St. Louis Woman Gets Jail Term in Car Donation Scheme

July 20, 2004

Car Donations • IRS Warns of Questionable Deductions for Donated Vehicles • Car Donation Free Ride Is Over • St. Louis Woman Gets Jail Term in Car Donation Scheme

A St. Louis-area woman found guilty of soliciting vehicle donations for charity then selling the cars for her own profit was sentenced to five one-year terms in the county jail.

Missouri Attorney General Jay Nixon said Patricia Gallagher took out newspaper advertisements asking people to donate cars. She led donors to believe their cars would be fixed up and given to those in need, including those who needed a car to get to work and cancer patients who needed transportation to the doctor’s office. Gallagher told donors she operated a charitable organization and their donations would be tax-deductible.

In May, the court found Gallagher guilty of five felony counts of unlawful practices in connection with the sale or advertisement of merchandise or solicitation of funds for a charitable purpose. Four of the five cars covered by the charges were resold by Gallagher, and she never obtained approval from the Internal Revenue Service to make donations tax-deductible.

Besides the sentence on five counts of consumer fraud, St. Louis County Circuit Judge Robert Cohen gave Gallagher a stern lecture for telling her supporters what Cohen called half the story.

Gallagher had claimed poor bookkeeping and good intentions. She said that she sold most of the cars because they were in such poor mechanical condition that they would pose a danger to a recipient. She put the proceeds into her own account.

Among the parts missing in Gallagher's version, the judge said, were her failure to tell people she stole and altered the tax-exempt number of the Archdiocese of St. Louis and used it on her documents, and that she knowingly commingled with her own money funds from her so-called charity, the "Key's Project."

Gallagher never told people who were donating their used cars that she failed to get the proper credentials from the Internal Revenue Service. Those donors could now face repercussions from the IRS for claiming the cars they gave away were charitable contributions when they legally were not, Cohen said.

Besides the fake charity program, Gallagher was already on probation, Cohen said, for using an archdiocesan credit card for personal gain. She also has other prior convictions.

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