December 3, 2014

Maui Resident Sentenced for Fraud and Tax Charges Related to Debt Elimination Scheme

HONOLULU—A federal judge sentenced Mahealani Ventura-Oliver, 44, formerly of Maui, to 78 months of imprisonment on December 1, for her role in marketing a debt elimination and tax scheme between 2008 and 2009. District Judge J. Michael Seabright also ordered Ventura-Oliver to pay $424,534 in restitution to the victims of her offenses. In October 2013, after an 11-day trial, the jury found Ventura-Oliver 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.

Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to evidence produced in court, Ventura-Oliver and others were part of a group known as Ko Hawaii Pae Aina, the Registry and Hawaiiloa Foundation. Between 2008 and 2009, the group held weekly seminars on Maui, where Ventura-Oliver and others spoke about Hawaiian history and culture, and royal land patents. The evidence showed that, 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. The “bonds” purportedly directed the United States Treasury Department or the State of Hawaii Comptroller of the Currency to make payments on behalf of the homeowners.

According to evidence presented at the trial, Hawaiiloa Foundation collected approximately $468,000 from approximately 200 individuals who went through the debt elimination process. Many of the individuals tried to use the bonds but ultimately lost their homes through foreclosure, or had to renegotiate loans. The government presented evidence that, as part of its process, the Hawaiiloa Foundation also promoted a tax program whereby participants supposedly could seek refunds from the IRS for debts paid off with the purported bonds.

At yesterday’s sentencing hearing, Judge Seabright said Ventura-Oliver portrayed herself as an expert in Hawaiian culture and history, and “sold herself as wanting to help Native Hawaiians.” The judge found that Ventura-Oliver actually knew that her program did not work but preyed on the vulnerabilities of her participants.

Ventura-Oliver was the last of four defendants sentenced in the case. Her estranged husband, John Oliver, who pled guilty, and Pilialoha Teves were previously sentenced to jail terms of 42 months, and Lehua Hoy was sentenced to a three year term of probation. The court earlier had ordered that certain property derived from the offenses be forfeited to the United States. The property included approximately $84,000 in cash, more than $18,000 seized from bank accounts, gold coins worth over $36,000, and vehicles.

The investigation of this case was conducted jointly by the Federal Bureau of Investigation, the Internal Revenue Service—Criminal Investigation, the United States Postal Inspection Service, and the Maui Police Department. The prosecution was handled by Assistant U.S. Attorney Larry Tong and former Assistant U.S. Attorney Michael Nammar.