Ex-trustee Lindsey faces big IRS lien, bank foreclosures
By David Waite
Advertiser Courts Writer
Bank of Hawaii is asking the federal court to hold about $230,000 of former Bishop Estate trustee Lokelani Lindsey's money until it can be determined if the IRS has the authority to take it to satisfy a tax lien.
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According to a lawsuit filed yesterday by Honolulu attorney Kath-
Lokelani Lindsey, convicted of money-laundering charges and facing a prison term, also is battling the IRS and Bank of Hawaii.
erine Leonard on behalf of the bank, a "final demand" letter from the Internal Revenue Service was received by the bank on Monday for $229,044.74 to satisfy a lien for unpaid taxes. An IRS "notice of levy" was filed against Lindsey and her husband, Stephen Lindsey, on Feb. 12, 2001, according to the lawsuit.
The IRS gave the bank five days to comply with the payment demand, but the bank received a
letter from Lindsey's attorney, Michael Rosenthal, on Wednesday telling the bank not to comply with the request, according to the lawsuit.
The bank's lawsuit requests a court order requiring Bank of Hawaii to place the money into the "registry of the court" until it can be determined whether the money should be paid to the IRS or returned to the bank.
Rosenthal and Lindsey could not be reached to comment. Lindsey and other former Bishop Estate trustees were ousted in 1999 amid allegations of mismanagement and abuse of power.
Lindsey was sentenced in October to six months in federal prison on money-laundering charges in connection with a bankruptcy case involving her sister. She was allowed to delay the start of her incarceration until Aug. 4 to care for her ailing husband.
Bank of Hawaii also filed a lawsuit earlier this month in Maui Circuit Court seeking to collect on a $1.1 million debt by foreclosing on two properties owned by Lindsey and her husband.
The bank said the Lindseys executed a promissory note for $672,000 in June 1996 and a second one for $411,934 in August 1997, both while Lokelani Lindsey was earning as much as $1 million a year as a trustee for the charitable trust now called Kamehameha Schools.
