HAWAII DENTAL SERVICES
Insurance Vampires in the Dentist Chairs
Sightings from The Catbird Seat
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December 30, 2007
Rodrigues’ term upheld
A judge rules that the former labor leader must
report to prison Jan. 7 as scheduled
By Debra Barayuga, Star-Bulletin
Convicted labor leader Gary Rodrigues will report to prison on Jan. 7 as scheduled, a federal judge ruled.
Earlier this month, U.S. District Judge David Ezra denied Rodrigues' request to delay his 64-month prison term until April 1, saying he wasn't swayed by the former labor leader's arguments.
Rodrigues had sought an extension because he plans to file a petition to the U.S. Supreme Court challenging his conviction on 101 felony counts. The defense has vigorously maintained that Rodrigues committed no crime.
Rodrigues and daughter Robin Sabatini were found guilty and sentenced on Sept. 30, 2003, to multiple charges of mail fraud, conspiracy to launder money, health care fraud, theft of union funds and accepting kickbacks from an employee benefit plan. Sabatini was sentenced to 46 months.
Both were allowed to remain free on bail pending the resolution of their appeal to the 9th Circuit. The 9th Circuit affirmed the jury's verdict on June 11.
Ezra affirmed the sentences for both father and daughter on Oct. 31 and ordered them to begin serving their sentence Jan. 7.
Rodrigues sought the extension because he has two pending civil cases in federal court and is due to testify in both cases, which are set for trial on Jan. 15 and March 11, respectively.
Government attorneys had called the request for an extension "yet another delay tactic."
"It is time for this defendant to start serving his prison term," wrote assistant U.S. Attorney Florence Nakakuni in the government's opposition.
Ezra noted that Rodrigues did not meet the statutory requirements for the release of an individual who has been convicted, sentenced and has filed a petition to the U.S. Supreme Court.
The court is required to find that the defendant presented clear and convincing evidence that he is not likely to flee or pose a danger to the community. The court said it did not know the basis for the petition and therefore could not determine whether the appeal would raise any issues that would likely result in a reversal of the verdict.
http://starbulletin.com/2007/12/30/news/story03.html
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August 4, 2003
Faye Kurren named president of
Hawaii Dental Service
Pacific Business News (Honolulu)
Faye Kurren, former president of Tesoro Hawaii Corp., will be the new president and CEO of Hawaii Dental Service beginning Sept. 3, the company announced Monday.
Kurren replaces Jonathan Won, who has been HDS president and CEO since 2000. He had announced in May that he was leaving the company.
Kurren has held executive leadership positions with companies such as Pacific Resources Inc. as counsel in 1984 and BHP Hawaii (formerly PRI) as vice president and general counsel.
When Tesoro Petroleum Corp. acquired BHP Hawaii in 1998, Kurren became president, overseeing refining, distribution and retail operations for the mid-Pacific region.
"Faye brings to HDS a solid track record of strong leadership," said Jay Kanegawa, chairman of HDS' board of directors. "Her local leadership experience and perspectives will strengthen HDS to better serve Hawaii's residents, businesses and organizations."
Kurren, a graduate of Punahou School, has a law degree from the University of Hawaii Richardson School of Law, a master's degree in sociology from the University of Chicago and a bachelor's degree in sociology from Stanford University.
She's a member of the boards of the University of Hawaii Foundation, Girl Scout Council of Hawaii, the Nature Conservancy of Hawaii, Pacific and Asian Affairs Council and Waikiki Aquarium.
HDS is the state's largest nonprofit dental service provider.
For more, GO TO > > > The Peregrine Gallery presents...Faye Kurren; David Farmer, Trustee vs. Harmon: Witness Faye Kurren; Witness Gary Rodrigues
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March 8, 2001
Indictment:
Rodrigues skimmed
$200,000
The UPW director is charged with
fraud, embezzlement and
money laundering
United Public Workers Director Gary Rodrigues skimmed more than $200,000 from two union health benefit plans by arranging secret payments to companies owned by his daughter, Robin Haunani Rodrigues Sabatini, according to a 43-count indictment handed down by a federal grand jury in Honolulu.
The payments were made at Rodrigues' direction by two insurers, Hawaii Dental Service and Pacific Group Medical Association, the indictment alleges.
Rodrigues and Sabatini face multiple counts of mail fraud, defrauding a health care benefit program, embezzlement, money laundering and conspiracy to commit money laundering.
The indictment could bring an end to Rodrigues' nearly three decades at the helm of the 15,000-member United Public Workers, one of the state's largest unions.
Doron Weinberg, a San Francisco attorney representing Rodrigues in the criminal case, said last night that it is "a little premature" to comment on the possibility he will step down from his union post....
Weinberg said he was retained by Rodrigues in late 1998 after a series of Star-Bulletin stories on alleged misuse of union resources by the UPW leader.
Honolulu attorney Robert F. Miller, who has represented the UPW in this matter, declined comment pending a meeting with the union's executive board.
The indictment alleges that UPW members unknowingly paid inflated fees for health care benefits under contracts negotiated by Rodrigues, who then directed the insurers to use the excess funds for payments to Sabatini's companies.
Although described as consulting fees, Sabatini did little or no work, according to the indictment.
Fees paid to daughter
On March 25, 1996, HDS made a lump sum payment of $25,381.19 to Sabatini's Four Winds RSK Inc. for consultant fees covering the period January 1994 through December 1995, although the company "was not in existence until February 1996 and could not have and did not perform any consulting work for UPW," the indictment said.
During 1996, Sabatini distributed $36,600 from Four Winds accounts to herself and other family members, the indictment alleges.
During 1997, Four Winds paid $54,600 to Sabatini and family members, and made a $35,000 distribution to her own pension plan.
The indictment lists 14 payments totaling more than $150,000 to Sabatini's companies between March 1996 and December 1998 involving funds originating with the UPW-HDS contract.
Sabatini also received more than $147,000 in a series of payments from PGMA and a sister company, Pacific Equity Growth and Management, during 1996.
Sabatini later distributed funds to Rodrigues and other family members, the indictment alleges, including $14,213.64 for purchase of a 1997 Ford Ranger truck registered in Rodrigues' name.
The payments to Sabatini began in early 1996 and continued through December 1998 but were never disclosed to the union's executive board or membership, according to the indictment.
U.S. Attorney Steven S. Alm said union members were defrauded of money paid for health benefits which instead went to benefit Rodrigues and his family.
"UPW members were also defrauded of their right to the honest services of their union director," Alm said.
The indictment seeks to recover $200,200 allegedly paid to Sabatini and Rodrigues, but Alm called that figure "very, very conservative."
The maximum penalty for mail fraud and embezzlement is five years of imprisonment and a $250,000 fine for each count. Defrauding a health benefit program has a maximum of 10 years in prison and a $250,000 fine. The two money-laundering conspiracy charges and related charges each carry maximum penalties of 20 years in prison and a fine of up to $500,000.
A conviction could also result in Rodrigues being barred from holding any union post as an employee, officer or even a consultant.
HDS premiums 'inflated'?
The indictment is the first to result from a continuing three-year investigation conducted by the Office of the Inspector General of the U.S. Department of Labor, the Criminal Investigation Division of the Internal Review Service, the FBI, the U.S. attorney's office and the Honolulu Police Department.
According to the indictment, Rodrigues' theft of union funds began in June 1992 when he negotiated a contract with HDS to provide dental benefits for union members and their families.
Rodrigues also negotiated an addendum to the contract calling for a consulting fee to be paid to a designated consultant, with the cost of the consulting fee added to the premium charged to the UPW and its members.
The HDS contract was disclosed to the UPW executive board, but Rodrigues "did not disclose the fact that the premiums charged by HDS were inflated to include the consulting fee," the indictment alleges.
The consulting fee was paid to an unidentified individual to pay off a personal loan made earlier to Rodrigues, according to the indictment.
The indictment does not identify the consultant, who was described as deceased.
However, former UPW employee Allan J. Loughrin was paid $10,000 by HDS as a consultant during the same time period, according to members of Loughrin's family.
Loughrin's son, Walter Parker, told the Star-Bulletin in 1998 that the consultant contract was arranged by the union as a means to repay a personal loan Loughrin made to Rodrigues.
Loughrin's daughter, Georgietta Carroll, was Rodrigues' secretary and had a personal relationship with the union director. Rodrigues and Carroll jointly purchased property in Bend, Ore., in the mid-1980s and built a home there, real estate records show.
Loughrin died in 1997.
Arraignment due soon
The indictment alleges that after the personal loan was paid off in March 1994, Rodrigues wrote to HDS asking that all consultant fees be held by the company "until further notification."
Two years later, in early 1996, Rodrigues instructed HDS to begin paying the consultant fees to Four Winds, formed by Sabatini in February 1996.
Four Winds also received fees from PGMA, which offered a union-sponsored health insurance plan to UPW members. The payments from PGMA continued through 1996 but ceased when the company became insolvent at the end of the year. PGMA was seized by state insurance regulators in March 1997.
After a January 1998 Star-Bulletin story disclosed the consultant fees by PGMA, Sabatini started a new company, Aulii Corp., which took over the assets of Four Winds and received the continued payments from HDS.
Beginning in February 1998, Rodrigues directed HDS to pay the consulting fees to the Voluntary Employees' Benefit Association of Hawaii, which in turn made payments to Sabatini's new company. The payments to Sabatini were made through an affiliate, Management Applied Programming Inc., the indictment charges.
At the time, Rodrigues was a director of VEBAH, which is linked both to UPW and the Hawaii Government Employees Association, the state's largest public employee union.
VEBAH attorney Paul Schraff could not be reached for comment.
Weinberg said Rodrigues and Sabatini are expected to appear in court for arraignment in the next week or two, although no court date has been set.
www.starbulletin.com/2001/03/08/news/story1.html
November 22, 2002
Union suspends Rodrigues
The move by UPW's mainland parent
comes 2 days after his conviction
By Rick Daysog, Star-Bulletin
The United Public Workers' mainland parent has suspended the union's state Director Gary Rodrigues two days after he was found guilty on federal embezzlement, mail fraud and money-laundering charges.
In a terse news release, the American Federation of State, County and Municipal Employees said it notified the UPW's local board of directors of the 30-day suspension yesterday....
AFSCME said it took action after a federal jury found Rodrigues guilty Tuesday on 101 counts of mail fraud, embezzlement and money laundering stemming from a kickback scheme involving union dental and medical contracts.
Rodrigues' daughter Robin Haunani Rodrigues Sabatini also was convicted on 95 counts of mail fraud and money laundering.
Robert Miller, an attorney representing the roughly 13,000-member UPW, had said Wednesday that no determination had been made about Rodrigues' leadership status. By law, Rodrigues did not have to resign until he is sentenced, Miller said...
But the parent union's action came as a relief to UPW state President George Yasumoto, who said he had planned to ask for Rodrigues to be suspended at a board meeting today....
Yasumoto said he has two candidates for interim state director, Rodrigues' executive assistant, Dayton Nakaneula, and Oahu Division Vice President Joe Rodrigues, who is no relation to Gary Rodrigues....
Although Rodrigues will not be considered convicted until a federal judge discharges the jury sometime next week, his suspension is prudent given the potential turmoil at the union, according to one of his critics.
John Witeck, former assistant Oahu division director for the UPW before he was fired by Rodrigues four years ago, said he was encouraged by AFSCME's decision....
But Witeck, who now works as training specialist with the city Department of Environmental Services, said AFSCME "blew it" three years ago when it failed to take action against Rodrigues on a related matter.
At the time, three UPW shop stewards, Keith Chudzik, Angel Santiago-Cruz and Keith Faufata, filed internal charges that Rodrigues violated the union constitution by failing to disclose information about questionable financial dealings. They also alleged that Rodrigues retaliated against members.
After a one-day hearing in July 1999, the union's international parent found Rodrigues innocent of the allegations.
"A lot of this could have been corrected earlier," said Witeck, who has a pending suit against Rodrigues for wrongful termination and retaliation. "It took courage for the three rank-and-file guys to stand up and come forward, and the international really failed them. The harm done to union democracy is very, very serious."
http://starbulletin.com/2002/11/22/news/story1.html
November 6, 2002
Document shredding alleged
The head of the UPW allegedly destroyed
records that listed fees paid to himself
By Rick Daysog, Star-Bulletin
An accountant with the United Public Workers union testified that state director Gary Rodrigues "shredded" records subpoenaed by federal investigators in their probe of the powerful labor leader.
Testifying before U.S. District Judge David Ezra yesterday, Jeanne Endo said Rodrigues told her in August 1999 that he had destroyed UPW documents that listed some $15,000 in consulting fees paid to Rodrigues and Allan Loughrin, the deceased stepfather of Rodrigues' former girlfriend.
"He said it was shredded, it's destroyed," Endo said.
Rodrigues and his daughter, Robin Haunani Rodrigues Sabatini, are on trial for a 102-count indictment alleging embezzlement, money laundering, mail fraud and health care fraud.
Federal prosecutors also have alleged that Rodrigues destroyed subpoenaed documents. They believe that the records, which provided details of the UPW's benefit plans with Hawaii Dental Service, showed that Rodrigues misappropriated union funds to pay consulting fees to himself and Loughrin.
The records, known as a form 550, are filed each year with the Internal Revenue Service and the U.S. Department of Labor and provide financial details of the union's benefit plans.
Endo said she turned over the HDS records in January 1999 to Rodrigues at his request. Eight months later, Rodrigues informed Endo that he had destroyed the documents after she advised him that the union's HDS benefit plan did not need to file a form 550.
But Endo said she kept a copy of the HDS form and turned it over to federal investigators last month.
Doron Weinberg, Rodrigues' attorney, criticized the shredding allegations as a last-minute ploy. He has argued that Rodrigues always served the interests of union members and his family and did not violate the law....
The records show that UPW paid $4,000 a month in administrative fees to Kaiser and $3,500 a month in administrative fees to HDS.
By contrast, the union paid $17,000 to $18,000 a month in administrative fees to Pacific Group Medical Association, the local health insurer that failed in 1997.
Federal prosecutors allege that HDS and PGMA and its sister company, Pacific Equity Growth and Management, paid consulting fees to two companies owned by Sabatini: Four Winds RSK on Kauai and Aulii Corp....
www.starbulletin.com/2002/11/06/news/story13.html
October 9, 2002
Ex-girlfriend testifies
Rodrigues received cash
By David Waite, Honolulu Advertiser
Almost every month from 1990 to 1993, a sales agent from a life insurance company who sold group benefit policies to United Public Workers union members would show up at the union hall with a white envelope for union leader Gary Rodrigues, Rodrigues' former secretary testified in federal court yesterday.
Georgietta Carroll, who was also Rodrigues longtime live-in girlfriend, said she never saw Rodrigues open one of the envelopes given to him by Transamerica Occidental insurance agent Herb Nishida but assumed there was cash inside based on what Rodrigues often told her afterwards.
"He would say, 'A payment was made,' or, 'We can go out to dinner tonight,' and would walk out of his office to put the envelope in the safe downstairs," Carroll said.
Carroll, a key prosecution witness and the first to take the stand in the fraud case against Rodrigues, provided testimony bolstering the prosecution's case that the union leader received kickbacks from Nishida.
But Rodrigues' defense lawyer Doron Weinberg suggested that Carroll assisted authorities because she was "a woman scorned."
"I was broken-hearted," Carroll testified. "He took my heart and ripped it into pieces, not once but two or three or four times. He made promises he didn't keep."
However, when asked if she were angry enough about the breakup to try to "harm Gary Rodrigues professionally or politically," Carroll answered, "Absolutely not!"
Rodrigues, state director of the 13,000-member UPW union, and his daughter, Robin Haunani Rodrigues Sabatini, are on trial in federal Judge David Ezra's courtroom on charges of mail fraud, conspiracy to defraud a healthcare benefit program and money laundering.
Rodrigues alone is charged with embezzling labor-organization assets and accepting kickbacks in connection with an employee welfare benefit plan.
Assistant U.S. Attorney Florence Nakakuni said during her opening statement in the trial last week that the evidence will show that Rodrigues devised a plan to charge union members more than necessary for life, health and dental insurance so he could use the surplus to steer consulting contracts to his daughter, with some of the money coming back to benefit him directly.
Nakakuni told the jury that Nishida earned more than $100,000 in commissions by selling union-endorsed life insurance policies to union members and gave cash payments to Rodrigues in return.
In her sometimes tearful testimony yesterday, Carroll said when she later questioned Rodrigues about Nishida's envelopes and asked him whether the union's executive board knew about the payments, Rodrigues grew angry and told her board approval was not required.
"I felt he should have gone to the board anyway to protect himself, and when I questioned him about it, he got angry and said I should go out and try to get elected to head the union myself," Carroll said.
Carroll also testified yesterday that she was surprised to learn when she came across a letter from Hawaii Dental Service to the UPW in December 1992 that her stepfather, Al Loughrin, had been named as a union consultant on the dental plan.
She said Rodrigues told her the money being paid to Loughrin as a consultant on the dental benefits contract was to pay off a $10,000 personal loan that Loughrin made to Rodrigues, who used the money to install a sprinkler system in the front and back yards of a house Rodrigues and Carroll shared near Bend, Ore.
She said she told Rodrigues he should have used "money out of his own pocket" and not the union's money to repay her stepfather.
Sobbing heavily, Carroll said Loughrin, who died in 1995, "thought the world of Gary and treated him as a son. He loved him deeply."
In his cross examination, Weinberg suggested that Carroll's motivation in talking with Honolulu police detectives about Rodrigues in 1998, trying to file a "palimony" lawsuit against him a year or two earlier and suing him for sexual harassment was based on Rodrigues' breaking off his relationship with her in 1995.
Carroll acknowledged that she hired someone to follow Rodrigues around during a business trip to Colorado after she began to suspect a co-worker at the UPW office was having an affair with him.
And she admitted looking through more than a year's worth of union records "that someone else provided me" to see if Rodrigues and the other woman were away from the union hall on the same day.
A tearful Carroll said after working at the UPW for 16 years, she left the union in 1998 after accepting the fact that she was continuing to give Rodrigues her love, but that none was coming back.
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John W. Keker of Keker & Van Nest in San Francisco, who is nobody’s fool, is so confident in his abilities that he’d represent himself. He has plenty of company:His name was mentioned more often than any other when our surveyed lawyers were asked who they’d turn to if faced with serious charges.“John embodies everything one looks for in a lawyer, whether criminal or civil,” says Tower C. Snow, chair of Brobeck, Phleger & Harrison in San Francisco.“He’s highly intelligent, creative, resourceful, tough, tenacious, a ruthless cross-examiner, and totally dedicated to the welfare of his clients.”
After graduating from Yale Law School in 1970, Keker clerked for Supreme Court Chief Justice Earl Warren, spent several months as staff attorney for the Natural Resources Defense Counsel, and then moved to California to become an assistant federal public defender for the Northern District of California. Since entering private practice Keker has tried cases involving everything from patents to palimony. But he is perhaps best known for successfully defending Patrick Hallinan of Hallinan, Wine & Sabelli, a prominent San Francisco defense lawyer who was charged with conspiracy, racketeering, illegal possession of weapons, and drug smuggling.The indictment was based on allegations made by one of Hallinan’s former clients, who fingered the attorney in a plea bargain. In 1995 Keker won Hallinan a full acquittal.
Keker also successfully defended attorney Doron Weinberg in 1994, when Weinberg and Penelope M. Cooper were accused of taking cash under the table to defend convicted Oakland drug lord Rudy Henderson. From 1987 to 1989 Keker worked the other side of the courtroom as chief prosecutor of Oliver North after the Iran-Contra scandal....
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For more sightings of insurance vampires...
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A CONNECTICUT YANKEE IN KING KAMEHAMEHA’S COURT
DIRTY MONEY, DIRTY POLITICS & BISHOP ESTATE
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THE KAMEHAMEHA SCHOOLS PENSION PLAN
MARSH & McLENNAN: THE MARSH BIRDS
MARSH & McLENNAN’S GUY CARPENTER
NESTS OF THE INSURANCE VAMPIRES
THE PRUDENTIAL: A NEST ON SHAKY GROUND
THE SILENCE OF THE WHISTLEBLOWERS
TRANSYLVANIA TRAVELERS IN ST. PAUL
CITIGROUP: VAMPIRES IN THE CITY
VAMPIRES IN THE VESTA INSURANCE GROUP
VULTURES IN THE NATURE CONSERVANCY
ZEROING IN ON ZURICH FINANCIAL SERVICES
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Last Update December 30, 2007, by The Catbird