A federal court in New York has held Robert L. Schulz of Queensbury, N.Y., in contempt of court, the Justice Department announced today. Judge Thomas J. McAvoy of the U.S. District Court for the Northern District of New York ruled that Schulz and his We The People organization have failed to comply with the court's earlier injunction order.

The contempt order states that if Schultz and the organization fail to turn over its customer list by May 5, 2008, they will face a daily $2,000 fine, imposed retroactively from April 28, 2008. The court also noted that it would consider a government request for incarceration of Schulz if the defendants have not turned over the required information by May 12, 2008.

The injunction order required Schulz and We the People to give the Justice Department a list of the names, addresses, telephone numbers and Social Security numbers of all people and businesses to whom they had distributed materials falsely purporting to show how employers and employees could legally stop federal tax withholding. The materials were distributed in connection with a tax defier scheme called the "tax termination package." The court previously found that Schulz "knew or had reason to know" that his statements in promoting the scheme were false.

"The court's action shows that promoters of tax defier schemes must obey court injunction orders or face serious sanctions," said Nathan J. Hochman, Assistant Attorney General for the Justice Department's Tax Division. "Through its National Tax Defier Initiative (TAXDEF Initiative), the Tax Division has prioritized civil and criminal prosecutions against tax defiers and promoters of bogus tax defier schemes. Since 2001, the government has recovered more than $600 million from its fraudulent tax preparer/promoter civil injunction program through the more than 330 injunctions it has obtained."

More information about these cases is available on the Justice Department website ().