WAILUKU – With a judge saying there had been “evil intent,” an accountant was sentenced Tuesday to a 10-year prison term after embezzling from clients while he was on probation for felony theft.

Michael Nathan, 64, of Wailuku was ordered to pay a total of $271,224 in restitution to three businesses.

“I think you are a con,” 2nd Circuit Judge Peter Cahill told Nathan. “You have conned everybody. You conned the system. It is just rampant.”

Nathan had pleaded no contest to two reduced counts of second-degree theft.

One charge involved stealing from Lanai Fine Art, which does business as Mike Carroll Gallery, from December 2006 to August 2010. The other charge was for thefts from Pacific Rim Publishing on Maui from September 2010 to June 2011.

Nathan also agreed to pay restitution to Barry Osman, owner of Dis ‘N Dat shop on Lanai.

An investigation showed that Nathan had set up automated general excise tax payments for the businesses but also had the owners write him checks for the excise tax payments.

Owners of the businesses were among those who had written letters, submitted to the court, supporting Nathan when he was sentenced to probation in July 2010 for stealing more than $33,000 from the nonprofit Hawaii State PTSA. Nathan had been the organization’s treasurer.

Mike Carroll said he and other Lanai business owners wrote letters when Nathan said he needed character reference letters after a “misunderstanding with travel expenses for the PTSA.” At the time, Carroll said he had “not a clue” that Nathan was being prosecuted for theft.

On the same day he was sentenced in the PTSA case, Nathan wrote and deposited into his account a gallery check for $2,871, Carroll said.

“What he did to the PTSA, he did to us,” Carroll said in court Tuesday.

“The ramifications of this theft continue to disrupt our daily lives,” he said.

To keep the business running, Carroll said he has worked seven days a week and taken only one vacation in the past four years.

He said Nathan had asked Carroll and his wife, Kathy, to sign bogus checks and used the money to “buy clothes for his mistress and take lavish trips.”

Kathy Carroll said the thefts have put stress on her husband, whose health has been affected. While Nathan voluntarily paid back $1,600, she said the couple had to go to court to obtain a judgment for the rest of the money, which still hasn’t been fully repaid.

Hali’i I’aea, who owns Pacific Rim Publishing with his wife, Robyn, said he wasn’t happy with a plea agreement that recommended a 30-day jail term and probation for Nathan. He said the business hasn’t been repaid the money Nathan stole.

“There’s no getting back the things that Michael took from us because we trusted him,” said Robyn I’aea. “Michael was part of our Bible study.

“The hardest thing is not for me, it’s that he’s out there still hurting people.”

Deputy Prosecutor Lewis Littlepage said the plea agreement was made so the businesses would be able to recover the stolen money even if Nathan were to file for bankruptcy.

Littlepage said Nathan “has a history of bilking his clients.”

“However, he has had some problems, and he has been making some payments,” Littlepage said.

Defense attorney Cary Virtue said Nathan had been confronting his issues, seeing a psychiatrist for counseling and joining a men’s church group. Nathan had paid back some money, including more than $120,000 to Lanai Fine Art, Virtue said.

He said the plea agreement recommended probation for Nathan “so he can continue to make payments.”

“I did abuse their trust,” Nathan said in court. “What I did was totally wrong. In my own defense, for the past few years I have not been doing anything wrong.

“I’m trying to do everything I possibly can to repay.”

He said he had sold his house to make a substantial payment toward restitution.

“The people that trusted me the most were the ones I hurt the most, including my children,” Nathan said.

Cahill said an expert witness hired to do a forensic review for the Carrolls’ civil case could only determine that between $200,000 and $249,000 was embezzled from the business. Nathan “covered his tracks by destroying things, by changing things so even an expert CPA could not determine the extent of Mr. Nathan’s criminality,” Cahill said.

Most of the thefts from Lanai Fine Art occurred before Nathan was sentenced in the PTSA case. The thefts from Pacific Rim Publishing occurred while Nathan was on probation.

Cahill said he suspected that some of the money Nathan used to pay full restitution in the PTSA case came from the victims in his current case.

In sentencing Nathan to prison instead of probation, the judge said the crimes were more than “property offenses.”

“When you take people’s money like this or their property, you take a part of them,” Cahill said. “You take so much more than just taking their money.”

He said the crimes occurred over an extended period and that Nathan took advantage of his position of trust.

“There’s a total lack of control,” Cahill said. “There is an absence of anything we can call good judgment. There is only bad judgment. There is only evil intent here.”

While Nathan was credited for his steady employment, “it is that stable employment that gave him the skill, knowledge and expertise to steal from people over a long period of time,” Cahill said.

“He used his knowledge as an accountant to steal from his own clients.”

Cahill said that some countries will send a bill for the bullet to the family of someone who is executed. Referring to Nathan, Cahill said, “He billed his clients for stealing from them.”

In his letter to the court, Nathan blamed his girlfriend, saying “she wanted to live this high lifestyle,” Cahill said.

“No, it’s your fault,” Cahill told Nathan.

“After looking at everything, I just see no alternative here,” the judge said. “Because I don’t think anything less would be sufficient.”

Nathan was sentenced to five-year prison terms on the most recent charges. The 10-year prison term was ordered in his resentencing for first-degree theft in the PTSA case. He was ordered to serve all prison terms at the same time, including five-year prison terms for six counts of second-degree forgery in the PTSA case.

Cahill ordered $234,878 in restitution to Lanai Fine Art, including 10 percent interest on the civil judgment in the case, $21,346 to Pacific Rim Publishing and $15,000 to Osman.

* Lila Fujimoto can be reached at lfujimoto@mauinews.com.