Lindsey’s debt to
IRS puts bank
in tight spot
Bank of Hawaii is asking the U.S. District Court to determine what amounts, if any, it can withdraw from former Bishop Estate trustee Lokelani Lindsey's pension plan to pay $229,000 in unpaid taxes to the Internal Revenue Service.
In a complaint filed yesterday, Bank of Hawaii asked that the court issue an order depositing trust amounts into the Registry of the Court until a determination is made whether the IRS is entitled to it.
Bank of Hawaii administers funds as trustee of Lokelani Lindsey's pension plan.
On Monday the IRS demanded payment from Bank of Hawaii to satisfy a lien for unpaid taxes, or else face enforcement proceedings.
Michael Rosenthal, Lindsey's attorney, has instructed Bank of Hawaii not to make any payment to the IRS from the plan and that Lindsey would be contesting the IRS's right to payment from the plan.
If Bank of Hawaii does not comply with his instruction, Lindsey will sue, Rosenthal said.
Bank of Hawaii cannot pay the funds without being involved in multiple litigation and has asked the court to order Lindsey and the IRS to settle their claims.
Lindsey is to begin serving a six-month term in a federal facility beginning Aug. 4 for her role in hiding sister Marlene Lindsey's assets from bankruptcy court.
She pleaded guilty in June 2002 to federal money-laundering and conspiracy charges.
On May 14, U.S. District Judge David Ezra gave Lindsey an additional 60 days to care for her ailing husband before she begins serving her term.