As I said to another trial observer this week, the defendants associated with the Hawaiiloa Foundation and its mortgage assistance scheme pitched a complex blend of a currently popular political narrative (bad U.S. used force to topple Hawaiian government, U.S. stole Hawaiian land, but Hawaiians claims now prevail and give right to land and take precedence over other laws) and techniques widely used by con artists.
Hawaiiloa Foundation and the affiliated Ko Hawaii Pae Aina appear to have been largely interchangeable and largely followed the same plan.
Tanya Andaya, a Maui High School graduate now working in medical billing on Maui, testified in federal court this this week that her mother-in-law told her about a group “that would be able to help us with our mortgage.”
She subsequently attended a public seminar with more than 50 others at Cameron Center in Wailuku. Andaya said the presentation was mostly about Hawaiian ancestry, history, and culture.
“I don’t know much about my Hawaiian ancestry, and all they had to offer about that history was of interest,” Andaya said. “In general, they spoke about annexation, the queen, how Hawaii was never overthrown, a history of the land.”
The group was also told the Hawaiian people “had this money accumulated that would be able to help us with our mortgage.”
Peter Hoy, who was among the original defendants in the case, described himself as an ambassador and spoke about the legal issues, “like he was an attorney and a lawyer.”
According to Andaya, it was necessary to make an appointment to get more specific information about the mortgage program, which she did.
Andaya said she was asked to make a “commitment,” which involved a payment. After talking with her family, she agreed, and was told to bring her mortgage statement and deed to a private meeting at the Hawaiiloa Foundation office in an industrial area of Wailuku.
At this meeting, Lehua Hoy, who has already entered a guilty plea in the case, explained how Hawaiiloa Foundation would help pay off the mortgage. First, Andaya would have to make a “commitment payment” of $2,500. When Andaya complained that her mother-in-law only had to pay $2,000, the amount was reduced.
She made the payment in several installments, and then Hoy provided a stack of documents. These included a bonded promissory note “to pay off our mortgage.” After she and her husband signed the documents, they were notarized by Mahealani Ventura-Oliver.
The promissory note was was payable to the Department of Hawaiian Home Lands, and also to then-secretary of the Treasury, Henry Paulson, in the amount of $152,158, which Andaya said was her outstanding mortgage balance.
Andaya was also directed to sign a “deed of trust,” assigning her property to a trust, which she was told would protect it from any legal action.
Andaya followed instructions carefully, and send documents off to the DHHL, the U.S. Treasury, and to credit rating agencies “to tell them the mortgage had been paid off.”
This, of course, is where the illusion started to come apart. The bogus documents weren’t accepted as valid forms of payment, a default warning was received from DHHK, and Andaya said she “flipped out” as reality closed in.
Andaya then contacted a group of other participants in the program had demanded their money back. Others were successful in getting refunds, but Andaya was told she did not qualify because her money had already been spent preparing all the paperwork.
Not long afterwards, Andaya said she went to the FBI with her story.
I did not find Andaya’s paperwork at the Bureau of Conveyances, but here are two other examples located in the bureau. One is a “Declaration of trust” prepared for Andaya’s in-laws and notarized by Mehealani Ventura-Oliver. The second was prepared for Donald and Francisca Lono of Hana, and was notarized by Pilialoha Teves.
Both claim to draw authority from a hodgepodge of sources from Hawaiian royal land patents to the Magna Carta, and both include an “Insurance and Indemnity Bond of Ownership” claiming to draw on $300 million “of lawful specie alloy or exchange in market currency” via the “Hawaiian Treasury: Waihona Waiwai, backed in gold, silver and national securities derived fro 33/1/3% kanaka vested lands, resources and rights.”
The two documents are essentially identical, with the appearance of a legalistic form filled with obscure and sometimes nonsensical gobbledygook.
During cross examination of the witnesses, attorneys for Pilialoha Teves and Mahealani Ventura-Oliver tried to pick apart references to their clients, showing that both were not necessarily involved in each transaction. However, if they are shown to be participants in a broader conspiracy, as the government alleges, then certain admissions and acts by individual defendants can be attributed to other conspirators as well. That makes these tough charges to beat.
How in the world would otherwise intelligent people be drawn into such a fantasy world as victims?
It may be, as one comment on an earlier post says, that they just wanted to get something for nothing, but I suspect it is more complicated.
• There are clearly elements of an “affinity con” here, where the con artist and victims belong to the same group, conveying a degree of comfort. In this case, they were recruited from audiences made up of people keenly interested in learning about things Hawaiian. And they certainly felt they could trust those “experts” who were also cultural “insiders” and appeared so knowledgeable about Hawaiian history. The Hawaii context provided an extra motive for those who want to believe they are rightful heirs to a prior period of history.
• There were implied warranties from authorities, such as the statements of “Ambassador” Hoy, who was seen as a lawyer.
• The documents themselves conform to a legal-looking format, complete with legal citations, dense language, and those fancy notarizations to provide the illusion of substance.
• And there was the sheer volume of documents needing to be signed, notarized, and processed. Neither of the witnesses whose testimony I heard on Wednesday had been able to fully understand the documents they were given to sign in rapid succession, and it didn’t appear that full explanations were even offered. There just wasn’t time.
An article in Forbes Magazine last year described what seems to have gone into similar documents prepared by the sovereign citizen movement. It seems like an apt description of how the documents in this case were prepared as well.
You start by looking for a combination of quotes, definitions, court cases, the Bible, Internet websites, and so on that justify how you can ignore the disliked law without any legal consequences. Be imaginative. Pull a line from the 1215 version of the Magna Carta, a definition from a 1913 legal dictionary, a quote from a founding father or two, and put it in the blender with some official-sounding Supreme Court case excerpts you found on like-minded websites. Better yet, find someone else online who disliked that same law and pay them $150 for a three-ring binder filled with their word salad research.
Both defendants appear to be intending on arguing that their mashup of Hawaiian Kingdom law trumps old-fashioned federal fraud statutes. This has been tried before and has no chance of prevailing in court, but will likely make for quite a show.