and donate the remaining fee simple interest to American Upland.¹⁰ (Id. ¶ 236.)

10 American Upland is not named as a Defendant in this matter, and as previously noted, neither is Wild Turkey Federation.

Wild Turkey Federation and Conservation Matters, LLC¹¹ prepared and transmitted the BDR for the property to the Industrial Syndicate on or around December 15, 2014. (Id. ¶ 238.) The Conservation Easement Deed was dated December 15, 2014, and jointly prepared by the MMM, L & G, and OSI Defendants and Wild Turkey Federation. (Id. ¶ 237.) The Industrial Syndicate officially conveyed the conservation easement to Wild Turkey Federation on December 15, 2014 and the remaining fee simple to American Upland on December 22, 2014. (Id. ¶ 239.) Wild Turkey Federation sent a letter to the Syndicate stating that the conveyance was "fully tax deductible." (Id. ¶ 240.) The Weibel Defendants prepared the Form 8283 for the property on or around January 12, 2015, which represented that the fair market value of the easement was $11,925,000 and the remaining fee simple was $3,975,000. (Id. ¶¶ 244, 246.)

11 Conservation Matter, LLC also is not named as a Defendant in this matter.

The L & G Defendants prepared the tax return for Industrial on or around February 2015 and reported a charitable contribution deduction of $15,154,598. (Id. ¶ 247.) The L & G Defendants prepared the Syndicate's K-1s as well. The Turks’ K-1 reflected a $246,808 deduction, and the L & G Defendants advised the Turks to report their deduction on their tax return as it was reported in the K-1. (Id. ¶ 248.) The Turks followed that advice and reported the $246,808 deduction on their 2014 tax return. (Id. ¶ 249.)

On or around January 31, 2017 the Industrial Syndicate received an audit notice for its 2014 partnership tax return, (id. ¶ 250), and on or around February 14, 2019 the IRS issued a FPAA for the Industrial Syndicate disallowing the deduction, (id. ¶ 251.) The grounds for the disallowance were (1) "lack of a valid conservation purpose," (2) "failure to properly substantiate a conservation purpose in the Conservation Easement Deed and/or the Baseline Documentation Report," (3) "an improper extinguishment proceeds clause causing the gift to not be in perpetuity," (4) "an improper appraisal method resulting in a grossly inflated valuation of the charitable gift," and (5) "failure to submit qualified appraisal from a qualified appraiser." (Id. ) The Industrial Syndicate filed a Tax Court petition to review the disallowance on May 13, 2019 where the case remains pending. (Id. ¶ 252); see Industrial S&G, LLC v. Comm'r of Internal Revenue , No. 7475-19 (T.C.).

3. FG River Partners, LLC ("FG River")

Radow participated in the FG River transaction in Fall 2015. He received the Promotional Materials for the Syndicate via email from Matt Ornstein of OSI on or around October 28, 2015. (SAC, Doc. 218 ¶ 195.) Like the Promotional Materials for Lakepoint, the Promotional Materials for FG River allegedly listed a "Conservation Easement Team."¹² For example, it listed Matt Ornstein and Frank Schuler of OSI as the Managers, Tim Pollock of MMM as Special Tax Counsel, ACC as the Land Trust, and Weibel and Lucas as the Appraisers. (Id. ¶ 196.) The Promotional Materials presented potential investors with four options for the property: (1) hold it for long-term investment; (2) lease it to a third party for mining and extraction of minerals; (3) operate it for the same; or (4) contribute a conservation easement. (Id. ¶ 198.) The Promotional Materials also included an initial appraisal from Weibel dated October 26, 2016, which stated that the fair market value of the property was $17,800,000. (Id. ¶ 199.) After receiving these materials, Radow paid $250,000 into the FG River Syndicate. (Id. ¶ 200.) On or around November 24, 2015, the Blethen Defendants prepared a business plan examining the feasibility of operating a mine on the FG River property. (Id. ¶ 201.) The Weibel Defendants subsequently sent a full appraisal on or around December 29, 2015. (Id. ¶ 202.) The appraisal stated that the fair market value of the property before the easement was placed was $17,800,000 and that the easement had a fair market value of $17,360,000. (Id. ) Around the same time, the Lucas Defendants sent a second appraisal stating that the fair market value of the easement was $17,890,000 as of December 29, 2015. (Id. ¶ 203.)

12 Upon reviewing the Promotional Materials, however, it does not appear that the Promotional Materials for this Syndicate actually used the phrase "Conservation Easement Team" when describing the points of contact for the transaction.

At some point that fall, the FG River Syndicate voted to place a conservation easement on the entirety of the property, convey the easement to ACC and convey the remaining fee simple interest to Atlantic Coast Conservancy Properties, LLC ("ACC Properties"). (Id. ¶ 205.) The ACC Defendants prepared and provided the BDR for FG River on or around December 22, 2015. (Id. ¶ 207.) The Conservation Easement Deed was dated December 22, 2015 and jointly prepared by MMM, OSI, PCLG, and ACC. (Id. ¶ 206.) The FG River Syndicate officially conveyed the easement to ACC on December 22, 2015 and the remaining fee simple interest to ACC Properties on December 28, 2015. (Id. ¶ 208.) The ACC Defendants provided the Syndicate with a letter on December 22, 2015 confirming the conveyance of the easement and representing that it was "fully tax deductible." (Id. ¶ 209.) The Weibel Defendants prepared the Form 8283 on or around March 18, 2016. (Id. ¶ 213.) The Form 8283 represented that the fair market value of the easement was $17,360,000. (Id. ¶ 214.) According to Plaintiffs, the Form 8283 essentially took the position that the value of the property had increased 25-fold since it was acquired by the Syndicate just a few weeks earlier. (Id. ) Like the Weibel Defendants, the ACC Defendants also signed the Form 8283 and verified it as accurate. (Id. ¶ 207.)

The Sklar Defendants prepared the tax returns for the FG River Syndicate on or around September 1, 2016, which reported a charitable deduction of $17,137,894. (Id. ¶ 215.) The Sklar Defendants also prepared the K-1s for FG River, including Radow's K-1 which reflected a $1,069,386 deduction. (Id. ¶ 216.) Radow followed the Sklar Defendants’ advice and reported the deduction as it appeared on the K-1. (¶ 217.) On or around October 3, 2017, the FG River Syndicate received a notice that its 2015 partnership tax return had been selected for an audit.¹³ (Id. ¶ 218.)

13 Since filing the SAC, Defendants have filed a petition in the Tax Court related to this transaction as well. See FG River Resources, LLC v. Comm'r of Internal Revenue , No. 30786-21 (T.C.) (filed Nov. 16, 2021).

4. Gulf Land Aggregates Group LLC ("Gulf Land")

Radow participated in the Gulf Land transaction in Fall 2015. He received the Promotional Materials for Gulf Land from the OSI Defendants at some point in late 2015. (Id. ¶ 254.) The Promotional Materials allegedly listed a "Conservation Easement Team"¹⁴ for the Syndicate, including Matt Ornstein and Frank Schuler of OSI as the Managers, Tim Pollock of MMM as Special Tax Counsel, ACC as the Land Trust, and Weibel and Von Esh as the Appraisers. (Id. ¶ 255.) The Promotional Materials presented potential investors with four options for the property: (1) hold it for long-term investment; (2) lease it to a third party for mining and extraction of surface minerals; (3) operate it for the same; or (4) contribute a conservation easement. (Id. ¶ 257.) The Promotional Materials included an initial appraisal letter from Weibel dated October 30, 2015, which stated that the fair market value of the property was $17,150,000. (Id. ¶ 258.) After receiving these materials, Radow paid $200,000 into the Gulf Land Syndicate. (Id. ¶ 259.)

14 However, it does not appear that these specific Promotional Materials actually used the phrase "Conservation Easement Team" when referring to the Syndicate's points of contact.

The Blethen Defendants prepared a business plan examining the feasibility of performing mining on the Gulf Land property on or around November 9, 2015. (Id. ¶ 260.) The Lucas Defendants subsequently submitted a secondary appraisal listing the fair market value for the conservation easement as $17,025,000 as of December 22, 2015. (Id. ¶ 262.) The Weibel Defendants then sent their full appraisal on or around March 29, 2016, stating that the fair market value of the property was $17,150,000 and the fair market value of the easement was $16,650,000. (Id. ¶ 261.) Sometime that fall, the Gulf Land Syndicate voted to place a conservation easement on the property. (Id. ¶ 265.) The Gulf Land Syndicate officially conveyed the easement to ACC on December 22, 2015 and the remaining fee simple to ACC Properties on December 28, 2015. (Id. ¶ 268.)

The MMM, OSI, PCLG, and ACC Defendants jointly prepared the Conservation Easement Deed, which was dated December 22, 2015, and the same Defendants prepared the BDR on that same date. (Id. ¶¶ 266–67.) The Weibel Defendants prepared the Form 8283 on or around March 18, 2016. (Id. ¶ 273.) According to Plaintiffs, the Form 8283 reflected a 62-fold increase from a prior appraisal from just over a month earlier, which reflected a valuation of $265,278.¹⁵ (Id. ¶ 274.)

15 Presumably, the earlier appraisal was performed when the Gulf Land Syndicate acquired the subject property.

The Sklar Defendants prepared the tax return for the Gulf Land Syndicate on or around September 1, 2016. (Id. ¶ 275.) The Sklar Defendants also prepared the Syndicate's K-1s, including Radow's K-1 which reflected a $851,619 charitable deduction. (Id. ¶ 276.) Following the Sklar Defendants’ advice, Radow reported a $851,619 deduction on his individual tax return for 2015. (Id. ¶ 277.) On or around October 3, 2017, the Gulf Land Syndicate received an audit notice for the 2015 tax year.¹⁶ (Id. ¶ 278.)

16 Defendants subsequently filed a petition with the Tax Court challenging the disallowance of the claimed deduction for this transaction as well. See Gulf Land S&G, LLC v. Comm'r of Internal Revenue , No. 32162-21 (T.C.) (filed Nov. 30, 2021).

C. The Present Lawsuit

Plaintiffs filed the present lawsuit on July 3, 2020. (Compl., Doc. 1.) They amended their Complaint on January 8, 2021 and amended it a second time on February 24, 2021. (Docs. 200, 218.) In the SAC, Plaintiffs allege that Defendants advanced an unlawful scheme in which they "fraudulently and grossly inflate[d]" the value of the Syndicates’ claimed charitable deductions and "[sold] the corresponding tax deduction to Plaintiffs and other clients for lucrative professional fees." (SAC, Doc. 218 ¶ 1.) Plaintiffs allege that Defendants leveraged their "purported expertise, experience, and reputation" to induce Plaintiffs into participating in the SCE Strategy, which they marketed as a "legitimate tax-savings product." (Id. ) However, Plaintiffs further allege that each of the Defendants knew or should have known that the claimed deductions did not comply with Section 170(h) of the Tax Code and other applicable laws and regulations. (Id. ¶ 62.) They also allege that Defendants knew that the IRS was heavily scrutinizing syndicated conservation easement transactions, and Defendants knew or should have known that the IRS would disallow the deductions. (Id. ¶ 64.)

Plaintiffs claim that unbeknownst to them, Defendants had entered into undisclosed, improper business arrangements for the purpose of advancing their own financial interests. More specifically, Plaintiffs allege that Defendants " conspired with one another to design, promote, sell, and implement the SCE Strategy for the purpose of receiving and splitting substantial fees," and that each Defendant had a distinct role in this alleged conspiracy. (Id. ¶¶ 298–99.) As a component of this conspiracy, Plaintiffs allege that Defendants "utilized their connections and networks to identify potential clients as ‘targets’ for SCE Strategy." (Id. ¶ 303.) Plaintiffs also allege that the OSI Defendants either directly or indirectly paid the other Defendants a share of the fees generated by the transactions, (id. ¶ 304), and that the MMM Defendants handpicked both the Appraisers who performed the appraisals that were central to the scheme and the Land Trusts that accepted the donations, (id. ¶¶ 306–07).

In addition, Plaintiffs allege that Defendants utilized the mail or wires to implement their common scheme, and that Defendants therefore constitute a racketeering enterprise. (Id. ¶ 12.) Finally, Plaintiffs claim that as a direct and proximate result of Defendants’ conduct, the IRS disallowed Plaintiffs claimed deductions, causing them to (1) pay substantial fees and transaction costs; (2) lose the benefits of their claimed deductions; (3) be exposed to back-taxes, interest, and penalties from the IRS; and (4) incur additional fees and expenses associated with the ensuing IRS fallout. (Id. ¶ 13.)

In the SAC, Plaintiffs raise claims against 21 individuals and entities: Morris, Manning & Martin, LLP; Timothy Pollock; Large & Gilbert, Inc.; Conservation Pays, LLC; Joseph C. Skalski; Atlantic Coast Conservancy, Inc.; Atlantic Coast Conservancy Properties, LLC; Environmental Research and Mapping Facility, LLC; Robert. D. Keller; Bennett Thrasher, LLC; Ornstein-Schuler Investments LLC; Ornstein-Schuler Capital Partners LLC; Weibel & Associates, Inc.; Clay Weibel; Lucas Mason, Inc.; Lucas Von Esh; Blethen Mine Consultants, LLC; Marvin Blethen; Donald R. Sklar; Partnership Tax Solutions, Inc.; Aaron Kowan; and the Private Client Law Group.¹⁷

17 In the interest of precision, the paragraph above includes the full name of each Defendant in unabbreviated form.

They raise 12 counts, including violations of both the Racketeer Influenced and Corrupt Organizations Act ("Federal RICO"), 18 U.S.C. §§ 1961 – 1968, and the Georgia RICO Act ("Georgia RICO"), O.C.G.A. § 16-14-1, et seq. (Counts I and III); conspiracy to violate Federal RICO and Georgia RICO (Counts II and IV); professional malpractice against the MMM Defendants, the Return Preparer Defendants,¹⁸ and the Appraiser Defendants¹⁹ (Count V); negligence against all Defendants other than the MMM Defendants, the Return Preparer Defendants, and the Appraiser Defendants (Count VI); breach of fiduciary duty and disgorgement against the MMM, L & G, OSI, PCLG, and Return Preparer Defendants (Count VIII); fraud (Count IX); negligent misrepresentation as an alternative to the fraud claim (Count VII); aiding and abetting breaches of fiduciary duty (Count X); civil conspiracy (Count XII); and an alternative claim for rescission (Count XI).

18 The Return Preparer Defendants are the L & G Defendants and the Sklar Defendants. (SAC, Doc. 218 ¶ 78.)

19 The Appraiser Defendants are the Weibel Defendants and the Lucas Defendants. (Id. ¶ 71.)

Plaintiffs also attempt to bring their claims as a class action. As stated in the SAC, Plaintiffs seek to represent a class consisting of

All Persons, from January 1, 2012 to the present, inclusive, (i) who have been assessed back-taxes, penalties, and/or interest (via a settlement with the IRS, an amended tax return renouncing the SCE deduction accepted by the IRS, a final Tax Court decision, or a Notice of Computational Adjustment from the IRS) or (ii) for which the IRS has made its final determination (via a Statutory Notice of Deficiency or FPAA) that the Person (or the entity through which they participated in the SCE Strategy) is liable for back-taxes, penalties, and/or interest, as a result of their involvement, either directly or indirectly through an ownership stake in another entity, in a Syndicated Conservation Easement designed, marketed sold, implemented or managed by the OSI Defendants.

(Id. ¶ 311.). Plaintiffs add, "Excluded from the Class are: Defendants; Defendants’ parents, subsidiaries, and affiliates; anyone receiving referral fees from the SCE Strategy transactions; and federal governmental entities." (Id. ) Plaintiffs believe the proposed class consists of over 2,000 members, and that those individuals are geographically dispersed throughout the United States. (Id. ¶ 312.)

Following Plaintiffs’ filing of the SAC, Defendants filed a joint motion to dismiss as well as twelve separate individual motions to dismiss. See (Doc. 223) (Joint MTD); (Docs. 229) (Bennett Thrasher); (Doc. 231) (Kowan and PCLG); (Doc. 233) (Sklar); (Doc. 234) (Blethen); (Doc. 236) (Weibel); (Doc. 237) (Conservation Pays and L & G); (Doc. 238) (MMM); (Doc. 240) (OSI); (Doc. 242) (ACC Defendants); (Doc. 244) (ERMF); (Doc. 248) (Skalski); (Doc. 249) (Lucas Mason). Plaintiffs responded by filing a motion to strike or, alternatively disregard evidence cited in Defendants’ motions. See (Doc. 251).

III. Legal Standard

A. Rule 12(b)(2)

A plaintiff's complaint is subject to dismissal if there is a lack of personal jurisdiction over the defendant. Fed. R. Civ. P. 12(b)(2). Plaintiff bears the burden of establishing jurisdiction in this Court. Consolidated Dev. Corp. v. Sherritt, Inc. , 216 F.3d 1286, 1291 (11th Cir. 2000) ; Diamond Crystal Brands, Inc. v. Food Movers Int'l, Inc. , 593 F.3d 1249, 1257 (11th Cir. 2010). "In the context of a motion to dismiss for lack of personal jurisdiction in which no evidentiary hearing is held, the plaintiff bears the burden of establishing a prima facie case of jurisdiction over the movant, non-resident defendant." Morris v. SSE, Inc. , 843 F.2d 489, 492 (11th Cir. 1988). Plaintiff may establish a prima facie case by presenting sufficient evidence to withstand a motion for directed verdict. Madara v. Hall , 916 F.2d 1510, 1514 (11th Cir. 1990) ; Allegiant Physicians Serv., Inc. v. Sturdy Memorial Hosp. , 926 F. Supp. 1106, 1112 (N.D. Ga. 1996). A party presents enough evidence to withstand a motion for directed verdict by putting forth "substantial evidence ... of such quality and weight that reasonable and fair-minded persons in the exercise of impartial judgment might reach different conclusions." Walker v. NationsBank of Fla. , 53 F.3d 1548, 1554 (11th Cir. 1995) ; see also Polskie Linie Oceaniczne v. Seasafe Transp. A/S , 795 F.2d 968, 972 (11th Cir. 1986) (noting that, if the defendant makes a showing of the inapplicability of the long-arm statute, "the plaintiff is required to substantiate the jurisdictional allegations in the complaint by affidavits or other competent proof, and not merely reiterate the factual allegations in the complaint."). The Court construes the allegations in the complaint as true to the extent that they are uncontroverted by defendant's evidence. Morris , 843 F.2d at 492 ; Allegiant Physicians , 926 F. Supp. at 1112 ; Foxworthy v. Custom Tees, Inc. , 879 F. Supp. 1200, 1207 n.10 (N.D. Ga. 1995).

B. Rule 12(b)(6)

To survive a motion to dismiss under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). For the purposes of a motion to dismiss, the court must accept all factual allegations in the complaint as true; however, the court is not bound to accept as true a legal conclusion couched as a factual allegation. Twombly , 550 U.S. at 555, 127 S.Ct. 1955. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Iqbal , 556 U.S. at 679, 129 S.Ct. 1937. Although the plaintiff is not required to provide "detailed factual allegations" to survive dismissal, "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 678, 129 S.Ct. 1937 ; Twombly , 550 U.S. at 555, 127 S.Ct. 1955.

IV. Discussion

A. Plaintiffs’ Motion to Strike

Before addressing Defendants’ 13 motions to dismiss, the Court first considers Plaintiffs’ motion to strike or, alternatively, disregard various extrinsic evidence relied on in Defendants’ motions.

In their motion, Plaintiffs seek to exclude several categories of evidence included in Defendants’ motions to dismiss. The first category includes the Promotional Materials for the four transactions discussed in the SAC and the Investor Agreements Plaintiffs signed when they purchased their shares in the four Syndicates. The second category includes two exhibits attached to Defendant Skalski's motion to dismiss — one is an article about conservation easements and the other is excerpts from one of Skalski's K-1s. The third category includes thirteen exhibits accompanying Defendant Robert Keller's declaration, which was included with the ACC Defendants’ motion to dismiss. These exhibits specifically include Conservation Easement Deeds, Form 8283s, BDRs, and the letters the ACC Defendants sent to the Syndicates to confirm the receipt of the conservation easements.²⁰

20 The Court notes that Plaintiffs also challenge the Promotional Materials and Investor Agreements attached to the MMM Defendants’ motion to dismiss; however, the Court finds Plaintiffs’ challenge to these documents duplicative of their challenge to the Promotional Materials and Investor Agreements described in the first category.

Ordinarily, the evidence the Court considers on a motion to dismiss should be limited to the four corners of the complaint because otherwise the motion would be converted to a motion for summary judgment. See 5C Charles Allen Wright et al., Federal Practice and Procedure § 1366 (3d ed. 1998) (noting that "whenever outside matters are presented to and not excluded by the court, the matter will be considered by the appellate court as one for summary judgment"). But the Eleventh Circuit has recognized an exception to this general rule for when "the plaintiff refers to certain documents in the complaint and those documents are central to the plaintiff's claim." Brooks v. Blue Cross & Blue Shield of Fla., Inc. , 116 F.3d 1364, 1369 (11th Cir. 1997). In such circumstances, "the Court may consider the documents part of the pleadings for purposes of Rule 12(b)(6) dismissal," meaning that "the defendant's attaching such documents to the motion to dismiss will not require conversion of the motion into a motion for summary judgment." Id. This exception applies when the materials cited are both (1) "central to the plaintiff's claim" and (2) "undisputed." Horsley v. Feldt , 304 F.3d 1125, 1134 (11th Cir. 2002). In their motion, Plaintiffs primarily argue that none of the challenged documents should be treated as incorporated by reference into the SAC because they are not "central" to Plaintiffs’ claims.

As an initial matter, Defendants argue that Plaintiffs’ motion is procedurally improper because only materials included in the pleadings may be subject to a motion to strike, and materials accompanying motions to dismiss are not "pleadings." Defendants may well be correct about this to the extent Plaintiffs’ motion is framed as a motion to strike. But in any event, the Court need not reach the issue because Plaintiffs have alternatively framed their motion as a motion to "disregard" the challenged evidence. Hence, the Court may still "disregard" that evidence, as Plaintiffs request in their motion, even if the Court declines to "strike" those same materials.

Turning to Plaintiffs’ specific challenges, the Court begins with the Promotional Materials. As this Court observed when it denied a similar motion filed by the plaintiffs in Lechter , "it appears that the Promotional Materials were one of the primary vehicles — if not the primary vehicle — through which Plaintiffs claim they were defrauded." 565 F.Supp.3d at 1301. Indeed, as Defendants point out, Plaintiffs cite the Promotional Materials no less than 61 times in the SAC. Further, Plaintiffs do not dispute their authenticity. Plaintiffs do contend that they "do not necessarily agree on what makes up" the Promotional Materials, but this vague assertion on Plaintiffs’ part is not an effective challenge to the authenticity of the Promotional Materials. Though Plaintiffs alternatively argue that the Promotional Materials should not be considered because Defendants are relying on them for purposes of an affirmative defense, that is not a relevant consideration for purposes of whether the documents are incorporated by reference into the complaint. And even if it were a relevant consideration, it would not be dispositive because the Promotional Materials also inform whether Plaintiffs reasonably relied on Defendants’ representations and omissions, which is an element of Plaintiffs’ common law fraud and negligence claims. The Court will therefore consider the Promotional Materials for purposes of resolving the pending motions to dismiss.

The Court next considers the Investor Agreements. As Defendants point out, the Investor Agreements are the very means by which Plaintiffs purchased their LLC interests that led to the claimed charitable deductions. Additionally, Plaintiffs raise an alternative claim for rescission, and the Investor Agreements are the very documents that Plaintiffs seek to rescind. Moreover, Plaintiffs can hardly dispute the authenticity of these documents given that they each personally signed them. Nevertheless, Plaintiffs claim that there is still a "dispute" over both whether Defendants’ disclaimer defense applies and whether the Court should grant Plaintiffs’ rescission claim. That may be so, but that only proves Defendants’ point about the centrality of the Investor Agreements to Plaintiffs’ claims. And to the extent Plaintiffs argue that the Investor Agreements were not effective disclaimers, that argument has no bearing on the authenticity of the documents themselves. The Court will therefore consider the Investor Agreements.

The Court need not reach a conclusion with respect to the attachments to Skalski's motion to dismiss because, as explained below, the Court can resolve that motion on an alternative ground. The Court therefore concludes by addressing the documents referenced in the ACC Defendants’ brief: the Conservation Easement Deeds, the BDRs, the Form 8283s, and the receipt letters. These documents may be treated as incorporated by reference into the complaint as well. First of all, Plaintiffs do not challenge the authenticity of any of the documents. Secondly, the centrality of the documents to Plaintiffs’ complaint is clear given that they are precisely the same documents Plaintiffs rely on as evidence of both the ACC Defendants’ alleged fraudulent misrepresentations and their alleged predicate acts of mail and wire fraud.²¹ The Court therefore declines to strike or disregard these documents.

21 As Defendants also point out, Plaintiffs refer to the Conservation Easement Deeds over 40 times in the SAC and they refer to the BDRs over 50 times.

Accordingly, Plaintiffs’ motion to strike or, alternatively, disregard various extrinsic evidence relied on in Defendants’ motions to dismiss is DENIED .

B. Threshold Issues Pertaining to Defendants’ Motions to Dismiss

1. Standing

Like the defendants in Lechter , Defendants argue that Plaintiffs lack standing to bring their claims. In essence, Defendants argue that Plaintiffs’ claims stem from the disallowance of the Syndicates’ claimed deductions at the partnership level, and that Plaintiffs lack Article III or RICO standing to bring derivative claims on behalf of the Syndicates in which they are merely members. In other words, Defendants argue that the proper Plaintiffs in this case are the Syndicates of which Plaintiffs are members rather than the Plaintiffs themselves.

As the Court discussed in detail in Lechter , the Supreme Court has addressed the limitations on individual plaintiffs’ standing to bring RICO claims on several occasions. For instance, in Anza v. Ideal Steel Supply Corp. , 547 U.S. 451, 126 S.Ct. 1991, 164 L.Ed.2d 720 (2006), the Supreme Court found that a business lacked standing to bring RICO claims against a competitor business when that business had allegedly defrauded the State of New York. In so holding, the Court emphasized that the direct victim of the fraud was the State of New York, not the plaintiff, and the plaintiff was only indirectly injured by the defendant's subsequent act of lowering its prices for customers. Several years later, the Supreme Court addressed Federal RICO standing again in Hemi Group, LLC v. City of New York , 559 U.S. 1, 130 S.Ct. 983, 175 L.Ed.2d 943 (2010). In that case, the Supreme Court found that the City of New York lacked standing when it allegedly lost sales tax revenue as an indirect consequence of the defendant's failure to submit customer information to the State.

Defendants rely on this line of cases as well as Harris v. Orange, S.A. , 636 F. App'x 476 (11th Cir. 2015), an unpublished opinion from the Eleventh Circuit. In Harris , the court found that the plaintiff lacked standing to bring a RICO claim when she alleged that the defendant's conduct deprived her of the value of her shares in a corporation in which she was a member. The court concluded that the plaintiff's injury was indistinguishable from the injury to the corporation because the injuries simply "flowed from her status as a shareholder and the diminution in the value of her shares." Id. at 481. Notably, the Eleventh Circuit found that situation in Harris distinguishable from other Eleventh Circuit cases where the court had found that the plaintiff had standing to sue based on "injuries inflicted directly on the plaintiff shareholder." Id. at 482. For example, in Beck v. Prupis , 162 F.3d 1090 (11th Cir. 1998), the Eleventh Circuit found that "[a] plaintiff's status as a creditor or stockholder ... does not preclude standing for RICO violations if the plaintiff has alleged an injury proximately caused by the defendants’ acts of racketeering that target the plaintiff. " Id. at 1096 n.10 (emphasis added). And because the plaintiff there had "properly set forth claims of injury proximately caused by racketeering activity that targeted him," the court concluded that he therefore had standing to pursue a RICO claim. Id. Likewise, in Bivens Gardens Office Building, Inc. v. Barnett Banks of Florida, Inc. , 140 F.3d 898 (11th Cir. 1998), the Eleventh Circuit acknowledged its prior holding that a plaintiff "had standing to bring a RICO claim" when "as a target of the defendant's alleged scheme, his injury would have been a direct result of the defendant's substantive RICO violation." Id. at 906 (citing Pelletier v. Zweifel , 921 F.2d 1465, 1500 (11th Cir. 1991), abrogated on other grounds by Bridge v. Phoenix Bond & Indem. Co. , 553 U.S. 639, 128 S.Ct. 2131, 170 L.Ed.2d 1012 (2008) ). The court added that in that circumstance "[b]ecause injury to the solicited investors was the direct result of the alleged activity, such an injury would have been sufficient to confer RICO standing." Id.

Plaintiffs argue that they have standing to bring their claims because they are raising those claims not on behalf of the Syndicates but on behalf of themselves as the individual investors who were targeted with a scam and subsequently incurred damages in their own individual capacities. Whereas the injury to the plaintiff in Harris was purely contingent on her status as a shareholder and rooted in "the diminution in the value of her shares," Plaintiffs argue that unlike the plaintiff in Harris they have suffered distinct injuries, such as back taxes, transactional costs, litigation expenses, and individual penalties. Plaintiffs therefore contend that they are in fact "bringing their own claims for injuries they sustained" as a result of "Defendants’ wrongful conduct that targeted them," which is sufficient to confer standing under binding case law in the Eleventh Circuit. (Pls.’ Opp'n to Joint MTD, Doc. 263 at 53–54) (citing Beck , 162 F.3d at 1096 n.10 ). Courts in other jurisdictions have reached the same conclusion in similar circumstances. See In re Colonial Ltd. P'ship Litig. , 854 F. Supp. 64, 105 (D. Conn. 1994) (holding that plaintiffs had standing to pursue RICO claims when they alleged that "defendants’ fraudulent conduct induced them to purchase their limited partnership interests" and "that they were injured directly by the defendants’ conduct"); see also Zurich Corp. Mkts. Inc. v. Coglianese , 332 F. Supp. 2d 1087, 1094, 1116 (N.D. Ill. 2004) (holding that plaintiff had standing to pursue RICO claims when it alleged that defendants "orchestrated an elaborate scheme to defraud [Plaintiff] and other investors out of millions of dollars by fraudulently inducing Plaintiffs to invest in highly risky and illiquid funds, while defrauding Plaintiffs into believing that they were actually investing in an extremely safe and liquid fund"); but see Rezner v. Bayerische Hypo-Und Vereinsbank AG , 630 F.3d 866, 874 (9th Cir. 2010) (holding that plaintiff lacked standing to bring RICO claim against organizers of a tax shelter scheme because "the United States, not Rezner, was the immediate victim of HVB's fraud and better situated to sue HVB").

As this Court previously found in Lechter , further factual development may be needed to determine whether this is a situation in which the plaintiff shareholders were injured by "acts of racketeering activity that target the plaintiff," Harris , 636 F. App'x at 481 (quoting Beck , 162 F.3d at 1096 n.10 ), or whether it is one in which the plaintiff shareholders suffered injuries "only as a result of harm to the corporation," id. (quoting Bivens , 140 F.3d at 908 ). For purposes of the pleading stage, however, Plaintiffs have plausibly alleged injuries distinct from the injuries to the Syndicates under the standards adopted by the Supreme Court and the Eleventh Circuit, assuming that they actually can also prove their substantive claims.

Therefore, just as in Lechter , the Court finds that Plaintiffs here have adequately plead a direct injury that was proximately caused by Defendants. On the current record, it also appears to the Court that these injuries are concrete and particularized, actual or imminent, fairly traceable to Defendants, and redressable by court order. Plaintiffs therefore satisfy the pleading requirements for both Article III and RICO standing. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc. , 528 U.S. 167, 180–81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) ("[T]o satisfy Article III's standing requirements, a plaintiff must show (1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." (quoting Lujan v. Defenders of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) )); Anza , 547 U.S. at 453, 126 S.Ct. 1991 ("[A] plaintiff may sue under § 1964(c) only if the alleged RICO violation was the proximate cause of the plaintiff's injury."). 2. Statute of Limitations

Defendants next argue that the majority of Plaintiffs’ claims are barred by the applicable statutes of limitations. Like in Lechter , though the parties vigorously dispute whether each of the applicable statutes of limitations have actually run, they generally agree what the statute of limitations should be for most claims, absent tolling: five years for the Georgia RICO claims, O.C.G.A. § 16-14-8 ; four years for the federal RICO claims, Rotella v. Wood , 528 U.S. 549, 553, 120 S.Ct. 1075, 145 L.Ed.2d 1047 (2000) ; and no more than four years for the state common law claims, O.C.G.A. § 9-3-31. The one exception is Plaintiffs’ professional negligence-based claims, for which Defendants argue that a shorter two-year statute of limitations should apply. But in any case, the parties agree that with the exception of Plaintiffs’ Georgia RICO claims, which Defendants do not claim are time-barred, the statute of limitations for Plaintiffs’ remaining claims is no longer than four years.²²

22 Unlike in Lechter , Plaintiffs in this case also raise an alternative claim for rescission. The Court will address the timing of that claim separately.

In this case, Plaintiffs all purchased their interests in the Syndicates between Fall 2013 and Fall 2015 and did not file suit until Summer 2020. That approximately five-to-seven year timespan is greater than the maximum four-year statute of limitations for each of Plaintiffs’ common-law claims, the four-year statute of limitations for their Federal RICO claims, and the five-year statute of limitations for their Georgia RICO claims for two of the four representative transactions. But as the Court noted in Lechter , that is not necessarily dispositive. As the Eleventh Circuit has made clear, "a Rule 12(b)(6) dismissal on statute of limitations grounds is appropriate only if it is ‘apparent from the face of the complaint’ that the claim is time-barred," La Grasta v. First Union Sec., Inc. , 358 F.3d 840, 845 (11th Cir. 2004) (quoting Omar v. Lindsey , 334 F.3d 1246, 1251 (11th Cir. 2003) ). And even if the statute of limitations began to run when Plaintiffs purchased their shares, the statute of limitations could potentially be tolled for each of Plaintiffs’ claims if Defendants prevented Plaintiffs from filing suit through an act of fraudulent concealment.²³ Cf. Sec'y of Lab. v. Labbe , 319 F. App'x 761, 764 (11th Cir. 2008) (declining to dismiss complaint on statute of limitations grounds because "as to those violations that may be time-barred" the court could not "conclude beyond a doubt that the Secretary can prove no set of facts that toll the statute").

23 Georgia law provides that when a plaintiff "has been debarred or deterred from bringing an action" through an act of fraud "the period of limitation shall run only from the time of the plaintiff's discovery of the fraud." O.C.G.A. § 9-3-96. Similarly, Federal RICO claims are "subject to equitable tolling," Curtis Inv. Co. v. Bayerische Hypo-Und Vereinsbank , No. 1:06-cv-2752, 2007 WL 4564133, at *9 (N.D.) (citing Rotella , 528 U.S. at 562, 120 S.Ct. 1075 ), which "allows a plaintiff to sue after the expiration of the statute of limitations if the plaintiff has been prevented from filing suit due to fraudulent concealment or other inequitable circumstances," Rowe v. Gary, Williams, Parenti, Watson & Gary, P.L.L.C. , 181 F. Supp. 3d 1161, 1174 (N.D. Ga. 2016), rev'd on alternative grounds , 703 F. App'x 777 (11th Cir. 2017).

The Court begins by addressing when the statutes of limitation should begin to run. For federal RICO claims, the statute of limitations begins to run "when the injury was or should have been discovered, regardless of whether or when the injury is discovered to be part of a pattern of racketeering." Rowe v. Gary, Williams, Parenti, Watson & Gary, P.L.L.C. , 181 F. Supp. 3d 1161, 1173 (N.D. Ga. 2016) (quoting Maiz v. Virani , 253 F.3d 641, 676 (11th Cir. 2001) ), rev'd on alternative grounds , 703 F. App'x 777 (11th Cir. 2017). This is "more restrictive" than the statute of limitations for a Georgia RICO claim. S. Intermodal Logistics, Inc. v. D.J. Powers Co. , 251 Ga.App. 865, 555 S.E.2d 478, 481 (2001). Georgia RICO claims do not accrue until plaintiffs are both aware of the injury and aware that the injury was the result of a pattern of racketeering activity, or else could have discovered both of these things through reasonable diligence. See id. ; Peery v. CSB Behavioral Health Sys. , No. 106-172, 2008 WL 4425364, at *20 (S.D. Ga. Sept. 30 2008). This is ultimately "a question of fact which must be resolved by a jury." S. Intermodal Logistics , 555 S.E.2d at 482. As for Plaintiffs’ state common law claims, the four-year statute of limitations for fraud claims begins to run "at the time the plaintiff sustains actual damages from the fraud." Curtis Inv. Co., LLC v. Bayerische Hypo-und Vereinsbank, AG , 341 F. App'x 487, 494–95 (11th Cir. 2009) (citing Green v. White , 229 Ga.App. 776, 494 S.E.2d 681, 685 (1997) ). The same is true for claims based on negligent misrepresentation. See Mbigi v. Wells Fargo Home Mortg. , 316, 336 Ga.App. 316, 785 S.E.2d 8, 18 (2016) ("[I]n a claim for economic injury sustained due to reliance upon false information negligently provided by a defendant, the statute of limitation begins to run when the plaintiff suffers pecuniary loss with certainty, and not as a matter of pure speculation." (quoting Hardaway Co. v. Parsons, Brinckerhoff, Quade & Douglas , 267 Ga. 424, 479 S.E.2d 727, 730 (1997) )). And for malpractice claims, the statute of limitations does not begin to run until "the plaintiff could first have maintained the action against the defendant to a successful result." Gibson v. Casto , 233 Ga.App. 403, 504 S.E.2d 705, 707 (1998).

Relying on Curtis Investment Co. v. Bayerische Hypo-und Vereinsbank, AG , 341 F. App'x 487 (11th Cir. 2009), Defendants argue, "the statute of limitations begins to run on an investment fraud claim ... when the plaintiff signs a contract that contains terms contrary to those representations." (Defs.’ Joint MTD, Doc. 223-1 at 58) (quoting Curtis , 341 F. App'x at 495 ). In Curtis , the court found that the statute of limitations began to run when the plaintiff signed a loan agreement containing terms that were "wholly inconsistent" with the defendant's prior representations and the plaintiff's understanding of the deal; namely, a term stating that the defendant could demand repayment of the loan after a single year. 341 F. App'x at 495.

Like the plaintiff in Curtis , Plaintiffs signed agreements that contradict Defendants’ alleged prior representations and Plaintiffs’ understanding of the deal. Specifically, Defendants note, "the Investor Agreements disavowed any promise of a deduction in any amount and warned of numerous risks with the conservation easements, including that the entire charitable deduction could be lost." (Id. ) Defendants provide detailed excerpts of this language in their Joint Motion to Dismiss:

F. Potential Changes in Law. There can be no assurance that the Internal Revenue Code (the "Code") or existing Treasury regulations thereunder will not be amended in such a manner as to alter the present form of computing the federal income tax liability of Investors, or to otherwise change in a materially adverse way the potential tax consequences

from an investment in the Membership interest.

G. Risks of Conservation Easements. ... You should be aware that conservation easements, the appraisal methodologies and techniques used in establishing the value thereof, and the tax laws applicable thereto, have come under significant scrutiny and criticism by Treasury officials in recent years, and proposed legislative changes have been identified as a means of increasing the Treasury revenues. If these proposed legislative changes were enacted, they would have a material adverse effect on the tax benefits which might otherwise arise from a charitable donation or an investment in the Membership Interest ... In addition, there are substantial risks associated with the granting of conservation easements, including, but not limited to, the valuation of the easement itself. ... Moreover, there is no assurance of the potential tax impact on a particular Investor in the event that the conservation easement is granted.

H. Risk of Audit. ... In the event of any audit adjustments, a Member might incur attorney's fees, court costs, and other expenses in connection with contesting a proposed deficiency asserted by the IRS ... Recent scrutiny of conservation easement transactions, as well as recent and proposed changes to IRS forms and reporting requirements for such transactions, may increase the likelihood that the Subsidiary's or the Company's return might be reviewed for possible audit. ...

I. Appraisal and Valuation Risks. ... THE VALUATION OF CONSERVATION EASEMENTS MAY BE CONSIDERED ESPECIALLY PROBLEMATIC AND HIGHLY SPECULATIVE [and] SUBJECT TO QUESTION BY THE IRS ... Qualified appraisals are not to be construed as a guaranty of value, or as an assurance that the value could be sustained on an audit by the IRS. If a lower valuation of the Property is determined, then the amount of the contribution deduction available to Subsidiary and ultimately the Company and the investors will be decreased. If the Subsidiary grants a conservation easement, neither the Company nor the Manager have guaranteed the amount of the appraisal or the amount of the contribution deduction to be allocated to the Investors.

(Defs.’ Joint MTD, Doc. 223-1 at 40–41) (capitalization in original) (citing Doc. 223-6 at 5–6, Doc. 223-7 at 5–6, Doc. 223-8 at 6–7, and Doc. 223-9 at 6–7). As Defendants point out, these agreements "warned of the very risks Plaintiffs now claim were not disclosed," including "[t]he risks that the IRS may challenge the value of the appraisal," "[t]he ‘substantial risks’ of conservation easement donations," "[t]he increased scrutinization of conservation easements by the IRS," "[t]he risk of an audit and attendant expenses," "[t]he risk that the IRS may challenge the appraisal as a qualified appraisal," "[t]he risk that any deduction may be reduced," and "[t]he risk of substantial penalties if a deduction was disallowed." (OSI Defs.’ MTD, Doc. 240-1 at 6–7.)

In other words, the Investor Agreements Plaintiffs signed contained clear warnings that Plaintiffs’ claimed deductions may be disallowed, just like the clear warnings in the agreement in Curtis stating that repayment may be required after a year. Defendants therefore conclude that the statute of limitations should begin to run for claims related to each of the representative transactions when Plaintiffs invested in the LLCs: Fall 2013 for Lakepoint, Fall 2014 for Industrial, and Fall 2015 for both FG River and Gulf Land.

In their opposition, Plaintiffs argue that the statute of limitations for their claims should not be triggered until the IRS audits concluded because until then it was "not inevitable" that the deductions would be disallowed. But even if it was not inevitable, Plaintiffs had certainly received "sufficient ‘storm warnings’ to trigger the duty to inquire" by the time they signed their investor agreements. Youngblood-W. v. Aflac Inc. , No. 4:18-cv-83, 2018 WL 10562576, at *6 (M.D. Ga. Oct. 22, 2018) (quoting Koch v. Christie's Int'l PLC , 699 F.3d 141, 153 (2d Cir. 2012) ). By way of analogy, it was not inevitable that the defendant in Curtis would demand the plaintiff's repayment of the loan within a year when the plaintiff signed the loan agreement, but that was still the triggering event for the statute of limitations.

The Fourth Circuit addressed an even more factually similar situation in Brumbaugh v. Princeton Partners , 985 F.2d 157 (4th Cir. 1993). There, the court determined that because an investment prospectus like the Promotional Materials in this case "sufficiently disclosed the risks that subsequently led the IRS to disallow the deductions," the statute of limitations should begin to run on the date the plaintiff investor purchased an interest in the limited partnership. Id. at 159. The court's rationale was that at that point the plaintiff was on "inquiry notice" that the deductions could be disallowed. Id. ; see also Dodds v. Cigna Secs., Inc. , 12 F.3d 346, 351 (2d Cir. 1993) (finding that plaintiff was placed on constructive notice of the illiquidity of her investments in limited partnerships when prior to investing she signed disclosure forms that "prominently state near the top: ‘I fully understand the illiquid nature of an investment in [the limited partnership] and that no secondary market is likely to exist for limited partnership units.’ "). The same is true in this case.

Although Plaintiffs allege that they "did not and could not discover the wrongful acts of the Defendants or the injuries caused by the wrongful acts of the Defendants alleged herein shortly before the filing of this lawsuit," (SAC, Doc. 218 ¶ 368), that argument is belied by the disclaimers Plaintiffs received prior to purchasing their shares. The Promotional Materials that Plaintiffs received prior to purchasing their interests in the Syndicates contained warnings that no return on investment was guaranteed and urged Plaintiffs to "rely upon their independent examination and judgment." (OSI Defs.’ MTD, Doc. 240-1 at 6) (citing Doc. 223-2 at 10, Doc. 223-3 at 3, Doc. 223-4 at 3, and Doc. 223-5 at 3). Then, when they purchased their interests in the Syndicates, as previously noted, Plaintiffs signed Investor Agreements that clearly identified a multitude of particular risks associated with syndicated conservation easement transactions.

Granted, this Court previously observed in Lechter that even though under Georgia law "the mere presence of a disclaimer" can render reliance unreasonable, Middleton v. Int'l Bus. Machs. Corp. , 787 F. App'x 619, 622 (11th Cir. 2019), factual issues may prevent a court from determining at the pleading stage that the disclaimers would "preclude any reasonable reliance as a matter of law," Raysoni v. Payless Auto Deals, LLC , 296 Ga. 156, 766 S.E.2d 24, 26 (2014). In Lechter , the Court found that there were factual questions as to whether the plaintiffs viewed any of the defendants as their own tax advisors. Specifically, the plaintiffs there had alleged that they decided to invest in the Syndicates based not only on the written representations contained in the Promotional Materials, but also based on the advice and representations they separately received from Defendants. As the Court explained,

Plaintiffs allege that the Dalba Plaintiffs consulted with Defendant Greenberger before deciding to invest in the Maple Landing Syndicate, and that Greenberger advised them "the SCE Strategy complied with the requirements of Code Section 170(h) and, as a result, they could legally report this allocated charitable contribution deduction provided by the SCE Strategy." Similarly, Plaintiffs allege that Lechter consulted with both Defendant Jowers and Defendant Zak before deciding to invest in the Oakhill Woods Syndicate, and that these Defendants "advised Lechter that the SCE Strategy complied with the requirements of Code Section 170(h) and, as a result, he could legally report this allocated charitable contribution deductions provided by the SCE Strategy." Plaintiffs also allege that, as a result of Defendants’ misrepresentations and omissions, they had to hire "new tax and legal advisors to rectify the situation."

565 F.Supp.3d at 1322 (internal citations omitted). The Court concluded, "These allegations raise a plausible inference that Plaintiffs viewed Defendants as their own tax advisors." Id. As a consequence, the Court found, "it would be premature to determine how the disclaimers should be read in conjunction with any additional written or oral misrepresentations Defendants have made, and whether Plaintiffs should have understood these disclaimers as qualifying any other written or oral misrepresentations Defendants may have made."²⁴ Id. at 1322 (citing Raysoni , 766 S.E.2d at 27 ).

24 Although the Court analyzed the disclaimers in the context of the reliance element for the plaintiffs fraud claims in Lechter , the effect of the disclaimers informs the statute of limitations analysis as well. See 565 F.Supp.3d at 1304 n.19.

Here, not only are the disclaimers in this case ostensibly more clear and unequivocal than the disclaimers in Lechter , but unlike in Lechter , there are no allegations of contemporaneous oral representations that may inform the Court's analysis. Plaintiffs do not allege, as the plaintiffs in Lechter did, that after receiving Promotional Materials Defendants advised them that the transactions complied with all relevant laws and regulations; instead, they simply allege that they chose to invest in the Syndicates after receiving the Promotional Materials.

Plaintiffs do allege in the SAC that "[w]hen OSI or another referral source had trouble convincing a client to participate in the SCE Strategy, Pollock would personally meet with these potential participants and/or their advisor to convince the individual to participate in the SCE Strategy." (SAC, Doc. 218 ¶ 94.) But Plaintiffs do not allege that Pollock personally met with any of the named Plaintiffs. Nor do Plaintiffs allege that any of the named Plaintiffs actually spoke with any of the Defendants prior to making the decision to invest in the Syndicates, as the plaintiffs in Lechter had alleged. The fact that Plaintiffs fail to include any references to such conversations in their 266-page complaint is telling. In support of their tolling theory, Plaintiffs allege that Defendants advised them that the deductions "complied with all applicable tax laws and regulations and would be accepted by the IRS," and that based on these representations "Plaintiffs and the members of the Class were delayed and deterred from bringing their claims against Defendants at an earlier date." (SAC, Doc. 218 ¶ 369.) However, there are virtually no allegations in the SAC that could support Plaintiffs’ theory that they were fraudulently deterred from bringing suit despite the clear "storm warnings" contained in the Investor Agreements. The closest Plaintiffs come to alleging fraudulent deterrence is a reference to a June 4, 2017 email from Matt Ornstein of OSI to Radow "regarding audit notices" in which Ornstein simply stated, "And please rest assured that we have complete confidence in the valuations and have the resources to defend through tax court if we have to." (Id. ¶ 351(zz).)

Compare that to the allegations in Lechter . In the complaint for that case, the plaintiffs alleged that the defendants (1) advised them that the status as a listed transaction "in no way makes this transaction illegal" and "should not significantly change the risk profile of your investment"; (2) "continued to reassure the members that there was nothing to worry about" after the IRS issued Revenue Agent Reports ("RARs") indicating that it would disallow the deductions; and (3) told them after the RARs were issued "[i]t is important to remember that this report is issued in connection with the very first stage of the IRS process, and tax counsel [Sirote] has advised us that the report marks only the beginning of the proceedings." Lechter , 565 F.Supp.3d at 1305.

Simply put, Plaintiffs have not plausibly alleged that a tolling provision applies. The statutes of limitations therefore began to run at the time Plaintiffs signed their Investor Agreements and expired after four years in the case of Plaintiffs’ common law and Federal RICO claims. Plaintiffs signed the Investor Agreements for two of the four representative transactions outside of the five-year statute of limitations period for a Georgia RICO claim. However, there is a question of fact as to whether by that point Plaintiffs could have discovered through reasonable diligence both that they had been injured and that the injury in question was a result of a pattern of racketeering activity. S. Intermodal Logistics , 555 S.E.2d at 481–82. As a consequence, all of Plaintiffs’ claims with respect to the four representative transactions are time-barred with the exception of the Georgia RICO and conspiracy to violate Georgia RICO claims.

3. Personal Jurisdiction

One set of Defendants — the Blethen Defendants — separately argue that the claims against them should be dismissed because they are not subject to personal jurisdiction in this Court. To determine whether the Blethen Defendants are subject to personal jurisdiction, the Court must assess whether exercising personal jurisdiction over these Defendants would be consistent with both the Georgia long-arm statute and the Due Process Clause.²⁵

25 As the Eleventh Circuit has acknowledged, "[T]he Georgia long-arm statute does not grant courts in Georgia personal jurisdiction that is coextensive with procedural due process." Diamond Crystal , 593 F.3d at 1259. Rather, the long-arm statute "imposes independent obligations that a plaintiff must establish for the exercise of personal jurisdiction that are distinct from the demands of procedural due process." Id. Thus, "the exercise of personal jurisdiction in Georgia requires a court to find that at least one prong of the long-arm statute is satisfied." Id. at 1260. And because the reach of the long-arm statute is a state law, federal courts are required to interpret the long-arm statute "as would the state's supreme court." Lockard v. Equifax , Inc., 163 F.3d 1259, 1265 (11th Cir. 1998).

To start, the Georgia longarm statute authorizes jurisdiction over an out-of-state Defendant who (1) "[t]ransacts any business within this state," O.C.G.A. § 9-10-91(1) ; (2) "[c]ommits a tortious act or omission within this state, except as to a cause of action for defamation of character arising from the act," id. § 9-10-91(2) ; or (3) "[c]ommits a tortious injury in this state caused by an act or omission outside this state" if the Defendant "regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state," id. § 9-10-91(3). Next, to determine whether the exercise of specific jurisdiction over a nonresident defendant comports with the Due Process Clause, the Court must apply a three-prong test that looks to (1) "whether the nonresident defendant ‘purposefully availed’ himself of the privilege of conducting activities within the forum state, thus invoking the benefit of the forum state's laws"; (2) "whether the plaintiff's claims ‘arise out of or relate to’ at least one of the defendant's contacts with the forum"; and (3) "whether the exercise of personal jurisdiction comports with ‘traditional notions of fair play and substantial justice.’ " Louis Vuitton Malletier, S.A. v. Mosseri , 736 F.3d 1339, 1355 (11th Cir. 2013) (quoting Burger King Corp. v. Rudzewicz , 471 U.S. 462, 472–73, 474–75, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) ).

The plaintiff bears the burden of satisfying the first two prongs, and "if the plaintiff does so," the burden then shifts to the defendant to show that the exercise of jurisdiction in the forum state would violate traditional notions of fair play and substantial justice. Id. For due process purposes, "the constitutional touchstone remains whether the defendant purposefully established ‘minimum contacts’ in the forum." Burger King , 471 U.S. at 474, 105 S.Ct. 2174 (quoting Int'l Shoe Co. v. Washington , 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ). And for plaintiffs to meet their initial burden under the first two prongs, they must show that the defendant's "suit-related conduct" created "a substantial connection with the forum State." Walden v. Fiore , 571 U.S. 277, 284, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014) ; see Diamond Crystal , 593 F.3d at 1267 ("Put differently, the defendant must have ‘purposefully availed’ itself of the privilege of conducting activities—that is, purposefully establishing contacts—in the forum state and there must be a sufficient nexus between those contacts and the litigation.").

In their motion to dismiss, the Blethen Defendants argue that they are not subject to personal jurisdiction in Georgia because they are residents of New Jersey, not Georgia, and the alleged tortious conduct related to their mining reports took place in New Jersey and Alabama rather than Georgia. In response, Plaintiffs argue that the Court has personal jurisdiction over the Blethen Defendants because they conspired with other Defendants who were Georgia residents and they "knew and intended that their reports would be used by Georgia coconspirators in Georgia to defraud Georgians." (Pls.’ Opp'n to Blethen Defs.’ MTD, Doc. 255 at 6.)

Plaintiffs cite First National Bank of Ames, Iowa v. Innovative Clinical & Consulting Services, LLC , 280 Ga.App. 337, 634 S.E. 2d 88 (2006). There, the court noted that the Supreme Court of Georgia has interpreted the first subsection of the long-arm statute expansively when construing the language authorizing jurisdiction over Defendants who transact "any business within this state." The court found that the defendant in that case — a bank with no physical presence in Georgia — satisfied the requirement that it transact "any business" in the State based on its telephone and written communications with an in-state business. The court observed, "Even if the bank did not ‘regularly’ conduct business or engage in a ‘persistent course of conduct’ in Georgia, no doubt exists that the bank sought to derive economic benefit from its interstate business activity involving ICCS." Id. at 338, 634 S.E.2d 88 (internal citation omitted). In short, "its postal, telephone, and other intangible Georgia contacts suffice to bring it within the purview of OCGA § 9–10–91(1)." Id. The court further held that the defendant had the requisite minimum sufficient contacts with the State of Georgia, such that specific personal jurisdiction could be exercised consistent with the Due Process Clause, because the defendant "sought the state's citizens out for purposes of business gain." Id.

Such is the case here. First, Plaintiffs have plausibly alleged that the Blethen Defendants have had communications with other Defendants in this case who reside in Georgia in the course of their business activities, which satisfies the first prong of the long-arm statute. Second, though there may be questions of fact concerning whether the Blethen Defendants "knew and intended" that the transactions at issue would involve Georgia residents, Plaintiffs have plausibly alleged that the Blethen Defendants’ "suit-related conduct" in connection with their role in preparing the mining reports that were relied upon for the appraisals establishes the requisite "substantial connection with the forum state" for the Court to exercise personal jurisdiction. Plaintiffs have therefore met their initial burden to show that the Blethen Defendants purposefully availed themselves of the forum state and that Plaintiffs claims arise out of or relate to the Blethen Defendants’ suit-related contact with the forum.

The burden now shift to the Blethen Defendants to show that the exercise of personal jurisdiction would not comport with traditional notions of fair play and substantial justice. In evaluating this element, the Court considers (1) "the burden on the defendant"; (2) "the forum's interest in adjudicating the dispute"; (3) "the plaintiff's interest in obtaining convenient and effective relief"; and (4) "the judicial system's interest in resolving the dispute." Louis Vuitton , 736 F.3d at 1358 (quoting Licciardello v. Lovelady , 544 F.3d 1280, 1288 (11th Cir. 2008) ). Here, the burden that would be imposed on the Blethen Defendants to litigate the case in Georgia is fairly minimal, especially considering that "modern transportation and communications have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity." Burger King , 471 U.S. at 474, 105 S.Ct. 2174 (quoting McGee v. Int'l Life Ins. Co. , 355 U.S. 220, 223, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957) ). "When minimum contacts have been established, often the interests of the plaintiff and the forum in the exercise of jurisdiction will justify even the serious burdens placed on the alien defendant." Asahi Metal Indus. Co. v. Superior Ct. of Cal. , 480 U.S. 102, 114, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) (plurality opinion). But here, the burden on Defendants is minimal, and the remaining factors all weigh in favor of litigating the case in Georgia: the named Plaintiffs are all located in Georgia, all of the other Defendants are located in Georgia, at least some of the properties at issue are located in Georgia, and most of the relevant evidence is likely to be located in Georgia. Thus, the interests of Plaintiffs, the forum state, and the judicial system all cut in favor of litigating the case in Georgia as opposed to somewhere else. As such, this is not "one of those rare cases in which ‘minimum requirements inherent in the concept of "fair play and substantial justice" ... defeat the reasonableness of jurisdiction even [though] the defendant has purposefully engaged in forum activities.’ " Id. at 116, 107 S.Ct. 1026 (quoting Burger King , 471 U.S. at 477–78, 105 S.Ct. 2174 ). Accordingly, the Court finds that the exercise of personal jurisdiction over the Blethen Defendants would not offend traditional notions of fair plan and substantial justice. The Court therefore declines to dismiss Plaintiffs’ claims against the Blethen Defendants for lack of personal jurisdiction.

C. The Merits of Plaintiffs’ Claims

1. Georgia RICO

Like the plaintiffs in Lechter , Plaintiffs raise claims under two separate provisions of Georgia RICO. See (SAC, Doc. 218 ¶ 393) (citing O.C.G.A. §§ 16-14-4(a), (b) ). One of these provisions, O.C.G.A. § 16-14-4(a) ("subsection(a)"), provides,

It shall be unlawful for any person, through a pattern of racketeering activity or proceeds derived therefrom, to acquire or maintain, directly or indirectly, any interest in or control of any enterprise, real property, or personal property of any nature, including money.

The other provision, O.C.G.A. § 16-14-4(b) ("subsection(b)"), states,

It shall be unlawful for any person employed by or associated with any enterprise to conduct or participate in, directly or indirectly, such enterprise through a pattern of racketeering activity.

To establish a violation under subsection (a), unlike a Federal RICO claim or a Georgia RICO claim under subsection (b),²⁶ all Plaintiffs have to show is "proof that the defendant committed predicate offenses ... at least twice." Cobb County v. Jones Grp., P.L.C. , 218 Ga.App. 149, 460 S.E.2d 516, 521 (1995) ; accord Williams v. Mohawk Indus. , 568 F.3d 1350, 1356 (11th Cir. 2009). To establish a violation of subsection (b), however, Plaintiffs would also have to show that Defendants were "employed by or associated with" an enterprise. O.C.G.A. § 16-14-4(b).

26 "Because the Georgia RICO Act is modeled upon the federal RICO statute, in the absence of Georgia authority, the Georgia courts have often looked to federal decisions for guidance on the interpretation of similar provisions of the Georgia RICO Act[.]" 4 Ga. Jur. § 7:3 (citing cases).

Under Georgia RICO, the same acts of mail and wire fraud that qualify as predicate acts under Federal RICO also qualify as predicate acts under Georgia RICO. See O.C.G.A. § 16-14-3(5)(C). And a "pattern of racketeering activity" for purposes of subsection (a) means the commission of at least two of these predicate acts, provided that they "are interrelated" and "were done ‘in furtherance of one or more incidents, schemes, or transactions.’ " Wylie v. Denton , 323 Ga.App. 161, 746 S.E.2d 689, 693 (2013) (quoting O.C.G.A. § 16–14–3(4)(A) ) (footnote omitted). Importantly, unlike for Federal RICO claims, plaintiffs do not have to show continuity to establish a pattern of racketeering activity under Georgia RICO. See Chesapeake Emps. Ins. Co. v. Eades , 77 F. Supp. 3d 1241, 1256 (N.D. Ga. 2015) ; see also 4 Ga. Jur. § 7:23 ("Georgia RICO plaintiffs need not show that the conduct will continue or that the defendants have been guilty of like conduct in the past."). Finally, a plaintiff raising a civil claim for damages under Georgia RICO must also show that the defendant's violation of the statute proximately caused the plaintiff's injury. Wylie , 746 S.E.2d at 693.

In analyzing Plaintiffs’ Georgia RICO claims, the Court will begin with the requirement that Plaintiffs establish a pattern of racketeering activity as to each Defendant. Next, the Court will consider whether that same conduct proximately caused Plaintiffs’ alleged damages.

a. Pattern of Racketeering Activity

The Georgia RICO allegations in Plaintiffs’ SAC follow the same general model as in the plaintiffs’ complaint in Lechter. For starters, in support of their Georgia RICO claims, Plaintiffs rely on the predicate acts of mail and wire fraud. See (SAC, Doc. 218 ¶ 351.) Specifically, Plaintiffs allege that Defendants utilized the mail and wires to send "contracts, instructions, correspondence, and other transmittals" in connection with each of the transactions at issue. (Id. ¶ 350.) Plaintiffs allege that Defendants sent these communications "[f]or the purpose of executing and/or attempting to execute their transaction to defraud and to obtain money by means of false pretenses, representations or promises." (Id. ) Through these communications, Plaintiffs allege that Defendants made fraudulent statements and omissions, including

• "[f]ailing to advise Plaintiffs and members of the Class that the SCE Strategy was an illegal and abusive tax shelter," (id. ¶ 354(4));

• "[a]dvising Plaintiffs and members of the Class that the SCE Strategy complied with the applicable tax laws, rules, regulations, common law doctrines, and published court decisions," (id. ¶ 354(6));

• "[f]ailing to advise Plaintiffs and members of the Class that the tax benefits of the SCE Strategy would be disallowed, if audited," (id. ¶ 354(25)); and

• "[f]ailing to advise Plaintiffs and members of the Class that each of the Defendants, the Sponsors, and the Other Participants were not ‘independent’ of one another and in fact were involved in a conspiracy to design, market, sell, and implement the SCE Strategy," (id. ¶ 354(27)).

Plaintiffs allege that Defendants’ commission of these predicate acts constituted a "pattern of racketeering activity" as defined by O.C.G.A. § 16-14-3(4) because Defendants each committed at least two related acts of mail or wire fraud within the past ten years to advance the SCE Strategy. (Id. ¶ 362.) Plaintiffs claim, in essence, that the predicate acts of mail and wire fraud are related because they were all committed for the similar purpose of defrauding Plaintiffs to generate fees. (Id. ¶ 363); see (id. ¶ 396) ("Through the fraudulent and wrongful conduct described in this Complaint, Defendants sought to obtain financial gain by depriving Plaintiffs and the Class of money and property rights."). Plaintiffs further allege that they have been "injured in their business or property" as a result of this conduct. (Id. ¶ 411.)

Like any fraud allegations, Plaintiffs’ allegations of mail and wire fraud must comply with the heightened pleading standard set forth in Fed. R. Civ. P. 9(b). Am. Dental Ass'n v. Cigna Corp. , 605 F.3d 1283, 1291 (11th Cir. 2010) ; see Burgess v. Religious Tech. Ctr., Inc. , 600 F. App'x 657 663 (11th Cir. 2015) (noting that "like any other fraud action, a [Georgia] RICO claim based on fraud must be pleaded with specificity"). Thus, Plaintiffs must "state with particularity the circumstances constituting" the mail and wire fraud. Am. Dental Ass'n , 605 F.3d at 1291 (quoting Fed. R. Civ. P 9(b) ). To satisfy Rule 9(b) ’s particularity requirement "a plaintiff must allege: ‘(1) the precise statements, documents, or misrepresentations made; (2) the time, place, and person responsible for the statement; (3) the content and manner in which these statements misled the Plaintiffs; and (4) what the defendants gained by the alleged fraud.’ " Id. (quoting Brooks , 116 F.3d at 1380–81 ). In short, Plaintiffs must set forth "the who, what, when[,] where, and how" circumstances of the fraud. Garfield v. NDC Health Corp. , 466 F.3d 1255, 1262 (11th Cir. 2006) (citation omitted). The Eleventh Circuit has acknowledged that this requirement "may be relaxed for allegations of ‘prolonged multi-act schemes.’ " Burgess , 600 F. App'x at 662–63 (quoting U.S. ex rel. Clausen v. Lab. Corp. of Am., Inc. , 290 F.3d 1301, 1314 n.25 (11th Cir. 2002) ). Under this relaxed standard, plaintiffs can satisfy Rule 9(b) ’s particularity requirement by simply pleading "one or more illustrative instances of the fraud." Id. at 663. However, plaintiffs still must provide "some measure of substantiation" to their allegations of fraud. Rowe , 181 F. Supp. 3d at 1186 (quoting Antilles Trading Co., S.A. v. Sci.-Atlanta, Inc. , 117 F.R.D. 447, 450 (N.D. Ga. 1986) ).

Importantly, "[a]n essential element of any fraud claim is that defendant knew his representation was false." First Fin. Sav. & Loan Ass'n v. Title Ins. Co. of Minn. , 557 F. Supp. 654, 661 (N.D. Ga. 1982). This is equally true for the predicate acts of mail or wire fraud. See Rowe , 181 F. Supp. 3d at 1190 ("An allegation that a defendant committed mail or wire fraud in furtherance of a RICO scheme requires a showing ‘that the defendant held the requisite mens rea ... a "conscious knowing intent to defraud." ’ ") (quoting Pelletier , 921 F.2d at 1499 (quoting United States v. Kreimer , 609 F.2d 126, 128 (5th Cir. 1980) )). In this case, like in Lechter , whether the Defendants knew that the representations they made were false largely depends on whether each Defendant knew that the appraisals of the properties were inflated — assuming for purposes of the pending motions to dismiss that the appraisals were in fact inflated. Plaintiffs do not have to provide direct evidence that Defendants knew that the appraisals were inflated and, consequently, that Defendants’ representations were fraudulent. But Plaintiffs’ allegations regarding Defendants’ knowledge of the fraud "cannot be merely conclusory and unsupported by any factual allegations." Id. (internal quotation marks omitted).

Finally, the parties vigorously dispute whether Plaintiffs are required to show that they relied on Defendants’ alleged misrepresentations and omissions to establish that Defendants committed predicate acts of mail or wire fraud. The Supreme Court addressed this question in Bridge v. Phoenix Bond & Indemnity Co. , 553 U.S. 639, 128 S.Ct. 2131, 170 L.Ed.2d 1012 (2008). In Bridge , the plaintiffs claimed that they had been injured as a consequence of misrepresentations — by means of the mail or wires — that had been relied on by a third party — Cook County, Illinois. The Court observed that nothing in the text of the Federal RICO statute imposed a first-party reliance requirement, and the statute expressly provided a cause of action to " ‘[a]ny person’ injured by the violation," which acknowledges that plaintiffs can be injured by predicate acts of mail or wire fraud even if they did not rely on them. Id. at 649, 128 S.Ct. 2131 (quoting 18 U.S.C. § 1962). The Court therefore concluded that unlike for a common law fraud claim — for which reliance is an underlying element — reliance is not an element of a statutory claim of mail or wire fraud.²⁷ Id. at 653, 128 S.Ct. 2131 ; see id. (finding that mail fraud is "a statutory offense that is distinct from common-law fraud and that does not require proof of reliance").

27 As the Eleventh Circuit has observed, to establish a statutory mail or wire fraud claim a plaintiff need only show that a defendant "(1) intentionally participates in a scheme to defraud another of money or property and (2) uses the mails or wires in furtherance of that scheme." Am. Dental Ass'n , 605 F.3d at 1290. Reliance is not a required element.

However, the Court acknowledged in dicta that in most cases plaintiffs would not be able to establish causation without proving that someone (i.e. , a third party) relied on the defendants’ misrepresentations even if the plaintiffs did not rely on them themselves. Id. at 658–59, 128 S.Ct. 2131. The Court speculated, " "it may well be that a RICO plaintiff alleging injury by reason of a pattern of mail fraud must establish at least third-party reliance in order to prove causation"; however, the Court clarified, "the fact that proof of reliance is often used to prove an element of the plaintiff's cause of action, such as the element of causation, does not transform reliance itself into an element of the cause of action." Id. at 659, 128 S.Ct. 2131 (quoting Anza , 547 U.S. at 478, 126 S.Ct. 1991 (Thomas, J., concurring in part and dissenting in part)).

Relying on Pierson v. Zuber , No. 1:09-cv-946, 2010 WL 11496944 (N.D. Ga. Jan. 13, 2010), Defendants read Bridge as standing for the proposition that Plaintiffs must show that somebody relied on the alleged misrepresentations as an element of the claims of mail and wire fraud. The Court finds that reading inconsistent with the holding in Bridge . Further, to the extent there was any ambiguity as to whether some form of reliance is required for a predicate act of mail or wire fraud, the Supreme Court of Georgia resolved that ambiguity the following year in Pollman v. Swan , 289 Ga. 767, 716 S.E.2d 191 (2011). See id. at 193 (citing Bridge ’s holding that "the common-law requirement of justifiable reliance in fraud is not a requirement of the mail fraud statute" and reversing the court of appeals on the ground that it "erred in making reliance an element of mail fraud and in affirming the grant of summary judgment to appellees based on the failure of appellants to establish reliance"). The Supreme Court of Georgia's authoritative interpretation of Georgia RICO controls. Accordingly, Plaintiffs do not have to establish reliance as an element of the predicate acts mail or wire fraud to support their Georgia RICO claims.

With that background in mind, the Court now addresses the predicate acts of racketeering activity that Plaintiffs allege were committed by each of the Defendants specifically.

i. The MMM Defendants

In their motion to dismiss, the MMM Defendants argue that Plaintiffs fail to plead RICO predicate acts with particularity and impermissibly lump them together with other Defendants. More specifically, they contend that they provided legal advice and services to four LLCs, including preparing transactional documents, and Plaintiffs were not their clients. The MMM Defendants claim that these ordinary legal services do not qualify as predicate acts of mail or wire fraud under Georgia RICO.

In their opposition, Plaintiffs note that MMM is mentioned 120 times in the SAC and Pollock is mentioned 58 times. They add that among these many references are allegations that the MMM Defendants — jointly with other Defendants — prepared numerous documents containing material misrepresentations that ultimately led to Plaintiffs’ claimed damages. But reviewing and approving documents is not a predicate act of mail or wire fraud.

Plaintiffs also appear to concede that their claims "do not turn on direct interactions between the MMM Defendants and Plaintiffs" but instead depend upon the MMM Defendants "review[ing] and approv[ing]" documents for the various transactions in which Plaintiffs took part. (Pls.’ Opp'n to MMM's MTD, Doc. 260 at 4.) In that regard, Plaintiffs allege that the MMM Defendants jointly prepared the Conservation Easement Deeds with other Defendants and that these documents were later sent through the mail or wires. However, as the MMM Defendants point out, these allegations appear to be nothing more than group pleadings. In response, Plaintiffs argue that, for example, the allegation that the MMM Defendants jointly prepared the Conservation Easement Deeds with the L & G, OSI, and ACC Defendants reflects that these Defendants were "coauthors" of these documents. But Plaintiffs do not specify precisely what portion of the Conservation Easement Deeds the MMM Defendants authored, or coauthored.

Simply put, though Plaintiffs claim that the MMM Defendants "drafted, reviewed, and revised every document central to the SCE Strategy," (Pls.’ Opp'n to MMM's MTD, Doc. 260 at 10), they fail to point to any particular acts of mail or wire fraud committed by the MMM Defendants with the requisite specificity to satisfy Rule 9(b). Plaintiffs’ Georgia RICO claim against the MMM Defendants therefore fails.

ii. The OSI Defendants

In the OSI Defendants’ own words, Plaintiffs’ allegations against them are that they formed the LLCs, provided the Promotional Materials, and engaged other professionals to help facilitate the transactions. As they state in their motion to dismiss, the only predicate acts that could potentially be attributable to the OSI Defendants stem from their allegations that they sent the Promotional Materials to Plaintiffs through the mail and wires. As previously noted, Plaintiffs allege that the OSI Defendants prepared and distributed Promotional Materials that falsely represented that the SCE Strategy was legal and would generate lawful charitable deductions. Accepting as true Plaintiffs’ allegations that the OSI Defendants sent the Promotional Materials through the mail and wires, and that these documents contained materials misrepresentations, the Court finds that Plaintiffs have plausibly alleged that the OSI Defendants committed predicate acts of mail or wire fraud.

The OSI Defendants argue that Plaintiffs could not have relied on these materials because they contained disclaimers; however, reliance is not an element of mail or wire fraud. The Court therefore finds that Plaintiffs have stated a Georgia RICO claim against the OSI Defendants.

iii. The Weibel Defendants

The Court next addresses the Weibel Defendants. These Defendants performed the allegedly inflated appraisals that served as the lynchpin of the entire SCE Strategy. If anyone would have known that the appraisals were inflated, it likely would have been the Weibel Defendants; after all, they were the ones who actually performed the appraisals.²⁸

28 That said, it is conceivable that even if the appraisals were inflated, this was only because of errors in the Blethen Defendants’ mining reports. And if that were the case, it is possible that the Weibel Defendants would not have known this. In any case, these are factual questions better suited for resolution at summary judgment.

In the SAC, Plaintiffs allege that the Weibel Defendants, as the Appraisers, "took steps to obscure the inflated nature of the appraisals" by "intentionally omitting key facts from the appraisals (such as recent comparable listings, recent sales, and prior unsuccessful attempts to develop the land for the same use as set forth in the Appraisals)." (SAC, Doc. 218 ¶ 8.) Accepting these allegations as true, and considering that the Weibel Defendants allegedly transmitted their appraisals through the mail and wires, the Court finds that Plaintiffs have plausibly alleged that the Weibel Defendants committed predicate acts of mail or wire fraud.

As Plaintiffs note, "The Weibel Defendants prepared and signed the Appraisal Summaries (Forms 8283) that included their inflated valuation and were submitted with the Syndicates’ tax returns and the Plaintiffs’ individual returns." (Pls.’ Opp'n to Weibel Defs.’ MTD, Doc. 253 at 9–10.) The Weibel Defendants argue that their role in preparing appraisals was simply ordinary business activity, and that Plaintiffs’ allegations that the appraisals were inflated are conclusory. Though it may ultimately turn out that the appraisals were not actually inflated, the fact that the IRS has challenged — and in some cases already disallowed — the Syndicates’ charitable deductions based on the Weibel Defendants’ appraisals suggests that these allegations are more than just mere speculation. Further, Plaintiffs’ allegations that the Weibel Defendants’ appraisals "were consistently able to produce the promised result of $2 in tax savings for every $1 invested" may be circumstantial evidence that the Weibel Defendants were attempting to reach a predetermined value in their appraisals. (Id. at 14.) Under the circumstances, the Court finds that Plaintiffs’ Georgia RICO claim against the Weibel Defendants survives a motion to dismiss.

iv. The Lucas Defendants

The Court reaches a different conclusion with respect to the secondary appraisals prepared by the Lucas Defendants.²⁹ As the Lucas Defendants point out, unlike the Weibel Defendants’ appraisals, the Lucas Defendants’ appraisals were never used in any of the transactions at issue — the Weibel Defendants’ appraisals were selected to support the charitable deductions instead. And though the Lucas Defendants were listed in the Promotional Materials along with the Weibel Defendants, the Lucas Defendants’ appraisals were not included in the Promotional Materials, and there are no allegations that the Plaintiffs ever saw those appraisals or that they were otherwise familiar with the substance of the Lucas Defendants’ work.

29 Lucas Mason and Lucas Von Esh filed separate briefs, but they are "nearly identical."

In their opposition to the Lucas Defendants’ motion to dismiss, Plaintiffs argue that they "relied on the representations in these Promotional Materials, including the promise of having two ‘qualified’ appraisers on the team to support the valuation of the real estate donation." (Pls.’ Opp'n to Lucas Mason's MTD, Doc. 252 at 6.) But if anything that is a representation on the part of the OSI Defendants who sent the Promotional Materials, not on the part of the Lucas Defendants whose role was to subsequently send the Syndicates appraisals that the Syndicates did not use and that Plaintiffs never saw. Even though reliance is not a required element of a mail or wire fraud claim, materiality still is, see Neder v. United States , 527 U.S. 1, 25, 119 S.Ct. 1827, 144 L.Ed.2d 35 (1999) (noting that "materiality ... is an element of the federal mail fraud, wire fraud, and bank fraud statutes"), and Plaintiffs have not plausibly alleged that the Lucas Defendants’ secondary appraisals played a material part in any of the transactions at issue.

Although they do not raise this in their opposition to the Lucas Defendants’ motion to dismiss, in their opposition to the Weibel Defendants’ motion to dismiss Plaintiffs state that the Lucas Defendants’ appraisals were always slightly higher than the Weibel Defendants’ appraisals. Plaintiffs argue that this suggests that the Lucas Defendants’ appraisals may have been included to make the Weibel Defendants’ slightly lower — but still inflated — appraisals appear more reasonable. But even if that were so, and assuming arguendo that the Lucas Defendants sent fraudulent appraisals to the Syndicates through the mail or wires, Plaintiffs still could not establish that the Lucas Defendants’ appraisals were the proximate cause — or even the but-for cause — of their alleged injuries. It was the Weibel Defendants’ alleged misrepresentations, not the Lucas Defendants’, that ultimately led to Plaintiffs’ damages. Plaintiffs cannot plausibly argue that they would not have been injured but for the alleged misrepresentations by the Lucas Defendants because Plaintiffs still would allegedly have been injured by the Weibel Defendants’ alleged misrepresentations.

To summarize, Plaintiffs’ fail to state a Georgia RICO claim against the Lucas Defendants on two independent grounds. First, that the Lucas Defendants’ alleged misrepresentations were not material to the transactions at issue. And second, Plaintiffs have not plausibly alleged that the Lucas Defendants’ alleged predicate acts of mail or wire fraud proximately caused Plaintiffs’ alleged injuries.

v. The Return Preparers

The Court addresses Plaintiffs’ claims against the Return Preparers together. Plaintiffs allege that the L & G Defendants acted as the return preparers for the Syndicates until 2015 at which point the Sklar Defendants took over the role of the return preparers. Plaintiffs’ claims against both sets of Defendants fail for the same reason: Plaintiffs have not plausibly alleged that these Defendants knew that the appraisals were inflated.

According to the SAC, the L & G Defendants and the Sklar Defendants both prepared tax returns and K-1s for the Syndicates and instructed Plaintiffs to report their deductions on their individual tax returns as they appeared on the K-1s. But based on the face of the SAC, there are no allegations that would plausibly suggest that the L & G Defendants or the Sklar Defendants knew that these representations were fraudulent.

Compare that to the Aprio Defendants in Lechter , who allegedly prepared the tax returns and K-1s for the Syndicates in that case. Plaintiffs there alleged that in addition to serving as tax return preparers the Aprio Defendants were intimately involved in every step of the allegedly fraudulent scheme, and even handpicked the Appraisers who performed the allegedly fraudulent appraisals. In fact, the plaintiffs in Lechter treated the Aprio Defendants as the focal point of the entire scheme, similar to the OSI Defendants in this case, and specifically defined their proposed class as encompassing any transaction in which the Aprio Defendants had been involved. Lechter , 565 F.Supp.3d at 1298. Based on these allegations, this Court concluded that the plaintiffs in Lechter had plausibly alleged that the Aprio Defendants knew that the appraisals in that case were inflated and therefore knowingly made fraudulent misrepresentations to the plaintiffs in connection with preparing tax returns.

Plaintiffs here do not include any similar allegations about the L & G Defendants or the Sklar Defendants. As far as the Court can tell, the only material roles these Defendants played were preparing tax returns and performing various document review, and Plaintiffs have not plausibly alleged that they were engaged in anything more than ordinary business activities. Although Plaintiffs include some additional allegations against Skalski, none of these allegations establish a Georgia RICO claim. For example, Plaintiffs allege that Skalski was a "key member" of the "team" that Pollock and MMM put together to market SCE Strategy transactions and that Skalski and Pollock jointly convinced the OSI Defendants to become Sponsors for the Syndicates. (SAC, Doc. 218 ¶¶ 96, 100.) Plaintiffs also allege that Skalski served as the "operations manager" for the OSI Defendants, that he was responsible for ensuring that every step of the transactions was properly and timely completed, (id. ¶ 67), and that at one point he served as a director of ACC, (id. ¶ 153). Even if these allegations could establish that Skalski was heavily involved in the transactions at issue, they do not establish that he committed any predicate acts of mail or wire fraud in the course of his involvement. Plaintiffs therefore fail to state a Georgia RICO claim against the return preparers

vi. The PCLG Defendants

Plaintiffs argue that the PCLG Defendants had "a significant role" in "providing advice, preparing documents, and recruiting participants" for the SCE Strategy (Pls.’ Opp'n to PCLG Defs.’ MTD, Doc. 262 at 3.) They further argue that the PCLG Defendants "shared a close working relationship with MMM" and that these sets of Defendants "worked jointly to prepare, review, revise, and approve the Conservation Easement Deeds, Baseline Documentation Reports, Appraisals, the Consulting expert reports, IRS Forms 8283, due diligence reports, and other documents integral to the SCE Strategy." (Id. at 5.) Plaintiffs also contend that the PCLG Defendants prepared at least 21 virtually identical legal opinion letters for the Syndicates. And Plaintiffs contend that, along with other Defendants, the PCLG Defendants selected the Weibel Defendants’ appraisals to be used in the transactions.

The majority of these allegations are group pleadings. But even putting that aside, none of these allegations qualify as predicate acts under Georgia RICO. As explained above, simply reviewing and preparing documents does not qualify as a predicate act of mail or wire fraud. Although the legal opinion letters the PCLG Defendants provided for the Syndicates could potentially serve as the basis for predicate acts of mail or wire fraud, Plaintiffs provide no details about the content of these opinion letters, nor do Plaintiffs allege that they ever saw them.

In short, even if the PCLG Defendants’ opinion letter contained fraudulent misrepresentations, the PCLG Defendants were aware of this, and these misrepresentations materially advanced a fraudulent scheme and caused Plaintiffs’ alleged injuries, Plaintiffs still have not plead these arguments in a manner that satisfies Rule 9(b). Plaintiffs’ Georgia RICO claim against the PCLG Defendants therefore fails.

vii. The ACC Defendants

Plaintiffs’ primary allegations against the ACC Defendants³⁰ are that they jointly prepared the Promotional Materials with other Defendants; either signed or helped prepare documents for the representative transactions, such as Conservation Easement Deeds, BRDs, and Form 8283s; and issued receipt letters to the Syndicates representing that the deductions were "fully tax deductible." In their motion to dismiss, though they generally do not dispute their level of involvement, the ACC Defendants argue that they did not in fact in endorse the amount of the claimed deductions.

30 ERMF filed a separate brief from the other ACC Defendants, but the briefs are substantively the same.

For instance, the ACC Defendants claim that Plaintiffs omit "critical language" from the Conservation Easement Deeds stating that the members of the Syndicates, including Plaintiffs, "represent and warrant that they had consulted their own professional advisors and that ACC had not made any representation or warranty regarding any entitlement to tax benefits, or the amount thereof, or whether the donation qualifies for certain tax treatment." (ACC Defs.’ MTD, Doc. 242-1 at 5.) The language the ACC Defendants point to specifically states,

Legal, Tax and Other Advice. Grantor represents that it has consulted Grantor's attorney, accountant, and other appropriate experts for advice relating to this Conservation Easement and any potential tax benefits that may inure the Grantor in connection with this Conservation Easement. Grantor warrants, represents and agrees that [ACC] has made no warranty or representations relating to 1) the value of the Property or the methodology or techniques used or useful in ascertaining or appraising the value of the Property (either before or after the granting of this Conservation Easement), 2) any entitlement to tax benefits by Grantor or the amount of any such benefits, or 3) whether the conveyance by Grantor of this Conservation Easement constitutes a ‘qualified conservation contribution’ such as defined in Section 170(h) of the Code.

(Id. at 5–6) (quoting Doc. 243-2 ¶ 24, Doc. 243-8 ¶ 23, and Doc. 243-13 ¶ 10.27). The ACC Defendants similarly argue that the receipt letter did not contain any representations about the value of the easements. They further argue that their additional responsibilities such as preparing documents, participating in seminars and workshops, recruiting participants, and accepting the donations of the easements were simply ordinary business activities for a land trust.

Though Plaintiffs argue that Keller in particular was "notorious in the land trust industry" as someone who was involved in transactions with excessive valuations, and that he had historically failed to question Appraisers about excessive valuations, (Pls.’ Opp'n to ACC Defs.’ MTD, Doc. 258 at 4), that does not mean that Keller or any of the ACC Defendants have committed any predicate acts of mail or wire fraud. Moreover, even if as Plaintiffs argue, "[t]he ACC Defendants knew that the appraisals were grossly inflated and unsupportable," (id. at 5) (emphasis added), Plaintiffs still have not pointed to any particular misrepresentations the ACC Defendants made about the value of the easements in question.³¹ As the ACC Defendants point out in their reply, it was the return preparers, not the ACC Defendants, who told Plaintiffs to report the charitable deductions and report them in the amounts reflected in the K-1s.

31 However, as explained below in section IV.C.2.g., these allegations could support a conspiracy to violate Georgia RICO claim.

As such, Plaintiffs fail to plausibly allege that the ACC Defendants have committed any predicate acts of mail or wire fraud. Consequently, Plaintiffs fail to state a Georgia RICO claim against the ACC Defendants.

viii. The Blethen Defendants

The Blethen Defendants allegedly prepared mining reports that falsely stated that mining on the subject properties was feasible and, in Plaintiffs’ view, assisted the Appraisers in falsely inflating the values of the properties. In their motion to dismiss, the Blethen Defendants claim that they merely performed ordinary professional services and that the allegations that the mining reports were fraudulent are simply conclusory. Additionally, the Blethen Defendants argue that Plaintiffs cannot establish causation because there were "dozens of intervening actions" between their preparation and transmittal of the mining reports and the disallowance of Plaintiffs’ claimed deductions.

Regarding the first point, as the Court noted with respect to the Weibel Defendants, the fact that the IRS has challenged Plaintiffs’ claimed deductions suggests Plaintiffs’ allegations with respect to the appraisals — and the mining reports on which they allegedly relied — are not merely conclusory. As for the causation issue, the Blethen Defendants cite Ontario Sewing Machine Co., Ltd. v. Smith , 275 Ga. 683, 572 S.E.2d 533 (2002), but the court finds that case distinguishable. Ontario Sewing was a products liability action that an injured employee initiated against the manufacturer of a product when he was injured on the job but the employer had failed to follow the manufacturer's recall notice, meaning that the employer's inaction was arguably a superseding cause. What is distinguishable about that case, however, is that the manufacturer in Ontario Sewing could not have foreseen that the employer would not follow the recall, whereas the Blethen Defendants could have easily foreseen that the Appraisers would have used their reports for the appraisals, and that the plaintiffs would have relied on those appraisals when they reported their tax deductions. According to the allegations in the SAC, that was the whole purpose of the reports. Moreover, as the Eleventh Circuit has explained, "a factor is a proximate cause if it is a substantial factor in the sequence of responsible causation." Cox v. Adm'r U.S. Steel & Carnegie , 17 F.3d 1386, 1399 (11th Cir. 1994) (cleaned up). At least on the face of the SAC, the Blethen Defendants’ mining reports were arguably a substantial factor in the chain of events that led to Plaintiffs’ alleged damages.

Admittedly, the Blethen Defendants were somewhat on the periphery of the alleged scheme. In fact, they were not even listed as a part of the "Conservation Easement Team" in the Promotional Materials. Nevertheless, construing the allegations in the SAC in the light most favorable to Plaintiffs, which indicate that the Blethen Defendants prepared the reports that serve as the foundation of the appraisals that are the lynchpin of the entire scheme, the Court finds that Plaintiffs have plausibly alleged that the Blethen Defendants’ predicate acts of mail or wire fraud proximately caused Plaintiffs’ alleged injuries.

ix. Bennett Thrasher, LLC

Plaintiffs allege that Bennett Thrasher's role in the SCE Strategy included (1) connecting the OSI Defendants with the Blethen Defendants and developing the strategy to incorporate the Blethen Defendants’ mining reports into the appraisals; (2) referring clients to the SCE Strategy transactions; and (3) performing due diligence and other consulting services. Bennett Thrasher argues in its motion to dismiss, "At best, these allegations plead a business relationship between OSI Defendants and BT." (Bennett Thrasher's MTD, Doc. 229 at 15.) Although as explained below that business relationship could serve as the basis for a conspiracy to violate Georgia RICO claim, it cannot serve as the basis for a predicate act of mail or wire fraud. Plaintiffs therefore fail to state a Georgia RICO claim against Bennett Thrasher.

b. Causation

As stated above, the Court finds that Plaintiffs adequately alleged that the following Defendants committed the pattern of racketeering activity necessary to state a Georgia RICO claim: the OSI Defendants, the Weibel Defendants, and the Blethen Defendants. For essentially the same reasons the Court found that Plaintiffs had standing to pursue Georgia RICO claims, the Court also finds that Plaintiffs have satisfied the proximate causation requirement for their Georgia RICO claims against each of these Defendants. Plaintiffs have plausibly alleged that they would have acted differently but for the alleged pattern of racketeering activity on the part of each of these Defendants. And because, if true, Plaintiffs could potentially show that these actions proximately led to Plaintiffs’ loss of "personal property of any nature, including money," O.C.G.A. § 16-14-4(a), Plaintiffs therefore state a Georgia RICO claim against these three sets of Defendants. Cf. Bridge , 553 U.S. at 658, 128 S.Ct. 2131 (finding that plaintiffs had satisfied the proximate causation requirement for a Federal RICO claim when their alleged injuries were "a foreseeable and natural consequence" of the defendants’ scheme and there were "no independent factors that account for respondents’ injury," there was "no risk of duplicative recoveries by plaintiffs removed at different levels of injury from the violation," and "no more immediate victim [was] better situated to sue").

To state a claim under subsection (b) of Georgia RICO, Plaintiffs would also have to show that the three sets of Defendants engaged in the alleged misconduct through their participation in an "enterprise." Georgia RICO defines an "enterprise" as "any person, sole proprietorship, partnership, corporation, business trust, union chartered under the laws of this state, or other legal entity; or any unchartered union, association, or group of individuals associated in fact although not a legal entity." O.C.G.A. § 16-14-3(3). That definition "includes illicit as well as licit enterprises and governmental as well as other entities." Id. The analogous provision of Federal RICO similarly defines an "enterprise" as "any ... group of individuals associated in fact." 18 U.S.C. § 1961(4). In interpreting that provision, the Supreme Court has held that "an association-in-fact enterprise is simply a continuing unit that functions with a common purpose." Boyle v. United States , 556 U.S. 938, 948, 129 S.Ct. 2237, 173 L.Ed.2d 1265 (2009).

For purposes of the pleading stage, the Court finds that Plaintiffs have plausibly alleged that the OSI Defendants, the Weibel Defendants, and the Blethen Defendants acted as part of an association-in-fact enterprise. Significantly, the Defendants in this case worked together on multiple transactions, and many of them were listed together in the Promotional Materials for the Syndicates as part of a "Conservation Easement Team." In addition, the common tactic of using properties with underlying mineral assets and incorporating the Blethen Defendants’ mining reports in the appraisals was utilized consistently throughout multiple transactions involving these same Defendants. What is more, the OSI Defendants, the Weibel Defendants, and the Blethen Defendants all allegedly played a key role in that particular component of the alleged scheme. The Court therefore finds that Plaintiffs state a claim against these three Defendants under subsection (b) of Georgia RICO as well. Plaintiffs’ Georgia RICO claims against the remaining Defendants are DISMISSED .

2. Conspiracy to Violate Georgia RICO

In addition to claiming that Defendants committed substantive violations of Georgia RICO, Plaintiffs also claim that Defendants conspired to violate Georgia RICO. Under the Georgia RICO statute, it is unlawful for any person to "conspire or endeavor to violate" Georgia RICO. O.C.G.A. § 16-14-4(c). Defendants may be liable for conspiracy to violate Georgia RICO "if they knowingly and willfully join a conspiracy which itself contains a common plan or purpose to commit two or more predicate acts." Wylie , 746 S.E.2d at 693 (quoting Rosen v. Protective Life Ins. Co. , 817 F.Supp.2d 1357, 1382 (N.D. Ga. 2011) ). As is the case with a substantive Georgia RICO claim, Plaintiffs would have to show that Defendants’ conspiracy to violate Georgia RICO was the proximate cause of their injuries. Id. (citing Cox v. Mayan Lagoon Ests. , 319 Ga.App. 101, 734 S.E.2d 883 (2012) ).

The Court now addresses whether Plaintiffs have adequately alleged that each set of Defendants conspired to violate Georgia RICO.

a. The MMM Defendants

Even though the Court finds that the MMM Defendants did not violate Georgia RICO themselves through substantive acts of mail and wire fraud, the MMM Defendants may have nevertheless "conspired" to violate the statute by facilitating other Defendants’ separate acts of mail and wire fraud. In the SAC, Plaintiffs allege that the MMM Defendants reviewed and approved every document in all SCE Strategy transactions and that no document could be used unless it was personally approved by Pollock. Plaintiffs also allege that the MMM Defendants handpicked the Appraisers and directed the Appraisers to reach predetermined values for the appraisals. Taken together, these allegations are sufficient to state a conspiracy to violate Georgia RICO claim against the MMM Defendants.

b. The OSI Defendants

In addition to committing mail or wire fraud by sending out the Promotional Materials, Plaintiffs have plausibly alleged that the OSI Defendants "agreed" to commit mail or wire fraud with other Defendants, such as the MMM Defendants. Plaintiffs allege that "[a]s the Sponsor and manager of each Syndicate, [the OSI Defendants] were involved in virtually every aspect of each Syndicate and ... were responsible for making sure every aspect of each Syndicate's transaction was properly and timely completed." (SAC, Doc. 218 ¶ 69.) For example, Plaintiffs allege that the OSI Defendants identified properties for the transactions, helped formulate the strategy to incorporate the Blethen Defendants’ mining reports into the appraisals, identified professional to assist with the transactions, and essentially paid other participants in the alleged scheme in exchange for referring clients. Assuming these allegations are true, these allegations are sufficient to state a conspiracy to violate Georgia RICO claim against the OSI Defendants.

Though the OSI Defendants argue that the fact they included disclaimers which should undercut any allegations of a conspiracy, that is ultimately a factual question that is premature to address at the pleading stage.

c. The Weibel Defendants

In addition to committing mail or wire fraud by sending inflated appraisals through the mail or wires, Plaintiffs have plausibly alleged that the Weibel Defendants "agreed" to do so with other Defendants, such as the MMM and OSI Defendants, the mining consultants, and the Lucas Defendants — whose reports they allegedly copied, or vice versa. As Plaintiffs state in their opposition to the Weibel Defendants’ motion to dismiss, the Weibel Defendants allegedly "allowed their initial appraisal to be used by the enterprise to pitch potential participants," "were listed in Promotional Materials as being part of the ‘Conservation Easement Team,’ " and "collaborated with other Defendants to prepare the Promotional Materials." (Pls.’ Opp'n to Weibel Defs.’ MTD, Doc. 253 at 12.) These allegations are sufficient to state a conspiracy to violate Georgia RICO claim against the Weibel Defendants.

d. The Lucas Defendants

At the same time, the Court once again reaches a different conclusion with respect to the Lucas Defendants. To be sure, if the Lucas Defendants coordinated with the Weibel Defendants in preparing their respective appraisals, that could potentially raise an inference of conspiracy. But causation is still required for a conspiracy to violate Georgia RICO claim, just like for a substantive Georgia RICO claim. On the face of the SAC, Plaintiffs have not plausibly alleged that any supposed act of conspiracy on the part of the Lucas Defendants proximately caused their injuries. Accordingly, Plaintiffs fail to state a conspiracy to violate Georgia RICO claim against the Lucas Defendants.

e. The Return Preparers

For the same reasons Plaintiffs fail to allege that the tax return preparers knowingly violated Georgia RICO's substantive provisions, Plaintiffs also fail to allege that the return preparers conspired to violate these same provisions. Plaintiffs conspiracy to violate Georgia RICO claims against the L & G Defendants and the Sklar Defendants therefore fail.

f. The PCLG Defendants

Even if the heightened pleading standard of Rule 9(b) does not apply to Plaintiffs’ conspiracy to violate Georgia RICO claim, unlike their substantive Georgia RICO claim against the PCLG Defendants, Plaintiffs still must plausibly allege that the PCLG Defendants engaged in a conspiracy. See Fed. R. Civ. P. 8(a). The notion that the PCLG Defendants performed various document reviews for SCE Strategy transactions and helped select the appraisals "along with others" could potentially support a claim of conspiracy even if it does not support a substantive violation, but Plaintiffs still have not provided enough specifics in support of their conspiracy claim to satisfy even the lower pleading requirements of Rule 8(a). See Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ("[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ "); cf. Cisneros v. Petland, Inc. , 972 F.3d 1204, 1213 (11th Cir. 2020) (finding that plaintiff's complaint had included "no factual allegations from which [the Court] could infer" that Defendants agreed to common fraudulent purpose). Plaintiffs therefore fail to state a conspiracy to violate Georgia RICO claim against the PCLG Defendants.

g. The ACC Defendants

Although Plaintiffs have not plausibly alleged that the ACC Defendants committed predicate acts of mail or wire fraud, Plaintiffs’ allegations against these Defendants could still potentially support a conspiracy claim. For example, Plaintiffs allege that Pollock handpicked Keller's organization to serve as a Land Trust for SCE Strategy transactions "even though ACC's application to become an accredited member of the Land Trust Alliance [had been] withdrawn." (SAC, Doc. 218 ¶ 118) (citing Peter Elkind, The Billion-Dollar Tax Loophole , ProPublica (Dec. 20, 2017, 6:30 A.M.), https://www.propublica.org/article/conservation-easements-the-billion-dollarloophole/amp). Supposedly, the Land Trust Alliance would not approve ACC's membership application because Keller was seen as someone who had previously "faile[d] to question appraisers about excessive valuations." (Id. ) The suggestion, of course, is that Keller was someone who was willing to accept conservation easement donations that other land trusts would not, and that this was precisely why Defendants sought him out to assist with the transactions at issue here. Further factual development in this case may tell a different story, but for purposes of the pleading stage, the Court must accept these allegations as true and construe them in the light most favorable to Plaintiffs.

To establish a conspiracy to violate Georgia RICO claim against the ACC Defendants, Plaintiffs would also have to show that these Defendants were knowing and willing participants in the alleged conspiracy rather than independent actors who were just "going about [their] own business" of conserving land. United Food & Com. Workers Unions & Emps. Midwest Health Benefits Fund v. Walgreen Co. , 719 F.3d 849, 855 (7th Cir. 2013). This Court previously found that the plaintiffs in Lechter had failed to satisfy that standard. See 565 F.Supp.3d at 1330-32. However, in this case Plaintiffs allege that the ACC Defendants appeared in the Promotional Materials as a part of the "Conservation Easement Team" for the Syndicates, and allegedly participated in seminars to help recruit additional participants. On top of that, Plaintiffs allege that Keller created a separate entity — ERMF — to collect fees for the BDRs Keller prepared in connection with SCE Strategy transactions, which Plaintiffs describe as "a ‘side hustle’ that generated substantial revenue for his own personal benefit." (SAC, Doc. 218 ¶ 119). These allegations could potentially establish a financial incentive for Keller — and by extension ACC — to induce Plaintiffs and other investors to invest in SCE Strategy transactions, an element that was absent from the similar claims raised against these same Defendants in Lechter.

All that said, the ACC Defendants’ purpose in participating in SCE Strategy transactions may have genuinely been simply to conserve land for environmental purposes, in which case they would not necessarily have shared their alleged co-conspirators’ goal of generating fees. But even if that were so, the ACC Defendants still could have shared the same "overall objective of the conspiracy" to the extent the overall objective of that conspiracy was to commit fraudulent transactions. Am. Dental Ass'n , 605 F.3d at 1293. Moreover, by allegedly fulfilling an important and necessary role in making those transactions happen, the ACC Defendants arguably committed acts in furtherance of the conspiracy even if they did not commit predicate acts of mail or wire fraud themselves. Therefore, at least for purposes of the pleading stage, the Court finds that Plaintiffs state a conspiracy to violate Georgia RICO claim against the ACC Defendants.

h. The Blethen Defendants

In addition to committing mail or wire fraud by sending out the mining reports, Plaintiffs have plausibly alleged that the Blethen Defendants "agreed" to commit mail or wire fraud with other Defendants, such as the OSI Defendants and Bennett Thrasher, especially considering that the OSI Defendants were allegedly paying them fees to keep producing the reports. Notably, Plaintiffs allege that between 2014 and 2018 Defendants "began using property with underlying mineral interests exclusively for all SCE Strategy transactions" and that "the Syndicates began paying consulting fees to the Greencone and Blethen Defendants in connection therewith." (SAC, Doc. 218 ¶ 107.) Of course, it may ultimately turn out that these fees were merely a product of ordinary business activities. However, at least for purposes of the pleading stage, Plaintiffs have plausibly alleged a conspiracy to violate Georgia RICO claim against the Blethen Defendants.

i. Bennett Thrasher, LLC

Even if it did not commit a substantive act mail or wire fraud itself, Plaintiffs have plausibly alleged that Bennett Thrasher conspired to do so with the Blethen Defendants and the OSI Defendants. According to the allegations in the SAC, which, for now, the Court must accept as true, "as a result of BT's recommendation that Defendants use properties with mineral assets for the SCE Strategy because of their more ‘favorable’ HBUs and greater valuations, such properties were used exclusively for all SCE Strategy transactions from 2014 to 2018, including the FG River, Industrial and Gulf Land Syndicate transactions in which Plaintiffs participated in." (Pls.’ Opp'n to Bennett Thrasher's MTD, Doc. 256 at 8.) Moreover, the allegations that Bennett Thrasher was referring clients to the transactions and reviewing Blethen's mining reports in exchange for a share of the fees provides the "further factual enhancement" necessary to support a conspiracy claim. Plaintiffs therefore state a conspiracy to violate Georgia RICO claim against Bennett Thrasher.

3. Rescission

In addition to the preceding claims, Plaintiffs raise an alternative claim for rescission. Plaintiffs specifically seek an order granting rescission of "all agreements they entered into and all documents they received in connection with entering into the SCE transactions, including the Purported Disclaimers." (SAC, Doc. 218 ¶ 463.) In their Joint Motion to Dismiss, Defendants argue that Plaintiffs’ rescission claim fails for three separate reasons. First, they contend that rescission is unavailable as a remedy because Plaintiffs are not in privity with Defendants. Second, Plaintiffs waived the right to bring a rescission claim because they failed to promptly raise the claim. And third, Plaintiffs failed to return their shares in the LLCs, or offer to do the same, as a condition precedent for bringing a rescission claim.

The Court begins with the waiver argument. Under Georgia law, a party has two options when it alleges fraudulent inducement to enter a contract: (1) affirm the contract and sue for damages from the fraud or breach; or (2) promptly rescind the contract and sue in tort for fraud. Novare Grp., Inc. v. Sarif , 290 Ga. 186, 718 S.E.2d 304, 307 (2011) (citing Ekeledo v. Amporful , 281 Ga. 817, 642 S.E.2d 20 (2007) ). "An announcement of the intent to rescind the contract must be made in a timely fashion, as soon as the facts supporting the claim for rescission are discovered." Holloman v. D.R. Horton , 241 Ga.App. 141, 524 S.E.2d 790, 795 (1999).

Additionally, Georgia precedent has generally found that "a claim for damages unaccompanied by a claim for rescission operates as an election to affirm the underlying contract." Weinstock v. Novare Grp., Inc. , 309 Ga.App. 351, 710 S.E.2d 150 (2011) (citing Megel v. Donaldson , 288 Ga.App. 510, 654 S.E.2d 656 (2007) ); see also Holloman , 524 S.E.2d at 796 ("The original complaint, by affirming the contract and seeking damages resulting from the alleged fraud without alleging any cause of action for rescission, constituted an election of remedies and a waiver of any rescission claim."). And "[o]nce a claim for rescission is waived" through an election of remedies "it cannot be revived." Holloman , 524 S.E.2d at 795.

Defendants argue that Plaintiffs waived the right to pursue a rescission claim because, instead of raising their rescission claim in the original complaint, Plaintiffs did not announce their intent to rescind the agreements at issue until several months later when they amended their complaint. That amendment came on the heels of Defendants’ motion to dismiss the original complaint based in part on "the numerous disclaimers and warnings in the Investor Agreements" that Plaintiffs now seek to rescind.³² (Defs.’ Joint MTD, Doc. 223-1 at 54.)

32 Defendants’ joint motion to dismiss states that Plaintiffs did not raise their rescission claim until the SAC; however, a review of the docket indicates that Plaintiffs actually raised the rescission claim for the first time in the First Amended Complaint, which they filed approximately six months after the original complaint.

In their opposition, Plaintiffs first argue that, under the circumstances, it would be unreasonable to require them to tender their shares as a condition precedent for raising a rescission claim. Then, relying on Denim North America Holdings, LLC v. Swift Textiles, LLC , 816 F. Supp. 2d 1308 (M.D. Ga. 2011), Plaintiffs argue that "a contention of impossible or unreasonable tender" — like the contention Plaintiffs make here — "excuses failure to timely seek rescission." (Pls.’ Opp'n to Defs.’ Joint MTD, Doc. 263 at 51.)

As an initial matter, Defendants’ argument conflates the issue of waiver with the requirement that Plaintiffs offer to tender back their shares as a condition precedent for raising suit. As this Court has previously acknowledged, "the tender back rule is a separate requirement for rescission that may have ‘nothing to do with the application of the doctrine of waiver.’ " See Partner Servs., Inc. v. Avande, Inc. , No. 1:13-cv-1, 2013 WL 12180442, at *4 (N.D. Ga. Aug. 26, 2013) (quoting Denim N. Am. Holdings, LLC v. Swift Textiles, LLC , 532 Fed.Appx. 853, 861 (11th Cir. 2013) ). A party is not "relieved of its obligation to announce its intention to rescind" based on the fact that application of the tender back rule "would be unreasonable." Id. ; see Weinstock , 309 Ga.App. at 355 n.5, 710 S.E.2d 150 ("Assuming, but not deciding, that no tender was required, this does not excuse an unreasonable delay in electing the remedy of rescission.").

Additionally, as the court in Denim acknowledged, the Georgia Court of Appeals’ "actual holding" from Weinstock — i.e. , that the plaintiffs in that case had waived the right to bring a rescission claim by failing to include it in the original complaint — was "inapplicable" in Denim because there, unlike in Weinstock , the plaintiff had in fact "made a claim for rescission in its original complaint." Denim , 816 F. Supp. 2d at 1322. But here, just like in Weinstock , Plaintiffs failed to raise their rescission claim until several months after they filed suit. Weinstock ’s holding therefore applies. See 309 Ga.App. at 356, 710 S.E.2d 150 (holding that "Weinstock's and Sarif's attempt to assert a claim for rescission in 2009 by amendment to the complaint was too late because the original complaint for damages affirmed the purchase contracts").

As an alternative, Plaintiffs argue that they could not have raised a rescission claim in the original complaint because they "could not have predicted" that Defendants would raise a disclaimer defense based on agreements to which they were not a party. But even if the Court were to credit this argument, which the Court is not inclined to, it still would not excuse Plaintiffs’ delay in raising their rescission claim. Under binding case law, Plaintiffs were required to promptly raise a rescission claim as soon as they discovered the alleged fraud. Holloman , 524 S.E.2d at 795. The fact that Plaintiffs may not have discovered that Defendants had a specific defense to the allegations of fraud until several months later does not excuse the delay. Separately, the Court also concludes that Plaintiffs’ rescission claim fails on the ground that none of the Plaintiffs were in privity with Defendants. See Greenwald v. Odom , 314 Ga.App. 46, 723 S.E.2d 305, 316 (2012) (holding that plaintiff was not entitled to rescind subscription agreement because "none of the defendants were parties to that agreement" and "the remedy of rescission is available only between parties who are in privity of contract."). As Defendants observe, the agreements Plaintiffs seek to rescind were between Plaintiffs and the LLCs, and Defendants were not parties to any of those agreements. Plaintiffs’ rescission claim therefore fails based on Plaintiffs’ lack of privity with Defendants.

Because the Court has already found that Plaintiffs’ rescission claim fails on two independent grounds, the Court need not address Defendants’ argument that Plaintiffs failed to offer to return their shares as a condition precedent for raising a rescission claim. Accordingly, Plaintiffs’ rescission claim is DISMISSED .

V. Conclusion

To recap, the Court DENIES Plaintiffs’ Motion to Strike or Disregard Extrinsic Evidence [Doc. 251]. The Court declines to dismiss Plaintiffs’ claims on the theory that Plaintiffs lack standing; however, the Court concludes that Plaintiffs’ common law fraud and Federal RICO claims are time-barred. The Court also finds that Plaintiffs have plausibly alleged that the Court has personal jurisdiction over the Blethen Defendants.

As for Plaintiffs’ remaining claims, the Court DENIES Defendants’ motions to dismiss Plaintiffs’ Georgia RICO claims against the OSI Defendants, the Weibel Defendants, and the Blethen Defendants because Plaintiffs have plausibly alleged that each of these Defendants committed a pattern of racketeering activity under that statute that proximately caused Plaintiffs’ losses of money or personal property. However, the Court GRANTS Defendants’ motions to dismiss Plaintiffs Georgia RICO claims as to the remaining Defendants. The Court also DENIES Defendants’ conspiracy to violate Georgia RICO claims against the MMM Defendants, the OSI Defendants, the Weibel Defendants, the ACC Defendants, the Blethen Defendants, and Bennett Thrasher because Plaintiffs have plausibly alleged that each of these Defendants conspired to violate Georgia RICO and that such conspiracy proximately caused Plaintiffs’ injuries. The Court DENIES Defendants’ motions to dismiss Plaintiffs’ conspiracy to violate Georgia RICO claims as to the remaining Defendants. Finally, the Court GRANTS Defendants’ motions to dismiss Plaintiffs’ rescission claim on that grounds that Plaintiffs waived the right to bring a rescission claim and Plaintiffs were not in privity with Defendants.

Defendants’ Joint Motion to Dismiss [Doc. 223] is accordingly GRANTED IN PART . A summary of the Court's rulings on Defendants’ individual motions to dismiss is included in the table below:

Doc. No.	Motion	Ruling
229	Bennett Thrasher LLC's Motion to Dismiss	GRANTED with respect to Federal RICO (Count I); conspiracy to violate Federal RICO (Count II); Georgia RICO (Count III); negligence (Count VI); negligent misrepresentation (Count VII); fraud (Count IX); aiding and abetting (Count X); rescission (Count XI); and civil conspiracy (Count XII) claims; DENIED with respect to remaining claims
231	The PCLG Defendants’ Motion to Dismiss	GRANTED in full
233	The Sklar Defendants’ Motion to Dismiss	GRANTED in full
234	The Blethen Defendants’ Motion to Dismiss	GRANTED with respect to Federal RICO (Count I); conspiracy to violate Federal RICO (Count II); negligence (Count VI); negligent misrepresentation (Count VII); fraud (Count IX); aiding and abetting (Count X); rescission (Count XI); and civil conspiracy (Count XII) claims; DENIED with respect to remaining claims
236	The Weibel Defendants’ Motion to Dismiss	GRANTED with respect to Federal RICO (Count I); conspiracy to violate Federal RICO (Count II); professional malpractice (Count V); negligent misrepresentation (Count VII); fraud (Count IX); aiding and abetting (Count X); rescission (Count XI); and civil conspiracy (Count XII) claims; DENIED with respect to remaining claims
237	The L & G Defendants’ Motion to Dismiss	GRANTED in full
238	The MMM Defendants’ Motion to Dismiss	GRANTED with respect to Federal RICO (Count I); conspiracy to violate Federal RICO (Count II); Georgia RICO (Count III); professional malpractice (Count V); negligent misrepresentation (Count VII); breach of fiduciary duty and disgorgement (Count VIII); fraud (Count IX); aiding and abetting (Count X); rescission (Count XI); and civil conspiracy (Count XII) claims; DENIED with respect to remaining claims
240	The OSI Defendants’ Motion to Dismiss	GRANTED with respect to Federal RICO (Count I); conspiracy to violate Federal RICO (Count II); negligence (Count VI); negligent misrepresentation (Count VII); breach of fiduciary duty and disgorgement (Count VIII); fraud (Count IX); aiding and abetting (Count X); rescission (Count XI); and civil conspiracy (Count XII) claims; DENIED with respect to remaining claims
242	The ACC Defendants’ Motion to Dismiss	GRANTED with respect to Federal RICO (Count I); conspiracy to violate Federal RICO (Count II); Georgia RICO (Count III); negligence (Count VI); negligent misrepresentation (Count VII); fraud (Count IX); aiding and abetting (Count X); rescission (Count XI); and civil conspiracy (Count XII) claims; DENIED with respect to remaining claims
244	ERMF's Motion to Dismiss	GRANTED with respect to Federal RICO (Count I); conspiracy to violate Federal RICO (Count II); Georgia RICO (Count III); negligence (Count VI); negligent misrepresentation (Count VII); fraud (Count IX); aiding and abetting (Count X); rescission (Count XI); and civil conspiracy (Count XII) claims; DENIED with respect to remaining claims
248	Skalski's Motion to Dismiss	GRANTED in full
249	The Lucas Mason Defendants’ Motion to Dismiss	GRANTED in full

Accordingly, Defendants the Private Client Law Group; Aaron Kowan; Donald R. Sklar; Partnership Tax Solutions, Inc.; Large & Gilbert, Inc.; Conservation Pays, LLC; Joseph C. Skalski; Lucas Mason, Inc.; and Lucas Von Esh are DISMISSED from this case. The following claims remain:

Count III	Georgia RICO against the OSI Defendants, the Weibel Defendants, and the Blethen Defendants
Count IV	Conspiracy to violate Georgia RICO against the MMM Defendants, the OSI Defendants, the Weibel Defendants, the ACC Defendants, the Blethen Defendants, and Bennett Thrasher

As a final note, the Court acknowledges that Plaintiffs have requested leave to file a Second Amended Complaint in the event that the Court denied any of their claims. Given that Plaintiffs have already amended their complaint twice, and the parties have had a full opportunity to extensively brief the issues involved, the Court denies this request and finds that the wiser course is to proceed with discovery on Plaintiffs’ remaining claims. Toward that end, the Court ORDERS the parties to meet and confer to discuss a plan for approaching discovery, and ultimately summary judgment. The parties are further ORDERED to appear in Court for an in-person Status Conference on April 18, 2022 at 3:30 P.M. to discuss their scheduling plan for proceeding with discovery and summary judgment and to file any preliminary agreements they have reached regarding case management by April 14, 2022 . In the meantime, Defendants are directed to file Answers to the Second Amended Complaint within 20 days of the date of this Opinion and Order.

IT IS SO ORDERED this 24th day of March, 2022.