What Did Your Brokerage Firm or Investment Adviser Do Wrong With GWG
Published On: May 7, 2021

Chicago-based Stoltmann Law Offices, P.C. offers contingency fee representation to investors nationwide who have been hit by the IRS for tax issues related to conservation or land easement investments sold by investment and financial advisors.  High-income investors are lured into investing in these products based on the promise of legal tax savings.  Through a complicated and circuitous waterfall, investors in conservation or land easements, can receive income tax breaks sometimes worth several times the amount of their actual investment. As the old adage goes, if it sounds too good to be true, it probably is.

A recent article by Investment News lifted the lid on three specific easements that resulted in an arbitration complaint by the investors, and includes an unsavory connection to motivational speaker Tony Robbins. The easements at issue in the investor complaint are:

  • GWM Capital Real Estate
  • Aldgate Real Estate Partners
  • Brentwood Real Estate Partners

Each one of these investments are registered with the Securities and Exchange Commission (SEC) as “Regulation D” private placements. What this means is, they are exempt from registration under SEC Rule 506(b), and are issued as “private placement” securities. GWM Capital Real Estate filed its Form D in January 2016 and identified $5,263,158 in sales made to 29 investors. The minimum investment is identified as $25,000 and Ajay Gupta signed the Form D as Manager of the issuer, GWM Capital Real Estate.  According to the investor complaint, Mr. Gupta was also the investor’s investment adviser who solicited them to invest in GWM. Since he was also the manager of the issuer, whether he disclosed it or not, that is a gross conflict of interest that a fiduciary investment advisor would be wise to avoid.

Aldgate Real Estate Partners was also registered as a Reg D private placement, filing Form D in December 2016. It disclosed sales in the amount of $2,510,000 to 28 investors. Michael McCarthy is identified as the Manager and signed the Form D. Similarly, Brentwood Real Estate Partners filed its Form D in December 2016. It identified $3,360,000 in sales to 21 investors, with another $640,000 left to be sold on the offering. Michael McCarthy was also the manager of the LLC and signed the Form D.

Conservation or Land Easements are extremely complicated investments. They are pitched as conservative tax saving deals, but in reality, they are speculative and carry incredible amounts of risk. In virtually all private placements, there is a risk of total loss of the investment. They are speculative and opaque by nature.  What makes conservation easements uniquely risky however, is the risk that the IRS will determine the deal violates the Internal Revenue Code. Once this happens, investors are at risk for not only a total loss of their investment principal, but for paying back taxes plus penalties, interest, and fees to the IRS. The risk of loss is far in excess to the amount of money invested and could even result in criminal prosecution.  If these risks are disclosed to the investors, it is highly doubtful ANYONE would agree to invest in a conservation easement. In reality, risks are downplayed by fiduciary investment advisors who distribute private placement memoranda for the offerings that are hundreds of pages long and disclose every risk considered in the history of mankind, including risks like  nuclear war and meteor strikes. When financial advisors sell any private placement, they must adhere to FINRA Rule 2111, Suitability, and the due diligence guidance provided by FINRA through several notices to members, especially Regulatory Notice 10-22 and Notice to Members 05-26.

If you were sold a conservation easement and have been alerted that the easement is being investigated by the IRS, please contact Stoltmann Law Offices, P.C., at 312-332-4200 for a free, no-obligation, initial consultation with a securities attorney. You may have a viable claim to pursue through arbitration or litigation.  We are a contingency fee law firm, which means we do not get paid until you do!


The posting on this site are mere OPINIONS and NOT statements of fact in any way whatsoever. The information should not be relied upon and there have been no findings made against the firms or individuals referenced on this site. In addition, this Blog is made available for educational purposes only and incorporates information from the web as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and Stoltmann Law Offices (161 N Clark Street 16th Floor Chicago, IL 60601). The Blog opinions should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.


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