District of Hawaii

HONOLULU – Matthew Brian Case, age 46, a fishing boat captain formerly based in Hawaii, pled guilty on December 6, 2013 in federal court for attempting to sell shark fins to a Honolulu restaurant, a violation of the federal Lacey Act. Case entered the plea before United States Magistrate Judge Kevin S.C. Chang, who sentenced him to a $100 fine.

Florence T. Nakakuni, United States Attorney for the District of Hawaii, said it is a violation of federal law to sell, or attempt to sell, shark fins, if a person knows that the fins were removed from the bodies of sharks at sea, and then possessed aboard a fishing vessel. According to information produced in court, Case was the captain of the “Hokuao,” a long-line fishing vessel which operated out of Honolulu. During a month-long fishing trip that began in February 2013, Case instructed his crew to engage in “shark finning,” which involved catching sharks, removing their fins aboard the vessel, and disposing of the carcasses in the ocean. Case concealed approximately 100 shark fins in a hidden compartment in the vessel, and transported them back to Honolulu.

During court proceedings, Case admitted trying to sell the shark fins to a restaurant in the Ala Moana area on March 8, 2013. According to Nakakuni, Case thought the fins could be sold for approximately $600, but the restaurant declined to buy the illegal fins. Case, who now lives in Mexico, voluntarily appeared in Honolulu to answer the criminal charge. During arguments presented to the court, the government recommended a $100 fine, based on various factors, including Case’s immediate and continued cooperation with authorities, lack of profit, and willingness to return from Mexico to enter the plea.

United States Attorney Nakakuni said that “shark finning” is prohibited not only by the Lacey Act, but also by the Federal Shark Conservation Act of 2010. That act prohibits persons subject to the jurisdiction of the United States to remove fins from sharks at sea, to possess such unattached fins in their vessels, and then bring the fins to land.

The prosecution resulted from an investigation conducted by the National Oceanic & Atmospheric Administration, Office of Law Enforcement, with assistance from the Coast Guard, Immigration and Customs Enforcement -- Homeland Security Investigations, and the State of Hawaii Department of Conservation and Resources Enforcement. The prosecution was handled by Assistant U.S. Attorney Thomas Brady.

HONOLULU – After a five day trial in United States District Court in Honolulu, a federal jury today found Jacob Drummondo-Farias, 30, of Waialua, guilty of conspiring to distribute and possess, with intent to distribute, 50 grams or more of methamphetamine between 2011 and January, 2012. Earlier during the trial, on November 8, 2013, Drummondo-Farias’ brother and co-defendant, Joshua Lew, 28, also of Waialua, pled guilty to conspiring to distribute and possess, with intent to distribute, 50 grams or more of methamphetamine. The jury acquitted Drummondo-Farias of a second charge of a distribution of approximately 54 grams of methamphetamine in December 2010.

Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to evidence presented at trial Drummondo-Farias and Lew agreed with other individuals to distribute methamphetamine that was sent from California, via express mail services, to Honolulu during 2011 and 2012. The evidence also reflected that Drummondo-Farias and Lew orchestrated the shipment of 852 grams of methamphetamine which was intercepted at the Honolulu Airport on January 26, 2012 by federal law enforcement authorities.

Lew faces up to life in prison with a mandatory minimum ten year term of imprisonment. Drummondo-Farias also faces up to life in prison, however, because he was previously convicted of a federal drug felony, he faces a mandatory minimum sentence of 20 years imprisonment. Both defendants will be sentenced by U.S. District Judge J. Michael Seabright on February 24, 2014.

The investigation which resulted in the charges in the case was conducted by the Drug Enforcement Administration and United States Postal Service. Assistant U.S. Attorney Mark A. Inciong handled the prosecution.

HONOLULU – United States District Judge Leslie E. Kobayashi today sentenced Roger Santos, age 54, of Kahului, Maui to 12 months and 1 day imprisonment, 6 months home confinement, 3 years supervised release, 100 hours of community service and restitution to the Internal Revenue Service in the amount of $317,599.00 for one count of income tax evasion and one count of structuring. Santos pled guilty to these offenses on May 22, 2013.

Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to documents filed in connection with the case, in 2008, Santos diverted approximately $959,883 from the checking account of the business he operated, Paradise Asian Foods, Inc., .into multiple personal checking accounts. He then reported as income only the money that was deposited into the business account. These actions fraudulently lowered his taxable income by approximately $365,267 for the 2008 tax year.

Information produced to the court also reflected that Santos deposited $30,000 in currency into multiple bank accounts on the same day in order to evade certain regulations relating to currency transactions. Under federal law, a Currency Transaction Report must be filed by a financial institution with the Internal Revenue Service in regard to any currency transaction over $10,000. It is illegal to structure transactions with financial institutions in order to avoid this filing requirement.

The charges resulted from an investigation conducted by IRS - Criminal Investigation. Assistant United States Attorney Leslie E. Osborne, Jr. handled the prosecution.

HONOLULU –A jury in United States District Court found Michelle Malufau, 47, of Laie, Oahu, guilty today of bankruptcy fraud related to the Chapter 7 bankruptcy that she filed in 2011. Specifically, after a four day trial and less than an hour of deliberation, the jury convicted Malufau of making false statements under penalty of perjury on documents filed in that 2011 bankruptcy, and also of testifying falsely under oath at a hearing in that same proceeding.

Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that the evidence presented at trial showed that Malufau knowingly and fraudulently concealed at least three assets that she owned and/or controlled during her 2011 bankruptcy: a house on the North Shore of Oahu, which had over $322,000 in equity in it; a bank account; and rental income. Malufau received a discharge of over $1 million of debt through that proceeding.

Malufau faces up to five years in prison on each charge when she is sentenced by Senior United States District Judge Helen Gillmor on February 27, 2014.

The investigation that resulted in the charges against Malufau was conducted by the Internal Revenue Service - Criminal Investigation, with assistance from the Federal Bureau of Investigation. Assistant United States Attorneys Michael Nammar and Andrea Hattan handled the prosecution.

HONOLULU -- A federal jury yesterday found Mahealani Ventura-Oliver, 44, and Pilialoha K. Teves, 52, both of Maui, guilty of conspiracy and mail fraud offenses arising out of their marketing of a debt elimination scheme between 2008 and 2009. The jury also found Ventura-Oliver guilty of conspiring to submit false tax returns, and of submitting a false tax return.

Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to evidence produced in court, Ventura-Oliver and Teves were part of a group known as Ko Hawaii Pae Aina, the Registry and Hawaiiloa Foundation. Between 2008 and 2009, the group held weekly seminars on Maui, where Ventura-Oliver and others spoke about Hawaiian history and culture, and royal land patents. The evidence showed that, in return for the payment of a fee, the group offered to provide distressed homeowners with “bonds” and other documents that would pay off their mortgages and forestall collection efforts. The “bonds” purportedly directed the United States Treasury Department or the State of Hawaii Comptroller of the Currency to make payments on behalf of the homeowners.

According to evidence presented at trial, Hawaiiloa Foundation collected approximately $468,000 from approximately 200 individuals who went through the debt elimination process. Many of the individuals tried to use the bonds, but ultimately lost their homes through foreclosure, or had to renegotiate loans.

The government presented evidence that, as part of its process, the Hawaiiloa Foundation also promoted a tax program whereby participants supposedly could seek refunds from the IRS for debts paid off with the purported bonds.

Following an 11 day trial, the jury found Ventura-Oliver guilty of conspiring to use fictitious financial instruments, 15 counts of mail fraud, one count of money laundering, one count of conspiring to submit false tax returns seeking $1.5 million in refunds from the IRS, and submitting one false tax return with her estranged husband, John Oliver, who pled guilty and testified at trial. Teves was convicted of conspiring to use fictitious financial instruments, and of 12 counts of mail fraud, and was acquitted of three counts of mail fraud.

Ventura-Oliver and Teves will be sentenced on February 10, 2014 by United States District Judge J. Michael Seabright. Ventura-Oliver faces the following penalties at sentencing: (1) a maximum sentence of five years on each of the conspiracy offenses, and the false claim offense; (2) up to 20 years on each of the 15 mail fraud offenses; and (3) up to 10 years on the money laundering offense of which she was convicted. Teves faces a maximum sentence of five years on the conspiracy charge, and up to 20 years on each of the 12 mail fraud offenses of which she was convicted. Each charge also carries a potential fine of up to $250,000.

The court will also have a hearing on whether the United States can forfeit property seized during the investigation of the case. The property includes approximately $84,000 in cash, more than $18,000 seized from bank accounts, gold coins worth over $36,000, and vehicles.

The investigation of this case was conducted jointly by the Federal Bureau of Investigation, the Internal Revenue Service -- Criminal Investigation, the United States Postal Inspection Service, and the Maui Police Department. The prosecution was handled by Assistant United States Attorneys Larry Tong and Michael Nammar.

HONOLULU – Defendants Roger Cusick Christie (age: 64) and Sherryanne L. Christie (age: 62), husband and wife, pled guilty today in U.S. District Court before U.S. Magistrate Judge Richard L. Puglisi to marijuana trafficking and tax offenses. Roger Christie pled guilty to conspiring to manufacture, distribute, and possess with intent to distribute marijuana, involving 100 or more marijuana plants and two separate tax counts for failure to file federal income tax returns for calendar years 2008 and 2009. Sherryanne Christie pled guilty to conspiring to manufacture, distribute, and possess with intent to distribute marijuana, involving 50 or more marijuana plants. Their sentencings have been set on January 22 (Roger Christie) and January 27, 2014 (Shierryanne Christie), before United States District Judge Leslie E. Kobayashi.

Florence T. Nakakuni, United States Attorney for the District of Hawaii, said, “this prosecution demonstrated the effectiveness of cooperative efforts among federal, state, and local law enforcement authorities in addressing persistent, significant illegal drug trafficking activity.” According to information produced to the court:

• From at least about 2000 up through July 8, 2010, the Christies operated the “THC Cannabis Ministry” in Hilo, Hawaii. In 2008, an undercover law enforcement officer was introduced to Roger Christie and on three separate occasions at the Ministry, Christie sold quantities of marijuana to him (the largest being one-half pound).
• Thereafter, a court-authorized wiretap on three telephone lines used by Roger Christie from April – July 2009 resulted in the interception and recording of numerous telephone conversations involving Roger and Sherryanne Christie, Ministry employees, and other persons.
• In 2009, the Ministry was open three days a week from 2:00 – 5:00 p.m. During this three hour period, there were up to 70 customers served, and the Christies sold over one-half pound of marijuana “sacrament,” making about $1,000 or more in profit. They estimated that about 90 percent of the customers were Ministry members, while the remaining ten percent had state medical marijuana cards.
• In order to join the Ministry, prospective members were supposed to sit through an orientation session with Roger Christie. However, Roger Christie said he scheduled membership sessions with passengers on visiting cruise ships who were in Hilo for one day, and one could also join by ordering a Ministry “sanctuary kit” by mail for a $250 donation.
• The Christies instituted an “express” procedure in early 2009, which made it unnecessary for prospective members to meet with the Christies or to receive any spiritual blessing/advice from them in order to receive their marijuana “sacrament.” Rather, as long as the customer could pay the full amount of the “donation” price and had someone’s membership card or state medical marijuana card, that person could acquire “sacrament.”
• There were “suggested donation” prices such as $50 for one-eighth ounce, $100 for one-quarter ounce, and $400 for one ounce. When one customer complained during an intercepted call that the quoted “donation price” of $400 an ounce was rather high, Roger Christie justified this amount, stating “It’s retail”, and “Normal retail. You know, we buy it, you know, at forty-five hundred, five grand a pound, so….”
• On July 8, 2010, both Christies and 12 other defendants were arrested in this case. As a result of Roger Christie’s arrest and his ensuing court-ordered pretrial detention without bond, the Ministry was effectively shut down in Hilo and it has not re-opened since that time.
• Both Christies admitted in their respective plea agreements to being leaders and organizers of the charged marijuana trafficking activities.

At the time of sentencing, Roger Christie faces up to 20 years imprisonment on the marijuana charge, with a mandatory minimum term of five years. The maximum term of imprisonment on each tax offense is one year. Sherryanne Christie can receive up to 20 years imprisonment. The Christies also agreed to forfeit to the United States $21,494.00 in U.S. currency (proceeds from their marijuana distribution activities), and a condominium apartment in Hilo owned by Roger Christie (which was used to facilitate their marijuana trafficking activities).

Under the terms of the plea agreement, both Christies have reserved their right to seek appellate review of the District Court’s denial of four pretrial motions, including one asking the Court to find that enforcement of marijuana trafficking laws against them constituted a violation of the Religious Freedom Restoration Act (RFRA). District Judge Kobayashi denied all four of the Christies’ pretrial motions, ruling that enforcement of federal marijuana trafficking laws against the Christies was not a violation of RFRA. The court ordered Roger Christie’s continued detention pending sentencing; Sherryanne Christie remained released on bond.

The prosecution resulted from the combined efforts from 2008-2010 of the Drug Enforcement Administration; the Internal Revenue Service - Criminal Investigations; Homeland Security Investigations; the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Postal Inspection Service; the U.S. Marshals Service; the National Park Service; the Sheriff’s Office, Department of Public Safety; the Hawaii Police Department; and the Honolulu Police Department. The case was prosecuted by Assistant U.S. Attorney Michael K. Kawahara.