In April 1997, Resistance Records was temporarily put out of business by a tax dispute and a prosecution for distributing materials that promoted hatred in Canada. The inventory was in the United States at that time, at a rented house in Milford, Michigan where the operations were run. The Federal Marshals, under the direction of the Internal Revenue Service, seized the company records and the entire inventory. Eventually a small fine was paid for failure to properly pay state sales tax, and the business records and inventory was returned. The label never again operated in Canada because of violations of Canadian hate speech laws. After his 1997 sentence, George Burdi renounced racism and formed an ethnically diverse band, Novacosm.