Desmarais Family, Prostitution and Tax Evasion, Oregon 2010

PORTLAND, OREGON - In a shocking turn of events, the Desmarais family, owners of eight strip clubs and two adult video stores in the Portland metropolitan area, have been found guilty of tax evasion and prostitution charges. The family, who used their businesses as a front for the largest prostitution enterprise ever prosecuted in Oregon, collected cash every time a stripper engaged in an act of prostitution with a customer from 2006 through 2010, evading $728,165 in income taxes due on $2.6 million in unreported prostitution income.

The four most culpable family members pleaded guilty to conspiring to defraud the Internal Revenue Service (IRS) and running a prostitution business. They were ordered to pay the IRS $728,165 in restitution and agreed to forfeit an additional $843,517 in cash seized during the execution of search warrants.

The case, which was brought to light by the U.S. Attorney's Office in the District of Oregon, highlights the importance of holding accountable those who seek to profit from illegal activities and protecting government programs from exploitation and abuse.

According to the U.S. Attorney's Office, the district collected $21,705,595 in criminal and civil actions in Fiscal Year 2017, with $8,066,251 collected in criminal actions and $13,639,344 in civil actions.

In addition to the Desmarais family case, the district also collected $13 million from PacifiCorp in a case stemming from a July 28, 2009 fire in the Umpqua National Forest in southern Oregon known as the Williams Creek Fire. The fire caused the U.S. Department of Agriculture (USDA) to incur suppression, resource damages, and rehabilitation costs totaling over $16 million.

The U.S. Attorney's Office filed an action on behalf of the USDA seeking to recover the costs incurred by the U.S. related to the fire and ultimately collected $13 million. The case serves as an example of the district's commitment to aggressively pursuing financial compensation for victims of crimes and protecting government programs from exploitation and abuse.

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on unpaid student loans, taxes, and other debts owed to the U.S.

Overall, the district collected nearly $24 million in civil and criminal actions in Fiscal Year 2017, with $21,705,595 collected in criminal and civil actions and $2,294,405 collected in joint criminal and civil actions and asset forfeitures. The funds recovered in the past fiscal year far exceed the office's annual operating budget.

The U.S. Attorneys' Offices, along with the department's litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.

The U.S. Attorney's Office in the District of Oregon is dedicated to holding accountable those who seek to profit from illegal activities and protecting government programs from exploitation and abuse. With the help of partner agencies, the district will continue to aggressively pursue financial compensation for victims of crimes and protect government programs from exploitation and abuse.

Source: https://www.justice.gov/usao-or/pr/oregon-us-attorneys-office-collects-nearly-24-million-civil-and-criminal-actions-us