The Office of Consumer Protection has a pretty straightforward view of the case against three people it alleges have been ripping off homeowners.

In the agency’s view, the three–David Keanu Sai, Dexter Kaiama, and Rose Dradi–sell homeowners facing foreclosure a package of services which is supposed to rescue the consumers’ homes by relying on Sai’s beliefs about Hawaiian sovereignty (see yesterday’s post, “Two sovereignty advocates hit with allegations of mortgage rescue fraud“).

But OCP says that after more than 100 attempts, no judge has ever blocked a foreclosure action based on the so-called sovereignty defense, a fact the three certainly know. So, according to OCP, they are committing a form of consumer fraud by selling something the three know doesn’t work in state or federal courts, even if they believe it is ultimately a valid argument and believe it should be accepted by the justice system.

“Although Sai would have the world think of him as an expert, in reality Sai is merely using his views on sovereignty to exploit people for his own personal gain,” the agency said.

It gets weirder and more interesting pretty quickly.

Sai responded to the allegations by triggering the option to move the case out of state court and into federal court.

Sai argued that the federal court should have jurisdiction “because the State of Hawai‘i seeks remedies involving Sai who [is] a foreign diplomat.”

Sai claimed he is a foreign diplomat because he has “served as Minister of the Interior and Agent for the Hawaiian Kingdom.” And, he says, he is therefore protected by diplomatic immunity against charges like those raised by the OCP.

The consumer protection agency, in response, called Sai’s claim to diplomatic immunity “ludicrous” and “without merit.” The agency then addressed the issue point by point.

The common law doctrine of head-of-state immunity is available where the United States government has officially recognized (i) the legitimacy of a foreign government, (ii) a particular individual’s authority to serve in a representative capacity of that government, and (iii) the individual is not engaging in conduct excepted from immunity.

First, OCP made the obvious point that the United States does not recognize the Hawaiian Kingdom and, therefore, Sai simply isn’t entitled diplomatic immunity based on his supposed position.

Second, even if the U.S. did recognize the existence of the kingdom, Sai is only one of a number of people claiming to represent it, and therefore has no authority to be the true representative.

It bears noting, however, that Sai’s claim to the Kingdom is but one of many. As reported by Honolulu Magazine in November 2009, Sai is but one of “[m]ore than 10 factions [that] currently claim to be the legitimate government of the Hawaiian kingdom.” (Michael Keany, “Contenders to the Throne,” Honolulu Magazine, November 2009.)

“Diplomatic immunity turns on whether the United States recognizes the foreign government and an individual serving as a duly authorized representative of that government,” OCP continued. ”Here there is no recognition, diplomatic immunity fails….”

Finally, according to OCP, diplomatic immunity does not extend to activity engaged in for personal profit.

The Office of Consumer Protection noted, the Vienna Convention on Diplomatic Relations (“VCDR”) and the Diplomatic Relations Act of 1978, recognize several exemptions to the protections of diplomatic immunity, including on exception for “an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving State outside his official functions.”

In short, don’t expect any deference to be given to Sai’s claims of diplomatic immunity.