2 guilty in bogus debt-elimination scheme
A U.S. District Court jury took a few hours Tuesday to convict two Maui residents of using Hawaiian sovereignty claims to bilk approximately 200 people out of nearly $468,000 in fees charged for a bogus debt-elimination program.
After an 11-day trial, Mahealani Ventura-Oliver was found guilty as charged of 19 felony offenses, including conspiracy to commit mail fraud, mail fraud, money laundering and submitting a false tax return, according to Assistant U.S. Attorney Lawrence Tong.
Pilialoha Teves was acquitted of three mail fraud charges but convicted of one count of conspiracy to commit mail fraud and 12 counts of mail fraud, Tong said.
Ventura-Oliver and Teves were among five Maui residents charged with falsely telling people they could eliminate debts, including home mortgages, by zeroing them out with “special reserves” at the U.S. Treasury.
The group held weekly seminars about Hawaiian history and culture at the Cameron Center in Wailuku from 2008 to 2009, Tong said. They persuaded approximately 200 people to pay fees ranging from $1,500 to $2,500 for bonds and other documents aimed at satisfying mortgages and other debts but that “proved to be worthless,” he said.
Numerous distressed homeowners, who had bought into the program and didn’t pay money owed on their mortgages, had their homes foreclosed, Tong said.
Also, Ventura-Oliver conspired with her husband, John D. Oliver, to file tax returns seeking $1.5 million in refunds, he said. The Internal Revenue Service did not make payments.
The money laundering charge against Ventura-Oliver arose from her use of money collected from victims to pay off $10,000 of her own credit card debt, Tong said.
Sentencing for Ventura-Oliver and Teves is scheduled for Feb. 10.
Prosecutors would seek a term of incarceration for the defendants, Tong said, but it was premature Tuesday to say what that recommended term might be.
Ventura-Oliver was taken into federal custody after the verdict, while Teves remained free on bond pending sentencing, court officials said.
Rustam Barbee, Ventura-Oliver’s attorney, said he mounted a “vigorous defense” of his client, trying to demonstrate by the evidence that she lacked the requisite mental intent to commit the offenses and that her estranged husband, John Oliver, was “the promoter of the fraud.”
Oliver testified against his wife during the trial.
Barbee said there is an exception for one spouse to testify against another, and he didn’t believe his client’s conviction could be appealed on that basis. Nevertheless, he said he was “almost sure to appeal” Ventura-Oliver’s conviction.
Teves’ attorney, Richard Gronna, could not be reached for comment late Tuesday afternoon.
Each conviction carries a maximum sentence of five years in prison and a $250,000 fine, Tong said.
There will be a forfeiture hearing in U.S. District Court to determine whether assets and property seized from the defendants during the federal investigation would be turned over to the United States or possibly as restitution to victims, he said.
Seized property included several vehicles, $83,000 in cash and gold coins valued at $36,000, Tong said.
In October, John Oliver pleaded guilty to conspiracy to commit mail fraud and use of a fictitious obligation and conspiracy to file false claims in U.S. tax returns, according to Tong. Leatrice Lehua Hoy pleaded guilty to conspiracy to commit mail fraud and use of a fictitious obligation.
Their sentencing is set for Nov. 18. They testified during the trial of Ventura-Oliver and Teves.
Hoy’s husband, Peter “Petro” Hoy, had been charged with conspiracy and 16 mail fraud offenses and was scheduled to enter a guilty plea, Tong said. But Peter Hoy was later found to be incompetent because of physical problems and his inability to understand court proceedings, the prosecutor said.
Peter Hoy was introduced to victims as an “ambassador” to the United Nations, Tong said.
The fraud victims have not recovered their money, he said, but they may receive some restitution from property seized from the defendants.
The defendants were associated with Ko Hawaii Pae Aina, a group that claimed that it has sovereignty over Hawaii and that the state of Hawaii is illegitimate because of the U.S. overthrow of the Hawaiian monarchy.
Their indictment says the defendants told seminar participants to stop paying their mortgages, property taxes and other debts, and they falsely promised that fictitious obligations would eliminate their debts and forestall mortgage foreclosure proceedings. The victims were told their property would be part of an “untouchable Hawaiian nation.”
In April 2009, the FBI raided four Maui homes, seizing records and cars and confiscating more than $100,000 from bank accounts as part of an investigation into Ko Hawaii Pae Aina, according to court documents.
* Brian Perry can be reached at email@example.com.