An Oregon federal court has permanently barred John Fitzgerald of Portland and his three daughters - Marilyn Dial, Martha Farr Sharp and Karen Gray - from marketing a tax fraud scheme involving sham nonprofit corporations that customers used to evade federal taxes, the Justice Department said.
The civil injunction order also bars Noreen McCausland, a family associate, from promoting the scheme. Judge Michael W. Mosman of the U.S. District Court for the District of Oregon found that the defendants, through their business American Family Enterprise, operated "a one-stop shop" for setting up sham nonprofit corporations in Oregon.
The defendants allegedly told customers they could put their income, assets and businesses into the corporations and would not have to file income tax returns or pay taxes.
The defendants also allegedly promised customers that their names would not be used in establishing the corporations and that the corporations could be considered nonprofit without having to obtain Internal Revenue Service approval for nonprofit status. The court found that at least 676 customers used the scheme to improperly reduce their reported income taxes.
The court order requires the defendants to notify their customers of the injunction and to give the Justice Department a list of their customers' names, addresses, phone numbers and Social Security numbers.
