Coffee grower donates fraud settlement money

By Hugh Clark
Advertiser Big Island Bureau

KAINALIU, Hawai'i — A Big Island coffee grower is using his share in a fraud settlement to help restore the good name of Kona coffee.

Skip Dahlen endorsed a check for $53,130 to the Kona Coffee Cultural Festival the same day he received it. The money came from a $608,000 settlement in a class-action lawsuit against a California wholesaler whose company, Kona Kai Farms, over a four-year period peddled $13 million of Latin American beans that were packed in bags labeled "Kona coffee."

Michael L. Norton of Berkeley was sentenced last month in federal court in San Francisco to a 2 1/2-year prison term for wire fraud and tax evasion, and was ordered to forfeit more than $3 million.

Norman Sakata, chairman of the volunteer group that runs the Kona Coffee Cultural Festival each fall, promised to use the windfall to "promote Kona coffee through national and international media to regain consumer confidence."

Dahlen, who owns Mauka Meadows Coffee Grounds, said the fraud was devastating, pushing the price Big Island farmers received down by 60 percent in recent years.

Kona coffee fetches three or more times that of coffee grown elsewhere in the state partly because of its reputation but also because it is hand-picked and is a variety found nowhere else, according to Virginia Easton Smith, a state extension agent who works with Kona farmers.

John Langenstein, head of the Kona Coffee Council that led the suit, split his share of the settlement among the coffee festival, the Salvation Army and other charities. "It was never about the money," he said.

Another coffee farmer, George Fike, said he believes some farmers didn't join the lawsuit because they did not want to bother with paperwork or did not understand the case.