Maui Residents Indicted for Fraud and Tax Offenses Relating to Debt Elimination Scheme
|U.S. Attorney’s Office May 26, 2011|
HONOLULU—A federal grand jury today returned a 25-count indictment charging five Maui residents with fraud and tax offenses based on their participation in a debt elimination scheme operated from 2008 to 2010. According to the indictment, MAHEALANI VENTURA-OLIVER, 42, JOHN D. OLIVER, 46, PILIALOHA K. TEVES, 49, LEATRICE LEHUA HOY, 52, and PETER HOY, 76, all of Maui, conspired together to create, sell and use fictitious obligations, and to commit mail fraud offenses. VENTURA-OLIVER and OLIVER are also charged with money laundering and with conspiring to submit false tax returns.
United States Attorney Florence T. Nakakuni said that according to the indictment, the defendants were part of entities known as “HAWAIILOA FOUNDATION,” “KO HAWAII PAE AINA,” and “THE REGISTRY.” Using these entities, the defendants held seminars on Maui and elsewhere, during which they taught others about Hawaiian history and real property rights. The defendants offered participants the chance to have private meetings in return for the payment of a “kokua,” or fee, at which they taught about a debt assistance program which they claimed could eliminate mortgage, credit card, and other debt.
According to the indictment, the defendants said all individuals have “special reserves” with the United States Treasury which could be used to “zero out” their private debts. Defendants thereafter prepared various fictitious obligations such as bonds, promissory notes, and money orders which they falsely claimed were backed by the United States Treasury and State of Hawaii, and which became effective if individuals sent them, via the United States mail, to the United States Treasury, the Federal Reserve Bank, the State of Hawaii, and their creditors. The indictment alleges that the defendants then instructed their participants to stop paying their mortgages, property taxes and other debts, and falsely promised that the fictitious obligations would eliminate the debts and forestall mortgage foreclosure proceedings.
United States Attorney Nakakuni said that according to the indictment, the defendants collected fees of approximately $468,000 from persons who participated in the debt assistance program.
All defendants are charged with conspiracy and 16 mail fraud offenses. VENTURA-OLIVER and OLIVER are also charged with one count of money laundering based on their alleged usage of funds obtained from participants to pay off a credit card debt. The indictment also charges VENTURA-OLIVER and OLIVER with conspiring to submit false tax returns to the IRS and seeking tax refunds based on false information on IRS 1099 OID (“Original Issue Discount”) forms. The alleged conspiracy included the preparation of IRS documents which falsely reported that certain individuals had income and tax withholdings in the amount of their debts, and seeking tax refunds in the same amounts. According to the indictment, VENTURA-OLIVER and OLIVER prepared and filed false tax returns on their own behalf and on behalf of others seeking fictitious refunds. The amount of those refunds identified in the indictment is over $1.5 million. In addition to the conspiracy, VENTURA-OLIVER is charged with one count of filing a false claim for a tax refund, and OLIVER is charged with seven such counts.
An indictment is merely an accusation, and all defendants are presumed innocent until proven guilty. The federal court will set arraignment dates and issue summonses requiring the defendants to appear in court to answer the charges. If convicted of the charges, all defendants face a maximum term of imprisonment of five years on the conspiracy charge, plus a maximum term of imprisonment of 20 years on each of the 15 mail fraud charges. VENTURA-OLIVER and OLIVER face a maximum terms of imprisonment of five years on the tax conspiracy charge, and up to ten years on the money laundering charge and each of the false claims charges.
United States Attorney Nakakuni praised the efforts of agents of the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the United States Postal Inspection Service, who conducted a joint investigation in this matter.