District of Hawaii
Press releases recorded for this federal judicial district.
Attorney General Sessions Announces 311 New Assistant United States Attorney PositionsRead the Press Release
HONOLULU – On the 500th day of the Trump Administration, Attorney General Jeff Sessions and U.S. Attorney for the District of Hawaii Kenji M. Price announced that the Department of Justice is taking a dramatic step to increase resources to combat violent crime, enforce our immigration laws, and help roll back the devastating opioid crisis.
In the largest increase in decades, the Department of Justice is allocating 311 new Assistant United States Attorneys to assist in priority areas. Those allocations are as follows: 190 violent crime prosecutors, 86 civil enforcement prosecutors, and 35 additional immigration prosecutors. Many of the civil enforcement AUSA’s will support the newly created Prescription Interdiction & Litigation Task Force which targets the opioid crisis at every level of the distribution system.
“Under President Trump's strong leadership, the Department of Justice is going on offense against violent crime, illegal immigration, and the opioid crisis—and today we are sending in reinforcements,” said Attorney General Jeff Sessions. “We have a saying in my office that a new federal prosecutor is 'the coin of the realm.' When we can eliminate wasteful spending, one of my first questions to my staff is if we can deploy more prosecutors to where they are needed. I have personally worked to re-purpose existing funds to support this critical mission, and as a former federal prosecutor myself, my expectations could not be higher. These exceptional and talented prosecutors are key leaders in our crime fighting partnership. This addition of new Assistant U.S. Attorney positions represents the largest increase in decades.”
The Department of Justice is allocating two new Assistant U.S. Attorney positions to the U.S. Attorney’s Office for the District of Hawaii. “The addition of these AUSAs to our office will further enhance our ability to protect Hawaii’s citizens by targeting violent criminals and taking an all-hands-on-deck approach to combatting the opioid crisis,” said U.S. Attorney Kenji M. Price.
Hawaiian Fishing Companies, Managers, and Operators Will Perform Corrective Measures and Pay Civil Penalties to Address Illegal Ocean PollutionRead the Press Release
Two Honolulu-based fishing companies, Triple Dragon, LLC, and Capt. Millions III, LLC, along with the company managers and vessel operators, have each agreed to implement operational improvements and other compliance measures and pay civil penalties to settle claims stemming from numerous discharges of oily bilge waste from the commercial fishing vessels Triple Dragon and Capt. Millions III, the Department of Justice and Coast Guard announced today.
In two separate complaints, filed in the U.S. District Court for the District of Hawaii today and on April 27, 2018, along with notices of lodging of consent decrees filed today, the United States alleges that the vessel owners, company managers, and vessel operators are each liable for civil penalties under the Clean Water Act for discharging oily mixtures into the waters off Hawaii. Both complaints also include civil penalty claims under the Clean Water Act for violations of the Coast Guard’s spill prevention and pollution control regulations, including failure to provide sufficient capacity to retain oily mixtures on board. The complaints further allege that in order to extend the length of the Triple Dragon’s and Capt. Millions III’s fishing voyages, the defendants routinely pumped a mixture of fuel oil, lubricating oils, water, and other fluids from the vessels’ engine room bilges into the Pacific Ocean rather than retain the waste on board.
To resolve the claims in the United States’ complaints, the consent decrees require the companies and vessel operators to perform corrective measures, including: (1) repairing the vessels to reduce the quantity of oily waste generated during a fishing voyage; (2) providing crewmembers with training on the proper handling of oily wastes; (3) documenting proper oily waste disposal after returning to port; and (4) submitting compliance reports to the Coast Guard and the Department of Justice.
Additionally, the consent decrees require each vessel owner, company manager, and vessel operator to pay a civil penalty. For the discharges from the Triple Dragon, the vessel owner, Triple Dragon, LLC, must pay a civil penalty of $15,000; the company manager, Trung Anh Quach, must pay a civil penalty of $10,000; and the vessel operator, Aukusitino Lui Maui, must pay a civil penalty of $500. For the discharges from the Capt. Millions III, the vessel owner, Capt. Millions III, LLC, must pay a civil penalty of $10,000; the company manager, Brian Nguyen, must pay a civil penalty of $5,000; and the vessel operator, Kha Van, must pay a civil penalty of $7,000. These penalty amounts were set considering each defendant’s limited ability to pay a higher penalty, as demonstrated through documentation submitted to the United States and analyzed by a financial expert.
“Law-abiding vessel owners and operators know the importance of complying with our Nation’s environmental laws,” said Acting Assistant Attorney General Jeffrey H. Wood for the Justice Department’s Environment and Natural Resources Division. “Members of the fishing fleet who disregard those laws put the public’s health and our Nation’s natural resources in jeopardy. The Justice Department and Coast Guard will continue to work together to hold companies and individuals who violate the Clean Water Act accountable.”
“All vessels, including commercial fishing vessels like these, must comply with the long-standing Clean Water Act environmental protection requirements as part of their normal operations," said Rear Adm. Brian Penoyer, Commander, Coast Guard 14th District. "As a steward of the marine environment, the Coast Guard will not tolerate illegal dumping of oily waste into the ocean."
“These settlements will serve to protect Hawaii’s citizens and our state’s unique natural resources,” said United States Attorney for the District of Hawaii Kenji M. Price. “Those who pollute the ocean should know that we will continue to vigorously pursue and prosecute these types of violations to the fullest extent of the law.”
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-call “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 penalty paid for these discharges 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 consent decrees, lodged in the District of Hawaii, are subject to a 30-day public comment period and court review and approval. Copies of the consent decrees are available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html.
Hawaiian Fishing Companies, Managers, and Operators Will Perform Corrective Measures and Pay Civil Penalties to Address Illegal Ocean PollutionRead the Press Release
HONOLULU — Two Honolulu-based fishing companies, Triple Dragon, LLC, and Capt. Millions III, LLC, along with the company managers and vessel operators, have each agreed to implement operational improvements and other compliance measures and pay civil penalties to settle claims stemming from numerous discharges of oily bilge waste from the commercial fishing vessels Triple Dragon and Capt. Millions III, the Department of Justice and Coast Guard announced today.
In two separate complaints, filed in the U.S. District Court for the District of Hawaii today and on April 27, 2018, along with notices of lodging of consent decrees filed today, the United States alleges that the vessel owners, company managers, and vessel operators are each liable for civil penalties under the Clean Water Act for discharging oily mixtures into the waters off Hawaii. Both complaints also include civil penalty claims under the Clean Water Act for violations of the Coast Guard’s spill prevention and pollution control regulations, including failure to provide sufficient capacity to retain oily mixtures on board. The complaints further allege that in order to extend the length of the Triple Dragon’s and Capt. Millions III’s fishing voyages, the defendants routinely pumped a mixture of fuel oil, lubricating oils, water, and other fluids from the vessels’ engine room bilges into the Pacific Ocean rather than retain the waste on board.
To resolve the claims in the United States’ complaints, the consent decrees require the companies and vessel operators to perform corrective measures, including: (1) repairing the vessels to reduce the quantity of oily waste generated during a fishing voyage; (2) providing crewmembers with training on the proper handling of oily wastes; (3) documenting proper oily waste disposal after returning to port; and (4) submitting compliance reports to the Coast Guard and the Department of Justice.
Additionally, the consent decrees require each vessel owner, company manager, and vessel operator to pay a civil penalty. For the discharges from the Triple Dragon, the vessel owner, Triple Dragon LLC, must pay a civil penalty of $15,000; the company manager, Trung Anh Quach, must pay a civil penalty of $10,000; and the vessel operator, Aukusitino Lui Maui, must pay a civil penalty of $500. For the discharges from the Capt. Millions III, the vessel owner, Capt. Millions III, LLC, must pay a civil penalty of $10,000; the company manager, Brian Nguyen, must pay a civil penalty of $5,000; and the vessel operator, Kha Van, must pay a civil penalty of $7,000. These penalty amounts were set considering each defendant’s limited ability to pay a higher penalty, as demonstrated through documentation submitted to the United States and analyzed by a financial expert.
“Law-abiding vessel owners and operators know the importance of complying with our Nation’s environmental laws,” said Acting Assistant Attorney General Jeffrey H. Wood for the Justice Department’s Environment and Natural Resources Division. “Members of the fishing fleet who disregard those laws put the public’s health and our Nation’s natural resources in jeopardy. The Justice Department and Coast Guard will continue to work together to hold companies and individuals who violate the Clean Water Act accountable.”
“All vessels, including commercial fishing vessels like these, must comply with the longstanding Clean Water Act environmental protection requirements as part of their normal operations," said Rear Adm. Brian Penoyer, Commander, Coast Guard 14th District. "As a steward of the marine environment, the Coast Guard will not tolerate illegal dumping of oily waste into the ocean."
“These settlements will serve to protect Hawaii’s citizens and our state’s unique natural resources,” said United States Attorney for the District of Hawaii Kenji M. Price. “Those who pollute the ocean should know that we will continue to vigorously pursue and prosecute these types of violations to the fullest extent of the law.”
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-call “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 penalty paid for these discharges 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 consent decrees, lodged in the District of Hawaii, are subject to a 30-day public comment period and court review and approval. Copies of the consent decrees are available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html.
Honolulu Man Indicted for Soliciting A Commercial Sex Act from A MinorRead the Press Release
HONOLULU – Dustin Trey Miyakawa, 32, a resident of Oahu, was indicted by a federal grand jury today with attempted enticement and coercion of a minor, solicitation of a minor for a commercial sex act, and attempted production of child pornography. Miyakawa was previously arrested on May 3, 2018, and ordered detained pending further proceedings.
Kenji M. Price, U.S. Attorney for the District of Hawaii, announced that the indictment charges Miyakawa with using social media and a cell phone to entice a 15-year-old female to engage in sexual conduct prohibited by Hawaii State law. The indictment also charges Miyakawa with soliciting a commercial sex act from the minor, in violation of the federal statute that prohibits child sex trafficking, and attempting to produce sexually explicit photos of her, i.e., child pornography. The charges arise out of allegations that Miyakawa, who advertises on social media as a photographer, used Instagram to set up a meeting with the minor victim at his apartment where he took nude photographs of her, offered her money for sex, and then tried to extort her with the nude photographs when she refused his offer to accept money for sex.
The FBI is asking members of the public who may be victims in this case, or have information about additional victims in this case, to contact the FBI at [email protected] or 1-800-CALL FBI (1-800-225-5324).
FBI Special Agent in Charge (SAC) Sean Kaul stated, “This type of crime represents a malicious threat to the most vulnerable among us, it specifically targets our children. The FBI is deeply committed to working with the U.S. Attorney's Office and our Law Enforcement Partners to investigate these crimes to the fullest extent.”
“The predators who are brazenly stalking our children online need to know that HSI, together with its law enforcement partners, is working tirelessly to track you down and hold you accountable for your crimes,” said Frank Cabaddu, acting Special Agent in Charge for Homeland Security Investigations (HSI) Honolulu. “We need the public’s assistance in this effort. We urge anyone in the community who has information about this case, or any other incident involving possible child sex trafficking, to come forward so we can prosecute the perpetrators and provide assistance to their victims.”
Miyakawa will appear in court on May 17, 2018, for an arraignment and plea on the charges, at which time a trial date will be scheduled. 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, Miyakawa faces a mandatory minimum sentence of 15 years in prison and up to a $250,000 fine for the sex trafficking and child pornography charges, and a mandatory minimum sentence of 10 years in prison and up to a $250,000 fine for enticement of a minor. The statutory sentence is prescribed by Congress and is provided here for informational purposes. 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.
The case was jointly investigated by Homeland Security Investigations, the FBI, and the Honolulu Police Department, and is being prosecuted by Assistant U.S. Attorney Morgan Early.
Owner of Harris Therapy, Inc. Convicted on Healthcare Fraud ChargesRead the Press Release
HONOLULU – A federal jury today found Sheila Harris, 53, of Honolulu, guilty of wire fraud, aggravated identity theft, and false statements involving healthcare matters for her role in submitting false claims and documents to TRICARE, a federal health benefits program serving military families. Harris owned and operated Harris Therapy, Inc., which provided therapeutic services, including speech, physical, and occupational therapy, on Oahu. The jury verdict came one day after a ten-day trial.
According to information presented in court, from 2008 to 2012, Harris submitted false claims and documents to TRICARE for payment for speech therapy services that were not performed. On the claims, Harris falsified dates of services and the treating speech therapy provider. Three Speech Language Pathologists who treated patients for Harris Therapy during this timeframe testified at trial that Harris directed them to create false invoices and false therapy notes for dates when no speech therapy treatment took place. During an audit of Harris Therapy, Harris directed others to alter and falsify therapy notes that were then submitted to TRICARE. In all, the scheme to defraud involved over $339,628 of false speech therapy services billed to TRICARE for non-existent treatment dates. It also involved 2,117 dates of service billed to TRICARE falsely using the name of a therapist as the treating provider who was on maternity leave at the time the services were supposedly provided.
“Rooting out health care fraud is critical to protecting the integrity of the health care system as a whole,” said U.S. Attorney Kenji M. Price. “TRICARE provides valuable health benefits to military families, and we are committed to vigorously prosecuting all providers who try to undermine our healthcare delivery systems by defrauding the government.”
“Health care fraud is a serious offense that costs Americans billions of dollars” said Chris D. Hendrickson, Special Agent in Charge, Defense Criminal Investigative Service, Western Field Office. “These crimes affect real people and erode the trust that should exist between a patient and their health care provider. DCIS and our law enforcement partners are committed and determined to doing everything it takes to ensure the health care system works for military families – and not those, whether health care providers or others, who seek to abuse the system.”
Harris was convicted of eleven counts of wire fraud, two counts of aggravated identity theft, and four counts of false statements relating to healthcare matters. Harris will face a mandatory term of two years in prison for aggravated identity theft, up to twenty years in prison for each count of wire fraud, and up to five years in prison for each count of false statements relating to health care matters when she is sentenced on August 20, 2018, by Senior U.S. District Judge Helen Gillmor.
The investigation was led by Defense Criminal Investigative Service and the FBI. Assistant U.S. Attorneys Rebecca Perlmutter and Gregg Paris Yates handled the prosecution.
Kaneohe Man Found Guilty of Federal Drug Trafficking CrimesRead the Press Release
HONOLULU – A federal jury today found Douglas Farrar, Sr., 54, of Kaneohe, guilty of four counts of federal drug trafficking crimes for his role as the leader of a local drug distribution organization. The verdict came a few hours after a four-day trial.
Kenji M. Price, U.S. Attorney for the District of Hawaii, said that according to information presented in court, between 2013 and 2014, Farrar conspired with others to purchase large quantities of methamphetamine and cocaine from sources in California and ship the drugs back to Hawaii for distribution. He hired others to work for him and help him import and sell the drugs. In one shipment in July of 2014, federal agents seized 32 pounds of methamphetamine and 4 kilograms of cocaine that Farrar had shipped into Hawaii, intending to sell it once it arrived.
Farrar was found guilty of conspiracy to distribute and to possess with the intent to distribute 50 grams or more of methamphetamine and 500 grams or more of cocaine. He was also found guilty of two counts of distributing 50 grams or more of methamphetamine, and one count of attempting to possess with the intent to distribute 50 grams or more of methamphetamine and 500 grams or more of cocaine. Farrar will face a mandatory minimum term of imprisonment of twenty years on each count when he is sentenced on August 20, 2018, by U.S. District Judge Susan Oki Mollway.
The investigation was led by Homeland Security Investigations, with assistance from the IRS and the Honolulu Police Department. Assistant U.S. Attorneys Mark Inciong and Amalia Fenton handled the prosecution.
Visitor to Haleakala National Park Found Guilty of Assault with a Dangerous Weapon and Assault by StrangulationRead the Press Release
HONOLULU – A federal jury yesterday found Matthew Berckmann, 44, guilty of assault with a dangerous weapon and assault of his spouse by strangulation. The verdict came a few hours after a four and a half day trial. Berckmann faces a maximum term of imprisonment of ten years on each count when he is sentenced on August 6, 2018, by U.S. District Judge Susan Oki Mollway.
Kenji M. Price, United States Attorney, said that according to information presented in court, while camping at Hosmer Grove Campground at Haleakala National Park on October 18, 2017, Berckmann threatened his wife with a large kitchen knife while pinning her to the ground by holding his forearm against her throat. Two eyewitnesses saw the assault and contacted 911. Berckmann was taken into custody by a Park Ranger, aided by two Maui Police Department officers.
The investigation was led by the National Park Service, with assistance from the FBI and the Maui Police Department. Assistant U.S. Attorneys Michael Albanese and Marion Percell handled the prosecution.
Former Maui Police Officer Pleads Guilty to Theft Under Color of Law and Witness TamperingRead the Press Release
HONOLULU – Former police officer Anthony Maldonado, of Kahului, Maui, pleaded guilty today in federal court to one count of Deprivation of Rights Under Color of Law in violation of Title 18, United States Code § 242, and one count of Conspiracy to Commit Witness Tampering in violation of Title 18, United States Code § 1512(k).
According to court documents and information presented in court, Officer Maldonado conducted a traffic stop at the Mala Wharf on Maui in September 2015. He used the opportunity to steal approximately $1,800 in cash from the fanny pack of the person who he stopped. When the victim later realized the cash was missing, he reported the theft to Maui police. After the report was filed, the defendant and four others attempted to bribe the victim to withdraw the complaint. Three co-defendants previously pled guilty to Conspiracy to Commit Witness Tampering.
"Law enforcement officers must uphold their pledge to protect the members of their communities and conduct themselves with honor," said Acting Assistant Attorney General John Gore of the Civil Rights Division. "The Justice Department will continue to enforce the law and protect the civil rights of all to be free from willful police misconduct."
"Everyone should be able to trust that an encounter with law enforcement will not result in theft," said Kenji M. Price, U.S. Attorney for the District of Hawaii. "No one is above the law, least of all police officers who are charged with protecting our community."
Maldonado’s sentencing is scheduled for August 23 before Senior U.S. District Judge Helen Gilmor. He faces up to 21 years in prison, a fine of up to $350,000, and a period of supervised release of up to three years.
The case was investigated by the Federal Bureau of Investigation, and was prosecuted by Trial Attorney Mary Hahn of the Civil Rights Division of the U.S. Department of Justice, and Assistant U.S. Attorney Marc A. Wallenstein from the U.S. Attorney’s Office for the District of Hawaii.
Oahu Physical Therapist Pleads Guilty to Health Care FraudRead the Press Release
HONOLULU – Garrett Okubo, of Honolulu, Hawaii, pled guilty today in federal court to four counts of health care fraud in violation of Title 18, United States Code, Section 1347.
According to court documents and information presented in court, Okubo was the owner and operator of a physical therapy business in Honolulu. From January 2011 through October 2017, Okubo submitted false claims for payment for physical therapy services to TRICARE, Medicare, Medicaid, and HMSA. Okubo submitted claims to these health care benefit programs using his unique provider number, thereby falsely stating that Okubo himself had personally provided the physical therapy services to his patients, when in reality the services were provided by Okubo’s unlicensed staff members, including at times when Okubo was travelling on the U.S. mainland or in a foreign country. The government alleges that Okubo billed approximately $5.5 million of false claims for services provided by his unlicensed staff members, of which approximately $3.7 million was actually paid. Okubo reserved the right to challenge the loss amount in his plea agreement.
Okubo’s sentencing is scheduled for August 6, 2018 before U.S. District Judge J. Michael Seabright. For each count, Okubo faces up to 10 years in prison, a fine of up to $250,000, and a period of supervised release of up to three years. Okubo agreed to pay restitution, and agreed to forfeit the proceeds of his unlawful activity, in amounts to be determined by the Court.
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 United States Attorney Marc A. Wallenstein.
Honolulu Man Sentenced to 57 Months for Defrauding University of HawaiiRead the Press Release
HONOLULU – U.S. District Court Judge Leslie E. Kobayashi sentenced Marc Hubbard, age 50, to 57 months in prison today for defrauding the University of Hawaii in violation of Title 18, United States Code, Section 1343. Hubbard pled guilty to the offense on October 4, 2016.
Kenji M. Price, U.S. Attorney for the District of Hawaii, said that according to court documents and information presented in court, in 2012, Hubbard falsely represented that he could book Stevie Wonder for a proposed concert to benefit the athletics program at the University of Hawaii. He made those false representations to an associate of his, whom he knew would relay them to the University. When his associate did so, in reliance on those false statements and to secure the concert, the University of Hawaii wired $250,000, and a supporter of the University wired an additional $50,000. The money was sent to Hubbard’s associate, and Hubbard personally received $147,500 of those funds, which he kept for himself and used for his own purposes.
The day before Hubbard was originally scheduled to be sentenced, he moved to withdraw his guilty plea. Judge Kobayashi gave Mr. Hubbard time to submit additional written materials, and then held a hearing during which Mr. Hubbard testified under oath, denying that he had committed fraud. After considering his testimony, and the evidence in the case, Judge Kobayashi denied Hubbard’s motion to withdraw his guilty plea. At today’s sentencing, Judge Kobayashi commented that Mr. Hubbard’s recent testimony was “completely opposite” the testimony he gave when he pled guilty. Because the testimony was so “diametrically opposed” to what Mr. Hubbard had previously stated, Judge Kobayashi found that Hubbard had willfully given false testimony and obstructed justice. She also found that he had failed to accept responsibility. Those determinations exposed Hubbard to a longer sentence.
Judge Kobayashi ordered that Hubbard’s 57-month sentence run consecutively to the 78-month sentence he is currently serving in another case in Pennsylvania. In imposing a consecutive sentence, Judge Kobayashi noted several aggravating factors. She highlighted the significance of the fraud on the local community, noting that it had “deeply wounded morale” at the University of Hawaii.
The case was investigated by the Federal Bureau of Investigation, and prosecuted by Assistant U.S. Attorney Marc A. Wallenstein.
Oahu Tax Preparer Pleads Guilty to Filing Fraudulent ReturnsRead the Press Release
HONOLULU – Guillermo Dahilig, of Waialua, Hawaii, pled guilty today in federal court to one count of aiding and assisting in the preparation and filing of false tax returns in violation of Title 26, United States Code, Section 7206(2).
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.
“During tax season, it’s especially important to remember that filing false tax returns is a crime,” said U.S. Attorney Kenji Price. “Our office is committed to prosecuting tax preparers who make a living by stealing from the government’s coffers.”
IRS-CI Acting Special Agent in Charge Troy Burrus stated, “This plea comes at a time when most Americans are filing their tax returns. Law abiding citizens deserve to know that IRSCI will investigate and prosecute those return preparers who use specialized knowledge of the tax laws for their own personal gains. Bad return preparers like Guillermo Dahilig, can cause problems for clients when they file fraudulent returns. It pays to be cautious when entrusting your tax affairs to others.”
Dahilig’s sentencing is scheduled for July 16, 2018 before U.S. District Judge Susan Oki Mollway. He faces up to three years in prison, a fine of up to $250,000, and a period of supervised release of up to one year. He agreed to pay restitution to the IRS in an amount determined by the Court for the taxes due from fraudulent tax returns filed between tax years 2010 and 2015 for himself and his clients.
The case was investigated by IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Amalia Fenton.
U.S. Attorney’s Office Commemorates National Crime Victims’ Rights Week, April 8-14Read the Press Release
HONOLULU – The United States Attorney’s Office in Hawaii, in commemoration of National Crime Victims’ Rights Week (NCVRW), April 8-14, 2018, is participating with the Department of Commerce and Consumer Affairs in a Financial Literacy Fair on April 4 from 10:00 a.m. to 1:00 p.m. at Tamarind Park at Bishop Square in Honolulu, to raise awareness about crime victims’ issues and rights and introduce the community to the important resources and services available. According to the most recent Bureau of Justice Statistics survey, victims experience more than five million violent crimes and nearly 15 million property victimizations a year.
The Office for Victims of Crime (OVC) of the U.S. Department of Justice leads communities throughout the country in their annual observances of National Crime Victims’ Rights Week, April 8-14, by promoting victims’ rights and honoring crime victims and those who advocate on their behalf. This year’s theme—Expand the Circle: Reach All Victims—highlights how the investment of communities in crime victims expands the opportunity for victims to disclose their victimization, connect with services, and receive the support they need. The theme also acknowledges the many barriers facing victims of crime especially those with disabilities, LGBTQ victims, older adults, speakers with limited English proficiency, American Indians and Alaska Natives, and others from historically marginalized communities.
The U.S. Attorney’s Office and OVC encourage widespread participation in the week’s events and in other victim-related observances throughout the year. The U.S. Department of Justice will host OVC’s annual National Crime Victims’ Service Awards Ceremony in Washington, D.C., to honor outstanding individuals and programs that serve victims of crime. Please call 855-4-VICTIM (842846) or visit www.VictimConnect.org for additional information about victims’ rights and options – confidentially. You may also contact the U.S. Attorney’s Office, District of Hawaii, Victim Witness Program at 808-541-2850 or visit the OVC website, www.ovc.gov.
Maui Man Sentenced for Theft from U.S. Department of Veteran's AffairsRead the Press Release
HONOLULU – United States District Court Judge J. Michael Seabright sentenced Cody Joslin, age 32,
to 18 months in prison today for theft of funds from the U.S. Department of Veteran’s Affairs (the
“VA”). Joslin pleaded guilty on October 24, 2017, to receiving VA benefits to which he was not
entitled by falsely claiming that he suffered from combat-related injuries and trauma.“The VA provides valuable services to the men and women who serve this country, but like all
government agencies, it is susceptible to abuse by dishonest people,” said Kenji Price, United
States Attorney for the District of Hawaii. “Our office will continue to investigate and prosecute
to the fullest extent of the law those who use deception to obtain vital resources that should
rightfully go to veterans who are truly in need.”“This conviction demonstrates the VA Office of Inspector General’s unwavering commitment to protect
the programs intended to assist veterans that have served this nation and rightfully earned their
benefits,” said Special Agent in Charge James Wahleithner, VA Office of Inspector General, Criminal
Investigations Division.According to court documents and information presented in court, Joslin was in the U.S. Army for
approximately nine months, and never served in a combat zone or overseas.
Nevertheless, Joslin submitted paperwork to the VA claiming that he suffered from Post- Traumatic
Stress Disorder and tinnitus as a result of multiple combat tours in Iraq and Afghanistan. To
support these claims, he fabricated stories about engaging in active combat, and about witnessing
combat-related deaths of friends, and injuries from rocket propelled grenades (RPGs). Joslin also
submitted fake military certifications purporting to show that he received certain combat awards.
He purchased these certifications online from a veteran who had been previously convicted for
possession and sale of counterfeit U.S. documents. As a result of these false claims, Joslin
received over $48,000 in VA disability benefits to which he was not entitled.At today’s sentencing, Judge Seabright commented that Joslin had engaged in a “gross abuse” of the
VA system by claiming he was a “war hero” when he wasn’t, conduct Judge Seabright called
“reprehensible on many levels.” In addition to a term of imprisonment, Joslin
must also pay $48,595.11 in restitution to the VA.The case was investigated by the VA Office of the Inspector General and prosecuted by
Assistant United States Attorney Rebecca A. Perlmutter.Bank Robber Sentenced to over 15 Years in PrisonRead the Press Release
HONOLULU – WALLACE J. SILVA, JR., 64, was sentenced on February 15, 2018, to 188 months imprisonment by United States District Judge Leslie E. Kobayashi for committing four bank robberies in Honolulu in December 2016. Silva pled guilty to those charges on April 19, 2017, before Judge Kobayashi.
Kenji M. Price, United States Attorney for the District of Hawaii, said that according to the information produced before the court, Silva, during December 2016, went on a crime spree where he committed ten bank robberies in Honolulu. Although the indictment charged only four of those ten bank robberies, and Silva pled guilty to only those four, as part of the plea agreement he admitted to committing all ten bank robberies and agreed to make restitution for all ten robberies. Silva robbed First Hawaiian Bank, Bank of Hawaii, and American Savings Bank of a total of about $32,000. The court ordered Silva to pay restitution in the amounts of $1,990 to First Hawaiian Bank, $8,480 to Bank of Hawaii, and $20,281 to American Savings Bank.
According to information produced to the court, Silva had two previous bank robbery convictions in two entirely separate cases. In 1997, Silva received a prison sentence of 112 months for one bank robbery. In 2005, five days after Silva completed that prison sentence and while he was on supervised release for it, he began committing more bank robberies. He later pleaded guilty to committing four bank robberies, and, on September 6, 2007, he was sentenced to a term of imprisonment of 151 more months in prison. The bank robberies for which Silva received his most recent sentence began within four months after his release in August 2016. Silva admitted during the sentencing hearing that he viewed committing a bank robbery as "going to work."
The Federal Bureau of Investigation, Honolulu Police Department, and United States Marshals Service conducted the investigation that resulted in these convictions. Assistant U.S. Attorney Marshall Silverberg handled the prosecution.
Justice Department Reaches Settlement with the City and County of Honolulu and All Island Automotive Towing for Illegally Auctioning Servicemembers’ CarsRead the Press Release
WASHINGTON – The Justice Department today announced it has reached an agreement with the City and County of Honolulu, Hawaii (Honolulu or the City) and its contracted towing company, All Island Automotive Towing (All Island Towing), to remedy alleged violations of the Servicemembers Civil Relief Act (SCRA). The Department’s lawsuit, filed Feb. 15, 2018, alleges that Honolulu and All Island Towing violated the SCRA by auctioning or otherwise disposing of cars owned by protected servicemembers without first obtaining the required court orders.
Under the agreement, Honolulu must adopt new SCRA-compliant procedures, compensate three servicemembers who complained to military legal assistance attorneys that the City had unlawfully auctioned off their cars while they were at sea aboard Navy ships, and establish a $150,000 settlement fund to compensate other servicemembers whose SCRA rights may have been violated.
The Department launched its investigation after receiving a referral from military legal assistance officer Geoffrey Irving, now a Captain in the United States Marines, alleging that Honolulu had auctioned a marine’s vehicle while he was deployed. Two Navy legal assistance attorneys, Ms. Sarah Courageous and Lieutenant Commander (LCDR) Lena Whitehead, also requested that the Department investigate Honolulu on behalf of servicemembers whose vehicles had been auctioned while they were deployed. For more than five years, Ms. Courageous and LCDR Whitehead sent letters to Honolulu’s Corporation Counsel explaining that auctioning active-duty servicemembers’ cars without court orders violated the SCRA, but Honolulu continued the practice.
Marine Staff Sergeant (SSgt.) Orrin Sanford’s car was auctioned while he was aboard a U.S. Navy ship en route to Camp Foster in Okinawa, Japan. The vehicle, which was towed from the street in front of his home, had decals in the front windshield that are distributed only to Department of Defense employees for base access. Honolulu mailed a notice to SSgt. Sanford’s base address that it had taken his car into custody, but by the time the notice reached the ship, the City had already auctioned off the car. SSgt. Sanford’s military legal assistance attorney notified Honolulu that it had violated the SCRA and requested reimbursement for the vehicle, but Honolulu refused. As a result of Honolulu’s actions, SSgt. Sanford has had to continue making payments on a car that he no longer owns.
Navy Chief Petty Officer (CPO) Timothy Hartzog was also aboard a U.S. Navy ship when he learned that his car had been towed by Pinky Tows, a subcontractor of All Island Towing. CPO Hartzog executed a Power of Attorney aboard the ship designating a fellow chief petty officer as his agent. Pinky Tows refused to release the vehicle to that officer or to allow him to retrieve valuable tools and personal items from the trunk. All Island Towing then disposed of the vehicle and its contents. In addition to losing valuable tools and irreplaceable personal items, CPO Hartzog had to continue making payments on a car he no longer owned.
Navy Petty Officer Second Class (PO2) Cheri Tarbet was at the end of a six month deployment to the South Pacific when her roommate told her that her car was no longer parked on the street in front of their home. When PO2 Tarbet returned to Honolulu the following month, she attempted to report the car as stolen and learned from the police department that the car had been auctioned by Honolulu. PO2 Tarbet never received a notice from Honolulu that it had taken her vehicle into custody. A military legal assistance officer sent a letter to Honolulu indicating that PO2 Tarbet was an active-duty servicemember and requested restitution, but Honolulu refused to provide any reimbursement.
The Department’s investigation revealed that between 2011 and 2016, Honolulu auctioned 1,440 cars registered to individuals who had identified themselves as servicemembers on City forms during the motor vehicle registration process. Honolulu’s new procedures will ensure that servicemembers receive notice that their car has been taken into custody by Honolulu, even if they are deployed off island, and requires the City to obtain a court order or a valid SCRA waiver prior to auctioning a car owned by an active-duty servicemember.
“The Justice Department is committed to working tirelessly to protect the rights of the servicemembers who make great personal sacrifices in service to our country,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “We appreciate that Honolulu and All Island Towing have been working cooperatively with the Department to reach a settlement that compensates servicemembers who lost their cars and personal possessions and that provides ongoing protections for the thousands of servicemembers stationed in Honolulu.”
“My office will continue to work with the Civil Rights Division to ensure that servicemembers who dedicate their lives to preserving our security and freedom do not forfeit their rights in doing so,” said U.S. Attorney Kenji M. Price of the District of Hawaii.
The SCRA protects servicemembers from certain civil proceedings that could affect their legal rights while they are in military service. One of those protections is the requirement that a person holding a lien on the property or effects of an active-duty servicemember obtain a court order prior to enforcing the lien. By failing to secure court orders before auctioning or disposing of cars owned by protected servicemembers, Honolulu and All Island Towing prevented servicemembers from obtaining a court’s review of whether the auction should be delayed or adjusted to account for their military service.
The SCRA also provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the Department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their SCRA rights have been violated should contact their nearest Armed Forces Legal Assistance Program Office. Office locations may be found at legalassistance.law.af.mil/content/locator.php.
FDC Inmate Found Guilty of Assault Resulting in Serious Bodily InjuryRead the Press Release
HONOLULU – A federal jury yesterday found Taloa Latu, 28, guilty of assault resulting in serious bodily injury. The verdict came a few hours after a two and a half day trial. Latu faces a maximum term of imprisonment of ten years when he is sentenced on June 4, 2018, by Chief U.S. District Judge J. Michael Seabright.
Kenji M. Price, United States Attorney, said that according to information produced in court, surveillance camera footage showed Latu, a State of Hawaii inmate housed at the Federal Detention Center ("FDC"), Honolulu, repeatedly punching, kicking, and stomping the victim on September 11, 2016, at FDC. 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.
The investigation in this case was led 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.
Former University of the Nations CFO Sentenced to 115 Months in Prison for Wire FraudRead the Press Release
HONOLULU – Pablo M. Rivera, age 42, formerly a resident of Colorado and Hawaii, was sentenced today to 115 months in federal prison for committing a wire fraud offense by which he obtained approximately $3,096,241 from the University of the Nations (UOFN) on the island of Hawaii.
Kenji M. Price, United States Attorney for the District of Hawaii, said that according to documents filed in this case and information presented in court, Rivera served as Chief Financial Officer for UOFN from July 2014 to January 2017. During that time, UOFN had construction projects on its campus, and invoices were sent to Rivera for his approval. According to the Criminal Information, Rivera created a scheme under which he persuaded a contractor to allow him to have signatory authority over its account. Rivera then created and submitted false invoices to UOFN, approved them, and took money from the contractor’s account once funds were transferred by UOFN. Rivera pled guilty to wire fraud in May 2017.
At today’s sentencing, Senior U.S. District Judge Susan Oki Mollway found that Rivera abused a position of trust, and took advantage of others to steal millions from UOFN. Judge Mollway noted that Rivera did not need to defraud UOFN to make ends meet, and had used the fraud proceeds to buy a gold mine in Africa, stocks and diamonds, and to pay for spa treatments. Judge Mollway also found that, when the government suggested he was hiding diamonds, Rivera submitted a fraudulent and altered email to the Court, which constituted an attempt to obstruct justice. Citing the need to protect the public from Rivera’s future crimes, Judge Mollway sentenced him to 115 months in jail, which will be followed by a 36-month term of supervised release. Rivera was also ordered to pay UOFN $3,128,194 in restitution, which included the university’s losses, and costs of investigation. Rivera will also be ordered to forfeit various assets and accounts traceable to his fraud scheme.
Rivera has been in custody at the Federal Detention Center in Honolulu since December 2017, and remains there pending designation of a facility on the mainland.
The case was investigated by the Federal Bureau of Investigation, and was prosecuted by by Assistant U.S. Attorney Michael Nammar.
Attorney General Jeff Sessions Appoints Kenji Price as Interim United States AttorneyRead the Press Release
HONOLULU -- Attorney General Jeff Sessions today announced the appointment of Kenji Price as Interim United States Attorney pursuant to 28 U.S.C. § 546, which provides that “the Attorney General may appoint a United States Attorney for the district in which the office of United States Attorney is vacant.” This appointment will take effect on January 5, 2018.
“Kenji Price is a former Army Ranger with two Bronze stars, and a former federal prosecutor who worked organized crime, public corruption, and international drug trafficking cases—including against the Sinaloa Cartel,” said Attorney General Sessions. “He will bring this outstanding background to the job of Interim U.S. Attorney for Hawaii. I am confident he will excel in this role as he has in every other.”
Mr. Price grew up in Hawaii and is currently a director at Alston Hunt Floyd & Ing, where his practice focuses on white collar criminal defense and commercial litigation. Prior to joining Alston Hunt Floyd & Ing, Mr. Price was a Partner and Of Counsel at Carlsmith Ball LLP, in Honolulu, Hawaii. Mr. Price previously served as an Assistant United States Attorney in the Eastern District of New York, where he prosecuted a variety of cases involving domestic and international narcotics trafficking and other federal offenses. He clerked for the Honorable Kent A. Jordan of the United States Court of Appeals for the Third Circuit, and the Honorable Robert B. Kugler of the United States District Court for the District of New Jersey. Mr. Price completed his undergraduate studies at Gonzaga University, and obtained his J.D. from the University of Pennsylvania Law School. He also served as an officer in the U.S. Army for approximately four years, during which he served as a member of the 75th Ranger Regiment and the 173rd Airborne Brigade.
Upon the appointment of Mr. Price as Interim United States Attorney, Acting United States Attorney Elliot Enoki will resume his role as First Assistant United States Attorney.
Honolulu Man Sentenced to 80 Months for Transporting Child PornographyRead the Press Release
HONOLULU – United States District Court Judge Leslie E. Kobayashi sentenced Beei-Huan Chao, age 62, to 80 months in prison today for transporting child pornography in violation of Title 18, United States Code, Section 2252(a)(1). Chao, who was formerly employed as a professor at the University of Hawaii at Manoa, pled guilty to the offense on May 30, 2017.
Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that according to court documents and information presented in court, in February of 2016, Chao was using a file sharing program called Vuze to obtain child pornography over the internet and share it with others. On February 11, 2016, a FBI agent working in an undercover capacity connected with Chao’s computer and downloaded 14 videos from Chao, all of which depicted child pornography. Agents executed a search warrant at Chao’s residence in June of 2016 and found more than 500 images of child pornography on his electronic devices.
At today’s sentencing, Judge Kobayashi commented that Chao’s conduct helped fuel a business that exploits minors and subjects them to humiliation. Judge Kobayashi also noted that the amount and type of child pornography Chao transported was an aggravating factor. In addition to sentencing Chao to 80 months in prison, Judge Kobayashi also imposed a ten-year term of supervised release and ordered Chao to pay a $35,000 fine. Chao must also register as a sex offender in any jurisdiction where he resides.
The case was investigated by the Federal Bureau of Investigation, and prosecuted by Assistant United States Attorney Michael Nammar.
Anil Uskanli Sentenced for Interference with Flight CrewRead the Press Release
HONOLULU – Anil Uskanli, age 26, of Turkey, was sentenced today to time-served (six months) in federal prison, and ordered to pay restitution of $8,525.00 for interfering with American Airlines flight crew members and attendants while aboard a May 19, 2017 flight from Los Angeles, California to Honolulu, Hawaii.
Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that Uskanli was arrested upon the flight’s arrival in Honolulu, after ignoring directions from flight attendants, yelling, pounding bathroom walls, and pushing against a drink cart positioned to prevent access to the cockpit. According to information presented in court, Uskanli carried a laptop while advancing towards the cockpit, causing fear that he was carrying an explosive. Flight attendants were required to ask passengers for help restraining Uskanli, and the pilot initiated emergency and bomb threat procedures. Two military fighter jets were dispatched from Joint Base Pearl Harbor-Hickam to escort the flight to a safe landing.
Uskanli was ordered detained following his arrest. After being determined competent to stand trial, Uskanli pled guilty to interfering with a flight crew. Uskanli claimed that his conduct was the result of mental illness.
At today’s sentencing, United States District Judge Derrick K. Watson sentenced Uskanli to six months in federal prison, the amount of time that he has served since his arrest. Uskanli was also ordered to pay restitution in the amount of $8,525.00 to American Airlines for the cost of a delayed return flight, flight crew expenses, and passenger inconvenience. The Court also ordered that Uskanli be placed under a term of supervised release for three years, the maximum term available by statute for this offense.
This case was investigated by the Federal Bureau of Investigation, with assistance from U.S. Department of Homeland Security, the State of Hawaii Department of Public Safety Sheriff’s Office, the Los Angeles Police Department and the Los Angeles Airport Police. It was prosecuted by Assistant United States Attorney Morgan Early.
Two Women Indicted and Arrested on Charges of Embezzling from Molokai Federal Credit UnionRead the Press Release
HONOLULU – Allennie Naeole, 55, a resident of Kaunakakai, Hawaii, and Janell Purdy, 40, a resident of Wailuku, Maui, were arrested on November 13, 2017, as a result of a federal indictment charging them with embezzling more than $1 million from a Molokai federal credit union over a seven year period of time.
Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that a federal grand jury returned a fifteen-count indictment against Naeole and Purdy on November 8, 2017. The indictment charged both individuals with conspiring to embezzle, and embezzling, funds belonging to the First Hawaiian Homes Credit Union ("First Hawaiian Homes") on Molokai between 2008 and 2015. According to the indictment, Naeole and Purdy were the only two permanent employees of First Hawaiian Homes, and were responsible for conducting all of its banking transactions and maintaining its books and records. The indictment alleges that the two individuals issued checks from First Hawaiian Homes’ accounts to pay personal expenses for Naeole and her family members, including credit card bills and car payments. Naeole and Purdy also withdrew more money than was on deposit in their own bank accounts and those belonging to their family members, and used the money to pay personal expenses. The withdrawals created negative balances in the accounts, which Naeole and Purdy concealed by making fictitious entries in First Hawaiian Homes’ records.
The indictment also alleges that Naeole took steps to conceal the embezzlements from First Hawaiian Homes’ board of directors and the National Credit Union Administration ("NCUA"), which insured its assets. According to the indictment, Naeole falsified records, created a letter bearing a forged signature and falsely claiming that First Hawaiian Homes had assets at another bank, and created a fictitious email account to communicate with the NCUA.
The indictment charges both individuals with one count of conspiracy and six counts of embezzlement, and Naeole with one count of making a false document and one count of aggravated identity theft. An indictment is merely an accusation, and Naeole and Purdy are presumed innocent until and unless proven guilty. If convicted, the defendants face up to thirty years’ of imprisonment and a fine of up to $1,000,000, as to each of the embezzlement charges, and up to five years’ imprisonment and a fine of up to $250,000 for the conspiracy charge. Naeole separately faces up to five years’ imprisonment and a fine of up to $250,000 for the false document charge, and a mandatory two-year term of imprisonment and a fine of up to $250,000 for the aggravated identity theft charge.
Naeole was arrested on Molokai, and Purdy was arrested on Maui. Purdy was brought to federal court, where she pled not guilty to all charges and was released on bail. Trial was set for January 9, 2018 before United States District Judge Derrick K. Watson. Naeole will be arraigned on the charges on November 14, 2017.
The case was investigated by the Federal Bureau of Investigation and the Treasury Department, Office of Inspector General, with assistance from the Maui County Police Department. The case is being prosecuted by Assistant U.S. Attorney Rebecca A. Perlmutter.
DEA Joins Local Law Enforcement Partners in Nationwide Take Back of Opioids and Other Prescription DrugsRead the Press Release
WASHINGTON – The Drug Enforcement Administration will join forces tomorrow with more than 4,000 local, tribal, and community partners at more than 5,000 collection sites to collect potentially dangerous expired, unused, and unwanted prescription drugs. The effort will help prevent these drugs, including opioids, from falling into the wrong hands and contributing to a lethal drug abuse epidemic in the United States.
On Saturday, Oct. 28, 2017, from 10:00 a.m. to 2:00 p.m. local time, individuals can take pills and other solid forms of medication at nearby collection sites (DEA cannot accept liquids, needles or sharps), which can be located at www.DEATakeBack.com or by calling 800-882-9539. The service is free and anonymous, no questions asked.
The DEA action comes just days after President Donald J. Trump announced the mobilization of his entire Administration to address drug addiction and opioid abuse by directing the declaration of a Nationwide Public Health Emergency to address the opioids crisis.
"Today the United States is facing the worst drug crisis in our history, as more Americans are dying from drug overdoses than ever before," said Attorney General Jeff Sessions. "We lose one American life to drugs every nine minutes. This crisis affects every American, as it is filling up our emergency rooms, our foster homes, and our cemeteries.
"President Trump is right to make this issue a top priority for his administration, and his plan will make a difference for millions of Americans. It will help those suffering from addiction get the treatment they need and prevent many new addictions from starting in the first place. I commend him for recognizing the public health emergency that this is."
"This Department of Justice is committed to doing its part to turn the tide. This year we have conducted the largest opioid-related health care fraud takedown in American history, charging some 120 defendants with opioid-related crimes. Since then I have taken additional steps to stop opioid-related fraud, creating a new data analytics team that can find evidence of overprescribing, and appointing 12 prosecutors to focus solely on this issue. I firmly believe that these steps will prevent drug abuse and addiction and save American lives.
"We will continue to do our part in this effort, prosecuting drug traffickers and those who exploit vulnerable people suffering from addiction, so that every American can be safe and live out their God-given potential."
On Oct. 17, the Justice Department announced the indictments of two Chinese nationals and their North American based traffickers and distributors for separate conspiracies to distribute large quantities of fentanyl and fentanyl analogues and other opiate substances in the United States. In July, the department announced the seizure of the largest criminal marketplace on the Internet, AlphaBay, which operated for over two years on the dark web and was used to sell deadly illegal drugs, including synthetic opioids like fentanyl, throughout the world. The international operation was led by the United States and involved cooperation with law enforcement authorities around the world.
In addition, DEA this week announced the formation of six new heroin enforcement teams in hard hit areas such as West Virginia, Ohio, North Carolina, New York and Massachusetts.
The Take-Back initiative by the DEA addresses a vital public safety and public health issue. Medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet. DEA launched its prescription drug take back program when both the Environmental Protection Agency and the Food and Drug Administration advised the public that their usual methods for disposing of unused medicines—flushing them down the toilet or throwing them in the trash—posed potential safety and health hazards.
"Disposing of leftover painkillers or other addictive medicines in the house is one of the best ways to prevent a member of your family from becoming a victim of the opioid epidemic," said DEA Acting Administrator Robert W. Patterson. "More people start down the path of addiction through the misuse of opioid prescription drugs than any other substance. The abuse of these prescription drugs has fueled the nation’s opioid epidemic, which has led to the largest rate of overdose deaths this country has ever seen."
Last April the public turned in 450 tons (900,000 pounds) of prescription drugs at almost 5,500 sites operated by the DEA and more than 4,200 of its state and local law enforcement partners. Overall, in its 13 previous Take Back events, DEA and its partners have taken in over 8.1 million pounds—more than 4,050 tons—of pills.
Honolulu Husband and Wife Sentenced to 24 Months in Prison for Filing False Tax ReturnsRead the Press Release
HONOLULU – United States District Court Judge Leslie E. Kobayashi sentenced Lorraine Yamauchi, age 70, and Jiitsu Yamauchi, age 63, of Honolulu, each to 24 months in prison yesterday for filing a false tax return in violation of Title 26, United States Code, Section 7206(1). The Yamauchis pled guilty to the offense on June 23, 2017.
Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that according to documents filed in this case and information made public during the sentencing hearing, the Yamauchis operated an Oahu-based church. Jiitsu Yamauchi served as the church’s bishop and Lorraine Yamauchi served as the church’s bookkeeper. The Yamauchis accepted millions of dollars in donations from church members and used a large portion of those donations for their own personal benefit. When filing their tax returns for tax years 2008 through 2014, the Yamauchis failed to include approximately $2.3 million of church-related income. Pursuant to the terms of their plea agreement, the Yamauchis have already paid restitution to the Internal Revenue Service (IRS) in the amount of $621,986.
At sentencing, Judge Kobayashi commented that the Yamauchis abused a position of trust to steal from the members of their church. Judge Kobayashi also noted that the Yamauchis used church donations to support their own personal lifestyle, which included buying 25 luxury vehicles and a 4.2 carat diamond ring. In addition to sentencing both Lorraine and Jiitsu Yamauchi to 24 months in prison, Judge Kobayashi also sentenced each of them to a 12-month term of supervised release.
Acting United States Attorney Enoki stated, "This office will vigorously prosecute fraud and tax crimes where defendants exploit the public’s well-intended desire to be charitable." IRS-Criminal Investigation Special Agent in Charge Darrell J. Waldon said that "IRS – Criminal Investigation is committed to investigating individuals who use charities as their own personal piggy banks. We are pleased that the Yamauchis will be held accountable for using donations for their own personal gain."
The case was the result of a lengthy investigation conducted by IRS-Criminal Investigation. The case was prosecuted by Assistant U.S. Attorney Michael Nammar.
Attorney General Jeff Sessions Announces Reinvigoration of Project Safe Neighborhoods and Other Actions to Reduce Rising Tide of Violent CrimeRead the Press Release
HONOLULU -- Today, Attorney General Jeff Sessions announced several Department of Justice actions to reduce the rising tide of violent crime in America. Foremost of those actions is the reinvigoration of “Project Safe Neighborhoods,” 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.
In announcing this recommitment to Project Safe Neighborhoods, the Attorney General issued a memo directing United States Attorneys to implement an enhanced violent crime reduction program that incorporates the lessons learned since Project Safe Neighborhoods launched in 2001.
In a statement on the program, the Attorney General said:
According to the FBI, the violent crime rate has risen by nearly seven percent over the past two years, and the homicide rate has risen by more than 20 percent. We cannot be complacent or hope that this is just an anomaly: we have a duty to take action.
Fortunately, we have a President who understands that and has directed his administration to reduce crime. The Department of Justice today announces the foundation of our plan to reduce crime: prioritizing Project Safe Neighborhoods, a program that has been proven to work.
Let me be clear – Project Safe Neighborhoods is not just one policy idea among many. This is the centerpiece of our crime reduction strategy.
Taking what we have learned since the program began in 2001, we have updated it and enhanced it, emphasizing the role of our U.S. Attorneys, the promise of new technologies, and above all, partnership with local communities. With these changes, I believe that this program will be more effective than ever and help us fulfill our mission to make America safer.
The Attorney General also announced the following Department of Justice initiatives to help reduce violent crime:
- Additional Assistant United States Attorney Positions to Focus on Violent Crime – The Department is allocating 40 prosecutors to approximately 20 United States Attorney’s Offices to focus on violent crime reduction.
- More Cops on the Streets (COPS Hiring Grants) – As part of our continuing commitment to crime prevention efforts, increased community policing, and the preservation of vital law enforcement jobs, the Department will be awarding approximately $98 million in FY 2017 COPS Hiring Grants to state, local, and tribal law enforcement agencies.
- Organized Crime and Drug Enforcement Task Force’s (OCDETF) National Gang Strategic Initiative –The National Gang Strategic Initiative promotes creative enforcement strategies and best practices that will assist in developing investigations of violent criminal groups and gangs into enterprise-level OCDETF prosecutions. Under this initiative, OCDETF provides “seed money” to locally-focused gang investigations, giving state, local, and tribal investigators and prosecutors the resources and tools needed to identify connections between lower-level gangs and national-level drug trafficking organizations.
- Critical Training and Technical Assistance to State and Local Partners – The Department has a vast array of training and technical assistance resources available to state, local and tribal law enforcement, victims groups, and others. To ensure that agencies in need of assistance are able to find the training and materials they need, the Office of Justice Programs will make available a Violence Reduction Response Center to serve as a “hot line” to connect people to these resources.
- Crime Gun Intelligence Centers (CGIC) – The Department has provided grant funding to support a comprehensive approach to identifying the most violent offenders in a jurisdiction, using new technologies such as gunshot detection systems combined with gun crime intelligence from NIBIN, eTrace, and investigative efforts. These FY 2017 grants were awarded to Phoenix, AZ, and Kansas City, MO.
- Expand ATF’s National Integrated Ballistic Information Network (NIBIN) Urgent Trace Program – The Department will expand ATF’s NIBIN Urgent Trace Program nationwide by the end of the year. Through this program, any firearm submitted for tracing that is associated with a NIBIN “hit” (which means it can be linked to a shooting incident) will be designated an “urgent” trace and the requestor will get information back about the firearm’s first retail purchaser within 24 hours, instead of 5 to 6 business days.
Owner of Engineering Firms and CPA Charged with Tax CrimesRead the Press Release
HONOLULU – A federal grand jury has returned an indictment charging two individuals with tax crimes including concealing income and assets, obstructing the Internal Revenue Service (IRS) from assessing and collecting taxes, and filing false tax returns, announced Acting United States Attorney Elliot Enoki and Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
The indictment charges Wagdy A. Guirguis, the owner of various engineering firms, and Michael H. Higa, his accountant, with conspiring to defraud the IRS. The indictment further charges Guirguis with filing false corporate tax returns, failing to file a corporate tax return, evading his individual income tax liabilities, corruptly endeavoring to obstruct the IRS, and tampering with a grand jury witness. Higa is also charged with aiding and assisting in the filing of false corporate and individual tax returns.
According to the indictment, Guirguis owned and operated GMP Associates Inc. and several other businesses (GMP) that provided engineering services. Higa, a certified public accountant, allegedly served as the controller of the GMP entities and prepared individual tax returns for Guirguis as well as corporate tax returns for some of the GMP entities.
The indictment charges that, beginning in 2005, Guirguis and Higa conspired to defraud the IRS by impeding its ability to assess Guirguis’s and GMP’s income tax liabilities and obstructing its ability to collect GMP’s unpaid employment taxes. According to the indictment, the IRS assessed approximately $812,000 in GMP’s unpaid employment taxes against Guirguis personally. The indictment alleges that the IRS attempted to collect the unpaid employment taxes – filing notices of federal tax liens, levying bank accounts and serving notices of levy to third parties who owed money to Guirguis. To thwart the IRS’s collection activity, Guirguis and Higa allegedly transferred funds from GMP to a nominee entity that Guirguis secretly controlled through Higa. The indictment further alleges that Guirguis fraudulently transferred ownership of a luxury condominium to his wife and used the nominee entity to divert approximately $1.5 million for his and his wife’s personal benefit. After an IRS revenue officer questioned the condominium transfer, Guirguis and Higa allegedly instructed a bookkeeper to alter the books and records of the nominee entity to conceal that he had diverted funds for his personal benefit.
The indictment further charges that Guirguis did not report more than $3 million of GMP’s gross receipts and filed false individual tax returns that did not report approximately $465,000 of the income he diverted through the nominee entity. He is also charged with attempting to tamper with a witness during the course of the grand jury’s investigation and corruptly endeavoring to obstruct and impede the IRS, by among other things, making false statements to an IRS revenue officer and special agents.
If convicted, Guirguis and Higa each face a statutory maximum sentence of five years in prison for engaging in the conspiracy. Guirguis also faces a statutory maximum prison sentence of five years for each of the tax evasion counts, three years for each of the false returns counts, three years for the corrupt endeavor count, one year for the failure-to-file count, and 20 years for the witness tampering count. Higa also faces a statutory maximum prison sentence of three years for each of the aiding and assisting counts. In addition, Guirguis and Higa each face a period of supervised release, restitution, and monetary penalties.
An indictment is a mere accusation, and not evidence of guilt.. Individuals charged in indictments are presumed innocent unless and until proven guilty beyond a reasonable doubt.
Acting U.S. Attorney Enoki and Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Senior Litigation Counsel John E. Sullivan and Trial Attorney Anahi Cortada of the Tax Division, and Assistant U.S. Attorney Rebecca A. Perlmutter, who are prosecuting the case.
Owner of Engineering Firms and CPA Charged in Hawaii with Tax CrimesRead the Press Release
A federal grand jury in the District of Hawaii returned an indictment charging a businessman and his accountant with tax crimes including allegedly concealing income and assets to obstruct Internal Revenue Service (IRS) collection, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Elliot Enoki for the District of Hawaii.
The indictment charges Wagdy A. Guirguis and Michael H. Higa with conspiring to defraud the IRS. The indictment further charges Guirguis with filing false corporate tax returns, failing to file a corporate tax return, evading his individual income tax liabilities, corruptly endeavoring to obstruct the IRS and tampering with a grand jury witness. Higa is also charged with aiding and assisting in the filing of false corporate and individual tax returns.
According to the indictment, Guirguis owned and operated GMP Associates Inc. and several other businesses (GMP) that provided engineering services. Higa, a certified public accountant, allegedly served as the controller of the GMP entities and prepared individual tax returns for Guirguis as well as corporate tax returns for some of the GMP entities.
The indictment charges that, beginning in 2005, Guirguis and Higa conspired to defraud the IRS by impeding its ability to assess Guirguis’s and GMP’s income tax liabilities and obstructing its ability to collect GMP’s unpaid employment taxes. According to the indictment, the IRS assessed approximately $812,000 in GMP’s unpaid employment taxes against Guirguis personally. The indictment alleges that the IRS attempted to collect the unpaid employment taxes – filing notices of federal tax liens, levying bank accounts and serving notices of levy to third parties who owed money to Guirguis. To thwart the IRS’s collection activity, Guirguis and Higa allegedly transferred funds from GMP to a nominee entity that Guirguis secretly controlled through Higa. The indictment further alleges that Guirguis fraudulently transferred ownership of a luxury condominium to his wife and used the nominee entity to divert approximately $1.5 million for his and his wife’s personal benefit. After an IRS revenue officer questioned the condominium transfer, Guirguis and Higa allegedly instructed a bookkeeper to alter the books and records of the nominee entity to conceal that he had diverted funds for his personal benefit.
The indictment further charges that Guirguis did not report more than $3 million of GMP’s gross receipts and filed false individual tax returns that did not report approximately $465,000 of the income he diverted through the nominee entity. He is also charged with attempting to tamper with a witness during the course of the grand jury’s investigation and corruptly endeavoring to obstruct and impede the IRS, by among other things, making false statements to an IRS revenue officer and special agents.
If convicted, Guirguis and Higa each face a statutory maximum sentence of five years in prison for engaging in the conspiracy. Guirguis also faces a statutory maximum prison sentence of five years for each of the tax evasion counts, three years for each of the false returns counts, three years for the corrupt endeavor count, one year for the failure‑to‑file count, and 20 years for the witness tampering count. Higa also faces a statutory maximum prison sentence of three years for each of the aiding and assisting counts. In addition, Guirguis and Higa each face a period of supervised release, restitution, and monetary penalties.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Enoki thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Senior Litigation Counsel John E. Sullivan and Trial Attorney Anahi Cortada of the Tax Division, and Assistant U.S. Attorney Rebecca A. Perlmutter, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Christopher Fox Arrested for Various Internet Crimes Against ChildrenRead the Press Release
HONOLULU – Christopher Ernest Fox, age 20, was arrested and had his Initial Appearance today on a Criminal Complaint filed in the United States District Court for the District of Hawaii. The Complaint charges him with five violations of federal law, including the transfer of obscene material to a minor under the age of 16, production of child pornography, cyberstalking, and distribution and possession of child pornography. The crime of production of child pornography carries a mandatory minimum of 15 years in prison.
According to Acting United States Attorney Elliot Enoki, the Complaint states that between August and November of 2016, Fox corresponded with a minor female in the United Kingdom using social media applications including Instagram and Snapchat. During the time the two were in contact, the girl turned thirteen years old and confirmed her age to Fox. Fox stated that he did not mind the age difference, and told her that he wanted to marry her when she turned 18 years old. During these discussions, Fox solicited information from the minor about her life, including the names of her friends.
According to the Complaint, after being in contact for several weeks, Fox sent sexually explicit photos and videos of himself to the minor female, and encouraged her to send sexually explicit photos of herself in return.
According to the Complaint, once in possession of these photos of the minor female, Fox threatened to post them online or send them to her friends unless she sent him more photos of herself naked. Fox then created a social media account using the minor’s name, and contacted her friends via the social media account. He then distributed the explicit images of the minor to her friends and classmates using the account.
The Honorable Richard L. Puglisi, United States Magistrate Judge, set a detention hearing for Friday, September 1, 2017 at 1:30pm before the Honorable Kenneth J. Mansfield.
The charges in the Complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the United States Department of Homeland Security, Homeland Security Investigations, with assistance from the Wiltshire Police Department in the United Kingdom. It is being prosecuted by Assistant United States Attorney Morgan Early.
Hawaii Soldier Indicted for Attempting to Provide Material Support to ISISRead the Press Release
An indictment was returned July 21 charging Ikaika Erik Kang, 34, an Army sergeant first class stationed at Schofield Barracks, Hawaii, with attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization. Kang was previously arrested on July 8, and ordered detained pending further proceedings.
Acting Assistant Attorney General for National Security Dana J. Boente, Acting U.S. Attorney Elliot Enoki of the District of Hawaii and Special Agent in Charge Paul Delacorte of the FBI’s Honolulu Field Office made the announcement.
The grand jury indictment, which was filed on July 19, charged Kang with four counts of attempting to provide material support to ISIS, based on events that occurred in Hawaii between June 21 and July 8. The indictment and an earlier criminal complaint allege that Kang met with undercover agents of the FBI whom he believed to be affiliated with ISIS and provided military information, some of which was classified at the SECRET level. Kang is also charged with providing property (a drone,s military clothing and equipment) and training (instruction on combat techniques and weapons training which was videotaped for future use by ISIS) to undercover agents whom he believed to be affiliated with ISIS.
Kang will appear in court on July 24, for an arraignment and plea on the charges, at which time a trial date will be scheduled.
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, Kang faces a maximum of 20 years in prison and up to a $250,000 fine for each count. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. 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.
The case was investigated by the FBI and the U.S. Army Criminal Investigation Division. This case is being prosecuted by Trial Attorney Taryn Meeks of the National Security Division’s Counterterrorism Section and Assistant U.S. Attorneys Ken Sorenson and Marc Wallenstein.
Hawaii Soldier Indicted for Attempting to Provide Material Support to IsisRead the Press Release
HONOLULU – Ikaika Erik Kang, 34, an Army sergeant first class stationed at Schofield Barracks, Hawaii, was indicted by a federal grand jury on July 19, 2017 with attempting to provide material support to the Islamic State of Iraq and al-Sham ("ISIS"), a designated foreign terrorist organization. Kang was previously arrested on July 8, 2017, and ordered detained pending further proceedings.
Elliot Enoki, Acting United States Attorney for the District of Hawaii, and Dana Boente, Acting Assistant Attorney General for National Security, announced that the indictment charges Kang with four counts of attempting to provide material support to ISIS, based on events that occurred in Hawaii between June 21 and July 8. The indictment and an earlier criminal complaint allege that Kang met with undercover agents of the FBI whom he believed to be affiliated with ISIS, and provided military information, some of which was classified by the United States at the SECRET level. Kang is also charged with providing property (a drone and military clothing and equipment) and training (instruction on combat techniques and weapons training which was videotaped for future use by ISIS) to undercover agents whom he believed to be affiliated with ISIS.
Kang will appear in court on July 24, 2017, for an arraignment and plea on the charges, at which time a trial date will be scheduled.
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, Kang faces a maximum of 20 years in prison and up to a $250,000 fine for each count. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. 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.
The case was investigated by the Federal Bureau of Investigation and the United States Army, Criminal Investigation Division, and is being prosecuted by Assistant U.S. Attorneys Ken Sorenson and Marc Wallenstein, and Trial Attorney Taryn Meeks of the National Security Division’s Counterterrorism Section.
Former Honolulu Police Department Officer Pleads Guilty to Honest Services Wire FraudRead the Press Release
HONOLULU – Maulia LaBarre, age 35, of Honolulu, Hawaii, pled guilty yesterday in federal court to one count of honest services wire fraud. LaBarre was formerly employed as a police officer with the Honolulu Police Department (HPD).
Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that according to court documents and information presented in court, LaBarre was employed as a police officer for HPD and, as such, had a duty of honesty and loyalty to the citizens of the City and County of Honolulu and the HPD to act in the public’s interest and not for his own illicit enrichment. LaBarre admitted during the plea hearing that he secretly used his official position to enrich himself by soliciting and agreeing to accept sex from an individual (described as Individual A in the Indictment) in exchange for a promise of providing Individual A with favorable official action in a pending criminal case involving prostitution charges. More specifically, LaBarre admitted that he agreed with Individual A that, in exchange for sex, he would arrange to have Individual A’s arresting officer not appear at court in her pending criminal case.
LaBarre will be sentenced on October 23, 2017, by United States District Judge Susan Oki Mollway, and will face a maximum penalty of 20 years imprisonment.
The case was the result of a joint investigation conducted by the Federal Bureau of Investigation and the Investigations Division of the Department of the Attorney General for the State of Hawaii. Homeland Security Investigations also provided assistance during the joint investigation. The case is being prosecuted by Assistant U.S. Attorney Michael Nammar.
Kapolei Woman Indicted and Arrested on Federal Bank Fraud and Tax ChargesRead the Press Release
HONOLULU – Johanne P. Jarlego, 44, a resident of Kapolei, Hawaii, was arrested on June 26, 2017 as a result of a federal indictment charging her with bank fraud and tax offenses.
Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that a federal grand jury indicted Jarlego on June 21, 2017. The indictment charged that, between June 2008 and February 2015, Jarlego executed a scheme to defraud American Savings Bank. According to the indictment, Jarlego worked for a Hawaii company that published magazines. Jarlego handled accounts receivables, and was responsible for collecting and depositing checks made payable to her employer’s magazines for the purchase of advertising space. According to the indictment, Jarlego filed business registration paperwork with the State of Hawaii Department of Commerce and Consumer Affairs, claiming she would do business in two trade names that were similar to the names of her employer’s magazines. Jarlego then opened two business accounts at American Savings Bank in those trade names.
The indictment alleges that Jarlego thereafter diverted checks made payable to those magazines, and deposited them into her two American Savings Bank accounts, falsely claiming that the payments were intended for her businesses. According to the indictment, between 2008 and 2014 Jarlego obtained approximately $3,833,640 by depositing her employer’s checks into the two American Savings Bank accounts, and then repaid $2,428,600 to conceal her activities. The indictment also alleges that Jarlego filed four false tax returns for calendar years 2011-2014, failing to report as income a total of $2,688,356 obtained from her bank fraud during those years.
The indictment charges Jarlego with 32 counts of bank fraud, and four counts of filing false tax returns. An indictment is merely an accusation, and Jarlego is presumed innocent until and unless proven guilty. If convicted of the charges, Jarlego faces up to thirty years’ of imprisonment, and a fine of up to $1,000,000 as to each of the bank fraud charges, and up to three years’ imprisonment, and a fine of up to $250,000 on each of the tax charges.
Following her arrest, Jarlego was brought to federal court, where she pled not guilty to all charges. She was released on $50,000 bail, and ordered to appear for a jury trial on August 29, 2017 before United States District Judge Leslie E. Kobayashi.
The case was investigated by Homeland Security Investigations, Internal Revenue Service – Criminal Investigation, and the United States Postal Inspection Service, and is being prosecuted by Assistant U.S. Attorney Larry Tong.
Former Federal Prison Guard Sentenced to One Year in Prison for Lying to Federal Agents Investigating His Inappropriate Behavior with InmatesRead the Press Release
HONOLULU – Diego Contreras, 31, formerly of Haleiwa, was sentenced to one year in prison on June 1, 2017, and ordered to pay a $5,000 fine. Contreras pleaded guilty in federal court to Making False Statements during an investigation into his inappropriate behavior with inmates.
Acting United States Attorney Elliot Enoki said that, according to information presented to the court, on June 1, 2016, the United States Department of Justice Office of the Inspector General (DOJ OIG) interviewed Contreras, who was then employed as a guard with the Federal Bureau of Prisons. DOJ OIG was investigating Contreras for having inappropriate relationships with two female inmates of the Federal Detention Center at Honolulu (FDC). Contreras lied to investigators, by denying, among other things, that he had contacted the inmates through the use of alias e-mail addresses while they were incarcerated, and by claiming that he had not had contact with one of the inmates after her release from the FDC. One of the relationships was discovered after a photo of Contreras and the former inmate was posted to her Facebook page.
In imposing sentence, United States District Judge Helen Gillmor pointed to Contreras’ "abuse of power," and emphasized the importance of sending a message of deterrence by remarking, "[o]ther people in positions of trust need to know that if they violate that trust there will be repercussions."
This case was investigated by DOJ OIG and was prosecuted by Assistant United States Attorney Jill Otake.
Complaint Filed and Initial Appearance Held for Anil UskanliRead the Press Release
HONOLULU – Anil Uskanli, age 25, of Turkey, had his Initial Appearance today on a Criminal Complaint that was signed over the weekend and filed this morning in the United States District Court for the District of Hawaii. The Complaint charges him with one count of Interference with Flight Crew Members and Attendants. That crime carries a maximum penalty of 20 years in prison.
Acting United States Attorney Elliot Enoki said that, according to the Complaint, on May 19, 2017, Uskanli boarded American Airlines Flight 31 from Los Angeles International Airport, bound for Honolulu International Airport. In the course of the flight, Uskanli got up to use the restroom, but did not lock the door to the lavatory, and became agitated, yelled, and pounded on the walls when a fellow passenger entered the lavatory. After this incident, the pilot executed a level 1 security measure, locking down the flight deck. Thereafter, Uskanli again got up from his seat, wrapped a blanket around his head, and took his laptop to the front area of the plane. A flight attendant used a drink cart to block Uskanli from advancing any further toward the cockpit. When Uskanli tried to push the drink cart down the aisle toward the front of the plane, the flight attendant asked nearby passengers for assistance. Once several passengers stood up, Uskanli put the laptop on the drink cart and walked back to his seat. The flight attendants were frightened of the laptop, due to recent information about laptops potentially posing a threat to airplane security because such devices may contain explosives.
An off-duty law enforcement officer walked with Uskanli back to his seat. The law enforcement officer and Uskanli remained in the seats for the rest of the flight. Flight attendants followed protocol for handling of possible explosive materials. They also alerted the captain of the events, and the captain then implemented a level 4 emergency. Two military fighter jets from Joint Base Pearl Harbor-Hickam were dispatched to escort the flight to safe landing.
The aircraft landed safely at Honolulu International Airport at 11:35 a.m. Bomb technicians worked to secure the plane. K-9 units were deployed to sweep the aircraft. All passengers and carry-on bags were rescreened, and checked bags inspected by a TSA Explosive Detection Canine Team. No explosives were discovered.
The Honorable Barry M. Kurren, United States Magistrate Judge, ordered the proceedings suspended pending the outcome of a competency evaluation.
The charges contained in the Complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the Federal Bureau of Investigation, with assistance from U.S. Department of Homeland Security, the State of Hawaii Department of Public Safety Sheriff’s Office, the Los Angeles Police Department and the Los Angeles Airport Police. It is being prosecuted by Assistant United States Attorney Morgan Early.
University of the Nations CFO Pleads Guilty to Wire FraudRead the Press Release
HONOLULU – Pablo M. Rivera, age 41, of Honolulu, Hawaii, pled guilty today in federal court to one count of wire fraud. According to court documents, from July 2014 to January 2017, Rivera, the Chief Financial Officer of the University of the Nations (UOFN), defrauded UOFN of $3,096,241 through a scheme that involved Rivera submitting false invoices for construction related projects on UOFN’s campus.
Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that according to court documents and information presented in court, UOFN tasked Rivera with hiring and paying contractors to do various jobs on UOFN’s Kailua-Kona campus. Rivera sent a series of invoices to UOFN which purported to reflect the true costs and labor charges of work performed by contractor KJ Walk, Inc. (KJ Walk), but in reality were false and altered KJ Walk invoices. The altered invoices falsely inflated the actual costs and wages for work performed by KJ Walk. UOFN paid the invoices, resulting in the transfer of funds from UOFN’s checking account to a KJ Walk corporate account that was controlled by both KJ Walk and Rivera. Once the money was transferred to the KJ Walk corporate account, Rivera made withdrawals from the KJ Walk account.
Rivera will be sentenced on August 28, 2017, by United States District Judge Susan Oki Mollway, and will face a maximum penalty of 20 years imprisonment. Rivera has agreed to repay UOFN $3,096,241.
The case was investigated by the Federal Bureau of Investigation. The prosecution was handled by Assistant U.S. Attorney Michael Nammar.
Waimanalo Event Promoter Sentenced to Eight Years in Federal Prison for Fraud OffenseRead the Press Release
HONOLULU – Turk K. Cazimero, 57, a resident of Waimanalo, Oahu, was sentenced today to serve eight years in federal prison, and ordered to pay restitution of $857,760 for committing fraud offenses over a period of twelve years.
Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that according to court documents, Cazimero operated Hawaiian Hurricane Productions, a company that promoted concerts and special events, including surfing competitions. Cazimero was charged in an indictment with wire fraud offenses involving the solicitation of money from "investors" between September 2013 and September 2015, by falsely promising that the money would be used to pay artists and costs associated with various concerts. Cazimero promised investors either high rates of return, ownership in the concerts, or the chance to be corporate sponsors. Cazimero also showed the investors posters that he had prepared, which made it appear that particular artists would perform concerts at certain venues, and that large corporations were sponsoring the concerts, when in fact the concerts had not actually been arranged.
In December 2016, Cazimero pled guilty, admitting that he had promoted fake concerts, and intended to use, and did use, money from investors to pay his own living expenses, or to pay back earlier investors who were owed money. Cazimero agreed that he obtained $901,000 from his victims, and agreed to the entry of an order directing him to pay restitution to eleven victims.
Cazimero was previously convicted in 2003 of Hawaii state securities fraud violations. Cazimero received probation on that charge, and began his federal violations shortly thereafter. At today’s sentencing before United States District Judge Derrick K. Watson, the government presented information that some of Cazimero’s victims took out home equity loans to generate money for him, lost their life savings and retirement accounts, and suffered emotional distress leading to depression and divorce. In imposing a 96 month sentence, Judge Watson noted that Cazimero has been committing ongoing fraud offenses for nearly two decades, and used the proceeds to support himself. Judge Watson ordered Cazimero into federal custody immediately to begin service of his sentence.
The case was investigated by the Federal Bureau of Investigation and the State of Hawaii, Department of Consumer and Commerce Affairs, Securities Enforcement Branch. The case was prosecuted by Assistant U.S. Attorney Larry Tong.
Dennis Alexio Sentenced for Tax Fraud, Money Laundering, and Commercial FraudRead the Press Release
HONOLULU – Chief U.S. District Judge J. Michael Seabright today sentenced Dennis R. Alexio, 58, of Aiea, to a term of imprisonment of 15 years.
The sentencing follows Alexio’s convictions last year in two trials. First, on January 22, 2016, a federal jury found Alexio guilty on all 28 counts of defrauding the Internal Revenue Service of more than $700,000 in illegally obtained tax refunds. Second, on September 16, 2016, another federal jury found Alexio guilty on all 18 counts of an indictment charging him with using false and fictitious financial instruments to obtain property from multiple unsuspecting victims.
Elliot Enoki, Acting United States Attorney, said that, according to evidence produced during the first trial, Alexio stole more than $700,000 from the Internal Revenue Service by preparing and filing tax returns for others which falsely claimed tax refunds in those amounts. Alexio then used cashier’s checks to try and launder the money and hide it from the government. Nevertheless, through the use of search warrants and tax levies, the government was able to recover most of the money.
According to evidence produced during the second trial, Alexio obtained $185,000 of silver coins and gold bars by fraud and theft from APMEX, an internet metals company based in Oklahoma City. Information presented in court also included Alexio’s theft of approximately $16,000 in currency from Dartmouth Capital, an internet currency exchange company based in Boston.
The Internal Revenue Service led the investigation which resulted in both sets of convictions. The prosecution was handled by Assistant U.S. Attorneys Marshall Silverberg and Margaret Nammar.
Tax Preparers Indicted and Arrested on Federal Tax ChargesRead the Press Release
HONOLULU – Christine Helliangao, 35, a resident of Henderson, Nevada, and Natasha Bardon, 31, a resident of Kapolei, Hawaii, were arrested on April 13, 2017 as a result of a federal indictment in Hawaii charging that they conspired to file false federal income tax returns, and filed such returns, for the 2013 and 2014 tax years.
Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that a federal grand jury indicted the two individuals on April 12, 2017. The indictment charged that, between January 2014 and April 2015, Helliangao and Bardon conspired to defraud the United States by preparing false income tax returns. According to the indictment, Helliangao operated a company called Pau Taxes, which served as a paid tax preparer for others. The indictment alleged that Helliangao and Bardon solicited clients, and prepared federal and state tax returns falsely claiming itemized deductions for business expenses and charitable contributions not incurred or made by their clients. The indictment alleges that Helliangao and Bardon caused the filing of tax returns claiming approximately $1.6 million in federal tax refunds to which their clients were not entitled, and charged fees based on the amounts of the refunds.
The indictment also charges Bardon with 25 counts of aiding and abetting the filing of specific false tax returns, and Helliango with four such counts.
Bardon was arrested at her home in Kapolei on April 13, and appeared in federal court, where she pled not guilty to the charges and was released on bail. Trial has been set for June 14, 2017 before United States District Judge Helen Gillmor. Helliangao was arrested on April 13 in Henderson, Nevada, and appeared in federal court in Las Vegas, where she was ordered to appear in Honolulu on April 24 to answer the charges.
An indictment is merely an accusation, and both defendants are presumed innocent until and unless proven guilty. If convicted of the charges, Helliangao and Bardon face a maximum term of imprisonment of five years as to the conspiracy charge, and three years as to each of the false tax return counts, plus a fine of up to $250,000 as to each count, and an order requiring that they pay restitution to the Internal Revenue Service.
The case was investigated by the Internal Revenue Service – Criminal Investigation, with the assistance of the Honolulu Police Department, and is being prosecuted by Assistant U.S. Attorneys Larry Tong and Amalia Fenton.
Husband and Wife Charged with Filing False Tax ReturnsRead the Press Release
HONOLULU -- A federal grand jury returned an indictment yesterday charging Lorraine Yamauchi, 70, and Jiitsu Yamauchi, 64, residents of Honolulu, Hawaii, with five counts of filing false tax returns in violation of Title 26, United States Code, Section 7206(1).
Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that according to the indictment, the Yamauchis are charged with filing false tax returns for tax years 2010, 2011, 2012, 2013, and 2014. The indictment alleges that the Yamauchis reported amounts of income that was far less than the amounts they knew they had actually received.
The Yamauchis’ initial appearance and arraignment will be held on April 18, 2017, at 2:00 p.m., before the Honorable Richard L. Puglisi, United States Magistrate Judge. If convicted of the charges in the indictment, the Yamauchis face a maximum of three years in prison as to each of the five counts. The charges in the indictment are merely accusations, and the Yamauchis are presumed innocent until proven guilty.
The charges resulted from an investigation conducted by the Internal Revenue Service, Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Michael Nammar.
U.S. Attorney's Office Commemorates National Crime Victims' Rights Week, April 2-8Read the Press Release
HONOLULU – The United States Attorney’s Office in Hawaii, in commemoration of National Crime Victims’ Rights Week (NCVRW), April 2-8, 2017, is participating with the Department of Commerce and Consumer Affairs in a Financial Literacy Fair on April 5 from 10:00 a.m. to 1:00 p.m. at Tamarind Park at Bishop Square in Honolulu, to raise awareness about crime victims’ issues and rights and introduce the community to the important resources and services available. Last year, over five million individuals were a victim of a crime, and there were nearly 15 million property victimizations (according to the 2015 National Crime Victimization Survey conducted by the Bureau of Justice Statistics).
The Office for Victims of Crime (OVC) of the U.S. Department of Justice leads communities throughout the country in their annual observances of National Crime Victims’ Rights Week, April 2-8, by promoting victims’ rights and honoring crime victims and those who advocate on their behalf. This year’s theme—Strength. Resilience. Justice.—emphasizes the importance of multidisciplinary responses and building the capacity of individuals, service providers, and communities to respond to crime and support the ongoing healing of victims and survivors. The theme also supports OVC’s Vision 21 Initiative to encourage research, address emerging issues, and build the capacity of victim service organizations by increasing the use of technology and training.
The U.S. Attorney’s Office and OVC encourage widespread participation in the week’s events and in other victim-related observances throughout the year. The U.S. Department of Justice will host OVC’s annual National Crime Victims’ Service Awards Ceremony in Washington, DC, to honor outstanding individuals and programs that serve victims of crime. Please call 855-4-VICTIM (842846) or visit www.VictimConnect.org for additional information about victims’ rights and options – confidentially. You may also contact the U.S. Attorney’s Office, District of Hawaii, Victim Witness Program at 808-541-2850 or visit the OVC website, www.ovc.gov.
Honolulu Massage Parlor Owner Found Guilty of Bribery of Federal AgentRead the Press Release
HONOLULU – A federal jury yesterday found Biyu Situ, 48, owner of Mayflower and Blue Angel Massage Parlors, guilty of two counts of bribery of a public official. The verdict followed a two and a half day trial. Situ faces a maximum term of imprisonment of 15 years for each count when she is sentenced on July 24, 2017, by Senior District Judge Susan Oki Mollway.
Elliot Enoki, Acting United States Attorney, said that according to information produced in court, on June 12, 2015, during a federal undercover investigation, Situ, the operator of the Blue Angel, a massage parlor front for prostitution activity, offered a special agent with Homeland Security Investigations $5,000 for protection of Blue Angel, consisting of advance notice of law enforcement inspections and raids. Other information produced during the trial showed that Situ also offered the special agent $5,000 to obtain United States citizenship without taking any citizenship test, and that Situ had previously operated the Mayflower Massage Parlor, another front for prostitution, which was shut down due to frequent police and immigration inspections.
The investigation resulting in the prosecution was led by Homeland Security Investigations. The prosecution was handled by Assistant U.S. Attorneys Morgan Early and Larry Butrick.
United States Attorney Leaves OfficeRead the Press Release
HONOLULU – The United States Attorney for the District of Hawaii, Florence T. Nakakuni, retired from federal service effective Saturday, March 11, after receiving a request for her resignation as part of the transition in administrations in Washington, D.C. Appointed by President Obama in 2009, she became the first woman to serve as the Presidentially appointed United States Attorney in this district. The appointment came after having been in the office as an Assistant U.S. Attorney since 1985, including roles as Chief of the Drug and Organized Crime Section and Chief of the Organized Crime Strike Force Unit.
Pursuant to the Federal Vacancies Reform Act, First Assistant U.S. Attorney Elliot Enoki became Acting United States Attorney upon her retirement.
Kauai Woman Indicted for Using A Non-Profit to Facilitate A Tax Fraud Scheme and Identity TheftRead the Press Release
HONOLULU – Leihinahina "Jennifer" Sullivan, 45, of Lihue, Kauai, was arraigned Friday, February 24, on a 12-count indictment charging her with tax fraud and aggravated identity theft. The indictment charges Sullivan with eight counts of false claims, two counts of wire fraud, and two counts of aggravated identity theft. Sullivan pled not guilty to all charges, and her trial was set for April 25, 2017, before Chief United States District Judge J. Michael Seabright.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to allegations in the indictment, from at least January 2011 through January 2017, the last year of which is the current tax filing season, Sullivan engaged in a scheme to defraud the IRS and the State of Hawaii by submitting false tax returns seeking refunds on behalf of other individuals. The tax returns contained false items such as the filing status, dependents, Schedule A expenses including medical and charitable donations, unreimbursed employment expenses, and claims for credits such as child care and the Earned Income Tax Credit.
The indictment alleges that Sullivan concealed her acts from the taxpayers, by not reviewing the returns with them before filing, and by using her email addresses as a point of contact with the IRS and State. Sullivan also directed that tax refunds be deposited into bank accounts of the Mobile Native Hawaiian Health ("MNHH"), a non-profit entity of which she held various positions including director, or into other accounts which she controlled. In some instances, when individuals requested copies of their filed returns, Sullivan provided those individuals with copies of returns that did not match the returns that she actually filed, including changing the direct deposit information. The copies did not include the false items, the same direct deposit information, or the inflated false refund amounts.
For the aggravated identity theft charges, the indictment alleges that Sullivan used an individual’s name, Social Security number, and signature, without that person’s authorization, to file State of Hawaii tax returns for 2010 and 2011.
The charges in the indictment are merely accusations, and the defendant is presumed innocent until proven guilty. If convicted, Sullivan faces a maximum term of imprisonment of up to 20 years for each wire fraud count, up to five years imprisonment for each false claims count, and a mandatory minimum term of imprisonment of two years for each aggravated identity theft count.
The case was investigated by IRS-Criminal Investigation with assistance from the Kauai Police Department and the State of Hawaii Department of Taxation, and is being prosecuted by Assistant U.S. Attorney Rebecca A. Perlmutter.
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Bookkeeper Pleads Guilty to 13 Counts of Wire Fraud in Scheme to Defraud Two Maui Business OwnersRead the Press Release
HONOLULU – A professional bookkeeper has plead guilty to 13 counts of wire fraud in a scheme to defraud two local Maui business owners. Felicidad Rivera, age 51, of Maui, plead guilty in the United States District Court for the District of Hawaii to wire fraud in connection with a scheme to defraud two Maui business operators of more than $373,682 in funds from their business banking accounts. Rivera faces a maximum penalty of five years imprisonment and a fine of $250,000 for each of the 13 counts to which she plead guilty when she is sentenced on June 5, 2017.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to court documents and information presented in court, Rivera became the bookkeeper for two Maui businesses operated by a mother and her son. As their bookkeeper, Rivera had access to the bank accounts of each business. After earning the confidence of the business owners, Rivera would falsely represent to them that business funds were required to pay legitimate business expenses. In truth, the funds were not required for business expenses but were intended by Rivera to be deposited into her personal checking account and fraudulently converted to her own use. From December 2008 through August 2015, Rivera fraudulently, and without authorization, wrote 193 checks to herself totaling approximately $334,450. Rivera also caused the victim’s business accounts to pay her personal monthly credit card debts. Information presented in Court showed that over the course of 87 monthly transactions Rivera stole another $75,488 from the victim’s bank accounts without their knowledge or consent. To conceal her activity Rivera falsified the accounting books of each business and presented fraudulently altered business financial records to the tax accountant preparing the taxes for the victims.
The case was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Ken Sorenson.
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Texas Man Guilty of Interference with Flight AttendantRead the Press Release
HONOLULU – A federal jury today found William Clark Turner, 53, of Kemp, Texas, guilty of one count of interference with a flight attendant. The verdict followed a four-day jury trial. Sentencing is scheduled for June 5, 2017, before Senior District Judge Susan Oki Mollway.
Florence T. Nakakuni, United States Attorney, said that according to information produced in court, on March 14, 2016, Turner, a physician, was flying on American Airlines from Dallas-Fort Worth International Airport non-stop to Maui, when he interfered with the ability of the flight attendant to perform her duties. According to witness testimony, Turner was threatening and verbally abusive toward other passengers, diverting a flight attendant from her normal duties to manage the situation. When Turner’s actions were communicated to the pilot, he placed the cockpit in lockdown, locking the doors for the duration of the flight so that no one could enter or exit the cockpit.
Turner faces a maximum term of imprisonment of 20 years. The jury also found him not guilty of two counts of simple assault.
The investigation was led by the Federal Bureau of Investigation. The prosecution was handled by Assistant U.S. Attorneys Margaret Nammar and Jill Otake.
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Two New York Residents Plead Guilty to Conspiring to Illegally Dispense and Administer Cosmetic Prescription Drugs, Import Misbranded Drugs, and Smuggle CashRead the Press Release
HONOLULU – Bu Young Kim, age 40, and Chan Hui Cho, age 40, residents of Brooklyn, New York, entered pleas of guilty on January 25 in the United States District Court for the District of Hawaii to the charge of conspiring to dispense and administer cosmetic drugs and treatment without being a licensed medical professional; import misbranded drugs contrary to law; and smuggle $79,986 in cash from the United States to South Korea. The defendants face a maximum penalty of five years imprisonment and a fine of $250,000 when they are sentenced on July 13, 2017 by U.S. District Judge Leslie E. Kobayashi.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to court documents and information presented in court, Kim and Cho regularly traveled to the Republic of Korea for the purpose of obtaining prescription drugs with the intent of administering them to persons in Hawaii and elsewhere to minimize the appearance of wrinkles and other signs of aging. Upon acquiring prescription drugs from sources in Korea, Kim dispensed such products in the United States, including in Hawaii, to individuals seeking facial cosmetic and "filler" type treatments and procedures, along with other facial, appearance and health enhancement benefits. Neither Kim nor Cho had any formal medical or pharmaceutical education or training, and neither was licensed to practice medicine or to provide any form of medical treatment to patients. Kim and Cho charged between $100 and $500 per session, and administered their treatments to large numbers in locations such as personal residences and businesses.
Information presented in Court also revealed that that products obtained, dispensed and/or administered to individuals in Hawaii by Kim contained active pharmaceutical ingredients requiring a prescription. These products included, but were not limited to: Dysport, a prescription injection for cosmetic improvement similar to "Botox"; Lidocaine, a numbing agent; Liporase Injectible Hyaluronidase, an injectable spreading substance used to encourage the dispersion and absorption of fillers; substances containing betamethasone, a corticosteroid used to alleviate inflammation and treat severe skin conditions; substances containing dexamethasone, another corticosteroid; and substances containing triamcinolone acetonide, a topical and injectable corticosteroid.
Information presented in Court also showed that Kim and Cho were interdicted by U.S.
Customs and Border Protection inspectors in Honolulu, Hawaii on in March 2016 attempting to smuggle $79,986 on their persons and luggage concealed in sanitary napkin containers. In addition, another $86,461 in U.S. currency seized during a search of Kim and Cho’s Queens, New York residence was forfeited to the government.
The case was investigated by the Homeland Security Investigations and the Food and Drug Administration. The case was prosecuted by Assistant U.S. Attorneys Ken Sorenson and Amalia Fenton.
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President of Muscle Inc. Sentenced to 18 Months Imprisonment for Tax FraudRead the Press Release
HONOLULU – Amalia Ralar, 50, a resident of Honolulu, Hawaii, was sentenced on January 19, 2017 to 18 months in federal prison for filing a false tax return underreporting her income, announced. In addition to the prison term, Senior District Judge Helen Gillmor ordered Ralar to pay a $40,000 fine and pay the sum of $354,511 in restitution to the Internal Revenue Service.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to court documents and information presented in court, Ralar, the owner and operator of a local business, Muscle, Inc., filed tax returns for tax years 2007 through 2014 in which she knowingly failed to report a total of $1,349,231 in taxable income. The failure to report the $1,349,231 resulted in tax losses to the federal government of $354,511. In delivering her sentence, Judge Gillmor referenced large and frequent cash deposits by Ralar totaling $3,046,092 in amounts which the court observed appeared structured to avoid their detection by the Internal Revenue Service.
The case was investigated by the Internal Revenue Service, Criminal Investigation, and was prosecuted by Assistant U.S. Attorney Ken Sorenson.
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Former Operator of Therapeutic Services Provider Indicted for Wire Fraud and Identity Theft OffensesRead the Press Release
HONOLULU -- Sheila Harris, 51, of Honolulu, formerly the owner and operator of Harris Therapy, Inc., a therapeutic services provider with a primary location in Honolulu, entered not guilty pleas today in federal court on a 13-count indictment returned by a federal grand jury on January 4, 2017. The indictment charges Harris with eleven counts of wire fraud and two counts of aggravated identity theft related to a scheme to defraud TRICARE, a military health benefits program. The indictment also includes forfeiture allegations to recover the proceeds of the scheme. United States Magistrate Judge Kenneth J. Mansfield set the case for trial on May 16, 2017, before Senior District Judge Helen Gillmor.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to allegations in the indictment, from at least 2010 through 2012, Harris engaged in a scheme to submit claims and bill TRICARE for speech therapy services that were not rendered to TRICARE beneficiaries. The beneficiaries were Harris Therapy speech therapy patients that were minors of military families. Harris falsified claims to TRICARE by including dates of service where no speech therapy was provided and by using the name and identifying information of a speech therapist as the rendering provider who was actually on maternity leave during the relevant period. In addition, the indictment alleges that during this time frame, after a beneficiary complaint to TRICARE about Harris Therapy’s billing for services not provided, TRICARE’s regional affiliate, Triwest, engaged in an audit of Harris Therapy. During the audit, Harris provided Triwest with false documentation in an attempt to conceal the scheme.
If convicted, Harris faces a maximum term of imprisonment of up to 20 years for each count of wire fraud and a mandatory minimum term of imprisonment of two years for each aggravated identity theft. The charges in the indictment are merely accusations, and the defendant is presumed innocent until proven guilty.
The case was investigated by the Defense Criminal Investigative Service and the Federal Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorney Rebecca A. Perlmutter.
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Honolulu Man Sentenced to 24 Months in Jail for Fraudulent Tax Return SchemeRead the Press Release
HONOLULU – Richard Lee Derrick, Jr., 52, a resident of Honolulu, Hawaii, was sentenced on January 10 to 24 months in federal prison for aggravated identity theft, announced Florence T. Nakakuni, United States Attorney for the District of Hawaii.
According to court documents, Derrick engaged in a scheme by which he filed numerous fraudulent federal and state income tax returns using the personal information of others. Derrick pled guilty to aggravated identity theft on September 19, 2016. During that court proceeding, he admitted to filing one such fraudulent federal tax return using his deceased wife’s social security number on February 20, 2014. As part of a plea agreement, Derrick pled guilty to only one offense, but agreed that he was responsible for fraudulently obtaining $241,897.60 in refunds from the State of Hawaii.
During Tuesday’s sentencing proceedings, United States District Judge Derrick K. Watson noted that Derrick’s use of the personal identifiers of deceased people was particularly "sinister" because his victims could not detect his conduct or protect themselves from it. Judge Watson further noted that identity theft not only causes financial harm, but also gives rise to numerous other problems, as victims must often spend significant time and effort attempting to repair the damage caused by the release and use of their personal information. In addition to the 24 month term of imprisonment, Judge Watson ordered the payment of $241,897.60 in restitution to the State of Hawaii Department of Taxation.
The case was investigated by the Internal Revenue Service - Criminal Investigation; the Social Security Administration, Office of Inspector General; and the United States Postal Inspection Service; with the assistance of the State of Hawaii Department of Taxation, Criminal Investigation Section, and is being prosecuted by Assistant U.S. Attorney Amalia Fenton.
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San Diego Man Sentenced to 28 Years in Prison for Aggravated Role in Methamphetamine ConspiracyRead the Press Release
HONOLULU – Jesse Wade Pelkey, 38, of Imperial Beach, California, was sentenced in federal court on January 5, 2017, by Senior District Judge Helen Gillmor to 336 months (28 years) imprisonment for his role in a conspiracy to distribute methamphetamine in the State of Hawaii. Pelkey had previously pled guilty on September 19, 2016 to conspiracy to distribute and possess with intent to distribute methamphetamine.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said the evidence presented in court showed that Pelkey was an organizer and leader of the methamphetamine conspiracy which operated in San Diego and Hawaii and involved five or more members. Pelkey was found responsible for the distribution of 424.9 grams of pure methamphetamine, or "ice," and an additional 4,989 grams of generic methamphetamine
At the sentencing hearing, the court found that Pelkey was the San Diego source of supply of the methamphetamine transported to Hawaii for distribution. Pelkey faced a mandatory minimum sentence of 240 months (20 years) imprisonment after the prosecution filed an enhancement alleging a prior felony drug conviction. A total of six individuals were convicted for their participation in the conspiracy.
The investigation which resulted in the charges in the case was conducted by the Drug Enforcement Administration. Assistant U.S. Attorney Mark A. Inciong handled the prosecution.
U.S. Attorney's Office Collects over Nearly $4 Million in Civil and Criminal Actions for U.S. TaxpayersRead the Press Release
HONOLULU –U.S. Attorney Florence T. Nakakuni announced today that the District of Hawaii collected over $3.9 million in criminal and civil actions in Fiscal Year 2016. Of this amount, approximately $3.6 million was collected in criminal actions and approximately $300,000 was collected in civil actions. Additionally, the Hawaii USAO worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $1.7 million in civil cases pursued jointly with these offices.
Attorney General Loretta E. Lynch announced on December 14, 2016, that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
"Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse," said Attorney General Lynch. "Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation."
In April and August 2016, for example, the District of Hawaii recovered $1,225,000 from Doorae Shipping Co., LTD, a South Korean maritime operations company. In April, as a result of convictions on two criminal charges relating to the unauthorized discharge of over 500 gallons of oily machinery space bilge water directly into the ocean, the office recovered $950,000, consisting of a $750,000 fine and $200,000 as a community service payment. In August, the office recovered an additional $275,000 as a result of another conviction relating to failure to document inappropriate storage of 5,400 gallons of oil contaminated bilge water and the location of approximately 8,400 gallons of machinery space oil contaminated bilge water.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.