Two Maui residents are facing reduced charges after pleading guilty to conspiracy and fraud charges as part of their alleged participation in a bogus debt assistance scheme.
Defendants John D. Oliver and Leatrice Lehua Hoy in May withdrew their not guilty pleas in U.S. District Court in Honolulu.
Oliver admitted to two counts of conspiracy offenses, while Hoy pleaded to a single count of conspiracy and mail fraud offenses, according to their respective plea agreements.
The two now face up to five years in prison and fines of up to $250,000 for each count when they are sentenced in March before U.S. District Judge J. Michael Seabright.
They also must pay restitution to all people who suffered a financial loss as a result of their criminal conduct, according to court documents.
"Both defendants have agreed as part of their plea agreements they will cooperate with the federal government and will testify as witnesses against the remaining defendants," said Assistant U.S. Attorney Larry Tong, who is representing the federal government in the case.
Two of the remaining defendants include Oliver's wife, Mahealani Ventura-Oliver, and Hoy's husband, Peter Hoy. The fifth defendant is Pilialoha K. Teves.
In exchange for the plea agreements, the federal government has agreed to move for a dismissal of the remaining counts against Oliver and Leatrice Hoy at the time of sentencing.
The five defendants were indicted by a federal grand jury last year for alleged offenses that took place between 2008 and 2011. A superseding indictment had charged the group with 25 counts.
Tong said Oliver is being held at the federal detention center in Honolulu, while the remaining defendants have been released on bail.
The defendants were associated with Maui-based Hawaiian sovereignty groups Hawaiiloa Foundation, Ko Hawaii Pae Aina and The Registry, and targeted victims through seminars offering to teach participants about Hawaiian history and property rights, according to the indictment.
It alleges the defendants "knowingly devised a scheme to defraud and to obtain money from others by means of materially false and fraudulent pretenses, representations and promises."
Oliver and Leatrice Hoy admitted in their plea agreements that the scheme involved marketing a debt assistance program in which they claimed participants could eliminate mortgage, credit card and other debt.
Participants were told that all individuals have an account at the U.S. Treasury that can be accessed through various bonds, promissory notes and other documents, according to Oliver's plea agreement.
"In return for the payment of a 'kokua,' or fee of approximately $1,500 to $10,000, the group prepared bonds and other documents which they claimed could be used to pay off their customers' mortgages and other debts," the court document said.
"John Oliver admitted that during the time of the conspiracy, he and others with the organization accepted money from more than 100 participants totaling $468,000," Tong said.
Hoy admitted that she initially got involved as a participant of the debt program, but later worked for the organization, collecting fees and preparing bonds "she knew were not legitimate and could not be used to pay debts."
Peter Hoy, had also attempted to change his plea to guilty. But, after taking up the motion in court, Seabright ordered a comprehensive evaluation of Hoy "to determine whether he is competent at this time."
Peter Hoy's attorney, Dana Ishibashi, did not respond to requests for comment about the status of his client's evaluation, but, Tong said the evaluation has not yet been completed.
Ventura-Oliver and Teves are pending trial in February.
* Nanea Kalani can be reached at nkalani@mauinews.com.
