Stewart Stant, the former head of the Maui County Department of Environmental Management, admitted to taking $2 million in bribes from Milton Choy to help secure more than $19 million in county contracts for Choy’s wastewater services business, H2O Process Systems.

The two entered guilty pleas in separate hearings before U.S. District Court Judge Derrick Watson in Honolulu on Monday morning.

“Anybody that intends to profit off of the public coffers through any kind of illicit or corrupt activities — in other words bribes or whatever — with the expectation they’re going to get something back, needs to be aware that we not only have the tools to come after them, we have the motivation to come after them,” Assistant U.S. Attorney Ken Sorenson said following the hearings on Monday morning. “And we will aggressively pursue anybody who violates their public oath and anybody who wants to corruptly affect the process.”

Maui criminal defense attorney Cary Virtue, Stant’s lawyer, said after the hearing that “I don’t have anything to say other than what we did in the plea today.”

Milton Choy (right) and attorney Michael Green arrive at the federal courthouse on Monday. The Maui News / COLLEEN UECHI photo

“He took responsibility for his actions and as you heard in court, he admitted his guilt in this matter,” Virtue told reporters as he and Stant left the courthouse.

He said he couldn’t comment on why Stant needed that much money.

Prosecutors said that Stant received $733,176 in bank deposits and $644,570 in cash deposits from Choy from October 2012 to December 2018, as well as $424,987 in travel benefits that included airfare and hotels. Las Vegas gaming records also document that Stant cashed in more than $183,000 in gambling chips that he did not purchase.

In exchange for financial benefits, Stant “regularly guided and arranged the awarding” of at least 56 Department of Environmental Management contracts to H2O worth about $19.3 million, according to his plea agreement.

Text messages also documented conversations between Choy and Stant regarding potential rewards for Stant’s actions.

On May 16, 2016, Stant texted Choy to say that he was “waiting for a PO#” (purchase order number) in order for the county to pay Choy and H2O Process Systems, said Sorenson, who read the contents of the messages aloud in court on Monday. The next day, Choy responded, “if we can get the big check Thursday, I will have something for you when I come to Maui.”

On Aug. 29, 2016, Stant texted Choy to notify him that a check for a purchase order “will be cut by tomorrow morning.” Choy responded Aug. 31, 2016, saying he hoped the purchase order would go through the next day and that “when we go up, I will have 125 for you.”

Sorenson said this referred to an upcoming trip to Las Vegas that the two planned to take and that Choy was promising $125,000 to Stant once they arrived.

“He was very well compensated for the contracts he was kicking out to H2O Process Systems,” Sorenson said after the hearing.

When asked what Stant used the money for, Sorenson replied, “He lived very well for awhile there, I can tell you that.”

Stant served as the manager of the Solid Waste Division from January 2009 to December 2015, when he was appointed by then-Mayor Alan Arakawa to serve as the director of the Department of Environmental Management, a position he held until December 2018.

Between Aug. 17, 2015, and Jan. 7, 2019, H2O received 31 percent of all sole source contracts awarded by the county. The company deposited about $20.5 million in total proceeds from the county from January 2014 to December 2017.

“Deposits from the County of Maui were by far the largest contributor of cash inflows into H2O’s primary deposit bank account,” according to Choy’s plea agreement.

When asked by reporters why Choy had to resort to bribery, given that his company was the only one offering certain services and may have been able to secure the contracts anyway, Michael Green, Choy’s attorney, acknowledged that H2O was getting contracts before Stant came in and was likely the best one to do it.

“But you know what happens, they knew each other for a long time, and then you do a favor for one person, and then it grows into another favor, and pretty soon somebody has a mortgage payment to make, they have a car payment to make. All of a sudden somebody’s going to Vegas to see a show, and it kind of escalates,” Green said.

Choy was also at the center of a bribery scheme that involved former state Senate Majority Leader J. Kalani English, a longtime East Maui senator who pleaded guilty to taking more than $18,000 in bribes, including $10,000 in cash to delay cesspool bills and $1,805 for hotel rooms in Las Vegas. He was sentenced in July to more than three years in federal prison.

Former Oahu state lawmaker Ty Cullen, who also pleaded guilty to taking bribes, is set to be sentenced in October.

“I think there’s a little bit to that old adage: ‘what happens in Vegas, stays in Vegas,’ “ Sorenson said of the recent corruption cases. “And I think from a mental standpoint, I think these guys think that, and indeed that’s what we found. A lot of the inhibitions that may be present here aren’t so much there, and so Vegas is one of the tools I think those who want to corruptly influence public officials will utilize in their efforts to get what they want.”

Sorenson said he wasn’t going to discuss when Choy was arrested, but that “he did get arrested a good while ago, and he became cooperative, and a lot of the work we’ve done more recently has been grounded in our work with him.”

Green said that Choy had retained him as an attorney “two years ago this month” and that he’d been working with authorities over a year before that.

Based on the bribes Stant got and the contracts Choy received, prosecutors are seeking nearly $2 million in forfeitures from Stant and up to $15 million from Choy. Sorenson said it was “really difficult to figure out the exact profit (that H2O made) because again, you’ve got legitimate goods and services being given to Maui in return for these contracts.

“You have real pieces of equipment, you have real services being performed, so under the law we have to take that into account when coming to a final figure of what the forfeiture amount should be,” Sorenson said.

When asked if any other Maui County officials knew about or participated in Stant’s dealings with Choy, Sorenson said, “I’m not going to talk anything about other things we know and other things that might happen at this juncture.”

Both Stant and Choy are scheduled to be sentenced Jan. 4 for one count of honest wire services fraud. Stant faces up to 20 years in prison, while Choy could see up to 10, according to the U.S. Attorney’s Office.

* Colleen Uechi can be reached at cuechi@mauinews.com.