Monday, October 14, 2019
Hawai'i Free Press

Current Articles | Archives

Wednesday, May 18, 2016
Hawaii Painters Business Agent Pleads Guilty in $1.5M Theft
By Selected News Articles @ 1:38 AM :: 3769 Views :: Ethics, Labor, Small Business

Hawaii Painters Business Agent Pleads Guilty in $1.5M Theft

by Carl Horowitz, National Legal and Policy Center, 03/11/2016 

When it comes to embezzling union funds, third-party administrators can be as adept as union officials themselves.  And thefts can go undetected for years.  Just ask Painters union members in Hawaii.  On January 27, Raymond Fujii, former executive director for a trade group, the Painting & Decorating Contractors Association of Hawaii (PDCA), pleaded guilty in U.S. District Court for the District of Hawaii to one count of mail fraud in the amount of nearly $1.5 million against the PDCA and a related union-supported entity, the Hawaii Painters Trade Promotion & Charity Fund (TP&C).  Fujii also pleaded guilty to one count of filing a false tax return.  He had been charged on January 20.  The actions follow an investigation by the IRS and the U.S. Labor Department’s Office of Labor-Management Standards.

Raymond Fujii is, or was, a Honolulu businessman.  His business was representing the Painting & Decorating Contractors Association of Hawaii, a trade group whose members had a collective bargaining agreement in force with International Union of Painters and Allied Trades (IUPAT) Local 1791.  Fujii headed two companies, Account Executives, Inc. and RHF, Inc.  Sometime around 1996, Account Executives entered into a consulting contract with PDCA and TP&C, the latter funded by local affiliates of Painters District Council 50.  Fujii would provide administrative services such as contract negotiation, conflict resolution, check disbursement and financial records maintenance.  As part of the arrangement, he also would serve as signatory for PDCA and TP&C bank accounts.

Unbeknownst to his clients, Fujii had laid the groundwork for massive theft.  According to court records (Case 1:16-cr-00079-JMS), he diverted client money to his own personal use over a 17-year period.  The mail fraud information count put it this way:  “From on or about February 19, 1997 to on or about May 8, 2014, in the District of Hawaii, Raymond Hiroshi Fujii, Defendant herein, did knowingly devise, and intended to devise, a scheme and artifice to defraud and to obtain money from the PDCA of Hawaii and the TP&C by means of materially false and fraudulent pretenses, representations and promises, as well as omissions of material fact, well knowing at the time that such pretenses, representations, promises and omissions would be and were falsely made…”

Specifically, Fujii wrote out checks payable to RHF, drawn on the accounts of PDCA and TP&C, making it appear as though RHF was entitled to these payments, when it was not.  In some cases, Fujii obtained the signatures of board members on blank checks, falsely claiming that the checks would be used for authorized purposes.  In other cases, he forged the signatures of board members to give the appearance that the payments were authorized.  To cover his tracks, Fujii provided false financial statements to board members, making sure to omit any entries reflecting checks or payments to RHF.  The grand total of theft from PDCA and TP&C bank accounts:  $1,483,800.  The mail fraud charge related to Fujii’s delivery on or about November 14, 2013 of an information packet via the U.S. Postal Service to a PDCA/TP&C joint board of directors meeting.  The packet failed to mention a $20,000 disbursement from TP&C’s Hawaii National Bank checking account to RHF.  The second information count charged Fujii with knowingly entering and submitting false information on his personal federal income tax form for calendar year 2009.  On or about March 4, 2010, said prosecutors, Fujii reported on IRS Schedule E (Supplemental Income and Loss) combined partnership and S Corporation income of $1,917; the true figure was $122,517.

That these schemes had gone unnoticed for more than 17 years is a testament to Fujii’s guile and his clients’ trust in him.  Eventually, PDCA and TP&C discovered something was amiss and reported the problem to the Labor Department.  Charged this January 20, he pleaded guilty a week later.  As part of the plea deal, Fujii agreed to make restitution of $1,483,800 to PDCA and $315,829 (plus interest) to the IRS.  He faces prison terms of up to 20 years and three years, respectively, for his mail fraud and tax evasion convictions.  Union members probably aren't complaining.


Former Executive Director of Contractors Association Sentenced To 42 Months In Jail For Mail Fraud and Tax Offenses

News Release from US Department of Justice Honolulu May 13, 2016

HONOLULU -- Raymond Fujii, 68, a resident of Kailua, Hawaii, was sentenced today by Chief U.S. District Judge J. Michael Seabright to 42 months in federal prison for engaging in a mail fraud scheme involving the embezzlement of $1,483,800, and failing to report that income on his federal tax returns. In addition to the 42 month term of imprisonment, Fujii was ordered to pay $1,234,713 in restitution to the victim organization and the Internal Revenue Service. Fujii pled guilty to mail fraud and filing a false federal income tax return on January 27, 2016.

Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to information produced to the court, from 1997 through 2014, Fujii used his position to embezzle money from the Painting and Decorating Contractors Association of Hawaii ("PDCA"), and the Painting Industry of Hawaii Trade Promotion and Charity Fund ("TP&C"), a trust fund that promotes the local painting industry. Fujii, who was executive director of the former and administrator of the latter, organized and directed board meetings, and prepared minutes of meetings and financial statements for both organizations. Fujii also was an authorized signatory on the bank accounts for both entities.

During court proceedings, Fujii admitted writing checks to a company that he owned, either forging or fraudulently obtaining the signatures of directors on the checks, and then depositing the money in his personal account. Fujii obtained a total of $1,483,800, but failed to report the money on his federal or State of Hawaii income tax returns. The failure to report the income resulted in tax losses to the federal and state governments of $315,829 and $135,565, respectively. Following the discovery of the offense, Fujii sold his personal residence and used the funds to repay $564,915 to the PDCA.

During today’s sentencing proceedings, Chief Judge Seabright noted that Fujii’s conduct was a "naked betrayal" of the painting association’s trust, and that Fujii had obtained the money tax-free by not reporting it on his income tax returns.

The case was investigated by the Internal Revenue Service, Criminal Investigation, and the Department of Labor Office of Management Labor Standards, and was prosecuted by Assistant U.S. Attorney Larry Tong.


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

808 State Update AM940


ACA Signups Hawaii



Alliance Defending Freedom

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii



Antonio Gramsci Reading List

A Place for Women in Waipio

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

Conservative Forum for Hawaii

CSIS Pacific Forum

DAR Hawaii

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii


Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling



Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube


Hump Day Report

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes


Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii


National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii


OHA Lies

Opt Out Today

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii


Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Salvage The Rail

Save the Plastic Bag

School Choice in Hawaii

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii