It took a very long time to bring Eric Aaron Lighter to justice, but in the end it took a federal jury in Northern California just one day of deliberating to find him guilty on all 17 counts stemming from his participation in a complex series of schemes to create fraudulent trusts to “help” clients avoid taxes, and then defraud the same clients by relieving them of their property.

The charges against Lighter, a 1968 graduate of Kailua High School who has been licensed in Hawaii as a real estate broker since 1973, included multiple counts of conspiracy to defraud the government, wire fraud, witness tampering, and blackmail. The charges and overt acts are described in the 3rd superseding indictment issued on October 4, 2011.

Many of the charges resulted from the case of a California couple, Irwin and Susan Gootnick. I briefly described the Gootnick’s situation in a Honolulu Weekly column in 2007.

According to the indictment, Fung referred Gootnick to Lighter in early 2004 for assistance in dealing with an IRS investigation of several family trusts. Lighter demanded $10,000 in cash for his services and later asked for and received an additional $50,000 ‘loan.’ Lighter, who is not an attorney nor an accountant, then advised Gootnick that the trusts ‘were fake and that by using them, [Gootnick] had committed fraud’ and could be prosecuted. Lighter advised Irwin that in order to protect his assets from seizure by the IRS, he should first convert the trusts into subsidiaries of a new family corporation and then transfer control of the corporation to Lighter.

Lighter then reportedly shuffled ownership in a series of self-dealing transactions after exchanging shares in the new Gootnick Family Trust Inc. for shares of stock in the Hawaiian Colony Hotel Corporation (HCHC), which Lighter claimed to own and was said to include the ‘air rights’ over a property along Ala Moana Boulevard across from Fort DeRussy. Although Lighter claimed HCHC and the accompanying air rights were worth $25-$50 million, a Hawai’i state court said they were worthless.

Lighter eventually received about $500,000 in cash and reportedly took control of a San Francisco medical office building owned by one of the Gootnick trusts. After gaining personal control of the building, Lighter allegedly tied up the property with fraudulent mortgages from other shell corporations that existed only on paper.

The Gootnick’s sued Lighter, and in response Lighter attempted to tie the Gootnick’s assets up in federal bankruptcy court in Honolulu.

Charges were originally filed against tax accountant Samuel S. Fung in 2005, shortly after he settled a civil suit filed by the IRS. Lighter was added to the case in a superseding indictment filed in April 2007.

Fung pleaded guilty in September 2011 to a single count of conspiracy to defraud the U.S., and agreed to pay restitution of more than $1.1 million, leaving Lighter to face trial alone.

Lighter is scheduled to be sentenced in March 2012. Lighter was released pending sentencing on the condition that he surrender any passport, not mail “any letters, forms, filings or correspondence of any kind to the IRS,” not dispose or alter any assets, and not contact any witnesses or parties in the case directly or indirectly. He has been ordered not to travel outside of Hawaii and California.

Lighter’s career stretches back decades, and it’s a story that really deserves a book-length history, something I’ve been considering.

I believe he was a latecomer to National Trust Services, an organization which was used to disseminate information about tax-avoiding trusts. According to the indictment, Lighter eventually had control of the National Trust Services trade name, part of a pattern of taking the business names other companies if they failed to promptly renew their trade name registrations.

Lighter was widely known for this practice in Hawaii, where he appropriated several well known business names.

A quick check of business registration records this morning showed Lighter has registered a long list of trade names or business entities in Hawaii.

In any case, there’s a lot more to say about this fascinating case.

For the record, I was sued by Lighter back in 2003 over a 2001 story published when I was still writing for the Star-Bulletin.