PGMA
Insurance Vampires in the Doctors’ Offices
Sightings from The Catbird Seat
~ o ~
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
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.
< < < FLASHBACK < < <
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....
December 21, 1999
Insurer charged in PGMA collapse
Metcalf sees negligence and fraud behind the failure,
but another suit targets the state insurance boss
By Ian Lind, Star-Bulletin
State Insurance Commissioner Wayne Metcalf has filed civil fraud and negligence charges against former island businessman Peter Posang Wong, founder of Pacific Group Medical Association, along with his wife, mother, and 21 other individuals or businesses alleged to be responsible for the insurer's collapse.
But Metcalf is the target of a separate whistleblower's suit by fraud investigator Thomas Hayes, who says he was fired after concluding that insurance regulators are also liable because they took so long to take action against the insolvent health insurer.
PGMA, which once provided health insurance coverage to more than 26,000 individuals, left an estimated $26 million in debts outstanding when it was declared insolvent and seized by insurance regulators in March 1997.
The insurance commissioner's 75-count civil suit seeks to recover about $20 million it says was "fraudulently and deceptively" transferred from PGMA to companies controlled by Wong or to individuals linked to him.
The lawsuit was filed in First Circuit Court by Honolulu attorney Wendell H. Fuji on behalf of Metcalf, who is the court-appointed liquidator of PGMA's remaining assets.
Many of the allegations have surfaced in court during liquidation proceedings, or in prior suits against the officers and directors of PGMA, but this is the first lawsuit aimed directly at Peter Wong.
Wong, now living and working in California, has not responded to repeated requests for comment on PGMA, and did not respond to a detailed message left at his office yesterday about this case. In prior court documents, he has denied any wrongdoing.
The suit alleges Wong committed unfair and deceptive trade practices by marketing and selling PGMA health insurance plans when the company did not have the financial resources to pay claims. In addition, Wong is charged with fraud, conspiracy to commit fraud, and fraudulent transfer for allegedly benefiting from funds transferred through a complex network of related companies and accounts.
The suit seeks to recover funds transferred to 11 companies controlled by Wong, including Toral-Vahey & Associates, the Southern California insurance agency where Peter and Susan Wong are now partners and key executives.
Two former in-house accountants, along with PGMA's former external auditors and consultants, are charged with negligence or breach of contract for failing to protect PGMA's financial interests.
Among those named in the suit are two companies owned by Robin H. Sabatini, daughter of UPW state director Gary Rodrigues, whose union had an agreement to provide PGMA policies as options for its members....
Sabatini's attorney, Richard L. Hoke Jr., said last month that records of all transactions with PGMA had been turned over to a federal grand jury several months earlier, although Sabatini herself is not a subject of the inquiry.
Hayes, an experienced financial investigator who has been involved in many of Hawaii's largest fraud cases, says he was abruptly terminated without explanation at the end of August by James Mzyk, chief examiner for the Insurance Division and special deputy to Metcalf in the PGMA case.
Hayes alleges he was later told that the move was an effort by Metcalf to save money, but says it happened soon after he told Mzyk that "major claims" can be made on behalf of PGMA's creditors against the insurance commissioner.
Metcalf was insurance commissioner during 1994-1997 when PGMA became insolvent.
Hayes' suit claims that "the true reason for his termination was to rid the PGMA Liquidating Trust of personnel who supported asserting claims on behalf of PGMA creditors against the Insurance Commissioner."
Fuji denied there is any basis for claims against regulators. The Insurance Division "followed the law at all times" and relied on the advice of professional accountants, actuaries and examiners "who at no time indicated that there were any significant problems with the company," Fuji said.
www.starbulletin.com/1999/12/21/news/story3.html
June 25, 1999
New firm takes
PGMA case
Kobayashi Sugita & Goda
will lead the efforts to recover
$27 million from failed health
insurer PGMA
By Ian Y. Lind, Star-Bulletin
State Insurance Commissioner Wayne Metcalf has dropped two law firms leading the legal effort to recover assets of the failed health insurer Pacific Group Medical Association.
All PGMA-related cases and files have recently been transferred to the law firm of Kobayashi Sugita & Goda, although the change has not yet been recorded in court, Metcalf confirmed this week.
The Kobayashi firm is one of the 10 largest in the state, with about 30 attorneys.
Metcalf declined to publicly discuss the reasons for the sudden change, but court records indicate rapidly mounting legal fees were a potential problem.
Metcalf said the move would not delay the complicated series of legal actions, which includes liquidation of PGMA and several related lawsuits against the insurer's officers, directors, accountants, lawyers and insurers.
"This doesn't affect our determination to recover all sums owed creditors. We intend to be very aggressive in our pursuit of all legal claims," Metcalf said.
The insurance commissioner serves as the court-appointed liquidator of PGMA's remaining assets, as provided by state law.
PGMA was insolvent when seized by state regulators in March 1997, leaving an estimated $27 million in outstanding bills.
The company once provided health insurance coverage to 28,000 island residents, including thousands of members of the two largest public employee unions, the Hawaii Government Employees Association and the United Public Workers, which offered PGMA plans directly to their members.
More than 10,000 individuals, companies and medical providers are known to have outstanding claims against PGMA, court records show.
Metcalf was reappointed to the state's top insurance post after his predecessor, Rey Graulty, was named a Circuit Court judge by Gov. Cayetano earlier this year.
The law firms hit by Metcalf's decision were both selected by Graulty.
Attorneys Don Gelber and Simon Klevansky of Gelber Gelber Ingersoll Klevansky & Faris did the bulk of the legal work after PGMA collapsed more than two years ago.
A second law firm, Davis Levin Livingston and Grande, was brought into the case in September 1998 to assist in the litigation....
Gelber's firm had received $644,000 in legal fees through October 31, 1998, and may have earned an additional $200,000 since that time, court documents show.
Also, the Davis firm was promised legal fees of $150 an hour plus a contingency fee of 23 percent of any amounts they successfully recovered, Metcalf said. Fees paid to the Davis firm have not yet been disclosed in court records.
In legal notices describing the procedure for filing claims against PGMA, Metcalf says funds are not available at this time to pay off the insurer's debts, and any future payments will depend on the outcome of "time-consuming and uncertain" litigation.
Thomas Hayes, a financial investigator serving as special assistant to Metcalf, said this week that a tentative settlement with a reinsurer promises to boost available funds by $3.25 million.
But another company that provided a $5 million liability insurance policy for PGMA's officers and directors has filed suit in federal court to rescind the policy and block any payout.
The company, Executive Risk Indemnity Inc., claims PGMA "made material misrepresentations, materially incorrect statements and omitted or concealed material facts" when applying for insurance.
Executive Risk also pointed to repeated allegations of fraud that have surfaced in court proceedings as further reason for rejecting claims against its policy.
Hayes has repeatedly alleged in court filings that millions of dollars were fraudulently diverted from PGMA into a network of for-profit companies controlled by PGMA founder Peter P.S. Wong.
http://starbulletin.com/1999/06/25/news/story4.html
January 8, 2002
NEWS RELEASE
Robert J. Faris Appointed Bankruptcy Judge
for District of Hawaii
SAN FRANCISCO — Chief Judge Mary M. Schroeder of the United States Court of Appeals for the Ninth Circuit has announced the appointment of Attorney Robert J. Faris to the United States Bankruptcy Court for the District of Hawaii, filling the vacancy created by the retirement of Judge Lloyd King.
Judge King’s last day on the bench will be Feb. 13, and Mr. Faris will begin his 14-year term on Feb. 14. He will maintain his chambers in Honolulu.
Mr. Farris currently is a director and vice president of the Honolulu law firm of Gelber, Gelber, Ingersoll, Klevansky & Faris, where he has practiced since 1983. His practice emphasizes civil litigation, bankruptcy, and business reorganization law....
The judges of the United States Court of Appeals for the Ninth Circuit are charged with the statutory responsibility for selecting and appointing the 68 bankruptcy judges in the nine western states that comprise the Ninth Circuit.
The court uses a comprehensive merit selection process for the initial appointment and for the reappointment of bankruptcy judges. Bankruptcy judges serve for 14-year, renewable terms, at a salary of $138,000, and handle all bankruptcy-related matters under the Bankruptcy Code.
October 11, 2005
BERT T. KOBAYASHI SR. / 1916-2005
Isle lawyer lauded for skill as negotiator
By Richard Borreca, Star-Bulletin
Bert T. Kobayashi Sr., a former attorney general and state Supreme Court associate justice, died Thursday. He was 89.
Kobayashi, born July 8, 1916, was former Gov. John Burns' first attorney general, serving from 1962 to 1969.
Burns called lawyer Kobayashi his administration's "strong right arm." Kobayashi was a skilled negotiator and served as a mediator for Burns in several dock strikes that threatened to cripple the state's economy.
In 1966 he declined several offers by Burns to run with him as his lieutenant governor candidate.
When, in 1969, Burns named Kobayashi to the state Supreme Court, the state Senate showed its respect for the Harvard-trained attorney by confirming his nomination with a standing vote. Burns and other governors used Kobayashi as a mediator in labor disputes even when he was still on the bench.
Kobayashi retired from the court in 1978 but told associates, "I do not intend to vegetate in a meaningless way."
Former Gov. George Ariyoshi, a former law partner of Kobayashi, said Kobayashi treated other partners as if they were part of his family.
"It was almost a father-and-son relationship. He treated others as if they were his own children," Ariyoshi said.
"I also called on him from time to time to help mediate labor disputes," he recalled.
As attorney general, Kobayashi was instrumental in breaking up the state's interlocking directorates, Ariyoshi recalled.
"The big companies had interlocking boards, and a few companies had a lot of control over Hawaii's economy," Ariyoshi said.
"Breaking them up was something that speeded up the increased opportunity for fairness and opportunity," he said.
After retiring from the court, Kobayashi continued to work as a mediator.
Honolulu attorney Jeff Watanabe, who worked with Kobayashi, called him "an extraordinary person."
"He was an agent of change in Hawaii. As AG he was involved in breaking up monopolies when Hawaii was a young state. He filed some of the first antitrust cases against oil companies," Watanabe said.
"He was my first boss. I owe him a lot and so does the state," he added....
He was in private practice from 1948 to 1962 and served as president of the Bar Association in 1959.
Kobayashi is survived by wife Victoria; sons Bert Jr. and Dr. Lincoln Kalani; daughters Josephine Leilani Chang and Dr. Victoria Punani Kobayashi; nine grandchildren; and five great-grandchildren....
http://starbulletin.com/2005/10/11/news/story03.html
February 8, 1999
Chubb takes Risk
Global insurance giant takes over
Executive Risk Inc. in $850M deal
NEW YORK (CNNfn) - Global insurance giant Chubb Corp. is acquiring
specialty insurer Executive Risk in an $850 million deal, Chubb said Monday.
Warren, N.J.-based
Chubb (CB) said shareholders of Simsbury, Conn.-based Executive Risk (ER) will receive 1.235 shares of Chubb common stock for each outstanding Executive Risk share. Based on the closing prices of both companies' shares Friday, Executive Risk shareholders will receive the equivalent of $71.71 per share.
Chubb said this represents a premium of 63 percent over Friday's closing price, 44 percent over Executive Risk's average trading price for the last month, and 38 percent over Executive Risk's average trading price for the last month, and 38 percent over Executive Risk's three-month average trading price.
The boards of both companies have approved the acquisition, which is expected to be closed in the second quarter of 1999.
Once the transaction is completed, Chubb will create a new operation, Chubb-Executive Risk, based in Simsbury, which will manage the combined company's book of executive protection business, which had combined gross premiums of about $1.7 billion in 1998.
"Our partnership with Executive Risk will enable Chubb to solidify leading
market positions in numerous, profitable executive protection lines and move
to top positions in others," said Dean R. O'Hare, Chubb's chairman and CEO.
"While the combination will result in expense savings," said Stephen J. Sills,
president and CEO of Executive Risk, "the driving force here is the
opportunity to accelerate premium growth in attractive specialty markets."
Chubb has about 9,500 employees worldwide and its 1998 gross written premiums were $6 billion. Executive Risk has almost 600 workers and its gross written premiums in 1998 exceeded $500 million, a 20 percent increase over the prior year.
Last week, Chubb reported lower earnings for the fourth quarter. Net income was $157.6 million, or 95 cents per share, compared with $194.7 million, or $1.13 per share, a year earlier. For the year, net income was $707 million, or $4.19 per share, compared with $769.5 million, or $4.39 per share, in 1997.
O'Hare said the market in standard commercial lines continued to deteriorate and undermine the company's profitability.
Chubb stock was down 9/16 at 58-1/2 in early morning trading. Executive Risk closed at 44 Friday.
March 4, 1998
Former PGMA
officers sue Wongs
The lawsuit alleges that false financial
reports made it appear all was well
By Ian Lind, Star-Bulletin
Two former officers of Pacific Group Medical Association say they were provided "false and misleading" financial reports that made it appear the company was "thriving and profitable" when it was heading for financial disaster.
The two, Henry Akiu Jr. and Edwin Ramos, have sued PGMA's founder, Peter P. Wong, his wife, Susan, and a series of companies Wong controlled, alleging they conspired to conceal vital information about the insurer's problems.
Akiu and Ramos should not be held liable for PGMA's problems because they were deceived by the Wongs and did not know enough about the true condition of PGMA to have taken corrective actions, the suit says.
The suit also names PGMA's accountants, Nishihama & Kishida CPAs Inc., and its attorney, John J. D'Amato of the firm D'Amato & Maloney, for failing to exercise reasonable care in carrying professional duties to the corporation.
The legal action is in response to an earlier suit against former PGMA officials by Insurance Commissioner Rey Graulty, court-appointed liquidator of PGMA.
PGMA, once a fast-growing health insurer, was seized by state regulators in March 1997 after the falsified reports were discovered and reported by Akiu and other company directors. Before its collapse, PGMA had about 30,000 members, with nearly half coming from the ranks of the United Public Workers and Hawaii Government Employees Association....
The suit alleges that the Wongs carried out a scheme to defraud PGMA by controlling its day to day operations through a series of management contracts, then "misleading, misinforming, misadvising and concealing information" from company officials.
In court documents, Akiu and Ramos charge that the Wongs and their companies:
> "Issued false and misleading monthly and annual financial reports to the directors of PGMA" which overstated company reserves and understated liabilities.
> Hid records of insurance claims in their offices or desks to prevent PGMA officials from learning how much the company really owed to doctors and other medical providers.
> Charged PGMA "excessive fees above the market rate, received illegal payments, and made other unauthorized and illegal payments," including fees for work that was never performed.
> "Invested funds illegally obtained and embezzled from PGMA for various unauthorized real estate and other transactions that were never disclosed to the directors or officers of PGMA."
The Wongs, who are living and working in California, could not be reached for comment.
Attorney D'Amato said he had not yet seen the suit and declined to comment on the matter.
Glenn Kishida, president of Nishihama & Kishida, said he had no comment on the suit at this time.
Akiu and Ramos also allege the state's lax regulation of so-called "mutual benefit societies" was also a "key element" in Wong's alleged scheme.
PGMA was set up as a mutual benefit society because "Wong understood that reserve requirements would be lower than it would otherwise be for an insurance company," the suit alleges.
Mutual benefit societies are organizations set up to provide services to their members. State insurance laws and regulations currently do not fully apply to the groups, which are also considered tax-exempt.
Mutual benefit societies include small health insurers, like PGMA, as well as the state's health insurance giant, Hawaii Medical Service Association.
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State regulators investigate
Wong investment club
By Ian Lind, Star-Bulletin
An investment club organized by former island insurance executive Peter P. Wong in 1996 is under investigation by state securities regulators following complaints that it was an illegal pyramid scheme.
Securities Commissioner Ryan Ushijima said his office is pursuing complaints about the club, which first operated under the name "Friends Helping Friends" and later, "Possibility Investment Club," Ushijima said.
Allegations about Wong's role in the collapse of Pacific Group Medical Association apparently prompted renewed state interest in the investment scheme.
Wong, who is now living and working in California, could not be reached to comment.
Ushijima said his office received complaints from people who were asked to invest $2,000 and promised they later would receive $10,000 back after recruiting three other investors.
Other participants say initial investments ranged from $1,000 to $2,000, and the promised returns varied as well....
Wong's club is accused of taking thousands of dollars from island participants, including officers, employees and sales agents of Pacific Group Medical Association and related companies controlled by Wong.
Ushijima said the investigation is ongoing, but declined to provide further specifics.
Larry Key, an insurance solicitor who worked for Pacific Equity Growth & Management, also owned by Wong, said company employees and sales agents were invited to meetings after work and asked to invest in the club.
"We were told it was a way to make additional money," Key said. "But why would an insurance company be involved in something like this?"
Meetings were held in Wong's home, in the PGMA office and later in meeting rooms at two private country clubs, participants told the Star-Bulletin.
Another former Pacific Equity Growth & Management employee who invested and later recruited others into the club spoke to the Star-Bulletin but asked not to be named because of potential litigation.
"Peter represented himself as a registered financial adviser, and said it was totally legal," this employee said.
"He was good at bringing documentation, and he said there would be no taxes, no nothing, because of the gift exclusion," the employee said.
Wong assured potential participants that nobody would lose money, and said he would buy out any investor who wanted to withdraw, according to the employee.
The club grew rapidly until two people were required to track all of the participants.
Wong collected about $21,000 from a group of employees at one early meeting and then left for a vacation in Las Vegas, the employee said.
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