Feds Drop Charges Against Oregon City Woman Who May Have Died

They say that the wheels of justice turn slowly. In the case of Priscilla Schrock of Oregon City, they may have moved too slowly.

On Oct. 20, the United States Department of Justice went to federal court in Portland asking a judge to compel Schrock to turn over information about customers, whom, it says, she helped evade taxes.

Federal officials argued that Schrock created hundreds of "sham" religious entities that allowed people to avoid paying income tax.

For a one time "gift" of $695 and an annual fee of $245, she would set up a customer with a religious not-for-profit that Schrock would have them direct their income to and, thus, not have to pay taxes.

Federal officials wrote they also wanted the judge to issue an injunction preventing her from continuing.

If she wasn't stopped, prosecutors said, the Internal Revenue Service will have "to devote scarce resources to attempt to locate and investigate her customers who ...have either not filed required federal tax returns or filed erroneous federal income tax returns that understate their correct federal income tax liability.

"Absent a permanent injunction, Schrock’s actions may result in the assessment of additional taxes, penalties and other civil and criminal sanctions being imposed against her customers."

It turns out that the Justice Department may not have needed a judge's help in stopping Schrock.

On Thursday, prosecutors went back to court to basically say, never mind.

"The United States dismisses this action without prejudice," they wrote in a court filing. "Since filing the complaint, the United States has learned that defendant Priscilla E. Schrock may be deceased."

As it turns out, it appears that Schrock died in July.

The investigation is likely not over, as paperwork was filed soon after she died, putting someone else in charge of the organization that the feds say she was using to run her scheme.

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