Attorney General's News Release

August 14, 2002

Nixon obtains TRO against Fenton woman who claims cars donated to her organization are tax-deductible

Jefferson City, Mo. — Attorney General Jay Nixon has obtained a temporary restraining order to stop a Fenton woman from falsely claiming that persons who donate a vehicle "for the needy" through her organization could claim a tax deduction for the value of the vehicle.

Nixon filed a lawsuit against Patricia Gallagher and her organization, the KEYS Project, in Jefferson County Circuit Court after Gallagher solicited vehicle donations in ads in several St. Louis-area newspapers stating that the vehicles would be "renovated and donated back to the needy" and that such vehicle donations would be tax-deductible.

The lawsuit states the vehicle donations are not, in fact, tax-deductible because the KEYS Project had not been granted tax-exempt status by the Internal Revenue Service. Nixon also said the organization is not registered with the Attorney General's Office to solicit charitable donations, and that it appears some of the vehicles donated were then advertised for sale in St. Louis-area newspapers.

"Tax advantages are one of the primary reasons why consumers make charitable donations," Nixon said. "We will deal aggressively with any deceptions or misrepresentations made to consumers that lead them to falsely believe their donations are tax-deductible."

Gallagher also is violating Missouri consumer fraud laws by failing to properly re-title the vehicles, by failing to send donors the appropriate letters that could be used as the basis for a tax deduction, and by falsely representing that the KEYS Project is a 501(c)(3) organization. The temporary restraining order, issued Aug. 9, prohibits Gallagher and the KEYS Project from:

• Soliciting for charitable donations to or for the KEYS Project.
• Advertising or offering for sale any motor vehicles, or selling or disposing of any vehicles.
• Advertising that donations to the KEYS Project are tax deductible or that the KEYS Project has tax-exempt status.

A hearing on Nixon's request for preliminary and permanent injunctions is scheduled for Aug. 19. Nixon is asking the court to order Gallagher and the KEYS Project to pay a civil penalty and to enjoin her from further violations of the law.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818