District of Hawaii
Press releases recorded for this federal judicial district.
Jury Finds Former HUD Employee Guilty of Fraud and Identity TheftRead the Press Release
HONOLULU – A federal jury today found Chun Mei Tong, also known as Mei Tong, 43, of Honolulu, guilty of five counts of wire fraud and three counts of aggravated identity theft for her scheme to use an alias and forge signatures to rent out properties under the U.S. Department of Housing and Urban Development ("HUD") Housing Choice Voucher Program (also known as the "Section 8 Program") while she was also a HUD employee involved in overseeing the Section 8 program. The verdict followed a seven-day trial before Chief District Judge J. Michael Seabright. Sentencing is scheduled for December 16, 2019.
Kenji M. Price, United States Attorney, said that the Section 8 program is HUD’s major program for assisting low-income families, the elderly, and the disabled to afford housing in the private rental market in the local community. Participants can choose any housing that meets the requirements of the program. The Section 8 program is administered locally by public housing authorities. A housing subsidy that may cover the full rent depending on the income of the participant is paid to the landlord directly by the public housing authority on behalf of the participating family.
According to the information presented during trial, from 2014 to 2019, Tong directed funds to her company for five Section 8 rentals located on Oahu. Tong received approximately $207,000 from HUD as part of her scheme. Tong created the alias, "Debbie Kim," to act as a property manager and landlord for five properties that she rented to Section 8 voucher holders. Posing as "Debbie Kim," Tong submitted documentation to the local public housing authorities for rental approval and payments of HUD funds. Tong covered up her ownership of two of the properties and also forged the signatures of the owners of three of the properties to ensure that all of the HUD funds paid to the landlord went directly to her company’s bank account.
Information produced in court also disclosed that Tong became a HUD employee in 2005 and worked in the Honolulu Field Office until her resignation in November 2015. As a HUD employee, Tong was prohibited from participating in the Section 8 program. Tong was also prohibited from engaging in the business of real estate. Tong never disclosed her involvement in multiple real estate companies or aliases she used in connection with those companies to anyone she worked with at the local public housing authorities or HUD.
Tong will face a mandatory term of two years in prison for aggravated identity theft and up to twenty years in prison for each count of wire fraud.
The investigation was led by HUD’s Office of Inspector General. Assistant U.S. Attorneys Rebecca A. Perlmutter and Morgan Early handled the prosecution.
Executive Union Board Member and Family Members Charged with CorruptionRead the Press Release
HONOLULU – Brian Ahakuelo, 58, former Business Manager of the International Brotherhood of Electrical Workers Local Union 1260 ("Local 1260") based in Honolulu, Hawaii, along with his wife, Marilyn Ahakuelo, 55, and sister-in-law, Jennifer Estencion, 52,were charged yesterday in a 70-count indictment. Charges include conspiracy, wire fraud, money laundering, and embezzlement.
U.S. Attorney for the District of Hawaii Kenji M. Price stated that according to court documents and information presented in court, from June 2011 to May 2016, Brian Ahakuelo, Marilyn Ahakuelo, and Estencion engaged in a conspiracy to divert Local 1260 union funds and property for their own personal use. Brian Ahakuelo hired family members at inflated salaries (some of whom did little or no actual work for the union) and authorized the use of union funds for personal travel, a vehicle, and dining expenditures. When his activities largely depleted the union’s coffers, Brian Ahakuelo, with the help of Marilyn Ahakuelo, Estencion and other union employees, rigged a vote on Resolution 14-07 to increase membership dues. The false election caused members to pay an additional $3.7 million in dues over about eighteen months.
"Our office will aggressively investigate and prosecute corruption in unions – and any other governmental or non-governmental entities – that abuse the trust vested in them by the hard working folks in our communities," stated U.S. Attorney Price. "If your job is to protect the hard-working men and women in our communities, then do that. If you use your position to corruptly line your own pockets or serve other corrupt interests, we will use all of our resources to hold you accountable."
"The State is committed to investigating and prosecuting individuals who hold positions of trust, and who engage in conduct that violates that trust," said Attorney General Clare E. Connors. "We look forward to continuing to work with our federal partners as this litigation proceeds."
"The alleged acts described in the charging document are troubling and violate the trust of the members of Local 1260," said Internal Revenue Service ("IRS") - Criminal Investigation Special Agent in Charge Justin Campbell. "IRS-Criminal Investigation is proud to hold those responsible accountable, particularly when the alleged crimes directly impact the paychecks of hard working electrical workers."
The conspiracy charge carries a maximum term of five years imprisonment; each wire fraud charge carries a maximum term of 20 years imprisonment; each money laundering charge carries a maximum term of 10 years imprisonment; and each embezzlement charge carries a maximum term of five years imprisonment. The charges in the information are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being jointly investigated by the State of Hawaii Attorney General’s Office, IRS-Criminal Investigation, and the Department of Labor Office of Labor Management. It is being prosecuted by Assistant U.S. Attorney Michael Albanese.
U.S. Citizen Arrested for Sexual Conduct with A Minor in A Foreign PlaceRead the Press Release
HONOLULU – George Alexis Theros, 76, was arrested yesterday and charged by criminal complaint with engaging in illicit sexual conduct in a foreign place, in violation of 18 United States Code § 2423(c). He made an initial appearance in federal court on July 31, 2019.
Kenji M. Price, U.S. Attorney for the District of Hawaii, announced that the criminal complaint charges Theros with sexually abusing a 14 year-old girl on a boat in Panama. The complaint alleges that witnesses in Panama reported acts of sexual conduct Theros committed on the girl, whom he had claimed was his daughter. Witnesses in Thailand reported that, years ago, Theros paid the girl’s family in Thailand in order to "adopt" her when she was nine or ten years old. The witnesses also reported that the girl then proceeded to live with Theros in his home in Thailand.
According to the criminal complaint, in the spring of 2019, Theros traveled with the girl from Thailand to Panama, and planned to transport her to Hawaii on a boat. When witnesses on the boat realized Theros was sexually abusing the girl, they reported his conduct to law enforcement in Panama. Theros abruptly fled back to Thailand, leaving the girl behind in Panama. He traveled to Hawaii last week, and was arrested on July 30, 2019.
Combatting the exploitation of children is a significant enforcement priority for the U.S. Attorney’s Office for the District of Hawaii (USAO), as well as federal law enforcement agency components in Hawaii, such as the Department of Homeland Security, Homeland Security Investigations (HSI), and the Federal Bureau of Investigation. This prosecution is one of many brought by the USAO in the last 15 months to hold those who sexually exploit minors accountable.
Last May, the USAO brought federal charges against Defendant Dustin Miyakawa for coercion and enticement of a minor, sex trafficking of children, and sexual exploitation of a child. Miyakawa pleaded guilty to coercion and enticement of a minor, and is facing a minimum term of 10 years of imprisonment when he is sentenced in October. Since last May, the USAO brought significant charges against 12 additional defendants—which includes Theros—for exploiting children. Eight of these defendants are charged with attempting to entice a minor to engage in sexual acts, and some of the eight are charged with other offenses. If convicted of attempted enticement, the defendants face a mandatory minimum term of 10 years of imprisonment.
Three of the 12 defendants are charged with child pornography offenses. Two of them—Daniel Lyles and Justin Furr—pleaded guilty. At sentencing, both face a mandatory minimum term of five years of imprisonment.
"These prosecutions demonstrate the federal law enforcement community’s commitment to protecting one of Hawaii’s most precious assets—the boys and girls who hold its future in their hands," stated U.S. Attorney Price. "Our message as a law enforcement community is simple: If your goal is to sexually exploit children, we’ll do everything in our power as a federal law enforcement community to find a home for you in federal prison."
"The sexual exploitation of children is a heinous offense, U.S. citizens traveling abroad need to be cognizant of the fact that U.S. law prohibits this activity and that U.S. law enforcement agents will work tirelessly to bring perpetrators to justice," said John F. Tobon, Acting Special Agent in Charge for HSI Honolulu.
The Theros prosecution was jointly investigated by HSI in Honolulu, Hawaii and Panama City, Panama, the U.S. Department of State’s Diplomatic Security Service (DSS) Overseas Criminal Investigations Division with assistance from the DSS Honolulu Resident Office, and local law enforcement in Panama and Thailand. It is being prosecuted by Assistant U.S. Attorney Morgan Early.
A criminal complaint is merely an allegation, and a defendant charged by complaint or indictment is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted of the charge in the complaint, Theros faces up to thirty years in prison. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Maui Doctor Pleads Guilty to Health Care FraudRead the Press Release
HONOLULU – Mark Lipetz, 50, owner and operator of the South Maui Clinic in Kihei, Maui, pleaded guilty today in federal court to two counts of health care fraud and one count of acquiring a controlled substance through misrepresentation, fraud, forgery, deception, or subterfuge. Sentencing is scheduled for December 5, 2019 before U.S. District Judge Leslie E. Kobayashi.
According to court documents and information presented in court, between January 2017 and June 2018, Lipetz, a licensed physician, wrote multiple prescriptions for medications using the names and addresses of actual patients. However, Lipetz did not intend to give the medications to the patients whose names appeared on the prescriptions. Instead, Lipetz filled the prescriptions and used the controlled substances for purposes other than the legitimate medical treatment of his patients. Such purposes included giving medications to patients other than those whose names appeared on the prescriptions or creating a stockpile from which he could provide “trial samples” to patients without writing them a prescription. Additionally, between May 2014 and July 2018, Lipetz engaged in a scheme to fraudulently obtain money from Medicare, Medicaid, Hawaii Medical Services Association, and United Healthcare by submitting more than 200 false claims for reimbursement. Each of the claims indicated that Lipetz had an in-person, face-to-face office visit with a patient, when in fact the office visits never occurred.
“The U.S. Attorney’s Office will continue its quest to root out fraud in the healthcare industry by working with the Drug Enforcement Administration (DEA) and other law enforcement entities dedicated to protecting patients,” stated U.S. Attorney Kenji M. Price for the District of Hawaii. “Our healthcare system relies upon the candor of physicians and other professionals who care for the vulnerable in our communities. Lipetz’s fraudulent behavior unlawfully steered precious funds towards his pockets and away from healthcare providers who serve the most vulnerable in our communities. We will continue to aggressively pursue physicians and other medical practitioners who, unlike the overwhelming majority of their colleagues, choose to violate federal law.”
“The DEA will continue to investigate illicit activity in the medical community,” said DEA Assistant Special Agent in Charge John Callery. “Dr. Lipetz is only one of several ongoing investigations throughout the state of Hawaii to shield our communities from the dangers of the Opioid Crisis that is crippling portions of the mainland. DEA is thankful to the U.S. Attorney’s Office for its outstanding assistance and partnership in this matter.”
This case was investigated by the DEA and the State of Hawaii Narcotics Enforcement Division. It was prosecuted by Assistant U.S. Attorney Michael Albanese.
Two Men Charged with Local Robbery SpreeRead the Press Release
Trey Hasegawa, 21, and Matthew Middleton, 26, were charged today with conspiring to interfere with commerce by robbery. The conspiracy charge carries a maximum term of 20 years imprisonment and a maximum fine of $250,000. Both Hasegawa and Middleton have been remanded to federal custody pending further proceedings.
Kenji M. Price, U.S. Attorney for the District of Hawaii, announced that the complaint alleges that over the span of two days Hasegawa and Middleton targeted three convenience stores, one on Waialae Avenue, one on S. King Street, and one on Nuuanu Avenue. On July 8 and 9, cashiers at three 7-Eleven stores handed money to a male brandishing what appears to be a handgun. At this time, the total amount of currency taken is undetermined.
The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the U.S. Marshals Service, and the Honolulu Police Department. It is being prosecuted by Assistant U.S Attorney Margaret Nammar.
Husband and Wife Plead Guilty to Involvement in Multi-Million Dollar Investment Fraud Scheme Based in HawaiiRead the Press Release
HONOLULU – Neil Kauhi, 51, pleaded guilty today in federal court to one count of wire fraud. Kauhi faces a maximum term of imprisonment of 20 years. His wife, Lyndie Kauhi, 49, pleaded guilty to one count of misprision of a felony. She faces a maximum term of imprisonment of three years. Both Lyndie and Neil Kauhi are detained without bail until their sentencings on October 17, 2019.
U.S. Attorney for the District of Hawaii Kenji M. Price announced that, according to court documents and information presented in court, between October 2012 and April 2018, Neil Kauhi executed an investment fraud scheme involving over 20 victims. Neil Kauhi took in more than $2.5 million by promising these victims that their money would be invested in precious metals, real estate, a trucking company, and a solar energy company. Instead of directing the victims’ funds into the promised investments, Kauhi diverted most of the money to his and his family’s own personal use, such as expenditures on travel, rent and utilities, restaurants, vehicles, retail purchases, entertainment, and a daughter's wedding, as well as into other unauthorized investments.
According to court documents, Lyndie Kauhi knew about her husband’s investment fraud scheme, but she did not report it to federal authorities. Instead, Lyndie Kauhi took steps to conceal the fraud scheme, by among other things, depositing and transferring victims’ funds into the Kauhi’s personal bank accounts. When interviewed on November 8, 2017 by agents of the Federal Bureau of Investigation (FBI), Lyndie Kauhi made misleading statements and material omissions about the fraud scheme.
As part of their plea agreement, both Lyndie and Neil Kauhi have agreed to pay restitution for the fraud losses to victims. Neil Kauhi has also agreed to a forfeiture money judgment of $2,981,191.64. Federal authorities have already seized approximately $581,618.51 in funds in connection with the sale of real property associated with Neil Kauhi.
The case was investigated by the FBI and was prosecuted by Assistant U.S. Attorney Rebecca A. Perlmutter.
Engineering Firms’ CPA Sentenced to Prison for Role in Tax SchemeRead the Press Release
Michael H. Higa, the Certified Public Accountant (CPA) and controller of several engineering businesses, was sentenced yesterday to 40 months in prison in Honolulu, Hawaii, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Kenji M. Price for the District of Hawaii.
On Nov. 20, 2018, a jury convicted Higa of conspiracy to defraud the United States along with co-conspirator Wagdy Guirguis. In addition to the conspiracy conviction, Higa was also convicted of one count of assisting in the preparation of a false tax return. The convictions arose from a scheme to divert funds from Guirguis’ business entities for his own personal benefit and to avoid the payment of federal employment taxes, corporate and individual income taxes, and Internal Revenue Service (IRS) penalties.
According to the evidence presented at trial, Guirguis operated numerous engineering businesses. Higa, a CPA, was the controller of these businesses. Higa also served as a nominee officer of another entity controlled by Guirguis. When the IRS determined Guirguis’ businesses owed over $800,000 in federal employment taxes and assessed an $812,000 penalty, Guirguis and Higa took steps to place income and assets out of the reach of the IRS. For instance, Guirguis and Higa used a nominee entity to fraudulently convey a condominium to Guirguis’ wife. After an IRS revenue officer began questioning Mrs. Guirguis’ sole ownership of this condominium, Guirguis and Higa instructed a bookkeeper to alter the books and records in an attempt to conceal this transaction from the IRS.
From 2001 through 2012, Guirguis and Higa also used a nominee entity to divert approximately $1.3 million from Guirguis’ businesses for Guirguis’ personal use. As a result of their diversion and concealment efforts, Guirguis’ 2010 through 2012 returns omitted $553,000 in income, resulting in a tax deficiency of $165,000. In addition, Higa prepared a false corporate income tax return for one of Guirguis’ entities that failed to report over $1.3 million in gross receipts.
In addition to the term of imprisonment, U.S. District Judge Helen Gillmor ordered Higa to serve three years of supervised released and to pay $2,045,544.97 (jointly and severally with his co-defendant Guirguis) in restitution to the IRS.
On June 27, Guirguis was sentenced to five years in prison. In addition, Judge Gillmor ordered Guirguis to serve three years of supervised released and to pay $3,078,157.81 in restitution to the IRS minus any payments already made to the IRS.
Principal Deputy Assistant Attorney General Zuckerman and United States Attorney Price thanked special agents of IRS-Criminal Investigation, who investigated the case, and Tax Division Senior Litigation Counsel John Sullivan and Trial Attorney Anahi Cortada and Assistant United States Attorney Rebecca Perlmutter, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Owner of Engineering Firms Sentenced to Five Years in Prison for Tax SchemeRead the Press Release
Wagdy A. Guirguis, owner of several engineering businesses, was sentenced today to five years in prison in Honolulu, Hawaii, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and United States Attorney Kenji M. Price for the District of Hawaii.
On Nov. 20, 2018, a jury convicted Guirguis of conspiracy to defraud the United States along with co-conspirator Michael Higa. In addition, Guirguis was also convicted of three counts of filing false corporate income tax returns, one count of failure to file a corporate income tax return, three counts of tax evasion, one count of corruptly endeavoring to obstruct and impede the Internal Revenue Service (IRS), and one count of witness tampering. The convictions arose from a scheme to divert funds from Guirguis’ business entities for his own personal benefit and to avoid the payment of federal employment taxes, corporate and individual income taxes, and IRS penalties.
According to the evidence presented at trial, Guirguis operated numerous engineering businesses. Higa, a Certified Public Accountant (CPA), was the controller of these businesses. Higa also served as a nominee officer of another entity controlled by Guirguis. When the IRS determined Guirguis’ businesses owed over $800,000 in federal employment taxes and assessed an $812,000 penalty, Guirguis and Higa took steps to place income and assets out of the reach of the IRS. For instance, Guirguis and Higa used the nominee entity to fraudulently convey a condominium to Guirguis’ wife. After an IRS revenue officer began questioning Mrs. Guirguis’ sole ownership of this condominium, Guirguis and Higa instructed a bookkeeper to alter the books and records in an attempt to conceal this transaction from the IRS.
From 2001 through 2012, Guirguis and Higa also used the nominee entity to divert approximately $1.3 million from Guirguis’ businesses for Guirguis’ personal use. As a result of their diversion and the concealment efforts, Guirguis’ 2010 through 2012 returns omitted $553,000 in income, resulting in a tax deficiency of $165,000.
In addition, Guirguis filed corporate income tax returns that fraudulently omitted millions of dollars of gross receipts. For one of his businesses, Guirguis simply did not file a corporate tax return, thereby not reporting more than $1.7 million in gross receipts.
After the IRS levied the bank accounts of one business, Guirguis diverted incoming funds owed to that business, directing payment of the funds to a different business. Guirguis also instructed a tenant to disregard IRS collection notices and pay rent directly to him rather than to the IRS. Moreover, Guirguis made false and misleading statements to IRS revenue officers, all in an effort to obstruct the IRS’ efforts to collect on the taxes he and his companies owed.
To impede the criminal investigation into his tax violations, Guirguis falsely told an employee, who had testified before the grand jury, that he did not know about the false backdating in the books of the nominee entity, and asked the employee to sign a false statement to that effect.
In addition to the term of imprisonment, U.S. District Judge Helen Gillmor ordered Guirguis to serve 3 years of supervised release, and to pay a $925 special assessment, $6,730.24 in prosecution costs, and $3,308,868 in restitution to the IRS minus any payments already made to the IRS.
Sentencing for Michael Higa is scheduled for July 1.
Principal Deputy Assistant Attorney General Zuckerman and United States Attorney Price thanked special agents of IRS-Criminal Investigation, who investigated the case, and Tax Division Senior Litigation Counsel John Sullivan and Trial Attorney Anahi Cortada and Assistant United States Attorney Rebecca Perlmutter, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Owner of Engineering Firm Sentenced to Five Years for Tax SchemeRead the Press Release
HONOLULU – Wagdy A. Guirguis was sentenced today to five years in prison for conspiracy to defraud the United States announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and United States Attorney Kenji M. Price for the District of Hawaii. As part of his sentence, Guirguis must serve three years of supervised release, and pay $3,308,868.00 in restitution to the Internal Revenue Service (IRS) and $6,730.24 in prosecution costs.
On November 20, 2018, a jury convicted Guirguis and co-conspirator Michael Higa, who was a certified public accountant, of conspiracy. In addition, Guirguis was also convicted of three counts of filing false corporate income tax returns, one count of failure to file a corporate income tax return, three counts of tax evasion, one count of corruptly endeavoring to obstruct and impede the IRS, and one count of witness tampering. The convictions arose from a scheme to divert funds from Guirguis’ business entities for his own personal benefit and to avoid the payment of federal employment taxes, corporate and individual income taxes, and IRS penalties.
According to evidence presented at trial, Guirguis and Higa used nominee entities to divert more than $1 million in funds from Guirguis’ businesses for Guirguis’ personal use. Guirguis made numerous false statements to IRS employees over the years during their attempts to collect taxes. In addition, to impede the criminal investigation into his tax violations, Guirguis falsely told an employee, who had testified before the grand jury, that he did not know about the false backdating in the books of the nominee entity, and asked the employee to sign a false statement to that effect.
Sentencing for Michael Higa is scheduled for July 1.
The case was investigated by the IRS-Criminal Investigation Division. It was prosecuted by Tax Division Senior Litigation Counsel John Sullivan and Trial Attorney Anahi Cortada and Assistant U.S. Attorney Rebecca Perlmutter for the District of Hawaii.
Hawaii Man Sentenced to over Nine Years in Prison for Distribution of Cocaine Near A PlaygroundRead the Press Release
HONOLULU – Jeffrey Rowell, 46, also known as Darnell Stinnette, was sentenced today to 110 months of imprisonment for the distribution of cocaine within 1,000 feet of a playground, specifically, Aala Park in Honolulu, Hawaii. A federal grand jury convicted Rowell after several days of trial on February 7, 2019.
U.S. Attorney for the District of Hawaii Kenji M. Price announced that, according to court documents and information presented in court, on June 13, 2018, Rowell sold crack cocaine to an undercover officer in exchange for $40 cash. When law enforcement executed his arrest, they found an additional 5.84 grams of methamphetamine in a small bag he was carrying. Rowell has an extensive criminal history, including state convictions on the mainland for assault, theft, battery, and domestic violence.
At sentencing, U.S. District Judge Derrick K. Watson remarked that Rowell’s criminal history was serious, and emphasized a need to protect the community from further crimes committed by Rowell. He noted that Rowell had served multiple terms of imprisonment before that were "slaps on the wrist," but stated, "that stops here."
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of its renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, and local law enforcement, and the community to develop effective strategies to reduce violent crime.
The case was investigated by the United States Drug Enforcement Administration and the Honolulu Police Department. It was prosecuted by Assistant U.S. Attorneys Morgan Early and Darren Ching.
U.S. Executive Sentenced to Prison for Role in Conspiracy to Violate Foreign Corrupt Practices ActRead the Press Release
The owner of a Hawaii-based engineering and consulting company was sentenced to 30 months in prison yesterday for his involvement in an international bribery conspiracy, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Sean Kaul of the FBI’s Honolulu Field Office.
Frank James Lyon, 53, a U.S. citizen residing in Hawaii, was sentenced by U.S. District Judge Susan O. Mollway of the District of Hawaii. Lyon pleaded guilty on Jan. 22 to a one-count information filed in the District of Hawaii charging him with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and to commit federal program fraud.
According to admissions made as part of his plea agreement, between 2006 and 2016, Lyon and his co-conspirators paid bribes to foreign officials in the Federated States of Micronesia (FSM) and to Hawaii state officials in exchange for those officials’ assisting Lyon’s company in obtaining and retaining contracts valued at more than $10 million. The bribes included, among other things, cash to FSM officials and Hawaii officials, and vehicles, gifts and entertainment for FSM officials.
In a related matter, Master Halbert, 44, a Micronesian citizen and government official, pleaded guilty on April 2, before Judge Mollway to one count of conspiracy to commit money laundering. He is scheduled to be sentenced on July 29, 2019.
Trial Attorney Katherine Raut of the Criminal Division’s Fraud Section is prosecuting the case. The Criminal Division’s Office of International Affairs and the U.S. Department of Transportation Office of Inspector General provided significant assistance.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Oahu Physical Therapist Sentenced to 42 Months for Mulit-Million Dollar Health Care Fraud SchemeRead the Press Release
HONOLULU – Garrett Okubo, 52, of Honolulu, Hawaii, was sentenced today to 42 months of imprisonment for committing health care fraud. As part of his sentence, Okubo must pay $3.7 million in restitution, $3.7 million in forfeiture, and must serve three years of supervised release.
According to court documents and information presented in court, from January 2011 through October 2017, Okubo submitted millions of dollars of false claims for payment for physical therapy services to TRICARE, Medicare, Medicaid, and HMSA. Moreover, Okubo falsely claimed he had personally provided physical therapy services to his patients, when in reality his staff members, who were not licensed, provided said services. Okubo was often not physically present in his clinic while his patients received treatment, and was instead available only by phone. Okubo inflated the amount of time that his patients were treated, by “rounding up” to the maximum amount of time that the health care benefit plan would pay for a single patient visit, even if a patient were seen for far less time. Nearly 70% of Okubo’s total billings over six years were fraudulent.
At sentencing, Chief U.S. District Judge J. Michael Seabright highlighted the importance of deterring others from committing similar crimes, and remarked that Okubo “knew exactly what he was doing.”
“Our dedicated law enforcement community will continue to pursue individuals like Mr. Okubo, whose fraudulent conduct drains money from public coffers,” stated U.S. Attorney for the District of Hawaii Kenji M. Price. “Fraud in the healthcare industry erodes the finite resources available to fund treatment for ailing patients, and we will continue to do our part as a law enforcement community to protect those resources by exposing misconduct and holding perpetrators accountable for their crimes.”
The case was jointly investigated by the Defense Criminal Investigative Service; the Federal Bureau of Investigation; the Department of Health and Human Services, Office of Inspector General; and the State of Hawaii, Department of the Attorney General, Medicaid Fraud Control Unit; and was prosecuted by Assistant U.S. Attorney Marc A. Wallenstein.
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Former U.S. Army Range Operations Manager Pleads Guilty to ConspiracyRead the Press Release
A former U.S. Army civilian employee pleaded guilty today to conspiring to accept bribes and disclose sensitive U.S. Army procurement information while serving as a range operations manager at Hawaii’s Schofield Barracks.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Kenji M. Price of the District of Hawaii, Special Agent in Charge Ray Park of the U.S. Army Criminal Investigation Command (Army-CID), Special Agent in Charge Bryan Denny of the U.S. Defense Criminal Investigative Service (DCIS) and Special Agent in Charge Sean Kaul of the FBI’s Honolulu Field Office made the announcement.
Franklin Raby, 67, of Greeneville, Tennessee, pleaded guilty before U.S. District Judge Ronnie Greer of the Eastern District of Tennessee to a one-count information charging him with conspiracy to commit bribery and disclose sensitive U.S. Army procurement information. Sentencing is scheduled for Aug. 5, 2019.
According to admissions as part of his plea agreement, from March 2015 through May 2018, Raby, while employed as a public official for the U.S. Army, accepted tens of thousands of dollars’ worth of bribes—including an antique automobile—from an employee of a federal contractor that sought and received business from the United States Army. In return, Raby provided the contractor with sensitive, internal U.S. Department of Defense procurement information, and otherwise used his position to benefit the contractor in securing U.S. Army contracts.
Army-CID, DCIS and the FBI investigated this case. Trial Attorney Laura Connelly and Assistant Chief Justin Weitz of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Marc Wallenstein of the District of Hawaii are prosecuting the case. The Fraud Section appreciates the substantial assistance of the U.S. Attorney’s Office for the Eastern District of Tennessee.
Former Union Executive Officer Charged with EmbezzlementRead the Press Release
HONOLULU – Charles Kimo Brown, 60, a resident of Mililani, Hawaii, was charged yesterday in a federal indictment with two counts of embezzling from a union and two counts of making false entries in the books and records of a union.
The indictment alleges that, from in or around December 2009 through April 2014, Brown was an executive officer of the Hawaii Longshore Division (the "Longshore Division"), which is a labor organization headquartered in Honolulu, Hawaii. The Longshore Division is an autonomous division of the International Longshore and Warehouse Union Local 142. The Longshore Division represents approximately 1,000 stevedores throughout the State of Hawaii. As the Secretary-Treasurer of the Longshore Division, Brown was responsible for the union’s financial matters, among other duties. Compensation for his work came directly from Longshore Division funds in lieu of wages that he would have received from his regular employer. These payments were known as lost time wages. Brown consistently inflated his lost time hours on the weekly vouchers that he signed and submitted for payment from the Longshore Division.
Each embezzlement charge in the indictment carries a maximum term of five years imprisonment, and each false entry charge carries a maximum term of one year imprisonment. The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the Department of Labor, Internal Revenue Service – Criminal Investigation, and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S Attorney Rebecca A. Perlmutter for the District of Hawaii.
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Kauai Woman Sentenced to 30 Months in Prison for Wire FraudRead the Press Release
HONOLULU – Rowenalynn P. Yorkman, 48, of Kekaha, Hawaii, was sentenced today to 30 months of imprisonment for defrauding the United States Department of the Navy and its employees. As part of her sentence, Yorkman must pay $364,838.33 in restitution, and serve 3 years of supervised release.
U.S. Attorney for the District of Hawaii Kenji M. Price announced that, according to court documents and information presented in Court, from January 2011 to June 2015, Yorkman was employed by the Department of the Navy as a travel clerk where she tracked and reviewed travel claims for personnel. Yorkman, without authorization, used a co-worker’s account to enter false information and create fraudulent voucher amendments for expenses travelers did not incur. Yorkman then approved these voucher amendments for payment into her own bank account. She then converted these funds for her personal use. During her scheme, Yorkman defrauded the United States government and travelers of at least $364,838.33.
At Yorkman’s sentencing, Senior U.S. District Judge Susan Oki Mollway remarked, "First of all, this was not a one-time giving into temptation," the 333 fraudulent transactions "was almost like a habit." The fraud involved "wholesale use of other people’s names and information" causing great concern.
The case was investigated by the United States Naval Criminal Investigative Service, and prosecuted by Assistant U.S. Attorney Darren W.K. Ching.
Two Honolulu Police Officers Charged with Federal Civil Rights OffensesRead the Press Release
HONOLULU – Two Honolulu Police Department officers were arrested today pursuant to a federal indictment charging them with one count of conspiring to deprive a person of his civil rights, and one count of acting under color of law to deprive the same individual of his civil rights. The indictment alleges that on or about January 28, 2018, HPD Officers John Rabago and Reginald Ramones deprived an individual of his constitutional right to be free from an unreasonable seizure by a law enforcement officer.
The conspiracy charge carries a maximum term of 10 years imprisonment and a maximum fine of $250,000; and the deprivation of rights under color of law charge carries a maximum term of one-year imprisonment and a maximum fine of $100,000. The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the Honolulu Division of the Federal Bureau of Investigation. It is being prosecuted by Trial Attorney Timothy Visser of the Justice Department’s Civil Rights Division and Assistant U.S Attorney Thomas Brady for the District of Hawaii.
Two Honolulu Police Department Officers Charged with Federal Civil Rights OffensesRead the Press Release
Two Honolulu Police Department officers were arrested today and charged in federal court with civil rights violations.
John Rabago, 43, and Reginald Ramones, 43, were charged in an indictment unsealed today with one count of conspiring to deprive a person of his civil rights, and one count of acting under color of law to deprive the same individual of his civil rights. Specifically, the indictment alleges that on Jan. 28, 2018, Officers Rabago and Ramones deprived an individual of his constitutional right to be free from an unreasonable seizure by a law enforcement officer.
An indictment is merely an accusation and the defendants are presumed innocent unless proven guilty. The indictment carries a maximum penalty of 10 years imprisonment and a $250,000 fine.
The case was investigated by the Honolulu Division of the FBI, and is being prosecuted by Trial Attorney Tim Visser of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Thomas J. Brady. Assistant U.S. Attorney Marion Percell also participated in the investigation.
Micronesian Government Official Pleads Guilty to Money Laundering Scheme Involving FCPA ViolationsRead the Press Release
A Micronesian government official pleaded guilty yesterday to a money laundering charge involving bribes made to corruptly secure engineering and project management contracts from the government of the Federated States of Micronesia (FSM), in violation of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Sean Kaul of the FBI’s Honolulu Field Office.
Master Halbert, 44, a Micronesian citizen, pleaded guilty in Honolulu before U.S. District Judge Susan O. Mollway of the District of Hawaii to a one-count information charging him with conspiracy to commit money laundering. He is scheduled to be sentenced on July 29, 2019 by Judge Mollway.
According to his admissions at the plea hearing, Halbert was a government official in the FSM Department of Transportation, Communications and Infrastructure who administered FSM’s aviation programs, including the management of its airports. Halbert admitted that between 2006 and 2016, a Hawaii-based engineering and consulting company owned by Frank James Lyon paid bribes to FSM officials, including Halbert, to obtain and retain contracts with the FSM government valued at nearly $8 million, in violation of the FCPA. Lyon and Halbert agreed that these bribe payments would be transported from the United States to the FSM.
In a related matter, Lyon, 53, of Honolulu, Hawaii, pleaded guilty on Jan. 22 to a one-count information filed in the District of Hawaii charging him with conspiracy to violate the anti-bribery provisions of the FCPA and to commit federal program fraud. Lyon is scheduled to be sentenced on May 13.
Trial Attorney Katherine Raut of the Criminal Division’s Fraud Section is prosecuting the case. The Criminal Division’s Office of International Affairs and the U.S. Department of Transportation Office of Inspector General provided significant assistance.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Justice Department Reaches Agreement with Hawaii Department of Public Safety to Ensure Equal Access to Its Programs for Inmates with DisabilitiesRead the Press Release
The Justice Department today reached a settlement agreement with the Hawaii Department of Public Safety (HDPS) to ensure that inmates with disabilities have an equal opportunity to participate in HDPS’ programs, services, and activities.
The settlement agreement resolves complaints, under the Americans with Disabilities Act (ADA), in which inmates with mobility disabilities alleged that HDPS excluded them from participating in its furlough program because of their disabilities and HDPS prison facilities were inaccessible to inmates with disabilities, thereby denying them equal access to HDPS’ programs, services, and activities. HDPS cooperated with the Department of Justice throughout the investigation.
“Compliance with the ADA ensures that inmates with disabilities have equal access to basic necessities, such as showers or sleeping areas, and to programs that are offered to qualified inmates,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “We commend HDPS for recognizing its obligations and working collaboratively with the Department of Justice.”
Among the terms of the agreement, qualified inmates with mobility disabilities will not be excluded from participating in HDPS’ furlough program. The agreement also requires HDPS to modify its policies, practices, and procedures; make architectural modifications to five correctional facilities (Hale Nani Correctional Facility, the Women’s Community Correctional Center, Halawa Correctional Facility, Waiawa Correctional Facility, and Oahu Community Correctional Center) to make them accessible to inmates with disabilities; train relevant staff; designate statewide and facility-specific ADA Coordinators; implement an ADA complaint procedure; and provide $45,000 in monetary damages to the complainants.
This agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments.
Those interested in finding out more about this settlement or the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed online at http://www.ada.gov/complaint/.
Mililani Man Sentenced to 20 Months in Prison for Social Security FraudRead the Press Release
HONOLULU – Gregory Scher, 66, of Mililani, Hawaii, was sentenced yesterday to 20 months of imprisonment for defrauding the Social Security Administration. As part of his sentence, Scher was also ordered to pay $26,298.12 in restitution and a $100 assessment, and to serve 3 years of supervised release.
U.S. Attorney for the District of Hawaii Kenji M. Price announced that, according to court documents and information presented in court, Scher admitted that he failed to disclose material information about his income and work, and lied about being legally blind, in order to receive and maintain Social Security Disability Insurance benefit payments. Scher also failed to disclose his employment while receiving Social Security Retirement Insurance benefits, and converted Social Security Child’s Insurance benefits intended for his minor daughter to his own personal use. Many of Scher’s lies and omissions occurred while he was on pretrial or supervised release for his federal Passport Fraud conviction.
At Scher’s sentencing, U.S. District Judge Susan Oki Mollway remarked that her sentence sends a “strong and clear message” that Scher’s “extensive networks of untruths and wrongful actions” must stop. She told Scher that she observed a “pervasive attitude that you could do whatever actions to get whatever benefits you wanted.”
The case was investigated by the Special Agent Robert Rodriguez with Office of Investigations - Office of Inspector General for the Social Security Administration, and prosecuted by Assistant U.S. Attorneys Darren W.K. Ching and Sara Ayabe.
Federal Inmate Sentenced to Eight Years in Prison for Assault Resulting in Serious Bodily InjuryRead the Press Release
HONOLULU – A federal inmate, Taloa Latu, 29, was sentenced today to 8 years of imprisonment for committing an assault resulting in serious bodily injury to another inmate. Following his incarceration, Latu will be on supervised release for 3 years.
U.S. Attorney for the District of Hawaii Kenji M. Price announced that, according to court documents and information presented in court, on September 11, 2016, Latu, a State of Hawaii inmate housed at the Federal Detention Center (“FDC”) in Honolulu, repeatedly punched, kicked, and stomped on another inmate. After the assault, the victim was transported to the Queens Medical Center, where he was treated for serious injuries, including a broken jaw and broken ribs. This case was prosecuted in federal court, as the United States has concurrent jurisdiction for crimes committed at FDC, Honolulu. Latu was convicted of the assault on February 15, 2018, following a two and a half day jury trial.
At sentencing, Chief U.S. District Judge J. Michael Seabright commented that Latu “is a grave danger to others,” based in part on his extensive criminal history, which includes multiple prior assault convictions.
The case was investigated by the Federal Bureau of Investigation, with assistance from the Federal Bureau of Prisons. Assistant U.S. Attorneys Morgan Early and Michael Nammar handled the prosecution.
Honolulu Woman Sentenced to Prison for Bank Fraud and Identity Theft OffensesRead the Press Release
HONOLULU – Kathy Funtila, 46, a resident of Honolulu, Hawaii, was sentenced yesterday to 119 months in federal prison for defrauding multiple Oahu businesses of $558,633.71 over the course of 5 years.
According to information presented in court, Funtila pled guilty in August 2018 to bank fraud and identity theft offenses that occurred while she was an accounting manager for two Oahu businesses: SMAC Hawaii (SMAC) and Pacific Rim Defense, LLC (PRD). While employed as the accounting manager at SMAC, Funtila submitted false documents to Hawaii National Bank to obtain withdrawals from SMAC’s lines of credit with Hawaii National Bank. On multiple occasions, Funtila submitted draw request forms to Hawaii National Bank that purported to be signed by the owner of SMAC. In reality, the draw request forms were not signed or approved by the owner of SMAC and contained signatures of the owner that Funtila knew had been copied from another document. After Hawaii National Bank processed the draw requests, it then transferred funds from Hawaii National Bank to a bank account controlled by SMAC. Funtila then embezzled money from SMAC’s bank accounts. While she was the accounting manager at PRD, Funtila made unauthorized charges on her company credit card and misrepresented the purpose for which the credit card charges were being made in PRD’s accounting records. Funtila also used another employee’s company credit card, without their permission, to book a $1,707 stay at the Waikiki Shore resort for one of her family members.
U.S. District Judge Leslie E. Kobayashi imposed a 119 month sentence, noting that Funtila’s conduct was egregious, repetitive, and had a devastating impact on the owners of SMAC. Funtila was also ordered to pay restitution of $115,362.25, and to serve a 5 year term of supervision following her release.
The case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Michael Nammar.
Owner and Officers of Japanese Fishing Vessel Charged with Unlawful Trafficking and Smuggling of Shark FinsRead the Press Release
HONOLULU – The owner and officers of a Japanese-flagged fishing vessel were charged in federal court today with aiding and abetting the trafficking and smuggling of 962 shark fins into and out of Hawaii on November 7, 2018.
According to court documents and information presented in court, the Japanese-flagged fishing vessel, M.V. Kyoshin Maru No. 20, engaged in longline tuna fishing in the southern Pacific Ocean for approximately one year. The officers were Japanese nationals, and the fishermen were Indonesian nationals. During the voyage, the fishermen harvested fins from approximately 300 sharks, in some instances while the sharks were stunned but still alive, and discarded the finless carcasses into the ocean, all under the supervision of the Captain, and at the direction of the Fishing Master and First Engineer. The Captain, Fishing Master, First Engineer, and many of the Indonesian fishermen all kept shark fins to take home with them.
On or about November 6, 2018, the Kyoshin Maru traveled to a location near Honolulu, Hawaii, but more than 12 miles from shore, where it met a water taxi that had been arranged by a Vessel Agent from a local marine navigation corporation. The Indonesian fishermen disembarked the Kyoshin Maru and boarded the water taxi. The Kyoshin Maru then left for Japan with the Captain, Fishing Master, and First Engineer onboard, still in possession of shark fins. Meanwhile, the Indonesian fishermen traveled to Pier 36, where they legally entered the United States for the purpose of traveling in the custody of the Vessel Agent to Honolulu International Airport, in order to board previously-ticketed flights to Indonesia.
During routine screening, officers with the Transportation Security Administration discovered shark fins in checked luggage. Upon discovering the shark fins, TSA immediately notified the U.S. Fish and Wildlife Service, which determined the checked luggage belonged to 10 of the Indonesian fishermen and included approximately 190 pounds of shark fins, which is worth as much as $57,850 on the black market.
Some of the shark fins were from oceanic whitetip sharks, which are listed as threatened species under the Endangered Species Act and are protected under the Convention on International Trade in Endangered Species (CITES), an international convention with over 180 parties, including the United States, Japan and Indonesia. According to the National Oceanic and Atmospheric Administration, the oceanic white tip shark has declined by approximately 80-95% across the Pacific Ocean since the mid-1990s. Other fins were from silky sharks and bigeye thresher sharks, which are also protected under the CITES Convention.
The 10 Indonesian fishermen were subsequently charged in a criminal complaint in United States v. Abdurahman, et. al., Mag No. 18-01253 (D. Haw. 2018), and are currently released on pretrial supervision. The criminal complaint filed today brings charges against five additional defendants: Hamada Suisan Co., Ltd, the Japanese business that owned and operated the vessel; JF Zengyoren, a Japanese fishing cooperative to which the vessel belonged; Hiroyuki Kasagami, the Captain of the vessel; Toshiyuki Komatsu, the Fishing Master of the vessel; and Hiroshi Chiba, the vessel’s First Engineer. The three Japanese nationals charged were not arrested because they never entered the United States. They remain at large, presumably in Japan.
The charges filed today include four counts of aiding and abetting violations of the Lacey Act, which each carry a maximum term of 5 years imprisonment; three counts of aiding and abetting the Smuggling of Goods Into the United States, which each carry a maximum term of 20 years imprisonment; and four counts of aiding and abetting the attempted Smuggling of Goods From the United States, which each carry a maximum term of 10 years imprisonment. The two corporate defendants each face a maximum fine of $500,000 per count, or $5.5 million. The three individual defendants each face a maximum fine of $250,000 per count, or $2.75 million. The charges in the criminal complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If the defendants are ultimately convicted of any offense, the sentencing will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
In announcing the charges, U.S. Attorney for the District of Hawaii Kenji M. Price stated: “Shark finning is unlawful and takes a very real toll on our precious ocean ecosystem. My office is committed to combatting this practice by prosecuting to the fullest extent of the law anyone found to be trafficking in shark fins.”
United States laws prohibit, within U.S. jurisdiction: the removal of any fins of any shark at sea; the possession of such fins aboard a fishing vessel that are not attached to the corresponding carcass; and the transfer or landing of any such detached fin. Some of these laws implement U.S. obligations under international conventions. In addition, the laws of the State of Hawaii make it unlawful for any person to possess, sell, offer for sale, trade, or distribute shark fins. Due in part to the over-harvest of sharks, some species of shark—including three species found among the fins at issue in this case—are protected under the CITES Convention.
This case is being investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement, with assistance from: the National Oceanic and Atmospheric Administration, Office of Law Enforcement; Homeland Security Investigations; U.S. Customs and Border Protection; the U.S. Postal Inspection Service; and the U.S. Coast Guard. It is being prosecuted by Assistant U.S. Attorney Marc A. Wallenstein, U.S. Attorney’s Office for the District of Hawaii, and Senior Counsel for Wildlife Programs Elinor Colbourn, Environmental Crimes Section, U.S. Department of Justice. The prosecution team is coordinating with the U.S. Department of State on this matter.
U.S. Soldier Sentenced to 25 Years in Prison for Attempting to Provide Material Support to ISISRead the Press Release
Ikaika Erik Kang, 35, a Sergeant First Class in the U.S. Army formerly stationed at Schofield Barracks, was sentenced today to 25 years in prison for attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization. Kang was sentenced to 240 months on Counts 2, 3 and 4 to run concurrently, and 60 months on Count 1, to run consecutively, for a total of 300 months in prison. As part of his sentence, Kang will serve 20 years of supervised release following his incarceration.
Assistant Attorney General for National Security John C. Demers, U.S. Attorney for the District of Hawaii Kenji M. Price, and Special Agent in Charge Sean L. Kaul of the FBI’s Honolulu Field Office announced the sentence.
At sentencing, Senior U.S. District Judge Susan Oki Mollway accepted a plea agreement between the United States and Kang, in which Kang had agreed to serve 25 years of imprisonment and a period of at least 20 years of supervised release and up to life. In imposing sentence, Judge Mollway said that Kang’s conduct was “extremely serious” and “had the potential to be disastrous.” She also noted that the undercover agents gave Kang “a number of chances to return the classified information and leave the training, but [he] didn’t do that.”
“Kang swore to defend the United States as a member of our military, but betrayed his country by swearing allegiance to ISIS and attempting to provide it material support,” said Assistant Attorney General Demers. “With the sentence imposed today, he is being held accountable for his betrayal and his crimes. I want to thank all of the agents, analysts and prosecutors who are responsible for this case.”
“Defending our country from terrorism is a core mission of the Department of Justice,” said U.S. Attorney Kenji Price. “Today’s sentence is the result of the hard work and dedication of all of the federal agents and prosecutors who work tirelessly every day to keep our community safe.”
“This is the first case in the State of Hawaii where someone was convicted for providing material support to terrorism,” said Special Agent in Charge Kaul. “This should serve as reminder that even though we are 2,500 miles from the U.S. Mainland these crimes can and do happen everywhere. I would like to personally thank the United States Attorney’s Office, the National Security Division’s Counterterrorism Section, the United States Army, the Naval Criminal Investigative Service, the Honolulu Police Department, and the entire Joint Terrorism Task Force Community here in Hawaii for bringing this investigation to a successful conclusion. Today, our community is a safer place due to their tireless efforts.”
According to court documents and information presented in court, Kang became sympathetic to ISIS by at least early 2016. He regularly watched ISIS propaganda videos online, for as long as four to five hours a day, or more. Kang made numerous statements in support of ISIS and expressed a desire to join ISIS. He spoke approvingly and in detail about committing specific acts of violence against others, including by attacking large public gatherings, such as the Honolulu Christmas Parade, and a parade at Schofield Barracks. At the time Kang made these statements, he owned an AR-15-style assault rifle and a pistol, both of which he kept at his residence on Oahu.
In late June and early July of 2018, Kang met numerous times with undercover FBI agents who he believed had connections to ISIS. He provided them with sensitive, non-public military documents, some of which were classified at the SECRET level, which he intended that they later provide to ISIS. He also provided them with a commercially-purchased small aerial drone, a military chest rig, and other military-style clothing and gear. Kang then met two additional undercover FBI personnel, one who purported to be a high-ranking ISIS leader, or “sheikh,” and another who played the role of an ISIS fighter. Kang led them in a two-hour, step-by-step military combatives training session, in order to train the purported ISIS member in hand-to-hand fighting techniques and marksmanship.
Kang was given numerous opportunities by the undercover agents to return the classified military documents, and to stop and leave the training, which he did not do. Instead, on July 8, 2017, Kang swore an oath of loyalty, known as “bayat,” to ISIS and its leader, Abu Bakr al-Baghdadi, in a ceremony conducted by the purported ISIS sheikh. After the ceremony, Kang said that he wanted to get his rifle and go to downtown Honolulu and Waikiki strip and start shooting. Kang was subsequently arrested and taken into custody.
The case was investigated by the Joint Terrorism Task Force in Honolulu, the FBI, and the U.S. Army, Criminal Investigative Division.
This case was prosecuted by Assistant U.S. Attorneys Kenneth M. Sorenson and Marc A. Wallenstein of the District of Hawaii, and Trial Attorney Taryn M. Meeks of the National Security Division’s Counterterrorism Section.
U.S. Soldier Sentenced to 25 Years in Prison for Attempting to Provide Material Support to ISISRead the Press Release
HONOLULU – Ikaika Erik Kang, 35, a Sergeant First Class in the U.S. Army formerly stationed at Schofield Barracks, was sentenced today to 25 years in prison for attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization. Kang was sentenced to 240 months on Counts 2, 3, and 4 to run concurrently, and 60 months on Count 1, to run consecutively, for a total of 300 months (25 years) in prison. As part of his sentence, Kang will serve 20 years of supervised release following his incarceration
Assistant Attorney General for National Security John C. Demers, U.S. Attorney for the District of Hawaii Kenji M. Price, and Special Agent in Charge Sean L. Kaul of the FBI’s Honolulu Field Office announced the sentence.
At sentencing, Senior U.S. District Judge Susan Oki Mollway accepted a plea agreement between the United States and Kang, in which Kang had agreed to serve 25 years of imprisonment and a period of at least 20 years of supervised release and up to life. In imposing sentence, Judge Mollway said that Kang’s conduct was “extremely serious” and “had the potential to be disastrous.” She also noted that the undercover agents gave Kang “a number of chances to return the classified information and leave the training, but [he] didn’t do that.”
“Kang swore to defend the United States as a member of our military, but betrayed his country by swearing allegiance to ISIS and attempting to provide it material support,” said Assistant Attorney General Demers. “With the sentence imposed today, he is being held accountable for his betrayal and his crimes. I want to thank all of the agents, analysts and prosecutors who are responsible for this case.”
“Defending our country from terrorism is a core mission of the Department of Justice,” said U.S. Attorney Kenji Price. “Today’s sentence is the result of the hard work and dedication of all of the federal agents and prosecutors who work tirelessly every day to keep our community safe.”
“This is the first case in the State of Hawaii where someone was convicted for providing material support to terrorism,” said Special Agent in Charge Kaul. “This should serve as reminder that even though we are 2,500 miles from the U.S. Mainland these crimes can and do happen everywhere. I would like to personally thank the United States Attorney’s Office, the National Security Division’s Counterterrorism Section, the United States Army, the Naval Criminal Investigative Service, the Honolulu Police Department, and the entire Joint Terrorism Task Force Community here in Hawaii for bringing this investigation to a successful conclusion. Today, our community is a safer place due to their tireless efforts.”
According to court documents and information presented in court, Kang became sympathetic to ISIS by at least early 2016. He regularly watched ISIS propaganda videos online, for as long as four to five hours a day, or more. Kang made numerous statements in support of ISIS and expressed a desire to join ISIS. He spoke approvingly and in detail about committing specific acts of violence against others, including by attacking large public gatherings, such as the Honolulu Christmas Parade, and a parade at Schofield Barracks. At the time Kang made these statements, he owned an AR-15-style assault rifle and a pistol, both of which he kept at his residence on Oahu.
In late June and early July of 2018, Kang met numerous times with undercover FBI agents who he believed had connections to ISIS. He provided them with sensitive, non-public military documents, some of which were classified at the SECRET level, which he intended that they later provide to ISIS. He also provided them with a commercially-purchased small aerial drone, a military chest rig, and other military-style clothing and gear. Kang then met two additional undercover FBI personnel, one who purported to be a high-ranking ISIS leader, or “sheikh,” and another who played the role of an ISIS fighter. Kang led them in a two-hour, step-by-step military combatives training session, in order to train the purported ISIS member in hand-to-hand fighting techniques and marksmanship.
Kang was given numerous opportunities by the undercover agents to return the classified military documents, and to stop and leave the training, which he did not do. Instead, on July 8, 2017, Kang swore an oath of loyalty, known as “bayat,” to ISIS and its leader, Abu Bakr al-Baghdadi, in a ceremony conducted by the purported ISIS sheikh. After the ceremony, Kang said that he wanted to get his rifle and go to downtown Honolulu and Waikiki strip and start shooting. Kang was subsequently arrested and taken into custody.
The case was investigated by the Joint Terrorism Task Force in Honolulu, the FBI, and the U.S. Army, Criminal Investigative Division.
This case was prosecuted by Assistant U.S. Attorneys Kenneth M. Sorenson and Marc A. Wallenstein of the District of Hawaii, and Trial Attorney Taryn M. Meeks of the National Security Division’s Counterterrorism Section.
Owner of Engineering Firms and CPA Convicted in Tax SchemeRead the Press Release
A federal jury in Honolulu, Hawaii, convicted Wagdy Guirguis and Michael Higa of conspiracy to defraud the United States yesterday, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Kenji M. Price for the District of Hawaii. In addition to the conspiracy conviction, Guirguis was also convicted of three counts of filing false corporate income tax returns, one count of failure to file a corporate income tax return, three counts of tax evasion, one count of corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws and one count of witness tampering. Higa was convicted of the conspiracy and one count of aiding and assisting in the preparation of a false tax return for one of Guirguis’ business entities. The convictions arise from a scheme to divert funds from Guirguis’ business entities for his own personal benefit and to avoid the payment of federal employment and income taxes.
“Employers who withhold employment taxes from their employees’ paychecks and choose to pocket those funds violate the trust of their employees and the United States,” said Principal Deputy Assistant Attorney General Zuckerman. “The Department of Justice will continue to identify and prosecute employment tax offenders, ensuring that such businesses and executives are held to account and do not gain an unfair advantage over honest employers who follow the law and pay their fair share.”
“Mr. Guirguis owed the Internal Revenue Service employment taxes and with the help of Mr. Higa, conspired to obstruct the Internal Revenue Service’s attempts to collect the tax by concealing income using a nominee entity and preparing false corporate and individual income tax returns,” said Acting Special Agent in Charge Troy Burrus. “The defendants’ actions to obstruct the Internal Revenue Service’s collection efforts are very serious. IRS-Criminal Investigation will continue to pursue employers, who collect these taxes and use the funds for personal gain.”
According to court documents and evidence presented at trial, Guirguis operated numerous engineering businesses. Higa, a certified public accountant, was the controller of these businesses. Higa also served as a nominee officer of another entity controlled by Guirguis. When the IRS determined Guirguis’ businesses owed over $800,000 in federal employment taxes and assessed a $812,000 penalty, Guirguis and Higa took various steps to place income and assets out of the IRS’ reach. For example, Guirguis and Higa used the nominee entity to fraudulently convey a condominium to Guirguis’ wife. After an IRS revenue officer began questioning Mrs. Guirguis’ sole ownership of this condominium, Guirguis and Higa instructed a bookkeeper to alter the books and records in an attempt to conceal this transaction from the IRS.
From 2001 through 2012, Guirguis and Higa also used the nominee entity to divert approximately $1.3 million from Guirguis’ businesses for Guirguis’ personal use. As a result of their diversion and concealment, Guirguis’ 2010 through 2012 returns omitted $553,000 in income, resulting in a tax deficiency of $165,000.
In addition, Guirguis filed corporate income tax returns that fraudulently omitted millions of dollars of gross receipts. For one of his businesses, Guirguis simply did not file a corporate tax return, thereby not reporting more than $1.7 million in gross receipts.
After the IRS levied the bank accounts of one business, Guirguis diverted incoming funds owed to that business, directing payment of the funds to a different business. Guirguis also instructed a tenant to disregard IRS collection notices and pay rent directly to him rather than to the IRS. Moreover, Guirguis made false and misleading statements to IRS revenue officers, all in an effort to obstruct the IRS’ efforts to collect on the taxes he and his companies owed.
To impede the criminal investigation into his tax violations, Guirguis falsely told an employee, who had testified before the grand jury, that he did not know about the false backdating done in the books of the nominee entity, and asked the employee to sign a false statement to that effect.
Guirguis and Higa face a maximum sentence of five years in prison each on the conspiracy counts. Guirguis faces a maximum sentence of five years on each of the tax evasion counts, three years in prison on each of the counts involving false tax returns and corrupt endeavors, and one year in prison for the count of failure to file a tax return, as well as a period of supervised release, restitution, and monetary penalties. Guirguis faces an additional maximum 20 year sentence for witness tampering. In addition to the maximum sentence of five years in prison on the conspiracy count, Higa faces a maximum sentence of three years on the aiding and assisting the filing of a false tax return count.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Price commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Tax Division Senior Litigation Counsel John Sullivan and Trial Attorney Anahi Cortada, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Owner of Engineering Firm and CPA Convicted in Tax SchemeRead the Press Release
HONOLULU – A federal jury in Honolulu, Hawaii, convicted Wagdy Guirguis and Michael Higa of conspiracy to defraud the United States yesterday, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney for the District of Hawaii Kenji M. Price. In addition to the conspiracy conviction, Guirguis was also convicted of three counts of filing false corporate income tax returns, one count of failure to file a corporate income tax return, three counts of tax evasion, one count of corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws and one count of witness tampering. Higa was convicted of the conspiracy and one count of aiding and assisting in the preparation of a false tax return for one of Guirguis’ business entities. The convictions arise from a scheme to divert funds from Guirguis’ business entities for his own personal benefit and to avoid the payment of federal employment and income taxes.
“Employers who withhold employment taxes from their employees’ paychecks and choose to pocket those funds violate the trust of their employees and the United States,” said Principal Deputy Assistant Attorney General Zuckerman. “The Department of Justice will continue to identify and prosecute employment tax offenders, ensuring that such businesses and executives are held to account and do not gain an unfair advantage over honest employers who follow the law and pay their fair share.”
“Mr. Guirguis owed the Internal Revenue Service employment taxes and with the help of Mr. Higa, conspired to obstruct the Internal Revenue Service’s attempts to collect the tax by concealing income using a nominee entity and preparing false corporate and individual income tax returns,” said Acting Special Agent in Charge Troy Burrus. “The defendants’ actions to obstruct the Internal Revenue Service’s collection efforts are very serious. IRS–Criminal Investigation will continue to pursue employers, who collect these taxes and use the funds for personal gain.”
According to court documents and evidence presented at trial, Guirguis operated numerous engineering businesses. Higa, a certified public accountant, was the controller of these businesses. Higa also served as a nominee officer of another entity controlled by Guirguis. When the IRS determined Guirguis’ businesses owed over $800,000 in federal employment taxes and assessed a $812,000 penalty, Guirguis and Higa took various steps to place income and assets out of the IRS’ reach. For example, Guirguis and Higa used the nominee entity to fraudulently convey a condominium to Guirguis’ wife. After an IRS revenue officer began questioning Mrs. Guirguis’ sole ownership of this condominium, Guirguis and Higa instructed a bookkeeper to alter the books and records in an attempt to conceal this transaction from the IRS.
From 2001 through 2012, Guirguis and Higa also used the nominee entity to divert approximately $1.3 million from Guirguis’ businesses for Guirguis’ personal use. As a result of their diversion and concealment, Guirguis’ 2010 through 2012 returns omitted $553,000 in income, resulting in a tax deficiency of $165,000. In addition, Guirguis filed corporate income tax returns that fraudulently omitted millions of dollars of gross receipts. For one of his businesses, Guirguis simply did not file a corporate tax return, thereby not reporting more than $1.7 million in gross receipts.
After the IRS levied the bank accounts of one business, Guirguis diverted incoming funds owed to that business, directing payment of the funds to a different business. Guirguis also instructed a tenant to disregard IRS collection notices and pay rent directly to him rather than to the IRS. Moreover, Guirguis made false and misleading statements to IRS revenue officers, all in an effort to obstruct the IRS’ efforts to collect on the taxes he and his companies owed.
To impede the criminal investigation into his tax violations, Guirguis falsely told an employee, who had testified before the grand jury, that he did not know about the false backdating done in the books of the nominee entity, and asked the employee to sign a false statement to that effect.
Guirguis and Higa face a maximum sentence of five years in prison each on the conspiracy counts. Guirguis faces a maximum sentence of five years on each of the tax evasion counts, three years in prison on each of the counts involving false tax returns and corrupt endeavors, and one year in prison for the count of failure to file a tax return, as well as a period of supervised release, restitution, and monetary penalties. Guirguis faces an additional maximum 20 year sentence for witness tampering. In addition to the maximum sentence of five years in prison on the onspiracy count, Higa faces a maximum sentence of three years on the aiding and assisting the filing of a false tax return count.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Price commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Tax Division Senior Litigation Counsel John Sullivan and Trial Attorney Anahi Cortada, who prosecuted the case.
U.S. Attorney's Office for the District of Hawaii Moves to Dismiss Charges Against Isaiah McCoyRead the Press Release
HONOLULU – Earlier today, the U.S. Attorney’s Office for the District of Hawaii moved to dismiss the Second Superseding Indictment against Isaiah McCoy. The dismissal was deemed appropriate in light of information the U.S. Attorney’s Office became aware of in the past several days. Senior U.S. District Court Judge Susan Oki Mollway granted the motion during a hearing held this morning. In announcing the dismissal, Kenji M. Price, U.S. Attorney for the District of Hawaii, stated: “Despite today’s dismissal, this office will continue the important work of investigating and prosecuting human trafficking crimes in Hawaii. We remain committed to tirelessly pursuing those who break the law, all the while vigilantly upholding the fundamental principles of integrity and justice that govern everything we do.”
Kailua-Kona Man Sentenced to over 24 Years in Prison for Production of Child PornographyRead the Press Release
HONOLULU – Michael Phillip Patrakis, 46, of Kailua-Kona, Hawaii, was sentenced today to 292 months of imprisonment for the production of child pornography of two minor females. As part of his sentence, Patrakis must forfeit numerous electronic devices, pay a $10,000 assessment under the Justice of Victims of Trafficking Act, and serve 20 years of supervised release. Patrakis will also be required to register as a sex offender.
According to court documents and information presented in court, in March 2015, Minor Female 1 (then 15 years old), and her daughter, Minor Female 2 (then two years old), rented a room in the home of Patrakis, located in Kailua-Kona. At the time, Patrakis knew Minor Female 1 was under the age of 18 and engaged in a sexual relationship with her. Patrakis used Minor Female 1 for the purpose of producing visual depictions of her engaging in sexually explicit conduct. Additionally, Patrakis had custody and control over Minor Female 2 when Minor Female 1 worked or left the residence. Patrakis used Minor Female 2 for the purpose of producing visual depictions of her with lascivious exhibitions of her genitals. On September 17, 2015, law enforcement executed a search warrant of the residence, recovering numerous electronic devices with said productions.
At the sentencing, U.S. District Judge Leslie E. Kobayahsi noted that Patrakis’ actions caused "incalculable harm" and hopes the sentence acts as a "deterrence to others."
"Our Office is committed to aggressively prosecuting those who sexually exploit our young people," said U.S. Attorney Kenji M. Price. "Defendant Patrakis preyed on the vulnerabilities of these two minor females. With the collaboration of our local, state, and federal law enforcement, the apprehension and prosecution of Patrakis put an end to the abuse. While his abhorrent actions cannot be undone, today’s sentence reflects the message that predators will be held accountable in our community."
"As this sentencing makes unmistakably clear, child sex predators will receive the justice they are due for their despicable actions," said Frank Cabaddu, acting Special Agent in Charge for Homeland Security Investigations (HSI) Honolulu. "HSI will continue to work tirelessly to ensure child predators and sex traffickers receive the justice they deserve. We owe it to the young victims in these cases, who will carry the emotional and physical scars of these crimes for the rest of their lives."
The case was investigated by the Hawaii Police Department and HSI, and prosecuted by Assistant U.S. Attorney Darren W.K. Ching with the assistance of the Hawaii County Prosecuting Attorney’s Office.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Doctor and Four Employees of Hawaii Clinic Charged in 43-Count IndictmentRead the Press Release
HONOLULU – Yesterday, a doctor and four employees from the Bade Medical Clinic, located in Hilo, Hawaii were indicted by a federal grand jury. Dr. Ernest Bade, 80, was charged with forty counts of distribution of a controlled substance outside the normal scope of professional practice and without a legitimate medial purpose. Dr. Bade and his office manager, Yvonne Caitano, 54, were charged with conspiracy to distribute and dispense controlled substances. Caitano and Sheena Strong, 32, an office assistant, were charged with a separate conspiracy to further distribute and possess with intent to distribute controlled substances. Caitano, Strong, and two other office assistants—Marie Benevides, 80, and Theresa Saltus, 59—were charged with conspiring to obtain controlled substances through misrepresentation, fraud, forgery, deception, and subterfuge.
According to the indictment, law enforcement received information from several sources that Dr. Bade was prescribing unusually large quantities of controlled substances, including powerful narcotics, sedatives, and opioids such as hydrocodone, oxycodone, fentanyl, and morphine. Based on this and other information, an undercover agent posing as a patient met with Dr. Bade at his clinic a number of times. The indictment alleges that during these appointments, Dr. Bade provided the undercover agent with multiple prescriptions of controlled substances after conducting only cursory examinations and no diagnostic testing. Dr. Bade’s clinic also allegedly provided refills for these prescriptions without any meaningful follow-up. The indictment also alleges that Dr. Bade and Caitano provided prescriptions to patients without personally examining or meeting with them.
The indictment further alleges that Caitano and Strong conspired to obtain large amounts of controlled substances through prescriptions signed by Dr. Bade, which they then further distributed to other individuals in exchange for profit. In order to continue to obtain prescription medications when several pharmacies in Hilo refused to fill Dr. Bade’s prescriptions, Caitano, Strong, Benevides, and Saltus conspired to fly from Hilo to Kahului, Maui, to fill and pick up numerous prescriptions signed by Dr. Bade and ordered prescriptions in the names of multiple individuals. These prescriptions typically involved large quantities of controlled substances, including opioids and powerful narcotics.
The announcement was made by U.S. Attorney Kenji M. Price for the District of Hawaii, and Assistant Special Agent in Charge John Callery of the DEA’s Honolulu Field Office.
"It is no secret that an opioid epidemic is sweeping through this country, leaving lost lives and shattered communities in its wake," said U.S. Attorney Price. "The problem is multi-faceted and requires an all-hands-on-deck response. And as federal officials charged with protecting and serving the people of Hawaii, we plan to do everything in our power to prevent the opioid epidemic from taking hold here in the Islands."
"This case is indicative of our goals for averting the opioid crisis that is devastating the mainland at this time," said DEA Assistant Special Agent in Charge John Callery. "These arrests are a culmination of several years' work to bring to justice those who would poison the communities of Hawaii with illicit prescription drugs and chemicals."
An indictment is merely an allegation, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted of the charges, Dr. Ernest Bade, Yvonne Caitano, and Sheena Strong could face up to 20 years imprisonment. Marie Benevides and Theresa Saltus face up to 4 years imprisonment.
The case was investigated by the Drug Enforcement Administration, and is being prosecuted by Assistant U.S. Attorney Michael Albanese.
U.S. Attorney Kenji M. Price Announces Progress in Making our Communities Safer Through Project Safe NeighborhoodsRead the Press Release
One year ago, the Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (“PSN”), the centerpiece of the Department’s violent crime reduction strategy. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. Throughout the past year, the U.S Attorney’s Office has partnered with numerous law enforcement entities to reduce violent crime and make our neighborhoods safer.
“Project Safe Neighborhoods is a proven program with demonstrated results,” Attorney General Jeff Sessions said. “We know that the most effective strategy to reduce violent crime is based on sound policing policies that have proven effective over many years, which includes being targeted and responsive to community needs. I have empowered our United States Attorneys to focus enforcement efforts against the most violent criminals in their districts, and directed that they work together with federal, state, local, and tribal law enforcement and community partners to develop tailored solutions to the unique violent crime problems they face. Each United States Attorney has prioritized the PSN program, and I am confident that it will continue to reduce crime, save lives, and restore safety to our communities.”
“This U.S. Attorney’s Office will continue to place the safety and security of our communities at the forefront of its enforcement efforts,” stated U.S. Attorney Kenji M. Price. “In collaboration with our federal, state, and local law enforcement partners, we are working to rid communities in Hawaii of drug dealers and violent offenders. We are strategically focusing our resources on high crime areas, and using the many tools available to federal, state, and local law enforcement to strike a substantial blow to those who endanger our communities through violence. Our message is clear – criminals will not find refuge in Hawaii.”
Enforcement Actions
As we celebrate the one-year anniversary of the revitalized PSN program, numerous individuals were charged in the District of Hawaii with federal crimes that involve violence (including firearms offenses) or illegal drugs. Law enforcement officers have seized multiple firearms and hundreds of rounds of ammunition, in addition to significant quantities of methamphetamine, cocaine and heroin.
Here are two examples of our enforcement efforts:
- Beginning August 29, 2018, a joint enforcement initiative between Honolulu Police Department and the Drug Enforcement Agency (DEA) resulted in the arrest of 14 individuals who were charged with distribution of narcotics within 1,000 feet of Aala Park, a frequented playground in Honolulu.
- On August 30, 2018, Shane Durante pled guilty to conspiring to distribute 50 grams or more of methamphetamine and being a felon in possession of a firearm. Durante admitted that he imported multi-pound quantities of methamphetamine from the mainland. Durante’s supplier, Eugene Lee, also pled guilty, and admitted that he had shipped multi-pound quantities of methamphetamine from Las Vegas to Durante on Oahu. Law enforcement recovered 2,411.60 grams of pure methamphetamine, as well as two firearms and ammunition.
As demonstrated by the above, our law enforcement community is working diligently to protect our communities from the scourge of violence and drug addiction.
Improvements to Community Safety
Nationwide, the law enforcement community’s efforts are also bearing fruit, and importantly, reversing a recent trend of rising violent crime rates. Notably, the FBI’s official crime data for 2017 reflects that, after two consecutive, historic increases in violent crime, in the first year of the Trump Administration the nationwide violent crime rate began to decline. The nationwide violent crime rate decreased by approximately one percent in 2017, while the nationwide homicide rate decreased by nearly one and a half percent.
The preliminary information we have for 2018 gives us reason for optimism that our efforts are continuing to pay off. Public data from 60 major cities show that violent crime was down by nearly five percent in those cities in the first six months of 2018 compared to the same period a year ago.
This data reveals what we in the law enforcement community know: by working together, side-by-side, to carry out a comprehensive crime-reduction initiative, we can reduce violent crime and keep our communities safe. We will continue to build upon our efforts to combat violent crime and drug abuse in our communities by enforcing the law, and look for effective ways to prevent crime by forging strong partnerships with governmental and non-governmental entities dedicated to crime-prevention. Learn more about Project Safe Neighborhoods.
Kauai Robber Sentenced to over 15 Years ImprisonmentRead the Press Release
HONOLULU – Walter Mills, 45, was sentenced today to 188 months imprisonment for robbing both a bank and a pharmacy on Kauai. As part of his sentence, Mills must pay $630 in restitution, and serve 3 years of supervised release following his incarceration.
U.S. Attorney Kenji M. Price stated that, according to court documents and information presented in court, on November 3, 2016, Mills escaped from Kauai Community Correctional Center (KCCC) in Wailua, Hawaii. The following day, Mills engaged in a one-day crime spree beginning at First Hawaiian Bank in Lihue, Hawaii. Mills handed the bank teller a demand note: "This is a robbery I have a gun count all the money in the drawer no die pack or mark money." He received $480 in cash. He then used the cash at a local Kmart store to purchase a BB gun. Thereafter, Mills committed a series of carjackings – brandishing the BB gun and stealing vehicles, regardless if the driver was still inside. During one of the carjackings of an occupied vehicle, Mills demanded the owner to drive him to a pharmacy in Koloa, Hawaii. Once he entered the pharmacy, Mills held the BB gun in the air and demanded Oxycontin pills. He received the pills, fled, and continued on his carjacking spree. Mills was arrested in Hanapepe later that day.
At sentencing, U.S. District Judge Helen Gillmor remarked, "I have to look at the safety of the community. The community is not safe when you are out and about."
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The case was investigated by the Kauai Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the FBI, and prosecuted by Assistant U.S. Attorney Sara D. Ayabe.
United States Files Complaint Against Hawaii Fishing Companies, Managers, and Vessel Operator over Illegal Oil Discharges and Lodges Partial Settlement with ManagersRead the Press Release
The United States filed a civil enforcement action against Azure Fishery LLC, the company’s managers, the operator of the commercial fishing vessel Jaxon T, and the new owner of the vessel for violations of the federal Clean Water Act, the Department of Justice and U.S. Coast Guard announced today. Along with the filing of the complaint, the United States also lodged a partial settlement to resolve the claims against the two company managers, Hanh Nguyen and Khang Dang, who have agreed to pay $475,000 in civil penalties and reimbursements. The managers also committed to perform operational improvements and other compliance measures to their entire fleet of 25 longline fishing vessels based in Honolulu. The claims against the rest of the defendants remain for future adjudication.
The complaint, filed in the U.S. District Court for the District of Hawaii today, alleges five causes of action against six defendants: Azure Fishery LLC, company managers Nguyen and Dang, company member and prior owner Tuan Hoang, vessel operator Andy Hoang and current owner Linh Fishery LLC. The complaint alleges willful discharges of oil, including oily bilge water, from the commercial longline fishing vessel Jaxon T, now known as the St. Joseph, into the ocean offshore of Hawaii, as well as related violations of the Coast Guard’s longstanding spill prevention and pollution control regulations, including failure to provide sufficient capacity to retain all oily mixtures on board. The complaint further alleges that in order to extend the length of fishing voyages, the defendants routinely pumped a mixture of fuel oil, lubricating oils, water, and other fluids from the vessel’s engine room bilge into the Pacific Ocean rather than retain the waste on board. The United States alleges that Azure Fishery LLC and the company managers and vessel operator are each liable for civil penalties under the Clean Water Act for discharging oily mixtures into the waters off Hawaii. The United States also seeks injunctive relief from these same defendants and Linh Fishery LLC, the current owner of the vessel.
“A thriving commercial fishing sector in Hawaii and other parts of the United States largely depends upon keeping our ocean environments free of harmful pollution,” said Acting Assistant Attorney General Jeffrey H. Wood for the Justice Department’s Environment and Natural Resources Division. “Today’s action shows that the Justice Department is as committed as ever to enforcing the nation’s vessel pollution laws in close partnership with the U.S. Coast Guard.”
“This is the fourth case we have brought this year involving illegal oil discharge practices in the Honolulu-based longline fishing fleet,” said Rear Adm. Kevin Lunday, Commander, Coast Guard 14th District. “All vessel owners and operators are responsible for maintaining their vessels and preventing illegal discharges of oily wastes into the ocean. We are committed to the people of Hawaii to protect our waters and the Pacific Ocean from the damage caused by illegal pollution.”
“We will continue to protect our precious natural resources by enforcing the Nation’s environmental laws,” said U.S. Attorney for the District of Hawaii Kenji M. Price. “This settlement, and the other tremendous work performed by the law enforcement community in this area, should encourage owners and operators to proactively make necessary repairs and improve their waste disposal practices. Violators who fail to act on this message will face similar, or more severe, consequences.”
The complaint further alleges that company managers Nguyen and Dang fraudulently transferred the vessel to the current owner, Linh Fishery LLC, shortly after the Coast Guard discovered the violations in March 2017. Because the sale of the vessel and distribution of the proceeds to company members rendered Azure Fishery LLC insolvent and thus otherwise unable to pay a civil penalty, the complaint seeks recovery of the value of the fraudulently transferred vessel from the beneficiaries of the transfer, Linh Fishery LLC, Hanh Thi Nguyen, Khang Nguyen Dang, and Tuan Ngog Hoang, under the Federal Debt Collection Procedures Act (“FDCPA”), 28 U.S.C. § 3001 et seq.
Contemporaneously with the filing of the complaint, the United States has lodged a partial consent decree addressing the claims against company managers Nguyen and Dang. Under the settlement, Nguyen and Dang will each pay $211,000 for the Clean Water Act penalty claims against them and they will jointly pay an additional $53,000 for their apportioned share of the fraudulent transfer claim under the FDCPA. Moreover, they will perform corrective measures across their fleet of 25 Hawaii-based longline fishing vessels. The corrective measures are designed to ensure safe and lawful operations going forward and include (1) repairing the vessels to reduce the quantity of oily waste generated during a fishing voyage; (2) obtaining independent verification of repairs; (3) providing crewmembers with training on the proper handling of oily wastes; (4) documenting proper oily waste retention during voyages and disposal after returning to port; and (5) submitting periodic compliance assurance reports to the Coast Guard and the Department of Justice.
Section 311(b) of the Clean Water Act makes it unlawful to discharge oil or hazardous substances into or upon the waters of the United States or adjoining shorelines in quantities that may be harmful to the environment or public health. Under the act, the Coast Guard also has promulgated spill prevention and pollution control regulations for vessels and other facilities. Overboard discharges of oily mixtures, whether by directly pumping out oily bilge water that has not been properly treated, or by attempting to pump only the portion of the oily bilge water beneath a floating oil layer in the bilge (so-called decanting), has long been unlawful under federal law. Eliminating oil discharges into the ocean helps protect people, birds, fish, marine mammals, sea turtles and other natural resources.
Under the terms of the Clean Water Act, the penalties paid for these violations will be deposited in the federal Oil Spill Liability Trust Fund managed by the National Pollution Funds Center. The Oil Spill Liability Trust Fund is used to pay for federal response activities and to compensate for damages when there is a discharge or substantial threat of discharge of oil or hazardous substances to waters of the United States or adjoining shorelines.
The proposed partial consent decree, lodged in the District of Hawaii, is subject to a 30-day public comment period and court review and approval. Copies of the consent decree are available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html.
Oahu Tax Preparer Sentenced to 18 Months in Prison for Filing Fraudulent ReturnsRead the Press Release
HONOLULU – Guillermo Dahilig, of Waialua, Hawaii, was sentenced yesterday to 18 months in prison for aiding and assisting in the preparation and filing of false tax returns in violation of Title 26, United States Code, Section 7206(2). Following his incarceration, Dahilig will be on supervised release for 1 year. As part of his sentence, Dahilig has been ordered to pay $318,222.00 in restitution to the IRS for the taxes due from fraudulent tax returns filed between tax years 2010 and 2015 for himself and his clients.
U.S. Attorney for the District of Hawaii Kenji M. Price announced that, according to court documents and information presented in court, from 2009 to 2016, Dahilig was the owner and operator of Speedy Gill Services, an Oahu tax preparation business. He prepared between 750 and 1,000 tax returns per year for clients, and charged between $100 and $200 per return. Dahilig falsified his clients’ tax returns by claiming deductions for items such as medical expenses, personal property tax, job expenses, and charitable contributions that he knew were greater than the figures provided by his clients. He then filed the returns, knowing that they would generate refunds larger than his clients deserved. In addition, from at least 2010 through 2013, Dahilig underreported the income of Speedy Gill Services on the income tax returns he prepared and filed for himself and his wife.
At sentencing, U.S. District Judge Susan Oki Mollway remarked upon the significant loss to the IRS caused by Dahilig’s conduct, and emphasized that he had “violated the trust” of his clients.
The case was investigated by IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Amalia Fenton.
U.S. Soldier Pleads Guilty to Attempting to Provide Material Support to ISISRead the Press Release
Ikaika Erik Kang, 35, a Sergeant First Class in the U.S. Army stationed at Schofield Barracks, pleaded guilty today in federal court to four counts of attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization. Kang was indicted on terrorism charges on July 19, 2017. As part of a plea agreement reached with the United States, Kang agreed to serve 25 years in prison and at least 20 years, and up to life, of supervised release. Kang will be sentenced on Dec. 10, by Senior U.S. District Judge Susan Oki Mollway. If Judge Mollway accepts the plea agreement at that time, the 25-year term of imprisonment will be binding.
The announcement was made by Assistant Attorney General for National Security John C. Demers, U.S. Attorney Kenji M. Price for the District of Hawaii, and Special Agent in Charge Sean Kaul of the FBI’s Honolulu Field Office.
“Kang swore to defend the United States as a member of our military, but betrayed his country by swearing allegiance to ISIS and attempting to provide material support to the foreign terrorist organization,” said Assistant Attorney General Demers. “With today’s plea, he will be held accountable for his crimes. I want to thank all of the agents, analysts and prosecutors who are responsible for this case.”
“This Office will vigorously prosecute anyone who attempts to provide material support to terrorists who seek to spread fear and cause mayhem in our communities through senseless acts of violence,” said U.S. Attorney Price. “The prosecutors and law enforcement agencies who brought the defendant to justice in this case work shoulder-to-shoulder, every day, promoting our national security interests and keeping our communities safe.”
“This is the first case in the State of Hawaii where someone was convicted of attempting to provide material support to a designated foreign terrorist organization,” Special Agent in Charge Kaul. “This should serve as reminder that even though we are 2,500 miles from the U.S. Mainland, these crimes can and do happen everywhere. I would like to personally thank the United States Attorney’s Office, the Unites States Army, the Naval Criminal Investigative Service, the Honolulu Police Department, and the entire Joint Terrorism Task Force Community here in Hawaii for bringing this investigation to a successful conclusion. Today, our community is a safer place due to their tireless efforts.”
According to court documents and information presented in court, Kang became sympathetic to ISIS by at least early 2016. He regularly watched ISIS propaganda videos online, including videos that depicted ISIS members violently executing civilian and military victims. Kang made numerous statements in support of ISIS, expressed a desire to join ISIS, and spoke approvingly about committing acts of violence. At the time, Kang made these statements, he owned an AR-15-style assault rifle and a pistol, both of which he kept at his residence on Oahu. Kang was under ongoing physical surveillance by law enforcement from the beginning of the investigation until the time of his eventual arrest.
In late June and early July of 2018, Kang met numerous times with undercover FBI agents who he believed had connections to ISIS. He provided them with sensitive, non-public military documents, some of which were classified at the SECRET level, which he intended that they later provide to ISIS. The documents included, among other things: classified air traffic control documents that describe call signs, aircraft types, route points, directives, mission procedures, and radio frequencies; the U.S. military’s “weapons file,” which describes all the armament capabilities of the U.S. armed forces; details about a sensitive mobile airspace management system used by the U.S. military; and documents containing personally identifiable information of U.S. service members.
Kang later provided the undercover agents with a commercially purchased small aerial drone, a military chest rig, and other military-style clothing and gear. Kang described how ISIS could operationally utilize the drone to track U.S. troop movements and gain tactical advantage by evading American armored vehicles. Kang then met two additional undercover FBI personnel, one who purported to be a high-ranking ISIS leader, or “sheikh,” and another who played the role of an ISIS fighter. Kang lead them in a hand-to-hand military combatives training session using his weapons, in order to train the purported ISIS member in fighting techniques. The sessions were video-recorded, with the understanding that the video would be taken back to ISIS-controlled territory and used to train other ISIS fighters in hand-to-hand combat and weapons techniques.
On July 8, 2017, Kang swore an oath of loyalty, known as “bayat,” to ISIS and its leader, Abu Bakr al-Baghdadi, in a ceremony conducted by the purported ISIS sheikh. After the ceremony, Kang kissed the ISIS flag. Kang then said that he wanted to get his rifle and go and fight; just go to downtown Honolulu and Waikiki strip and start shooting. Kang was subsequently arrested and taken into custody.
This case was investigated by the Joint Terrorism Task Force in Honolulu; the FBI; and the U.S. Army, Criminal Investigative Division, and was prosecuted by Assistant U.S. Attorneys Kenneth M. Sorenson and Marc A. Wallenstein of the District of Hawaii, and Trial Attorney Taryn M. Meeks of the National Security Division’s Counterterrorism Section.
U.s. Soldier Pleads Guilty to Attempting to Provide Material Support to ISISRead the Press Release
HONOLULU – Ikaika Erik Kang, 35, a Sergeant First Class in the U.S. Army stationed at Schofield Barracks, pleaded guilty today in federal court to four counts of attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization. Kang was indicted on terrorism charges on July 19, 2017. As part of a plea agreement reached with the United States, Kang agreed to serve 25 years in prison and at least 20 years, and up to life, of supervised release. Kang will be sentenced on December 10, 2018 by Senior U.S. District Judge Susan Oki Mollway. If Judge Mollway accepts the plea agreement at that time, the 25-year term of imprisonment will be binding.
The announcement was made by Assistant Attorney General for National Security John C. Demers, U.S. Attorney Kenji M. Price for the District of Hawaii, and Special Agent in Charge Sean Kaul of the FBI’s Honolulu Field Office.
“Kang swore to defend the United States as a member of our military, but betrayed his country by swearing allegiance to ISIS and attempting to provide material support to the foreign terrorist organization,” said Assistant Attorney General Demers. “With today’s plea, he will be held accountable for his crimes. I want to thank all of the agents, analysts and prosecutors who are responsible for this case.”
“This Office will vigorously prosecute anyone who attempts to provide material support to terrorists who seek to spread fear and cause mayhem in our communities through senseless acts of violence,” said U.S. Attorney Price. “The prosecutors and law enforcement agencies who brought the defendant to justice in this case work shoulder-to-shoulder, every day, promoting our national security interests and keeping our communities safe.”
“This is the first case in the State of Hawaii where someone was convicted of attempting to provide material support to a designated foreign terrorist organization,” Special Agent in Charge Kaul. “This should serve as reminder that even though we are 2,500 miles from the U.S. Mainland, these crimes can and do happen everywhere. I would like to personally thank the United States Attorney’s Office, the Unites States Army, the Naval Criminal Investigative Service, the Honolulu Police Department, and the entire Joint Terrorism Task Force Community here in Hawaii for bringing this investigation to a successful conclusion. Today, our community is a safer place due to their tireless efforts.”
According to court documents and information presented in court, Kang became sympathetic to ISIS by at least early 2016. He regularly watched ISIS propaganda videos online, including videos that depicted ISIS members violently executing civilian and military victims. Kang made numerous statements in support of ISIS, expressed a desire to join ISIS, and spoke approvingly about committing acts of violence. At the time, Kang made these statements, he owned an AR-15-style assault rifle and a pistol, both of which he kept at his residence on Oahu. Kang was under ongoing physical surveillance by law enforcement from the beginning of the investigation until the time of his eventual arrest.
In late June and early July of 2018, Kang met numerous times with undercover FBI agents who he believed had connections to ISIS. He provided them with sensitive, non-public military documents, some of which were classified at the SECRET level, which he intended that they later provide to ISIS. The documents included, among other things: classified air traffic control documents that describe call signs, aircraft types, route points, directives, mission procedures, and radio frequencies; the U.S. military’s “weapons file,” which describes all the armament capabilities of the U.S. armed forces; details about a sensitive mobile airspace management system used by the U.S. military; and documents containing personally identifiable information of U.S. service members.
Kang later provided the undercover agents with a commercially purchased small aerial drone, a military chest rig, and other military-style clothing and gear. Kang described how ISIS could operationally utilize the drone to track U.S. troop movements and gain tactical advantage by evading American armored vehicles. Kang then met two additional undercover FBI personnel, one who purported to be a high-ranking ISIS leader, or “sheikh,” and another who played the role of an ISIS fighter. Kang lead them in a hand-to-hand military combatives training session using his weapons, in order to train the purported ISIS member in fighting techniques. The sessions were video-recorded, with the understanding that the video would be taken back to ISIS-controlled territory and used to train other ISIS fighters in hand-to-hand combat and weapons techniques.
On July 8, 2017, Kang swore an oath of loyalty, known as “bayat,” to ISIS and its leader, Abu Bakr al-Baghdadi, in a ceremony conducted by the purported ISIS sheikh. After the ceremony, Kang kissed the ISIS flag. Kang then said that he wanted to get his rifle and go and fight; just go to downtown Honolulu and Waikiki strip and start shooting. Kang was subsequently arrested and taken into custody.
The case was investigated by the Joint Terrorism Task Force in Honolulu, the FBI, and the U.S. Army, Criminal Investigative Division, and was prosecuted by Assistant U.S. Attorneys Kenneth M. Sorenson and Marc A. Wallenstein of the District of Hawaii, and Trial Attorney Taryn M. Meeks of the National Security Division’s Counterterrorism Section.
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Former Maui Police Department Officer Sentenced for Unlawfully Seizing Money and Conspiring to Obstruct JusticeRead the Press Release
The Justice Department and the U.S. Attorney’s Office for the District of Hawaii announced today that former Maui Police Department (MPD) Officer Anthony Maldonado, 29, of Kahului, Hawaii, was sentenced yesterday by Senior United States District Judge Helen Gillmor of the District of Hawaii to 24 months in prison, three years of supervised release, and required to pay $1,917.70 in restitution.
On April 19, Maldonado pleaded guilty to one count of violating the civil rights of a civilian by stealing money from him, and one count of conspiring to obstruct the federal investigation of that theft. According to court documents, on Sept. 30, 2015, former Officer Maldonado conducted a traffic stop of J.A. and stole approximately $1,800 during that stop. Officer Maldonado then conspired with several other MPD officers and civilians to intimidate J.A. and bribe him to withdraw his theft complaint. Specifically, Maldonado tasked his former brother-in-law, Damien Kaina, with executing the bribery plan. J.A. initially refused to take money from Kaina, but Kaina insisted. J.A. eventually accepted some money because he was frightened that Kaina or others might retaliate against him and his family if he continued to refuse. Walter Ahuna, a former MPD sergeant, served as Kaina’s getaway driver.
Kaina and Ahuna both previously pleaded guilty to participating in the obstruction plot.
J.A. immediately reported the attempted bribe to MPD and, the next morning, delivered the bribe money to MPD detectives. The day after the bribe, when it became clear that J.A. was not going to withdraw the theft complaint, Maldonado, Kaina, and another MPD officer, Chase Keliipaakaua, called J.A. in an effort to pressure him to withdraw the complaint. Keliipaakaua also pleaded guilty to his role in the crime.
“Defendant Maldonado stole money from a civilian and conspired with others, including other law enforcement officers, to intimidate and bribe his victim, defying the law he swore to protect,” said Acting Assistant Attorney General John Gore. “The Civil Rights Division will hold law enforcement officers who abuse their positions of power accountable under the law.”
“Police officers are sworn to protect and serve; whenever that oath is broken, it is a blow to our community as a whole. That is why our office is committed to vigorously investigating and prosecuting all instances of police misconduct,” said U.S. Attorney for the District of Hawaii Kenji M. Price.
“The men and women of the Honolulu FBI would like to thank the Maui Police Department for their diligence and thoroughness in identifying several of their own officers and assisting in this civil rights investigation. It is a sad day when an officer abuses their authority and violates the trust of the public they have been sworn to serve. However, this is a consummate example that these crimes will not be ignored and will be prosecuted to the fullest extent of the law,” said FBI Special Agent in Charge Sean L. Kaul.
The FBI conducted the investigation. Assistant United States Attorney Marc Wallenstein of the District of Hawaii and Trial Attorney Mary J. Hahn of the Civil Rights Division prosecuted the case.
Former Maui Police Department Officer Sentenced for Unlawfully Seizing Money and Conspiring to Obstruct JusticeRead the Press Release
HONOLULU – The Justice Department and the U.S. Attorney’s Office for the District of Hawaii announced today that former Maui Police Department (MPD) Officer Anthony Maldonado, 29, of Kahului, Hawaii, was sentenced yesterday by Senior United States District Judge Helen Gillmor of the District of Hawaii to 24 months in prison, three years of supervised release, and required to pay $1,917.70 in restitution.
On April 19, Maldonado pleaded guilty to one count of violating the civil rights of a civilian by stealing money from him, and one count of conspiring to obstruct the federal investigation of that theft. According to court documents, on Sept. 30, 2015, former Officer Maldonado conducted a traffic stop of J.A. and stole approximately $1,800 during that stop. Officer Maldonado then conspired with several other MPD officers and civilians to intimidate J.A. and bribe him to withdraw his theft complaint. Specifically, Maldonado tasked his former brother-in-law, Damien Kaina, with executing the bribery plan. J.A. initially refused to take money from Kaina, but Kaina insisted. J.A. eventually accepted some money because he was frightened that Kaina or others might retaliate against him and his family if he continued to refuse. Walter Ahuna, a former MPD sergeant, served as Kaina’s getaway driver.
Kaina and Ahuna both previously pleaded guilty to participating in the obstruction plot.
J.A. immediately reported the attempted bribe to MPD and, the next morning, delivered the bribe money to MPD detectives. The day after the bribe, when it became clear that J.A. was not going to withdraw the theft complaint, Maldonado, Kaina, and another MPD officer, Chase Keliipaakaua, called J.A. in an effort to pressure him to withdraw the complaint. Keliipaakaua also pleaded guilty to his role in the crime.
“Defendant Maldonado stole money from a civilian and conspired with others, including other law enforcement officers, to intimidate and bribe his victim, defying the law he swore to protect,” said Acting Assistant Attorney General John Gore. “The Civil Rights Division will hold law enforcement officers who abuse their positions of power accountable under the law.”
“Police officers are sworn to protect and serve; whenever that oath is broken, it is a blow to our community as a whole. That is why our office is committed to vigorously investigating and prosecuting all instances of police misconduct,” said U.S. Attorney for the District of Hawaii Kenji M. Price.
“The men and women of the Honolulu FBI would like to thank the Maui Police Department for their diligence and thoroughness in identifying several of their own officers and assisting in this civil rights investigation. It is a sad day when an officer abuses their authority and violates the trust of the public they have been sworn to serve. However, this is a consummate example that these crimes will not be ignored and will be prosecuted to the fullest extent of the law,” said FBI Special Agent in Charge Sean L. Kaul.
The FBI conducted the investigation. Assistant United States Attorney Marc Wallenstein of the District of Hawaii and Trial Attorney Mary J. Hahn of the Civil Rights Division prosecuted the case.
Bank Robber Sentenced to 14 Years in PrisonRead the Press Release
HONOLULU – Mitchum L. Pastor, 52, was sentenced today to 14 years in prison for the bank robberies of First Hawaiian Bank and Hawaii State Federal Credit Union. As part of his sentence, Pastor must pay $320 in restitution, and serve 3 years of supervised release following his incarceration.
U.S. Attorney Kenji M. Price stated that, according to court documents and information presented in court, on April 12, 2018, Pastor entered First Hawaiian Bank, told the teller he had a weapon, and demanded money. He received $320 in cash and fled on foot. The incident was captured on bank surveillance. The next day, Pastor entered Hawaii State Federal Credit Union, demanded money from the teller, and stated he had a gun as he reached into his back pocket. The teller placed $2,000 in cash in a bank envelope and handed it to Pastor. Pastor again fled the scene. Shortly thereafter, Honolulu Police Department officers identified Pastor from First Hawaiian Bank surveillance footage and arrested him. At the time of his arrest, he was found in possession of $2,000 in cash.
Pastor has two previous felony bank robbery convictions in two entirely separate cases. In 1993, Pastor received a prison sentence of 12 years for one bank robbery. In 2005, approximately a week after Pastor completed that prison sentence and while he was on supervised release, Pastor committed another bank robbery. He pled guilty and was sentenced to a term of imprisonment of 10 years. In addition, Pastor has two prior New York state robbery convictions.
The case was investigated by the Honolulu Police Department and the FBI, and prosecuted by Assistant U.S. Attorney Sara D. Ayabe.
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Mexican National Sentenced to 30 Months in Prison for Illegal Reentry and Firearms OffenseRead the Press Release
HONOLULU –Navor Salas-Cruz, 45, a Mexican national residing on Kauai, was sentenced by U.S. District Judge J. Michael Seabright today to 30 months of imprisonment for illegally reentering the United States after being deported, and for being a felon in possession of firearms and ammunition. As a result of his conviction, Salas-Cruz will be deported after he serves his prison term.
According to court documents and information presented in court, Salas-Cruz was deported on July 10, 2008, after being convicted of illegally reentering the United States after a prior deportation. Nonetheless, on December 15, 2017, Homeland Security Investigation (HSI) special agents again found Salas-Cruz in the United States, residing on Kauai. In addition, at that time of his arrest in 2017, Salas-Cruz illegally possessed three firearms, including a 12 gauge shotgun and two pistols, and numerous rounds of ammunition.
“This office is committed to protecting the community by promoting the integrity of the immigration system,” said U.S. Attorney Kenji M. Price. “The efforts of local and federal law enforcement officers in locating this defendant and disarming him is a testament to their tireless efforts to keep our community safe.”
“This sentence demonstrates that there are serious consequences for those who lack respect for our nation’s laws or our borders,” said Frank Cabaddu, Acting Special Agent in Charge for Homeland Security Investigations (HSI) Honolulu. “HSI will continue to work with DOJ and our law enforcement partners to take dangerous recidivists or other felony offenders off our streets and help to disrupt other types of criminal activity.”
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Kauai Police Department, and prosecuted by Assistant U.S. Attorney Darren Ching.
Convicted Felon Sentenced to 10 Years in Prison for Methamphetamine and Firearm ChargesRead the Press Release
HONOLULU – Ikaika Adams-Feeney, 28, was sentenced today to 10 years of imprisonment for possessing methamphetamine with intent to distribute and for being a felon in possession of a firearm. Following his incarceration, Adams-Feeney will be on supervised release for 5 years. As part of his sentence, Adams-Feeney also forfeited $3,089 in drug proceeds.
According to court documents and information presented in court, on August 29, 2017, Honolulu Police Department officers arrested Adams-Feeney at the Hawaiian Ebbtide Hotel in Waikiki on an outstanding warrant. Upon his arrest, Adams-Feeney, a convicted felon, was found to be in possession of 43 grams of pure methamphetamine, a loaded 9mm Beretta pistol with numerous rounds of ammunition, drug paraphernalia, and $3,089 in cash.
At sentencing, Senior U.S. District Judge Helen Gillmor commented that Adams-Feeney’s conduct in selling drugs and possessing a loaded firearm was “unacceptable.”
“As a part of Project Safe Neighborhoods, we are working with our local and federal partners to target for investigation and prosecution repeat offenders and the most violent criminals in Hawaii,” said U.S. Attorney Kenji M. Price. “This case is a great example of what we can achieve when we work together to keep our communities safe.”
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The case was investigated by the Honolulu Police Department, the Federal Bureau of Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, and prosecuted by Assistant U.S. Attorney Darren Ching.
Ewa Beach Man Sentenced to 88 Months for Fireworks, Methamphetamine ChargesRead the Press Release
HONOLULU – Malcolm Militante, 51, formerly a resident of Ewa Beach, Hawaii, was sentenced yesterday to 88 months’ imprisonment for possession of explosives, namely display fireworks, and for possession with intent to distribute methamphetamine. As part of his sentence, Militante must pay $2,966.60 in restitution to Hawaii Explosives & Pyrotechnics (HEP), the company from which Militante stole the fireworks.
U.S. Attorney Kenji M. Price stated that, according to court documents and information presented in court, HEP produces commercial fireworks shows, including the Friday night fireworks show at the Hilton Hawaiian Village in Waikiki. On November 25, 2016, HEP reported that the company truck had been stolen, and HEP’s storage bunker, which had contained display and general use fireworks, fireworks supplies, and equipment, had been burglarized. The next day, the Honolulu Police Department received an anonymous tip that Militante possessed the stolen fireworks at a residence in Ewa beach that he shared with his mother. HPD officers searched the residence, found the stolen fireworks, and seized them. Militante was later indicted for stealing the fireworks from HEP and for being a convicted felon in possession of explosives, namely the fireworks. On November 9, 2017, Militante was arrested on those charges. At the time of the arrest, HPD recovered a backpack containing about 29 grams of methamphetamine, a digital scale, other drug paraphernalia, and $6,000 in cash. Militante was later indicted in a separate case for possessing the 29 grams of methamphetamine with the intent to distribute it.
On January 16, 2018, Militante pleaded guilty to possession of explosives, namely display fireworks, and possession with intent to distribute methamphetamine. The two cases were joined for purposes of sentencing. U.S. District Judge Derrick K. Watson, imposed a sentence of 88 months to be followed by a five-year term of supervised release. In imposing sentence, Judge Watson noted that possession of display fireworks is inherently dangerous. He further stated that, while Militante did not attempt to modify or destroy the fireworks, the possession of them in an unsecured place like his residence, which he shared with his mother, put them both at risk.
The case was jointly investigated by the Honolulu Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. It was prosecuted by Assistant U.S. Attorney Marshall H. Silverberg.
Justice Department, DEA Propose Significant Opioid Manufacturing Reduction in 2019Read the Press Release
HONOLULU – The Department of Justice and U.S. Drug Enforcement Administration (DEA) have proposed a reduction for controlled substances that may be manufactured in the U.S. next year. Consistent with President Trump’s “Safe Prescribing Plan” that seeks to “cut nationwide opioid prescription fills by one-third within three years,” the proposal decreases manufacturing quotas for the most six frequently misused opioids for 2019 by an average ten percent as compared to the 2018 amount. The Notice of Proposed Rulemaking (NPRM) marks the third straight year of proposed reductions, which help reduce the amount of drugs potentially diverted for trafficking and used to facilitate addiction.
On July 11, 2018, the Justice Department announced that DEA was issuing a final rule amending its regulations to improve the agency’s ability consider the likelihood of whether a drug can be diverted for abuse when it sets annual opioid production limits. The final rule also promotes greater involvement from state attorneys general, and today’s proposed reduction will be sent to those offices.
In setting the aggregate production quote (APQ), DEA considers data from many sources, including estimates of the legitimate medical need from the Food and Drug Administration; estimates of retail consumption based on prescriptions dispensed; manufacturers’ disposition history and forecasts; data from DEA’s own internal system for tracking controlled substance transactions; and past quota histories.
The DEA has proposed to reduce more commonly prescribed schedule II opioids, including oxycodone, hydrocodone, oxymorphone, hydromorphone, morphine, and fentanyl:
Ultimately, revised limits will encourage vigilance on the part of opioid manufacturers, help DEA respond to the changing drug threat environment, and protect the American people from potential addictive drugs while ensuring that the country has enough opioids for legitimate medical, scientific, research, and industrial needs. “The opioid epidemic that we are facing today is the worst drug crisis in American history,” Attorney General Jeff Sessions said. “President Trump has set the ambitious goal of reducing opioid prescription rates by one-third in three years. We embrace that goal and are resolutely committed to reaching it. According to the National Prescription Audit, we have already made significant progress in reducing prescription rates over the past year. Cutting opioid production quotas by an average of ten percent next year will help us continue that progress and make it harder to divert these drugs for abuse. The American people can be confident that federal law enforcement and the Trump administration are taking action to protect them from dangerous drugs. These smarter limits bring us one big step closer to President Trump’s goal of finally ending this unprecedented crisis. I congratulate Acting Administrator Uttam Dhillon and his team for taking action.”
U.S. Attorney for the District of Hawaii, Kenji M. Price, commented: “Across the country, and even here in Hawaii, the opioid epidemic is taking precious lives. We applaud this effort by the DEA to stem the tide of this epidemic by seeking to limit the ways in which these drugs are able to make their way into our communities here in Hawaii.”
“We’ve lost too many lives to the opioid epidemic and families and communities suffer tragic consequences every day,” said DEA Acting Administrator Uttam Dhillon. “This significant drop in prescriptions by doctors and DEA’s production quota adjustment will continue to reduce the amount of drugs available for illicit diversion and abuse while ensuring that patients will continue to have access to proper medicine.”
Once the aggregate quota is set, DEA allocates individual manufacturing and procurement quotas to those manufacturers that apply for them. DEA may revise a company’s quota at any time during the year if change is warranted due to increased or decreased sales or exports, new manufacturers entering the market, new product development, or product recalls.
When Congress passed the Controlled Substances Act, the quota system was intended to reduce or eliminate diversion from “legitimate channels of trade” by controlling the quantities of the basic ingredients needed for the manufacture of controlled substances.
The Proposed Aggregate Production Quotas for schedule I and II controlled substances published in the Federal Register reflects the total amount of controlled substances necessary to meet the country’s medical, scientific, research, industrial, and export needs for the year and for the establishment and maintenance of reserve stocks. DEA establishes an APQ for more than 250 schedule I and II controlled substances annually.
In 2016, the Centers for Disease Control and Prevention issued guidelines to practitioners recommending a reduction in the prescribing of opioid medications for chronic pain. DEA and its federal partners have increased efforts in the last several years to educate practitioners, pharmacists, manufacturers, distributors, and the public about the dangers associated with the misuse of opioid medications and the importance of proper prescribing.
Las Vegas Woman Sentenced to Jail for Wire Fraud and Money Laundering OffensesRead the Press Release
HONOLULU – Donna Alms, 55, a resident of Las Vegas, Nevada, and formerly of the Big Island of Hawaii, was sentenced today to 33 months in federal prison for defrauding Waste Management of Hawaii, Inc. of $862,722 over the course of 4 years.
According to information presented in court, Alms pled guilty in January 2018 to wire fraud and money laundering offenses that occurred while she was an operations specialist for Waste Management on the Island of Hawaii. Alms’s duties included obtaining temporary laborers to pick litter from Waste Management’s landfill site, and to arrange for their payment through an outside vendor. The vendor would then submit invoices to Alms for payment by Waste Management. During court proceedings, Alms admitted that she inflated approximately 247 invoices submitted to Waste Management by the vendor by cutting and pasting numbers onto a template that she maintained. Alms’s activities caused Waste Management to pay the vendor $862,722 in costs above what was actually billed. Alms then directed the vendor to return $692,549 of the excess payments to her, calling them “wages” to disguise the nature, source, and ownership of the funds.
U.S. District Judge Derrick K. Watson imposed a 33 month sentence, noting that Alms’s conduct was elaborate and repetitive. Alms was also ordered to pay restitution of $862,722, and to serve a 3 year term of supervision following her release.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigations, and was prosecuted by Assistant U.S. Attorney Larry Tong.
Hawaii Man Pleads Guilty to Witness TamperingRead the Press Release
HONOLULU – Jonathan Cadet, 30, pled guilty yesterday in federal court to one count of witness tampering in violation of 18 United States Code § 1512(d)(1). Cadet faces a maximum term of imprisonment of three years when he is sentenced on November 26, 2018, by Senior U.S. District Judge Susan Oki Mollway.
U.S. Attorney Kenji M. Price said that, according to court documents and information presented in court, in May 2018, Cadet directly contacted a witness in the pending criminal sex trafficking prosecution, United States v. Isaiah McCoy et al. Cadet told the woman that he knew she was a witness in the pending case, and proceeded to harass her, calling her a “rat” and other names. He admitted in Court that he made these statements to her because he was angry, and intended to dissuade her from testifying.
The investigation in this case was led by the U.S. Department of Homeland Security, Homeland Security Investigations, with assistance from the FBI and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorneys Thomas J. Brady and Morgan Early handled the prosecution.
Former Military Police Officer Sentenced to 15 Years in Prison for Production of Child PornographyRead the Press Release
HONOLULU – Christopher Ernest Fox, 21, a former Military Police Officer stationed at Schofield Barracks, Hawaii, was sentenced today to 15 years of imprisonment for the production of child pornography for his online exploitation and “sextortion” of a minor female. As part of his sentence, Fox must pay $10,000 in restitution to the victim and her family, and serve 10 years of supervised release. Fox will also be required to register as a sex offender.
According to court documents and information presented in court, in August 2016 Fox began corresponding with a 12-year-old female in the United Kingdom using social media applications, including Instagram and Snapchat. In September 2016, Fox began to solicit sexually explicit photographs from the girl, knowing she was a minor. After obtaining naked photographs of the girl, Fox then asked for more. Fox used the photographs he initially received from the girl to blackmail her into sending additional explicit photographs, and threatened to distribute the initial photographs to her friends and family if she did not comply with his demands. Ultimately, when his victim refused to continue sending Fox explicit photographs, he created a fictitious social media account under her name, and used that account to distribute the sexually explicit photographs to her friends and classmates. As a result of Fox’s crime, the minor was bullied, harassed, and threatened with further extortion by random strangers online.
At Fox’s sentencing, Chief U.S. District Judge J. Michael Seabright remarked upon the “harm and terror this [crime] would cause somebody.” He went on to call Fox’s actions “a lifechanging, traumatic experience,” and noted, “saying his actions were wrong is a grave understatement.”
“Project Safe Childhood, a national initiative within the Department of Justice, combats crimes against children,” said U.S. Attorney Kenji M. Price. “This Office is committed to holding those who sexually exploit our young people accountable for their crimes. These kind of crimes are serious and have devastating impacts on victims, their families, and the community atlarge. The U.S. Attorney’s Office will continue to aggressively prosecute, and seek significant sentences for defendants who prey on our young people.”
The case was investigated by the United States Department of Homeland Security, Homeland Security Investigations, with assistance from the Wiltshire Police Department in the United Kingdom, and prosecuted by Assistant U.S. Attorney Morgan Early.
Hawaii Woman Sentenced to Prison for Stealing over $1 Million from A Molokai Credit UnionRead the Press Release
HONOLULU – Janell Purdy, 40, a resident of Wailuku, Hawaii, was sentenced today to 50 months’ imprisonment for her role in conspiring to embezzle from the First Hawaiian Homes Federal Credit Union on Molokai. As part of her sentence, Purdy must also pay $949,736.36 in restitution and serve 3 years of supervised release. Purdy’s co-conspirator, Allennie Naeole, 55, of Kaunakakai, Hawaii, previously pled guilty to conspiracy and aggravated identity theft, and was sentenced on June 13, 2018 to 7 years’ imprisonment, 3 years of supervised release, and payment of $1,055,188.12 in restitution.
According to court documents and information presented in court, from June 2008 through December 2015, Naeole and Purdy agreed to embezzle more than $1 million from the First Hawaiian Homes Federal Credit Union (the “Credit Union”). Throughout the conspiracy, Purdy and Naeole were the only two permanent employees of the Credit Union and were responsible for all the daily banking activities, including maintaining the Credit Union’s books and records. Naeole ran the Credit Union while Purdy was the teller and customer service representative. Purdy and Naeole overdrafted accounts in violation of bank policies and issued unauthorized checks from the Credit Union’s financial accounts. They spent the money on personal expenses, including credit card payments, trips, car payments, mortgage payments, vacation property payments, and various bills. They concealed the embezzlement by creating fictitious deposit and loan entries in the Credit Union’s books and records.
To further conceal their conduct, Naeole created a fake email account to communicate with the National Credit Union Administration (NCUA). She also submitted a fictitious letter to an NCUA regulator forging a Bank of Hawaii branch manager’s signature and listing Credit Union investment assets at the Molokai branch of the Bank of Hawaii, even though she knew those assets did not exist. In December 2015, the scheme was uncovered by a regulator from the NCUA. As a result of the embezzlement, the Credit Union had become insolvent and was shut down. At the time of its dissolution, it had served the local community for over 75 years and had approximately 1,400 members. The loss and liquidation expenses related to Naeole and Purdy’s conduct exceeded $2 million.
At Purdy’s sentencing, U.S. District Court Judge Derrick K. Watson stated that the results of the conspiracy were “catastrophic.” He stated that Purdy did not seem to understand the root cause of her conduct in continuing “to march along in her spendthrift ways,” even after she knew she was under investigation and would be responsible for hundreds of thousands of dollars in losses. He also agreed with the government that Purdy’s motivation to steal appeared to be “greed.”
The case was investigated by the Federal Bureau of Investigation and the Treasury Department – Office of Investigations, and prosecuted by Assistant U.S. Attorney Rebecca A. Perlmutter.
Singaporean Shipping Company to Pay $1 Million Fine for Oil Tank Vessel PollutionRead the Press Release
HONOLULU – Earlier today, U.S. District Court Judge Helen Gillmor sentenced Hai Soon Ship Management, a Singaporean shipping company, to pay a fine of $1 million and serve a two-year term of probation for charges stemming from its the failure to maintain an accurate oil record book in violation of the Act to Prevent Pollution from Ships (APPS), and false statements concerning the illegal dumping of oil contaminated bilge water at sea. The company pled guilty to the charges on June 14, 2018. Pursuant to its plea agreement with the U.S. Attorney’s Office, Hai Soon Ship Management’s vessels operating in U.S. waters will be required to comply with a comprehensive environmental compliance plan that provides for regular inspections under the supervision of an independent auditor.
According to court documents and information presented in court, Hai Soon Ship Management is the operator of the 3,878 gross ton oil tank vessel called the Hai Soon 39. The Hai Soon 39 provided refueling services to fishing vessels operating at sea. International and U.S. law require that vessels like the Hai Soon 39 use pollution prevention equipment to prevent the discharge of oil-contaminated bilge into the sea. Should any overboard discharges occur, they must be recorded in an oil record book, a log that is inspected by the U.S. Coast Guard. In October of 2017, the Chief Engineer of the Hai Soon 39, along with other engine room staff, constructed a hose in the engine room to bypass the ship’s pollution prevention equipment, including its oil water separator, and pump oily waste directly overboard. The resultant discharges were never recorded in the ship’s oil record book, as required by APPS, and the Chief Engineer made false entries in the oil record book to make it appear that the discharges had been routed through the oil water separator when in fact they had not.
“The marine environment that surrounds the Hawaiian Islands is unique, and part of the Islands’ natural beauty,” said U.S. Attorney Kenji M. Price. “This Office will continue to work with the U.S. Coast Guard and use every tool at its disposal to bring to justice those who violate the law by polluting the sea.”
As part of its sentence, Hai Soon Ship Management will be placed on a two-year term of probation that includes the environmental compliance plan to ensure, among other things, that all of the ships the company operates that come to the United States fully comply with all applicable marine environmental protection requirements established by national and international laws. The compliance plan will be implemented by an independent auditing company and supervised by a court-appointed monitor.
The case was investigated by the U.S. Coast Guard’s Investigative Service and prosecuted by Assistant U.S. Attorneys Ken Sorenson and Amalia Fenton.
15 People from Hawaii Charged and 13 Firearms Seized as Part of Project Safe NeighborhoodsRead the Press Release
HONOLULU – In the past three months, 15 people from Hawaii were charged with drug or violent crimes in the U.S. District Court in Honolulu, and 13 firearms, 543 rounds of ammunition, approximately 13 pounds of methamphetamine, and over $35,000 were seized, as part of Project Safe Neighborhoods (“PSN”). Due to these prosecutions and others, the U.S. Attorney’s Office for the District of Hawaii is on pace to file approximately twice as many firearms and violent crime indictments in Fiscal Year 2018 as it did in the previous two fiscal years.
“Project Safe Neighborhoods is fundamentally about getting Hawaii’s most violent offenders off our streets,” said U.S. Attorney Kenji M. Price. “Along with our federal and local law enforcement partners, we are committed to working tirelessly to make our community safer by targeting for prosecution the most dangerous offenders in Hawaii.”
Prosecuting Attorney for the County of Maui John Kim commented: “The Department of the Prosecuting Attorney for the County of Maui, truly enjoys working with our Federal Partners in law enforcement because they bring so much to the table, including resources, knowledge, experience, and an ‘open door’ policy we can tap into at any time.”
“Project Safe Neighborhoods brings the expertise and resources of federal law enforcement to bear on our local community issues. We are grateful for the partnership of the U.S. Attorney’s Office and all our federal partners in dismantling drug cartels and violent criminal enterprises,” said Justin F. Kollar, Prosecuting Attorney for the County of Kauai.
The fifteen individuals charged include, among others:
Shane Durante, 46, who was charged with possession of methamphetamine with intent to distribute; conspiracy to distribute methamphetamine; using firearms and ammunition during and in relation to a drug trafficking crime; and being a felon in possession of firearms and ammunition, namely, a Winchester .30-30 rifle, 20 rounds of Winchester ammunition, and a Glock brand 9 mm pistol. According to a criminal complaint, at the time of his arrest, Durante had more than six pounds of methamphetamine, as well as firearms and ammunition in his possession. Three other individuals were charged with related crimes in connection with Durante’s arrest. One of them was alleged to have mailed multiple pounds of methamphetamine from the mainland to Oahu. That individual was arrested on the mainland and transported to Oahu to face charges.
Chester Cabang, 37, and Kloulubak Debedebek, 37, were charged in a criminal complaint with distributing 14 ounces and 3 ounces of methamphetamine, respectively. Following their arrests, law enforcement recovered a .40 caliber Glock pistol from Cabang’s vehicle, and a 9 mm Glock pistol from Debedebek’s vehicle. Law enforcement also recovered an AR-15-style assault rifle from Debedebek’s self-storage unit. Another individual was charged in a related indictment with two counts of distributing methamphetamine. According to a criminal complaint, this individual had mailed five one-pound parcels of methamphetamine from the mainland to Oahu. This person was arrested on the mainland and transported to Hawaii to face charges.
Ikaika Adams-Feeney, 28, was charged and pleaded guilty to possessing with the intent to distribute methamphetamine, and unlawfully possessing a firearm as a convicted felon. According to documents filed in federal court, Adams-Feeney was arrested on an outstanding warrant and found to be in possession of a distributable amount of methamphetamine, a loaded Beretta Model 92SB 9 mm pistol, and 14 rounds of ammunition, all while having previously been convicted of a felony offense.
Adalberto Cortez, 46, was charged with conspiring to distribute and possess with the intent to distribute heroin, with several counts of possession with the intent to distribute heroin, and with possessing a firearm in furtherance of a drug trafficking crime. According to the criminal complaint filed in the case, Cortez and another individual sold heroin to an undercover Honolulu Police Department officer, after which a search of Cortez’s residence resulted in the seizure of heroin, a 9 mm Glock pistol with 25 rounds of ammunition, and a 100 mm Glock handgun with 10 rounds of ammunition. Also seized during the case were three Rolex watches and other pieces of jewelry, gold and silver coins and bars, and $31,500 in U.S. currency.
Mitchum Pastor, 52, was charged with one count of bank robbery and one count of credit union robbery. Pastor pled guilty as charged and is currently awaiting sentencing. He has two previous convictions for federal bank robbery, among other prior convictions.
John Hubbard, 61, was charged with being a felon in possession of a firearm. According to allegations in the criminal complaint, Hubbard fired two shots above a victim’s head in the Leilani Estates Subdivision on the Big Island. Hubbard was charged with possessing a revolver, 12 rounds of .38 special caliber ammunition, 19 rounds of Winchester Super X .30-06 caliber ammunition, and multiple additional boxes of other types of ammunition, all while having previously been convicted of two prior felonies.
Chad Valoroso, 53, was also charged with being a felon in possession of a firearm. According to the allegations in the criminal complaint, after Valoroso fired two shots from a moving vehicle into the air in Wailuku, Maui, he was apprehended by Maui Police Department officers. A subsequent search of a car revealed a loaded Smith & Wesson .38 Special caliber revolver and 47 rounds of ammunition. According to the criminal complaint, at the time, Valoroso had 22 prior felony convictions.
All of these cases are part of PSN, a program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
These cases were investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Federal Bureau of Investigation, Drug Enforcement Administration, Department of Homeland Security (Homeland Security Investigations), U.S. Marshals Service, State of Hawaii Department of Public Safety, State of Hawaii Department of the Attorney General, and the police departments and prosecutor’s offices of Hawaii, Maui, and Kauai Counties and the City and County of Honolulu.
If convicted, each defendant’s sentence will be determined by the court after reviewing factors unique to the case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence should not exceed the maximum penalty allowed under the charged statute, and in most cases, it will be less than the maximum.
Criminal complaints and indictments only contain charges and are not evidence of guilt. The defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Kauai Man Sentenced to 25 Years in Prison for Manufacturing Child PornographyRead the Press Release
HONOLULU – Chief United States District Court Judge J. Michael Seabright sentenced Michael J. Terui, age 38, to 300 months (25 years) in prison yesterday, plus a lifetime period of supervised release, for four counts of manufacturing child pornography. Terui will also be required to register as a sex offender. Terui pled guilty to the offenses on December 12, 2017.
Kenji M. Price, United States Attorney for the District of Hawaii, said that according to court documents and information presented in court, Terui repeatedly sexually abused numerous young children, ranging in age from seven to 13 years old, over a period of more than a decade. Fifteen minor victims have been identified. Terui acted as an outreach resource for his father’s church, which held services in the homes of members of the congregation and offered outreach programs to families that lacked a father figure in the home. Terui would often host "sleepovers" and other gatherings at his residence, where he kept video games and movies, which he used to "groom" the children and gain their trust. Church members and other parents would entrust their children to Terui’s care. Terui engaged in sex acts with the children, often while they were sleeping (or pretending to sleep). Terui recorded his conduct using hidden and handheld digital video cameras. Terui also lured his child-victims on vacations in an effort to bond with them and use them for his sexual gratification. Digital storage media found at Terui’s house contained 77 child pornographic video files and 690 child pornographic images.
At yesterday’s sentencing, Chief Judge Seabright commented that Terui’s conduct was "shocking, abhorrent, callous, and devastating," and told Terui that he had "left a trail of pain through what you’ve done." Chief Judge Seabright said that this was the "worst type of breach of trust possible." In imposing the 25-year sentence, Chief Judge Seabright noted several aggravating factors, including that Terui had groomed the children to gain their trust; taken advantage of his position in the church in order to gain access to the children; and engaged in the egregious sexual abuse over a period of more than 10 years. Chief Judge Seabright also highlighted that Terui had recorded the abuse of the children in order to use the recordings for his future sexual gratification. Four parents of the minor victims participated in the sentencing. The parent of one victim told Terui that he was a "wolf in sheep’s clothing" and accused him of "hiding behind the ministry."
The case was investigated by the Federal Bureau of Investigation, and prosecuted by Assistant United States Attorney Marc A. Wallenstein.
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