FOR IMMEDIATE RELEASE TUESDAY, MAY 1, 2007 WWW.USDOJ.GOV TAX (202) 514-2007 TDD (202) 514-1888 Customers Across the Country Allegedly Used Scheme to Hide Income and Assets from the IRS WASHINGTON A federal court in Seattle has shut down a nationwide warehouse banking scheme whose promoter falsely promised customers they could legally hide their income, assets, and identities from the Internal Revenue Service, the Justice Department announced today. The warehouse bank, known as Olympic Business Systems (OBS), is operated by Des Moines, Wash., resident Robert Arant.
The court order, called a preliminary injunction, was signed on April 27 by Judge Marsha J. Pechman of the U.S. District Court for the Western District of Washington. A temporary restraining order freezing Olympics assets was previously signed on April 17 by Chief Judge Robert L. Lasnik. The court orders were initially filed under seal, but the court today ordered them unsealed.
In papers filed in support of obtaining the injunction, the government alleged that Olympic deposited almost $28 million of customer funds into accounts that OBS maintained in its own name at commercial banks. Olympic allegedly used the funds to pays customers bills and expenses while promising to leave no paper trail.
Judge Lasniks order held that Arant is or should be aware that courts have repeatedly held that warehouse banks are tax evasion schemes. A California federal court in 2004 permanently closed a similar warehouse bank. Details about that case are available at http://www.usdoj.gov/tax/txdv04785.htm. In 2005 a federal court in Oregon sentenced operators of a warehouse bank to prison, after their criminal convictions. Details are available at http://www.usdoj.gov/tax/txdv05070.htm.
Since 2001 the Justice Department has obtained injunctions against more than 235 tax preparers and tax-fraud promoters. Information on those cases is available at http://www.usdoj.gov/tax/taxpress2007.htm. More information about the Justice Departments Tax Division can be found at www.usdoj.gov/tax. 07-313
Source: US Department of Justice
