“Second Chance and the appraisal company had a mountain of information about the IRS’ hostile view of the benefits that the defendants were promoting,” said Ugo Colella, a partner with Duane Morris, the law firm representing the plaintiffs. “The representations they were making were at best incomplete, and at worst, they were hiding this information to ensure the donors keep coming. Either way, the defendants withheld critical information from Maryland consumers.”
The problem, the lawsuit contends, is that Second Chance and NoVaStar have known for many years that (1) the IRS audited consumers and did not allow tax refunds or deductions for house donations made to Second Chance, and (2) that NoVaStar’s appraisals were IRS non-compliant. According to the complaint, despite this knowledge, Second Chance and NoVaStar concealed that information from Maryland consumers, including Gogtay and Dixit.