The Justice Department said a federal court in Seattle has permanently shut down a nationwide "warehouse bank" tax defiance scheme that helped its customers evade federal taxes.
The bank, known as Olympic Business Systems, was operated by Des Moines, Wash., resident Robert Arant. The court said the warehouse bank was used by customers "who owe substantial tax debts or have failed to file federal tax returns." Evidence in the court record showed that Arant commingled nearly $28 million in customer deposits made over a four-year period and held these funds at a number of commercial banks. Customers had Arant use their deposited funds to pay customers' bills, which made it difficult or impossible for the IRS to identify customers' expenditures.
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