Former trustee Lindsey admits money laundering
By Curtis Lum
Advertiser Staff Writer
Lokelani Lindsey, who once held one of the most powerful jobs in Hawai'i as a Bishop Estate trustee pleaded guilty to money laundering charges yesterday in Las Vegas to become the only former trustee of the charitable trust to be found guilty of felony charges.
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Under the plea agreement with the U.S. attorney's office, Lindsey will receive probation and no more than a year in confinement. It has yet to be determined if she will serve her sentence in a federal prison, a community halfway house or at home.
Former Bishop Estate trustee Lokelani Lindsey will be sentenced Oct. 16.
In exchange for the guilty pleas to two counts of money laundering, federal prosecutors dropped other charges of bankruptcy fraud and conspiracy to commit bankruptcy fraud. Lindsey could have faced up to 10 years in prison on each of the charges.
Lindsey will be sentenced Oct. 16 in Las Vegas by U.S. District Judge David Ezra. Her trial was moved to Las Vegas after Lindsey's attorney argued that the negative publicity Lindsey received because of the Bishop Estate controversy made it impossible for her to receive a fair trial in Honolulu.
The guilty plea is another step in Lindsey's downfall. She and four others were once trustees of the multibillion-dollar Bishop Estate, Hawai'i's largest private landowner, which operates Kamehameha Schools for children of Hawaiian ancestry. The estate is now called Kamehameha Schools.
She and three other Bishop Estate trustees were ousted in 1999 after state and federal investigators found evidence of mismanagement and abuse of power. A fifth trustee resigned.
Lindsey was indicted in December 2000 on five felony charges of conspiring to commit bankruptcy fraud and money laundering in connection with a bankruptcy case involving her sister. The charges were unrelated to her work as a Bishop Estate trustee, but the crimes occurred while she was a member of the Bishop Estate trustee board.
Marlene Lindsey pleaded guilty to filing a false federal income-tax return and was scheduled to testify against her sister. Marlene Lindsey will be sentenced by Ezra on Monday.
Jury selection for Lokelani Lindsey's trial was set to begin yesterday. But her attorney, William Harrison, said Lindsey agreed to plead guilty to the two charges to spare her ill husband "any further pain and anguish."
"She wants to ask the court to be allowed to care for her husband," Harrison said. Steven Lindsey is suffering from a spinal affliction and is confined to a wheelchair.
U.S. Attorney Ed Kubo Jr. said his office was prepared to go to trial, but said he was happy with the guilty plea.
"I am satisfied that Miss Lindsey has accepted responsibility for her actions," Kubo said.
Kubo said Lindsey admitted acquiring stock with her sister in a company named Atlantic Pacific International. Lindsey knew that her sister did not disclose the existence of the $100,000 worth in stock in her bankruptcy filings, but Kubo said Lokelani Lindsey accepted the transfer of the API interests.
Lindsey admitted in the plea agreement that she transferred the stock to an unnamed person and placed the money in an account controlled by another unnamed person, Kubo said. Lindsey then withdrew $35,000 from that account and deposited the money into her personal account, Kubo said.
Ousted Bishop Estate trustees Henry Peters and Richard "Dickie" Wong were indicted on state theft charges in connection with a 1995 Hawai'i Kai land deal. But those charges were thrown out by a Circuit Court judge and the dismissals were upheld by the Hawai'i Supreme Court.
The Associated Press contributed to this report.
