A Maui woman who was found guilty of federal charges in connection with a debt-elimination scheme that used Hawaiian sovereignty claims to bilk about 200 people out of $468,000 was sentenced Tuesday to 3 years in prison.
Pilialoha Teves, 52, also was ordered to pay $331,263 in restitution and $1,300 in assessments.
She was ordered to forfeit any interest in property and assets seized in the case, including bank accounts, roughly $40,000 in cash and gold coins valued at more than $50,000.
After an 11-day trial in October in U.S. District Court in Honolulu, Teves was convicted of conspiring to use fictitious financial instruments and 12 counts of mail fraud arising out of marketing of the debt-elimination scheme between 2008 and 2009.
Mahealani Ventura-Oliver, 44, who was identified as the lead defendant in the case, was found guilty of conspiring to use fictitious financial instruments, 15 counts of mail fraud, one count of money laundering, one count of conspiring to submit false tax returns seeking $1.5 million in refunds from the IRS, and submitting one false tax return with her estranged husband, John Oliver.
He pleaded guilty and testified at the trial.
U.S. District Judge Michael Seabright imposed the sentence for Teves on Tuesday morning.
"The court took note of the harm caused to the community in terms of the number of victims, which was more than 100 people who went through the program," said Assistant U.S. Attorney Lawrence Tong.
According to evidence presented at the trial, Teves and Ventura-Oliver were part of a group known as Ko Hawaii Pae Aina, the Registry and Hawaiiloa Foundation. The group held weekly seminars on Maui, where Ventura-Oliver spoke about Hawaiian history and culture, and royal land patents. In return for the payment of a fee, the group offered to provide distressed homeowners with "bonds" and other documents that would pay off their mortgages and forestall collection efforts, according to evidence at trial. The "bonds" purportedly directed the U.S. Treasury Department or state of Hawaii comptroller of the currency to make payments on behalf of the homeowners.
Hawaiiloa Foundation collected approximately $468,000 from about 200 people who went through the debt-elimination process, according to trial evidence. Many of the people tried to use the bonds but ultimately lost their homes through foreclosure or had to renegotiate loans, according to the U.S. attorney's office.
"A lot of people suffered harm that went beyond the economic harm," Tong said. "People trusted them believing that the program was real. When they learned that the documents were not genuine, they had a lot of emotional stress. Some had separations and divorces. Their credit scores were impaired. A number of them felt they had been betrayed by the defendants because many of them were Native Hawaiians who had been given false hope by the defendants."
After serving the prison sentence, Teves will be on supervision for three years.
Honolulu attorney Richard Gronna said Teves plans to appeal the conviction and sentence.
"She became cast under the spell of the Olivers, who were the main designers of this whole scheme," Gronna said. "She got caught up in their scheme, but she participated in it. The judge took into account the fact that she's never been in trouble before and is unlikely to ever get in trouble again.
"She's remorseful for the people that were affected by it."
Teves has been allowed to remain free on home detention with a Global Positioning System monitor to ensure she doesn't leave her home except for work. She was ordered to turn herself in to begin serving the federal prison term in early April.
"We were very pleased with the verdict, and we're happy with the sentence and the fact that it provides both incarceration, deterrence and restitution for those who were harmed by the offense," Tong said.
Ventura-Oliver has been jailed since the guilty verdicts. Her sentencing is scheduled for March 20.
* Lila Fujimoto can be reached at firstname.lastname@example.org.