David Farmer vs. Harmon - Witness John Candon, Candon Consulting Group

David C. Farmer, Successor-Trustee vs. Harmon

(Formerly Woo vs. Harmon & Nicholson vs. Harmon)

CV05-00030 DAE KSC

U.S. District Court For the District of Hawaii

Judges: David A. Ezra; Kevin S. Chang

—

DEFENDANT’S WITNESS

JOHN CANDON, CPA, ASA, CBA, CFE

American Savings Tower, Ste 955
1001 Bishop Street
Honolulu, HI 96813

Fax: 808-533-1528
E-mail: info@candonconsultinggroup.com

John Candon, CPA, ASA, CBA, CFE, is the President of Candon Consulting Group, LLC , He was formerly the Director of KPMG Peat Marwick LLP's Hawaii-based Corporate Transactions Practice, where he provided valuation, corporate finance services, forensic accounting, and corporate recovery services. Prior to joining KPMG, he was the managing partner of a regional consulting practice that primarily provided business valuation services. He has also held senior executive positions with a commercial bank and a publicly-held member of the tourism industry.

Mr. Candon is an experienced neutral party and often is engaged by negotiating or opposing parties to prepare business valuations. He serves as a U.S. Bankruptcy Court appointed Trustee for large bankruptcies involving construction, real estate, hospitality, medical services and retail distribution and has served as a Court appointed Examiner. He has also been the Court-appointed Receiver for commercial properties and the Court-appointed Special Master in matters requiring financial investigations.

With over 20 years of business experience, his accomplishments include:

Business valuations for enterprises involved in a variety of areas including real estate investment, tourism, manufacturing, distribution, retail, financial services, transportation, agribusiness, professional services and others.

Acquisition assistance to both buyers and sellers of business interests with regard to identification of candidates, pricing, term structuring, investor qualification, and due diligence investigation.

Valuations of intangible assets such as customer relationships, financial instruments, leasehold interests, management agreements and franchises.

Lost profits and lost earnings (including untimely death) analyses for businesses and individuals.

Investigation of evidence of actual and suspected financial frauds in connection with divorces, bankruptcies, credit fraud, commercial litigation, and other matters.

In addition to being a Certified Public Accountant, Mr. Candon is a Certified Business Appraiser (CBA) and has earned advanced recognition as a Senior Member of the American Society of Appraisers (ASA). He is a Certified Fraud Examiner (CFE); the President of the ASA’s Hawaii Chapter; a past Chair of the Hawaii Society of CPAs' Management Consulting Services Committee; and a Life Member of the Association of Certified Fraud Examiners.

Mr. Candon is a former member of the adjunct faculties of both the University of Hawaii and Chaminade University. He has provided expert witness testimony at depositions and trials for a variety of issues including fraud, economic damages calculation, business valuation, complex accounting matters, bankruptcy, and earning capacity assessment. He is also a member of Dispute Prevention & Resolution’s panel of arbitrators and mediators.

http://www.candonconsultinggroup.com/Professionals.htm

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HONOLULU, HI - Political Contributions
by Individuals

JOHN R CANDON (BANK OF HONOLULU), (Zip code: 96813) $300 to AMERICAN BANKERS ASSOCIATION BANKPAC on 06/20/90

www.city-data.com/elec2/90/elec-HONOLULU-HI-90-part1.html

* * * * *

NEW DISCOVERY (03/30/09): Undisclosed conflicts of interest between Attorney General Alberto Gonzales, the United States Department of Justice, Office of the U.S. Trustee, Curtis Ching, Carol Muranaka, Guido Giacometti, Susan Tius, Sukamto Sia, Bank of Honolulu, Diane Plotts, Bob Awana, Linda Lingle, Citigroup, Robert Rubin, Bill Clinton, John Waihee, Ben Cayetano, Goldman Sachs, Colbert Matsumoto, Henry Peters, Matsuo Takabuki, Richard Wong, Jeff Stone, Oswald Stender, Gerard Jervis, Lokelani Lindsey, Nathan Aipa, Colleen Wong, Louanne Kam, John Candon, Judge Eden Elizabeth Hifo (fka Bambi Weil), Judge Lloyd King, Judge Robert Faris, Judge David A. Ezra, Judge Barry Kurren, Mary Lou Woo, James B. Nicholson, David C. Farmer, Steven Guttman, etc.:

August 24, 2000

Executive Centre
units auctioned
for $4 mil

Ownership of the properties
could change during
another round of bids

By Peter Wagner, Star-Bulletin

A Nevada investor has outbid Citibank on 32 residential and two commercial units at Executive Centre, the downtown high rise that once belonged to Indonesian investor Sukamto Sia.

But with court confirmation and another round of bids possibly ahead, ownership of the property is yet to be determined.

Clifford Laughton, president of the Reno-based Nevada Holdings Ltd. and chief executive at Honolulu-based satellite company Columbia Communications Corp., yesterday made the winning bid of $4,000,100.

Laughton's bid topped a $4 million offer by Citibank N.A., the only other bidder at a foreclosure auction at the state courthouse yesterday.

The leasehold properties include 31 residential units, a penthouse, two commercial spaces occupied by Sprint Hawaii and Fujikami Florist and 65 parking stalls.

The heavily mortgaged 41-story building, at 1088 Bishop Street also includes a 120-room Aston hotel, retail outlets including Long's Drugs and Ross Dress For Less and nearly 300 residential units.

The entire property was appraised last year at $39.5 million.

Citibank, the major creditor in a foreclosure action against one of Sia's company's, MKS Executive Partners, took possession last month of most of the 41-story building in a complex bankruptcy deal in which Sia's estate will receive about $500,000.

Citibank affiliate EXCT L.P. took ownership of about 400 units on July 28.

Sia, currently in Chapter 7 bankruptcy liquidation, originally filed for Chapter 11 bankruptcy reorganization in November 1998.

While Citibank yesterday allowed itself to be outbid by $100, the sale is far from over. Under rules of the foreclosure, new bids may be entertained at confirmation but must be at least 5 percent above the auction price.

Foreclosure commissioner John Candon said at least three parties who were silent during yesterday's auction have asked when the confirmation hearing would be. No date has been set.

Laughton yesterday said he would likely honor existing leases at Executive Centre if he remains the high bidder. He said the units are a good investment because of depressed property values and a strong rental market in the downtown area.

While Executive Centre was once a key holding of Sia in Honolulu, the bankruptcy trustee was unable to liquidate the property for creditors because Sia held no equity in it.

His ownership in the building was through MKS Executive Partners, one of his numerous companies.

The 40-year-old businessman owes nearly $300 million to casinos, banks and creditors around the world.

www.archives.starbulletin.com/2000/08/24/business/story1.html

~ ~ ~

NEW DISCOVERIES (02-08-09): More undisclosed conflicts of interest between Steven Guttman, John Candon, James Duca, David Farmer, Guido Giacometti, Diane Hastert, John Waihee, etc.:

February 14, 2005

Receiver fires RightStar execs

Pacific Business News (Honolulu)

The court-appointed receiver of an embattled Hawaii cemetery business said Monday he has fired a handful of the company's top executives since his appointment two months ago.

Guido Giacometti said that among key officers let go from RightStar Hawaii Management Inc. are principals John Dooley and Kathy Hoover, who were named in the recent foreclosure suit that led to Giacometti's appointment.

Giacometti, a Big Island resident, said he also fired RightStar CEO Bruce Dooley, who is John Dooley's brother, and the company's chief information officer, Zachery Hoover, Kathy Hoover's son.

"It was a top-heavy management structure," Giacometti said. "Over a year's time, we should see six figures in savings from the changes we've made."

Circuit Court Judge Sabrina McKenna appointed Giacometti to run the cemetery business after it was sued by Vestin Mortgage Inc. on Nov. 16, 2004, for defaulting on an estimated $34 million loan.

Cemeteries under RightStar management include Valley of the Temples in Kaneohe, Kona Memorial and Homelani Memorial on the Big Island and Maui Memorial.

~ ~ ~

May 6, 2005

John Candon steps in to investigate RightStar finances

Pacific Business News (Honolulu) - by Harold Nedd

Accountant John Candon is ready to help state investigators determine whether an estimated $20 million was misused by an embattled cemetery business and four trustees, including former Gov. John D. Waihee III.

The 53-year-old president of Candon Consulting Group is the court-appointed master in the Office of the Attorney General's lawsuit against RightStar Hawaii Management Inc. and has been asked to pore over the company's books.

His task will be to uncover the great mystery behind the $20 million that is supposed to be in a trust for nearly 20,000 people who pre-paid for funeral services at Hawaii cemeteries.

Follow the money

What is supposed to emerge from his forensic accounting work is a portrait of where that money went and who -- if anybody -- is to blame for the lapse at RightStar.

Jim Wagner, the lawyer representing RightStar, contends that there has been no wrongdoing. Rather, he says, the company inherited serious financial problems when it bought the business out of Chapter 11 bankruptcy in Delaware in 2001.

It's Candon's job to penetrate that structure to detect whether there was wrongdoing at RightStar, which fired Waihee, a Democrat who served as governor from 1986 to 1994, and three other trustees.

"We will follow the money and do our best to find out what's going on," Candon told PBN. "People want to get the trust accounts straightened out. They want to get to the bottom of this and we're delighted that they feel we'll do a good job."

Candon's appointment comes following the court's appointment of a receiver, Guido Giacometi, to run the day-to-day operation of the cemetery business that has been sued by a Nevada mortgage company for defaulting on an estimated $34 million loan.

Giacometi's job is to help keep RightStar in business, paying bills and serving clients. In contrast, Candon's role is to dig into the company's finances.

The law requires RightStar and other businesses licensed for pre-need funeral services to put 70 percent of the money into a trust fund to be held until it's used for funeral expenses.

The law also requires RightStar to give an accounting for those funds every year. RightStar didn't do that in 2002 or 2003.

The state said it already knows from independent audit firm KMH LLP that $20 million was withdrawn from RightStar's pre-need trusts. In its lawsuit, the state said $38 million is still in RightStar's trust funds. But there should be $58 million.

If anybody can figure out what happened to that money, it's Candon, said James Duca, a bankruptcy lawyer in Honolulu.

Candon's résumé is full of the kind of "forensic accounting" work that involves finding out all the facts that need to be learned, Duca said.

"One of his specialties is reassembling records and figuring out where the money went," Duca said.

Other lawyers point out that it's difficult to "snow" him with too much information and expect that he'll find the "needle in the haystack." Colleagues insist that following $20 million around isn't too tricky for Candon, who they say is known to go wherever the money takes him.

Previous court-appointed cases include the bankrupt House of Adler, a large retail jewelry chain. Candon had to liquidate its roughly $10 million in assets to repay creditors.

Also, Candon was brought in by the courts when Jackson Builders Corp., a large drywall contracting firm, went under and needed someone to collect on debt and pay bills.

Plus, he is a court-appointed trustee for Trans Hawaiian, the motor coach company currently in a complex dispute with Roberts Hawaii involving roughly $10 million. On top of all that, Candon is the special master in a $3 million dispute between Loveland Academy and the state Department of Education.

Within the past couple of weeks, lawyers for the state and RightStar gave the court their consent for Candon to be appointed master. His appointment will become official once it has been sanctioned by the court.

hnedd@bizjournals.com I 955-8039

~ ~ ~

NEW DISCOVERY (02-04-09): More undisclosed conflicts of interest between David Farmer, James Nicholson, Steven Guttman, Paul Alston, Judith Neustadter Fuqua, John Waihee, Bill Clinton, Hillary Clinton, Janet Reno, Alberto Gonzales, Michael Mukasey, Eric Holder, and other witnesses in this case:

June 26, 2008

Pardongate Is The Least of
Eric Holder’s Sins

“I was wondering when you were going to call me,” so said the irrepressible Nolanda Butler Hill when I phoned last week.

She knew precisely what item of news had prompted me to call: the revelation that Barack Obama had selected Clinton Deputy Attorney General and Ron Brown protege, Eric Holder, to help vet his vice presidential candidates.

As the confidante and business partner of the late Clinton Commerce Secretary Ron Brown, Hill knows from personal experience that Holder’s sins go well beyond his seamy role in the Marc Rich pardon scandal.

In the way of background, in May 1995, Clinton’s unpredictable Attorney General Janet Reno called for an independent counsel to assess whether Ron Brown had “accepted things of value” from Hill in exchange for his influence.

Reno’s pursuit of Brown did not shock either of them. He had been the subject of an inquiry for months. Targeting Hill, however, had no precedent, and it unnerved them both.

By statute, the independent counsel law applied only to political and government figures. “It was unlawful,” says Hill of her own targeting, “I was the only such person in history.”

In time, the independent counsel also targeted Brown’s son, Michael, for laundering money to his father through a scam minority set aside deal with a sleazy pair of Asian-American fundraisers. In Hill’s words, Michael “was as guilty as a goose.”

Hill and Brown both understood that she was being targeted in the hopes that she would roll over on Brown. Her condition for not doing so was that Brown share with her his every point of vulnerability.

Nowhere was Brown more vulnerable than in his unwelcome role as chief bagman for the Clintons’ relentless and often illicit fundraising in the run-up to the 1996 election.

Hill learned virtually every unseemly detail--from Brown’s go-between work with the Chicoms and their American vendors to his wholesale distribution of walking around money to Democratic race hustlers. As Brown understood, Hill knew way too much.

Even before his own mysterious death, Brown worried openly about her life and safety. He went so far as to call Hill’s sister, with whom she stayed from time to time, and insist Hill not be allowed to go out jogging alone.

As soon as Brown died, the independent counsel ceased the investigation into his illicit activities. As to Michael, he pled guilty to a single misdemeanor, accepted a small fine, and was out playing golf with the president a month later.

Not surprisingly, however, the Justice Department kept the pressure on the outspoken Hill, still deeply troubled by the circumstances surrounding Brown’s death.

Hill took heart when, in July 1997, President Clinton appointed Holder to replace Jamie Gorelick as Deputy Attorney General. Although ostensibly second in command, the Deputy AG was the real power in Justice, the Clinton equivalent of a Soviet “political officer.”

Hill knew Holder through Brown, who had been instrumental in getting him his previous job as U.S. Attorney for the District of Columbia.

She and her attorney wasted no time in contacting Holder at the American Bar Association Annual Meeting, which was held that year in San Francisco in early August.

Holder, however, did not get to be Deputy AG by being naïve. “The train is already going down the tracks,” he explained to Hill. “It will take your cooperation to stop it.”

The “train” in question was a D.C. grand jury, which was being led to indict Hill. The “cooperation” meant Hill keeping her mouth shut.

Hill clarifies, “He [Holder] told me and my attorney that if I told what I knew about election fundraising I would be indicted.”

Holder was as good as his word. On March 13, 1998, ten days before Hill was to testify in a suit brought by Judicial Watch on the subject of Brown’s fundraising, the Clinton Justice Department indicted Hill on trumped up charges of fraud and tax evasion.

The willfully blind lead of the New York Times called the indictment “a vivid example of how an investigation can outlive its target.”

Larry Klayman of Judicial Watch knew better. In a motion to the court, he would write, “The timing of these events is neither accidental nor coincidental. Ms. Hill’s indictment was likely an effort to retaliate against her and deter her from giving any further damaging testimony at the March 23, 1998 hearing.”

At White House bidding, Holder had Hill indicted to shut her up, and he succeeded. Anxious, alone, and broke, facing as many as seventy years in prison if convicted, Hill chose to negotiate a deal.

On June 15, 1999, a day before her fifty-fifth birthday, she reported to a halfway house in Seagoville, Texas, her silence at least temporarily assured.

As James Sanders, my partner on the TWA 800 investigation, can attest, silencing whistleblowers through bogus prosecution was the modus operandi in the Holder era. Sanders and his wife Elizabeth were indicted and convicted on federal conspiracy charges on Holder’s watch.

Although generally appalled by the Clintons, Hill understands how betrayed they must feel when their very proteges desert them for Obama.

Holder did so early on. “Given Holder’s credentials,” the Chicago Tribune reported breathlessly in August 2007, “it isn’t outside the realm of possibility to suggest he could wind up the nation’s first African-American attorney general should Obama win the White House.”

Hill thinks she knows why Holder jumped ship. He was a key player in a racially exclusive cabal of DC insiders. “He’s so racist it’s not even funny,” she says of Holder, “not only racist but elitist.”

Still, no matter how compromised Holder might be, Obama can ill afford to dismiss him from his vice-presidential selection committee.

Obama has already had to dismiss one of the three selectors. If he dismisses a second, it will become absurdly obvious that the real problem is not Holder or Jim Johnson of Countrywide fame, but Mr. Obama himself

http://www.cashill.com/natl_general/pardongate.htm

* * * * *

NEW DISCOVERY (11-30-08):

THE BEST GOVERNMENT MONEY CAN BUY

* * * * *

NEW DISCOVERIES (11-25-08): Exhibit: “EQ2048 - DEPOSITIONS OF JOHN D. WAIHEE, VOLUME I & MARION MAE LINDSEY, VOLUME III”. This document provides more evidence regarding the IRS “interim sanctions” and “arms length” issues, and undisclosed conflicts of interest between Governor John D. Waihee, Lokelani Lindsey, Richard Wong, Oswald Stender, Henry Peters, Gerard Jervis, Nathan Aipa, Gilbert Ishikawa, Colleen Wong, Louanne Kam, Bruce Graham, Mark McConaghy, Colbert Matsumoto, Judge Kevin Chang, Judge David Ezra, Judge Eden Elizabeth Hifo, Judge Patrick Yim, Judge Lloyd King, Judge Robert Faris, and other parties related to this lawsuit:

http://www.kycbs.net/Lindsey-docs-Vol-2.pdf

~ ~ ~

NEW DISCOVERY (11-24-08): Exhibit: “EQ 2048 - Deposition of Lokelani Lindsey taken on November 4 & 9, 1999". This document provides clear evidence that J. Douglas Ing had multiple conflicts-of-interest in this case and, since he was not a named Defendant in my RICO lawsuit against the former Trustees, he was not a legitimate signatory to the Settlement Agreement: Furthermore, since the Settlement Agreement was NOT SIGNED by any of the five Trustees actually named as Defendants, the Settlement Agreement was not legal or valid. (See Exhibit A)

http://www.kycbs.net/Lindsey-docs-Vol-1-p1-4.pdf

http://www.kycbs.net/Lindsey-docs-Vol-1.pdf

http://www.kycbs.net/Lindsey-docs-Vol-2.pdf

~ ~ ~

NEW DISCOVERY (08-23-08): Undisclosed conflicts of interests between David Farmer, James Nicholson, John Waihee, Bill Clinton, Ron Rewald, Larry Mehau, BCCI, others:

Check out The Executions of
two reporters Anson Ng and
Joseph "Danny Casolaro

Saturday, August 23, 2008 5:46 PM

From: "Hapa1234@aol.com" <Hapa1234@aol.com>

To: AskDOJ@usdoj.gov, sf.nancy@mail.house.gov, senator@akaka.senate.gov, webmaster@ustaxcourt.gov, keith.i.kawachi@hawaii.gov, edo@spike.dor.state.co.us, insfraud@dcca.hawaii.gov, bobby_n_harmon@yahoo.com, hwburgess@hawaii.rr.com

The Executions of two reporters Anson Ng and Joseph "Danny Casolaro" by Virginia McCullough

HANA HOU....ONE MORE TIME FOR THE PUBLIC RECORD: OMINIOUS PARELLES....HELPING CONNECT THE DIRTY LITTLE POLITICAL DOTS IN WASHINGTON DC:

Public Scope: former Hawaii Eagle Scout / University of Hawaii William Richardson Law School cabal / Broken Trust Hawaiian Sovereignty Activist / Asian Pacific Hui - Investor associate under the Political 1978 Hawaii Constitutional Convention with the stealth creation for the nonprofit Office of Hawaiian Affairs / Hawaii Lt. Governor from the Big Island of Hawaii {1982 - 1986} and Hawaii Governor {1986 - 1994} / Close Political Associate to former President William J. Clinton linked to former National DNC Chairman - U.S. Commerce & Trade Director Ron Brown linked to:

CHINA-GATE - John Hugan - Charlie Trie - Norman Hsu} vis -a-vis THE INDONESIAN CONNECTIONS {Honolulu Bank President - Sia Sakamto vis-a-vis Moctar Riaday under the corrupt U.S. supported Sukharno Dictator Regime} with the Asian Pacific Advisory convicted cabals / Waikiki T-Shirt Vendors / Hawaii -California Political Consultants linked to the Oklahoma Dynamics Energy Co investments with Rose Law {Hugh Rodham} Law Firm connections for Gene and Nora Lum; PARDONGATE connections to the earlier IRAQ-GATE cabals under the Bush Sr. Administrations linked later to Clinton Political Pardons for SEC BILLIONAIRE Fugitive / Israeli Philanthropist / MARC RICH and former convicted HUD Director / Colorado RNC - University of Denver International Studies cabals for PHIL WINN.

Please scroll down, again, for John Waihee with convicted CIA - Asian Pacific Scapegoat for BBRD&W CEO scapegoat involving the Silence of the Lambs: U.S. Federal Prosecutors John Peyton and Kenneth Starr, in collusion with Hawaii District Judges Martin Pence {Hilo Sugar Strikers} and Harold Fong {both deceased}, with Political - Judicial scapegoat UH Law School novice - California Appointed Federal District Judge - Brian Tomahana.

Do the Disavowed facts matter with A - LO - HA FOR ALL?

dismissed mutant ninja blackcats with Boots on the Ground for Uncle Sam's Guinea Pigs - Sovereign South Pacific Kabuki theatre

http://www.newsmakingnews.com/vm,deadly,1991,10,27,04,pt3.htm

~ ~ ~

July 8, 2004

Hawaiian Air owes $129M, IRS claims

The airline's bill for more than two years of underpayments
includes $40.5 million in penalties

By Dave Segal, Star-Bulletin

The Internal Revenue Service is seeking nearly $129 million from Hawaiian Airlines for the underpayment of federal excise and corporate income taxes over more than two years.

The IRS claim, filed in federal Bankruptcy Court, seeks $84.1 million in taxes, $4.3 million in interest and $40.5 million in penalties. The airline industry excise taxes, which cover such areas as fuel and transportation, are for 2001 and 2002 and the first two quarters of 2003. The corporate income tax claims are for $43.1 million in 2001 and $19.7 million in 2002.

Most of the claim covers time before the airline's Chapter 11 reorganization filing on March 21, 2003, when John Adams was chairman and chief executive of the company. He was removed two months later by Bankruptcy Court Judge Robert Faris for financial decisions he made involving the airline's $25 million stock tender offer in 2002.

Hawaiian Airlines had been aware that the federal agency was conducting an audit for 2001 and 2002, but airline trustee Joshua Gotbaum, who took over the company in July 2003, called the magnitude of the claim "unjustified."

"We believe the estimate is substantially overstated and expect the claim will be greatly reduced by the bankruptcy court," Gotbaum said. "Hawaiian Airlines has been providing detailed information and cooperating fully with the IRS over the past year."

The state Department of Taxation also has filed a claim with Bankruptcy Court but lists the amount it is seeking as "unknown."

State Tax Director Kurt Kawafuchi said he does not know how much the state might seek from the airline in back taxes.

"We definitely will follow up on it and will do whatever we can to protect the state's interest," Kawafuchi said. "We need to look into what the IRS was making as claims to see if we have parallel state adjustments, and if we do, we'll do whatever steps we can to protect the state's rights."

Hawaiian Airlines, which expects to emerge from bankruptcy this fall, has received claims in excess of $500 million since filing for reorganization. Insiders connected with the case expect the number of legitimate claims to end up around $300 million.

The IRS claim is the largest so far in the case, just ahead of a $110 million claim by aircraft lessor Ansett Worldwide.

Insiders say the amount that Hawaiian ultimately pays likely will be considerably less than what the IRS is seeking.

For example, the IRS initially sought $138 million from bankrupt Hawaii retailer Liberty House but ended up settling $103 million of that claim for $4.2 million and capped the remainder at $14 million.

Carol Muranaka, special assistant U.S. attorney, said the two cases cannot be compared because they are different taxpayers. She declined to discuss any details about the Hawaiian Airlines case due to privacy issues.

"The government always tries to determine the correct amount of tax," Muranaka said. "We filed the proof of claim because we believe we have determined the correct amount of tax that is due."

http://starbulletin.com/2004/07/08/news/index1.html

* * * * *

Disavow: A CIA Story of Betrayal

By Rodney Stich & T. Conan Russell

The Saga of
Ron Rewald and Bishop, Baldwin, Rewald & Wong

CAST OF CHARACTERS

http://www.namebase.org/sources/ZS.html

* * * * *

NEW DISCOVERY (08-15-08): Undisclosed conflicts of interests between Dan Inouye, Ted Stevens, VECO Corporation, George W. Bush, John McCain, Dick Cheney, Halliburton, Shell Oil, Barack Obama, Bill Clinton, Hillary Clinton, John Waihee, Ben Cayetano, Bishop Estate, Aloha Petroleum, James Ahloy, Chevron-Texaco, Mark Bennett, Linda Lingle, Tesoro Petroleum, Faye Kurren, Judge Barry Kurren, Enron, Goldman Sachs, Robert Rubin, Henry Paulson, Henry Peters, Paul Alston, etc.:

December 6, 1996

ENRON and Shell Win Bid in
Capitalization of YPFB's
Transportation Segment

LA PAZ, BOLIVIA – Enron Development Corp. and Shell International Gas Ltd. announced today that the government of Bolivia has named the companies the successful capitalizing company for the transportation segment of the state oil and gas company, Yacimientos Petroliferos...

Business Wire

~ ~ ~

March 30, 1998

The following is an excerpt from a 10-K SEC Filing, filed by TESORO PETROLEUM CORP on 3/30/1998:

ACCESS TO NEW MARKETS

A lack of market access has constrained natural gas production in Bolivia. With little internal gas demand, all of the Company's Bolivian natural gas production is sold under contract to the Bolivian government for export to Argentina.

Major developments in South America indicate that new markets will open for the Company's production. Construction of a new 1,900-mile pipeline that will link Bolivia's extensive gas reserves with markets in Brazil commenced in 1997 and is expected to be operational in early 1999.

The owners of the new pipeline include Petrobras (the Brazilian state oil company), other Brazilian investors, Enron Corp., Shell International Gas Ltd., British Gas PLC, El Paso Energy Corp., BHP, and Bolivian pension funds. When completed, the new pipeline will have a capacity of approximately 1 billion cubic feet ("Bcf") per day.

For more, see...

Googling the Ghost of Ken Lay

Aloha, Harken Energy

Citigroup: Vampires in the City

Dirty Gold in Goldman Sachs

Shell Oil: The Shell Game

The Story of Enron

Vultures Up to their Necks in Tesoro Petroleum

~ ~ ~

NEW DISCOVERY (07-12-08):

Harken Energy & The SEC

~ ~ ~

NEW DISCOVERY (07-21-08):

October 10, 2003

Hemmeter
still fighting

The one-time Hawaii resort
developer has come back
to town to see friends
and speak his piece

By Russ Lynch, Star-Bulletin

Former Hawaii developer Chris Hemmeter has battled prostate cancer and Parkinson's disease and is now dealing with a killer cancer affecting the bile duct. For Hemmeter, it's a liver transplant or death and his doctors told him he wouldn't make his 64th birthday.

But in a visit with friends in Honolulu this week, which included a party for that birthday, Hemmeter said his biggest trial was dealing with corrupt politicians in New Orleans.

Hemmeter -- who developed King's Alley and the twin-tower Hyatt Regency Waikiki, as well as luxury resorts such as the Hyatt Regency Waikoloa on the Big Island, now the Hilton Waikoloa Village, and the Westin Maui -- said in an interview that he was upset about the way Louisiana reporters picked on him over his grand plan for a $1 billion casino in New Orleans.

The bottom line to Hemmeter is that while the casino plan failed, it also put Louisiana Gov. Edwin Edwards in federal prison a year ago, to serve a 10-year term for extortion.

And Hemmeter said the luxury resorts he built in Hawaii made real money for him and his family and are now doing well again, despite setbacks under mostly Japanese owners following the burst of the late 1980s Japanese investment bubble.

Hemmeter sold those resorts at big profits, but when he stepped into the murky waters of Mississippi politics he ran aground, leading to the filing of personal bankruptcy by Hemmeter and his wife Patsy in 1997.

It began with the award to the Hemmeter group 10 years ago of a lease for a property designated to house the city's first land-based casino. The 60-year ground lease, worth hundreds of millions of dollars, was awarded because "we had the best plan," Hemmeter said.

Enter Edwards, a keen gambler and, according to Hemmeter and other critics, a corrupt politician. Edwards wanted a piece of the action for himself and his cronies and relatives, Hemmeter said. "He let me know in no uncertain terms that he expected his boys cut in on the deal. We said, no way we could do business like that," Hemmeter said. That's when the rot set in, ending with Edwards ignoring the law that said the land owner, in this case Hemmeter's company, would choose the gaming operator and simply telling Hemmeter that his choice of Caesar's as an operator was not going to be approved.

In the end, Edwards forced through a deal with three companies sharing the business, leaving Hemmeter with about a third of it.

"I ended up as a minority investor and watched my investment go down, down, down," Hemmeter said.

Hemmeter, who had kept his Hawaii developments as individual entities, ended up breaking that rule in New Orleans and consolidating several of his companies and pledging several multimillion-dollar homes as collateral for loans. The first casino, on a temporary location intended to get the business started while a new one was built, closed a few months after it opened in 1995, with Edwards' pick Harrah's going bankrupt and bond-holders unable to recover the $400 million they had invested.

That was about the end of the saga, except for the corruption and extortion federal case against Edwards.

During the selection process, Hemmeter paid for Edwards and other Louisiana officials to make luxury trips to Hawaii.

Hemmeter maintains that was all part of the shakedown and said he was vindicated when it was revealed that federal investigators had bugged his phones for 2 1/2 years and in "tens of hours" of tapes and they were unable to show one incident in which Hemmeter did anything wrong. The experience certainly soured him on the location. "I've never set foot in New Orleans, even to change planes, since 1995," he said.

For now, Hemmeter is looking after his health. He hopes for a liver transplant in the next month or so. He and his family have embarked on a new business, a Western-style restaurant called Saddle Ranch Chop House. The first unit is up and running next to the Universal Studios theme park in Los Angeles and is doing well, particularly late at night when the mechanical-bull rides, music and bands are in full swing, he said.

"We're doing just under $1 million a month in revenues" and that works out to about $250,000 in profits. Planning for four more restaurants in the next two years, Hemmeter said he hopes for eventual profits of more than $10 million a year and a number of potential buyers are paying attention.

"We should be able to get 10-12 times earnings when we sell," he said. The restaurant business is headed by Hemmeter's oldest son, Mark.

Hemmeter is also working on a golf project on the mainland. He said his family businesses have lined up some 400 pay-for-play golf courses that are interested. The idea is to have a couple of holes at each golf course wired for video with half a dozen cameras at each hole. Golfers can turn it on by dropping a $2 token in a slot and later they can go to a Web site and watch the video along with an analysis of their swings.

There will also be a $10,000 prize for a hole in one and the cameras won't let anyone cheat, he said.

Meanwhile, Chris and Patsy Hemmeter are living in a gated community near Bel Air, outside Los Angeles. Second son Chris graduated from Harvard business school and went into a dot-com business. When that failed, he got into the food and beverage distribution business and started a credit card for restaurants, but he wants to get a doctorate and may end up teaching.

Daughter Katie is doing well as an actress and playwright and makes money buying and selling residential real estate, Hemmeter said.

The Hemmeters had a "reverse surprise birthday party" at the Kahala Avenue home of lingerie multilevel marketing moguls Walter and Tiffany James Wednesday night, with a short but elite list of guests invited for what they thought was going to be a video-conference with Hemmeter speaking from the mainland.

Present were three former governors -- George Ariyoshi, John Waihee and Ben Cayetano -- former Mayor Frank Fasi and an array of other Hemmeter friends representing much of the long-time business leadership in the islands.

Guests were delighted when Walter James, who runs UndercoverWear with his wife, confessed that Chris and Patsy Hemmeter were in the house. Hemmeter was welcomed warmly and he said doctors had told him and Patsy that they should not expect him to be around for a 64th birthday party.

One who was completely taken by surprise was Larry Johnson, former chief executive officer of Bank of Hawaii, who had arrived only half an hour earlier on a flight from New York. Johnson said he hadn't showered but his wife Claire told him not to worry because the video link would not detect any body odor.

Thos Rohr, who headed the group that developed the Waikoloa Resort, said the best thing about Hemmeter was that he started at the bottom, as a trainee with Sheraton Hotels here in the early 1960s, and rose to the top, handling deals with hundreds of millions of dollars in the same gracious way he always acted.

Tim Guard, a longtime Hemmeter friend and president of the stevedoring company McCabe, Hamilton & Renny, called the reunion "an evening of smiles."

www.starbulletin.com/2003/10/10/business/story2.html

~ ~ ~

November 28, 2003

Developer Christopher Hemmeter
dies at age 64

Pacific Business News (Honolulu)

Christopher B. Hemmeter, a prolific developer who built some of Hawaii's most notable hotels and resorts, died Thursday at his Los Angeles home. He was 64.

Eight months ago he was diagnosed with severe liver cancer. He also had been coping with Parkinson's disease. This was his second bout with cancer.

Sharing memories of his father, son Mark Hemmeter told PBN from Los Angeles, "Thanksgiving was his favorite holiday because it was all about just family. Our whole family was with him yesterday, and it was very peaceful."

Hemmeter came to Hawaii in the 1960s and became a noted developer while still in his 20s, along with partners Henry Shigekane and Diane Plotts. Many credit Hemmeter with creating the concept of a destination resort. He moved to the mainland in 1991 and became a casino developer in Colorado and New Orleans. His most recent venture was a successful restaurant near Universal Studios.

Former President Jimmy Carter, Hemmeter's close friend, told PBN for an October profile: "Chris has the uncanny ability to dream ... then put his concepts into practice for the enjoyment of countless others."

"We are extremely saddened by his passing, but we also rejoice as we reflect upon his life," the family said in a statement Friday. "He stood for all that was good in us and gave unselfishly of his time and energy. He will be greatly missed. His affection and caring for others, his charisma, and his professional accomplishments lead many people to pronounce that he was truly 'larger than life.'"

For his accomplishments, Hemmeter has received numerous awards including being named twice as the Businessman of the Year, Salesperson of the Year, Marketing Man of the Year and Islander of the Year in Hawaii. He was inducted into the American Academy of Achievement in 1979. In 1991 Hemmeter was selected the Independent Hotelier of the World.

Hemmeter's activities went beyond the hotel industry. He was the founder and chairman of the Bank of Honolulu, a director of the First Hawaiian Bank, a director of the National Symphony Orchestra in Washington D.C., a trustee of Punahou School in Honolulu, a member of the Young Presidents Organization, a director of the Carter Center, a director of Morrison Knudsen, a director of Resort Income Investors, and a Trustee Fellow of Cornell University where he received the prestigious Entrepreneur of the Year award granted to Cornell University graduates.

"Hawaii needs to appreciate his contributions to the visitor industry and the state," close Hemmeter friend and retired Bank of Hawaii CEO Larry Johnson told PBN previously. "His legacy will live here forever."

He is survived by his wife of 25 years, Patricia; children Mark and daughter-in-law Lisa, Chris and fiancée Debi, Katie and husband Cully; stepchildren Kelley, Shane, Brendan and wife Brook, and Holli; sister Sally Younge and husband Eric; brother Dr. Mead Hemmeter and wife Mari-Jo; sister-in-law Karen Cook; and six grandchildren, Taylor, Maddy, Annabelle, Austin, Ryan and Quinn.

Private services will be held Sunday in Los Angeles. In lieu of flowers, donations can be sent to the new Christopher B. and Patricia K. Hemmeter Kahaola Hospice Foundation at 1164 Bishop St., Suite 800, Honolulu, HI 96813.

http://pacific.bizjournals.com/pacific/stories/2003/11/24/daily58.html

~ ~ ~

October 3, 1997

Bishop legal team
size exaggerated,
lawyer says

McCorriston says rumors
that the estate has hired
several law firms are false

By Mike Yuen, Star-Bulletin

Bishop Estate attorney William McCorriston says Gov. Ben Cayetano was wrong in asserting that the five trustees for the $10 billion charitable trust are improperly using trust funds for legal representation during a state investigation.

Cayetano was also incorrect when he repeated a rumor that the estate was bracing for the inquiry by bolstering its "legal armament" by hiring five to seven law firms, including several from the mainland, McCorriston said yesterday.

There are only two outside lawyers - himself and Malcolm Moore, 60, who is regarded as one of the nation's leading trust law experts, McCorriston said.

The Princeton-and Harvard-educated Moore, a former president of the American College of Trust and Estate Counsel, is with the Seattle law firm of Davis Wright Tremaine, whose 10 branch offices include Honolulu, San Francisco, Washington and Shanghai.

Responding to Cayetano

McCorriston's rebuttal came less than two hours after Cayetano, in response to reporters' questions, commented on the state's investigation into the estate.

"Unfortunately, the governor was not aware of all the facts before he made a judgment. The fact of the matter is that the trustees, on my advice, have retained individual counsel on matters pertaining to the investigation that could lead to personal liability," said McCorriston, who began representing the estate last month.

The trustees will be paying for their personal counsel - not the estate, said McCorriston.

Trustee Gerard Jervis said his attorney, Ronald Sakamoto, 46, a partner in the Honolulu law firm of Char Sakamoto Ishii Lum & Ching, will represent him.

Jervis said he was confident there will be no finding that he breached his fiduciary responsibilities. "I welcome the inquiries," he said, referring to the investigation headed by state Attorney General Margery Bronster and the fact-finding inquiry by retired state Circuit Judge Patrick Yim.

Trustee Oswald Stender is represented by attorney Crystal Rose, 39, a partner in the Honolulu law firm of Bays Deaver Hiatt Lung & Rose. Rose accompanied Stender when he met with Bronster last month.

Trustees Richard "Dickie" Wong, Henry Peters and Lokelani Lindsey could not be reached for comment yesterday.

Individuals investigated

McCorriston declined to reveal who are the personal attorneys for Wong, Peters and Lindsey. He also declined to say when trustees retained personal attorneys and when the estate hired Moore.

McCorriston said he and Moore are representing the institutional interests of the Bishop Estate, while the trustees have their own lawyers because "it's hard now to ascertain what the attorney general's investigation consists of."

It is when Bronster's investigation becomes more focused that he, Moore and the trustees' personal attorneys will know who has to respond, McCorriston said.

"Until there are specific allegations, it's like shadow boxing," he added.

Cynthia Quinn, Bronster's special assistant, said McCorriston should by now know where the state inquiry is headed. "It's abundantly clear" that Bronster is investigating individual trustees - not the estate, Quinn said.

And if it becomes clear that McCorriston's role, for example, is more in the interest of the trustees than the Bishop Estate, the state will ask the court that trust funds not be used to pay McCorriston, Quinn said.

'Resistance is a mistake'

Cayetano, who had urged reporters to ask estate representatives if they were amassing a large and formidable legal team, did at the same time say, "If I am wrong, I apologize."

But he also asserted that "resistance to us looking into (Bishop Estate) documents is a mistake."

Cayetano added: "If you want to just get this thing over with, it's not hard to separate the interest of the trustees from the estate. If what we want is information which may substantiate that trust money was used to repair someone's home, how is that hurting the estate by giving us that information? In fact, it helps protect the estate from further misuse of money - if, in fact, it was misused."

The "Broken Trust" opinion piece that appeared Aug. 9 in the Star-Bulletin, sparked the state's investigation. One of the questions it raised: Did trustee Lindsey use Bishop Estate workers "to survey her North Shore property, process her permits and supervise the rebuilding of her house"?

Cayetano said even with 1998 an election year, the investigation won't go away.

~ ~ ~

Reporters object to subpoenas

By Gordon Pang, Star-Bulletin

Kamehameha Schools Bishop Estate will have to go to court if it wants the notes and documents of three reporters who have written on the estate.

Attorneys for the reporters are objecting to subpoenas served by Bishop Estate two weeks ago.

Paul Alston, who is representing reporters Jim Dooley of KITV News4 and Sally Apgar of the Honolulu Advertiser, yesterday filed formal objections in Circuit Court.

Both he and Corey Park, attorney for Associated Press reporter Bruce Dunford, have sent letters to the estate refusing to release any documents.

Bishop Estate alleges that information obtained by the reporters came from Bobby Harmon, an executive who was fired by the estate.

Harmon, who served as president and chief executive for Bishop subsidiary P&C Insurance Co., was sued by the estate to stop him from releasing information he gathered or learned while still in its employment.

The estate says Harmon stole documents from its offices.

Harmon countersued, claiming wrongful termination.

Alston said the subpoenas served to his clients were improperly issued and violate the First Amendment.

He added that Harmon never claimed to have given reporters anything more than a synopsis of information which he wrote.

Park said it didn't matter even if Harmon had given his client documents that were stolen.

"The press in this case was not a party to any kind of alleged improper activity in obtaining the information."

The estate must now ask a judge to intercede if it wants the documents.

Estate spokeswoman Elisa Yadao would not say if the estate would go to court to seek the documents.

"We are going to do what is appropriate and prudent in our attempts to get the information back," she said.

http://www.starbulletin.com/97/10/03/news/story2.html

~ ~ ~

NEW DISCOVERY (06-06-08):

June 4, 2008

'Death care' experts running RightStar

By Jim Dooley, Advertiser Staff Writer

A new court-approved management team has been installed to operate the financially stricken RightStar group of cemetery and funeral services companies here.

Circuit Judge Sabrina McKenna, who has overseen the companies since foreclosure proceedings were first filed in 2004, yesterday approved a request from the state attorney general's office and Vestin Mortgage of Las Vegas to appoint a group of experienced "death care" professionals from the Mainland to improve operations and finances at the RightStar companies.

Efforts earlier this year to publicly auction the companies were cancelled after no bidders came forward who were willing to pay the minimum asking price of $25 million set by the state and Vestin.

Vestin financed the 2001 purchase of the RightStar companies by a small group of Mainland buyers and filed foreclosure proceedings against the borrowers in 2004, claiming they defaulted on repayment of more than $35 million in loans.

McKenna yesterday released Guido Giacometti, who served as court-appointed receiver at RightStar since 2004, and approved the appointment of retired Circuit Judge Marie Milks as "commissioner" overseeing RightStar operations.

'PRE-NEED' PLANS

The new management group is headed by Dusan "Duke" Radovich, a cemetery and funeral services company operator based in Kansas City, Mo.

Radovich yesterday acknowledged offering to buy the RightStar companies several years ago but said he did not offer an auction bid this year because he felt the $25 million minimum asking price was too high.

He said the first order of business for the new management team will be to finally submit audited statements of RightStar's finances to state regulators.

A heavily redacted copy of the new team's management plan was filed with McKenna, but large portions of the version of the plan available to the public have been removed to "protect sensitive business information," according to papers filed by the office of Attorney General Mark Bennett and Vestin Mortgage. Those parties originally tried to file the entire plan under seal but McKenna ordered sections of it available to the public.

The RightStar companies are the largest operators of cemeteries and funerals in Hawai'i, with nearly 50,000 customers statewide holding "pre-need" contracts for services to be provided when loved ones die.

RightStar owns Valley of the Temples and Diamond Head Mortuary on O'ahu, Maui Memorial Park, and Homelani and Kona Memorial Parks on the Big Island. RightStar also owns several companies that sell and administer "pre-need" funeral plans, including 50th State Funeral Plan.

The state consistently has said that all outstanding RightStar pre-need contracts will be honored.

LAWS TAKE HEAT

One portion of the business plan open to the public says the new management "intends to aggressively market funeral, cemetery and cremation arrangements on a pre-need basis."

A leading national funeral services consumer group, the Funeral Consumers Alliance, has been harshly critical of Hawai'i laws governing operation of such pre-need plans, saying they are among the most lax in the country.

Efforts by the FCA and others to reform the laws have repeatedly failed to win support of state officials and legislators.

Bennett's office has filed civil lawsuits against the former operators of RightStar, alleging that they fraudulently removed between $20 million and $30 million from company trust funds between 2002 to 2004. Those suits are still pending.

Only one criminal charge has been lodged in the case, against former RightStar President John Dooley. He was indicted in late 2006 on a theft charge and was recently arrested in Oregon and returned to Hawai'i to face trial.

Dooley, who has previously denied any wrongdoing, is being held on $100,000 bail.

The Honolulu Advertiser

~ ~ ~

NEW DISCOVERY (04-04-08):

WILLIAM J. CLINTON FOUNDATION

Speech: William J. Clinton’s remarks at the Goldman Sachs & Company 2004 Global Conference

December 3, 2004

New York, NY

Thank you very much. Thank you. Thank you very much. Thank you. Thank you, Hank, for that wonderful introduction. I probably should quit while I’m ahead. [LAUGHTER] And thank you, ladies and gentlemen, for the warm welcome.

I admire Hank Paulson very much for many things. His interest in Asia and our long-term relationship with the Asian Pacific community and particularly his leadership of the Nature Conservancy, some of you may not be familiar with it, but it is the principal private organization facilitating the preservation of precious natural land in the United States, and increasingly, in other places on the globe. I don’t think I ever told Hank this. But when I was the Governor of Arkansas, we used the Nature Conservancy more than any other State in the country.

I also want thank the people at Goldman Sachs, many of whom have contributed to the work of my Foundation, and the work we do around the world to try to fight AIDS and extend economic opportunity, to promote education and citizen service and to try to bridge the racial and religious divides that still bedevil the world. And I want thank Goldman Sachs for hiring at least a dozen people, who worked in the White House and other places in the administration. I was worried about what all those young people were going to do when we left office. [LAUGHS] So I am deeply in your debt....

www.kycbs.net/Clinton-Speech-2004-Global-Conference.htm

www.kycbs.net/Confessions.htm

www.kycbs.net/GoldmanSachs.htm

www.kycbs.net/MaunawiliValley.htm

www.kycbs.net/NatureConservancy.htm

www.kycbs.net/Nature-Conservancy-Hawaii.htm

www.kycbs.net/Global-Fund.htm

www.kycbs.net/Peregrine-Fund.htm

www.kycbs.net/Peregrine-Gallery.htm

www.kycbs.net/CV05-00030-Witness-Paulson-Henry.htm

www.kycbs.net/CV05-00030-Witness-Rubin-Robert.htm

www.kycbs.net/CV05-00030-Witness-Peters-Henry.htm

www.kycbs.net/CV05-00030-Witness-Chang-Kevin.htm

www.kycbs.net/CV05-00030-Witness-Jervis-Gerard.htm

www.kycbs.net/CV05-00030-Witness-Clinton-Bill.htm

www.kycbs.net/CV05-00030-Witness-Clinton-Hillary.htm

www.kycbs.net/CV05-00030-Witness-Mailer-Dee-Jay.htm

www.kycbs.net/CV05-00030-Witness-Kurren-Faye.htm

www.kycbs.net/CV05-00030-Witness-Alston-Paul.htm

www.kycbs.net/CV05-00030-Witness-Fuqua-Judith.htm

www.kycbs.net/CV05-00030-Witness-Apoliona-Haunani.htm

www.kycbs.net/CV05-00030-Witness-Dunn-Greg.htm

www.kycbs.net/CV05-00030-Witness-Arrigo-Sue.htm

www.kycbs.net/CV05-00030-Witness-Lingle-Linda.htm

www.kycbs.net/CV05-00030-Witness-Crowe-William.htm

www.kycbs.net/CV05-00030-Witness-Kissinger-Henry.htm

www.kycbs.net/CV05-00030-Witness-Farmer-David.htm

~ ~ ~

NEW DISCOVERY (03-19-08):

March 19, 2008

RightStar auction fails to draw
a qualified bid

By Jim Dooley, Honolulu Advertiser

A sales auction of the debt-ridden RightStar group of cemetery and funeral home companies did not produce a single qualified bid, but the companies' financial health is improving and they will be re-auctioned, a state judge was told yesterday.

All 50,000 customers holding funeral and/or burial service contracts with the companies will have their contracts honored, various attorneys involved in the RightStar foreclosure case told Circuit Judge Sabrina McKenna in a briefing on the status of the case.

RightStar, a start-up company incorporated in Nevada, purchased Valley of the Temples Memorial Park on O'ahu, Homelani and Kona Memorial Parks on the Big Island and Maui Memorial Park in 2001.

The previous owner was in bankruptcy proceedings in Delaware.

RightStar also purchased numerous Hawai'i pre-need funeral plan providers, including 50th State Funeral Plan.

Las Vegas-based Vestin Mortgage, RightStar's principal lender, filed a mortgage foreclosure suit here in 2004, alleging it was owed more than $36 million. McKenna appointed Guido Giacometti as receiver to run the companies while the foreclosure suit is pending.

Giacometti's attorney, Diane Hastert, yesterday balked at briefing McKenna in open court about the results of the RightStar auction and asked to submit the information to the judge under seal.

McKenna, however, ordered some information to be placed on the record, saying, "I do consider this a public matter and the public needs to be informed about what's going on."

Hastert then told the judge that two "non-conforming bids" from qualified buyers were received by the Feb. 29 auction deadline.

It's believed that the bids were less than the $25 million minimum price set last year by the state attorney general's office and Vestin.

Deputy Attorney General C. Bryan Fitzgerald told McKenna that a third bid was also received but it was "unacceptable."

He indicated that the third bidder offered more money but could not have received a state license to operate a funeral home or cemetery.

"The amount was correct but the bidder was not license-able," Fitzgerald said.

A new sales auction may be scheduled or sales conditions may be amended, McKenna was told.

Fitzgerald said that Giacometti has "dramatically improved" the financial condition of RightStar.

"I'm not discouraged," McKenna told various attorneys involved in the long-running case.

She said she was pleased to hear that an "interim business management team" is being brought in to "improve the market value" of the companies.

The state is pursuing other litigation against the former owners of RightStar, alleging that they fraudulently removed some $20 million the company held in trust for the benefit of RightStar customers.

That suit alleges that four trustees responsible for protecting the funds, including former Gov. John Waihee, should have stopped the improper removal of funds.

The former RightStar owners and former trustees have denied wrongdoing.

Former RightStar executive John Dooley was indicted on a theft charge in December 2006, but authorities have been unable to locate him.

Reach Jim Dooley at jdooley@honoluluadvertiser.com.

~ ~ ~

NEW DISCOVERIES (02-04-08): Re: FURTHER EVIDENCE OF UNDISCLOSED, CONFLICTING PROFESSIONAL AND FINANCIAL RELATIONSHIPS BETWEEN TRUSTEE DAVID C. FARMER AND WITNESSES, FORMER GOVERNOR JOHN WAIHEE, GERARD JERVIS, NATHAN AIPA, AND BRUCE GRAHAM, ESQ, OF THE LAW FIRM OF ASHFORD & WRISTON:

http://www.kycbs.net/EQ2048-Adler-Aipa-3-15-95.pdf

http://www.kycbs.net/EQ-Adler-Cartwright-4-14-95.pdf

http://starbulletin.com/2007/08/09/editorial/special.html

http://www.actec.org/private/freeform/page.asp?PageID=614

* * *

July 3, 2005

Cemetery operator faces criminal probe

'Wall' keeps criminal, civil probes separate

By Jim Dooley, Advertiser Staff Writer

The state Attorney General's office is conducting a criminal investigation of the purchase and operation of the RightStar group of funeral and cemetery companies in Hawai'i, according to state officials and private attorneys familiar with the investigation.

The criminal probe is separate from a civil lawsuit filed last year by the Attorney General's office that accuses RightStar officials and four local lawyers, including former Gov. John Waihee, of mismanaging more than $20 million in RightStar funds held in trust for thousands of Hawai'i customers who purchased "pre-need" funeral services and cemetery plots.

RightStar owns and operates four cemeteries: Valley of the Temples on O'ahu, Maui Memorial Park on the Valley Isle, and Homelani and Kona Memorial Parks on the Big Island.

The company purchased the cemeteries and related mortuary and funeral plan trust assets in 2001, and the state licensed RightStar to operate them in November 2001.

William McCorriston, attorney for Waihee and the other three lawyers who acted as trustees of the RightStar customers' trust funds, said he does not believe his clients are targets of the criminal investigation.

"We have informed the Attorney General of irregularities and delinquencies which had concerned us," McCorriston said. "We believe our information was the genesis of their investigation."

Waihee could not be reached for comment.

Attorneys for RightStar officials and Vestin Mortgage Inc., a Las Vegas-based lender that financed RightStar's purchase of the companies and filed a mortgage foreclosure lawsuit against RightStar for failure to repay $34 million in loans, said their clients have done nothing wrong. They said company officials are cooperating in the criminal and civil probes conducted by the Attorney General.

State Attorney General Mark Bennett and Deputy Attorney General Lawrence Goya confirmed the criminal investigation but would not elaborate on details of the case.

Legal quagmire

RightStar's financial problems have spawned a welter of lawsuits in state and federal court here, and involved the companies and its officials in at least one other ongoing criminal investigation, according to court records.

Most of the civil cases center on how the companies and trustees managed trust-fund assets.

The trust funds contain money from cemetery plot and funeral plan buyers that is supposed to be held in trust for the customers until they die. The funds also contain money set aside for "perpetual care" of the cemeteries.

According to state figures, the value of the trust funds stood at $63.2 million when RightStar took control of them. A year later, the value dropped to $40 million.

The foreclosure lawsuit filed by Vestin Mortgage claims that RightStar defaulted on loans that were used to purchase the companies. A state judge handling that case has appointed an independent receiver, Guido Giacometti, to run the cemeteries and funeral businesses and protect the rights of customers while the competing claims from numerous parties are sorted out.

In his two most recent monthly reports filed with the court, Giacometti said the companies have a "critical need" for additional money and are attempting to develop new cemetery plots and sell new funeral plans to increase cash flow.

"We're doing OK — sales volumes are relatively consistent," Giacometti said. "We'd like them to be higher but we inherited a company that had not reinvested in itself. There are a limited number of cemetery plots available, so we're working toward development of future areas."

Consumers caught

Local resident John Quinores bought four burial plots for himself and his family at Valley of the Temples in the 1960s and said he's worried about his investment. After agreeing to buy the cemetery plots, Quinores later supplemented that purchase with "pre-need" plans designed to provide funeral services when he dies.

"I'm still paying," Quinores said. "I called the company a couple of months ago with some questions but the lady that answered was vague and defensive."

Giacometti said he has made customer service a top priority and also is dealing with a variety of other pressing issues, including satisfying a dozen consumer complaints filed with the state Regulated Industries Complaints Office. Also unresolved are numerous other complaints about RightStar's decision last year to sell burial plots and funeral services contracts at a discount to a company called Alternative Debt Portfolios.

That sale was an effort by previous RightStar management to raise funds, Giacometti said.

"About 2,100 cemetery plot contracts were sold, but some of the contracts had already been paid in full and should not have been included in the deal," Giacometti said. "There are also some questions about who is responsible for the funeral services that are included in some of the other contracts."

Giacometti said he's cooperating in state and federal tax investigations of RightStar as well as a separate FBI investigation of Funding Solutions Inc., a company in Stamford, Conn., to which RightStar turned for financial assistance in 2004.

RightStar "made a $250,000 payment to them in return for a loan commitment, but then never got the loan," Giacometti said.

When Giacometti asked the company for a refund, "we ran right into an FBI investigation," he said. "They are investigating Funding Solutions and principals of the company and we are cooperating in that investigation."

According to federal court records, Funding Solutions executives Leonard Kalish and Joel Pondelik were charged with conspiracy to commit wire fraud in a criminal complaint filed by the U.S. Attorney's office in New York City in January.

A call to the company for comment was returned by Kalish's New York attorney, Martin Adelman, who said only that Kalish "will answer any and all official inquiries (about RightStar) when they are made."

A right to foreclose

Hawai'i Circuit Judge Sabrina McKenna ruled last month and again Friday that Vestin had the right to foreclose on RightStar, with the companies to be sold "to a licensed and qualified buyer" who would protect "the interests of consumers."

Attorney Grant Kidani, attorney for Alternative Debt Portfolios, had asked McKenna to delay foreclosure proceedings for 120 days, arguing that documents filed in another RightStar-related lawsuit, now pending in federal court here, showed both Vestin and RightStar had "unclean hands." Their relationship should be examined more closely before foreclosure takes place, he said.

The other federal court suit, first filed in U.S. Bankruptcy Court in Delaware and now pending before Hawai'i Federal Judge Helen Gillmor, alleges that Waihee and three other local attorneys who acted as RightStar funeral plan trustees were part of a fraudulent conspiracy to "strip the assets" of RightStar.

The suit was filed against RightStar by Alderwoods (Hawai'i) Inc., which purchased the assets of the cemetery and mortuary business in a Delaware bankruptcy court sale and then resold it to RightStar in 2001.

Charges in the suit are based in part on allegations from David Jackson, a former financial controller of RightStar Hawaii Management, who charged that Waihee used his "political influence" to smooth the company's dealings with state regulators.

McCorriston, Waihee's attorney, said Jackson's allegations "are part of an effort to besmirch Waihee's and the other trustees' reputations. RightStar has gone belly-up, so instead they're pointing their guns at the trustees."

Candace Ito, executive officer of the state Cemetery and Funeral Trusts Program, also denied Jackson's allegations, saying that "RightStar did not receive any special treatment" from the state.

RightStar President John Dooley said Waihee "did nothing improper while representing the company in the licensing process. He used his abilities to assist a private business attain licensing in the state of Hawai'i in much the same way that other former governors have assisted businesses in the past."

RightStar attorney James Wagner added, "Jackson is a disgruntled former employee who was fired for incompetence."

Attempts to reach attorneys for Jackson and Alderwoods were unsuccessful.

Transfers questioned

The state has charged in its civil suit against RightStar that the company and the former trustees improperly removed about $20 million in trust fund assets in 2002, transferring the money to RightStar's operational accounts. The state said the transfers should only have been made after a full accounting of the finances of the cemeteries and trust funds had been completed and filed with the state. Such financial statements have yet to be filed by RightStar, according to court records.

The Attorney General's suit also charged that the trustees removed another $20 million in trust fund assets and improperly invested the money in a Nevada real estate venture called Vestin Fund II. That fund is managed by Vestin Mortgage, the same company that financed RightStar's purchase of the cemeteries and trust funds in the first place.

An independent expert, John Candon, has been appointed by the court in the Attorney General's civil lawsuit to examine the finances and activities of RightStar and the trust funds and to make sure the money is properly accounted for and protected.

Last year, the U.S. Securities Exchange Commission revealed that it was investigating Vestin Fund II. Vestin called the SEC probe an "informal inquiry" that appears to focus on its financial reporting to the SEC.

Vestin attorney Paul Alston said the investment has yielded a return of 9 percent interest per year and is probably one of the best investments the trustees made."

And Alston said at least some of the blame for RightStar's problems belongs with the state. "It appears that the trusts were mishandled under the state's proverbial nose, and it is only because of Vestin's complaints ... that the state has stirred to action," Alston said in a letter to Judge McKenna.

In late May, state Deputy Attorney General James Paige said in a letter to Judge McKenna that the state had attempted unsuccessfully to recover $20 million in RightStar trust money from Vestin Fund II.

Under the terms of the investment, Paige said, the fund can give back no more than 10 percent of an investment per year. At that rate, the consumer trust funds that the state wants back will not be fully recovered "until approximately the year 2015," Paige wrote.

Class-action suit filed

Last week, a class-action lawsuit was added to the legal woes besetting RightStar. One plaintiff in the suit, Yahnina Hackney, repeated claims reported earlier by The Advertiser that RightStar improperly canceled her stepmother's funeral services contract after the elderly woman became sick and failed to make monthly payments to the company.

The company said in response that the cancellation was made by previous owners of the company and some of the disputed funds are still being held in trust.

Hackney said when her stepmother died, there was no money to pay for her burial. "I had to ask the state to do it," she said. "It was very sad. She was cremated. She didn't want that. I have her ashes at home."

She said she "would like to see everybody wake up and take a look at this issue. It's very important and it's something we all will have to face."

Reach Jim Dooley at 535-2447 or jdooley@honoluluadvertiser.com.

Honolulu Advertiser

For more, GO TO > > > Vampires in the Cemetery; The Candon Consulting Group

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John Candon is expected to testify with regard to his business, professional, personal and political relationships with Kamehameha Schools, Bank of Honolulu, Sukamto Sia, Diane Plotts, Bob Awana, Judge Robert Faris, Judge Lloyd King, John Waihee, Bill Clinton, Hillary Clinton, Verner Liipfert Bernhardt McPherson & Hand, Ron Rewald, Kenneth Starr, Warren Price III, Yukio Takemoto, Kazu Hayashida, George Ariyoshi, William McCorriston, Office of Hawaiian Affairs, John Waihee IV, Robert Klein, Clayton Hee, Haunani Apoliona, The Nature Conservancy, Faye Kurren, Judge Barry Kurren, John Goemans, Mark Bennett, Jon Miho, McCorriston Miho Miller Mukai, Lawrence Goya, Lisa Ginoza, Gerard Jervis, Judge Kevin S. Chang, Judge David Ezra, William S. Richardson, Matsuo Takabuki; Bank of Hawaii, Donna Tanoue, Renton Nip, Charles Chidiac, Mary Lou Woo, Joanne Mucha, Peter Savio, Wallace Chow Estate, Ms. Simm Wenner, Jann Wenner, Clyde S. Umebayashi, Steven Guttman, Robert Kihune, Gilbert Tam, Guido Giacometti, Susan Tius, RightStar Management, Paul Alston, Louise Ing, Judith Neustadter Fuqua, Steven Sofos, Gary Rodrigues, Alvin Shim, Carol Muranaka, Liberty House, Cecil Santos, Joshua Gotbaum, John Dasburg, St. Paul Travelers Insurance Co., Bruce Graham, David C. Farmer, Ron Burkle, Howard Dean , Jim Nabors, The Hawaii Nature Conservancy, Ralph Boyd, Jr., Mark Hemmeter, Francis Oda, Group 70, Lawrence Johnson, Summit Communications, and others to be named upon discovery.