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The Honolulu Advertiser
Posted on: Tuesday, June 18, 2002

Fraud case nets guilty plea

By David Waite
Advertiser Courts Writer

A former Unity House consultant who devised a scheme to get a $150,000 kickback by getting the organization to invest in a made-for-TV movie, pleaded guilty yesterday to federal wire fraud and tax evasion charges.

Roberta "Robby" Cabral, 44, pleaded guilty to four of 14 criminal charges lodged against her in an indictment that was modified three times to include a host of charges including fraudulent use of a Social Security number and money laundering.

In exchange for pleading guilty to the three felony counts and one misdemeanor charge, prosecutors agreed to dismiss the remaining counts after she is sentenced Nov. 1.

Cabral yesterday pleaded guilty to felony charges of wire fraud for attempting to defraud Unity House in hopes of obtaining a $150,000 kickback related to the proposed TV movie and evading personal income taxes in 1992 and 1993.

She also pleaded guilty to a misdemeanor of failing to file an individual federal income tax return for 1994.

Cabral faces maximum sentences of five years in prison and a $250,000 fine for each of the felony counts and a year in jail and a $100,000 fine for the misdemeanor count.

Unity House is a $60 million nonprofit organization that was established by Art Rutledge, to benefit members of Local 5 of the Hotel Employees and Restaurant Employees and the Hawai'i Teamsters unions. The president and chief executive officer of Unity House is Tony Rutledge, Art Rutledge's son.

According to the government, Cabral and Roderick "Roddy" Rodriguez, former Unity House executive director and a former codefendant, came up with a scheme to defraud Unity House by inflating the costs of producing a one-hour television movie titled "Heavenly Road."

The show was supposed to be spun off into a weekly TV series called "Blue Hawaii," according to Edward Groves, a special attorney with the U.S. Justice Department's Tax Division,.

Rodriguez was found dead of an apparent drug overdose on Aug. 8, 2000, shortly after the indictment was issued against him and Cabral.

The government claimed that Cabral and Rodriguez devised the kickback scheme to help Cabral pay taxes on commissions paid to her by North Pacific Investments Inc., a Washington state company that Cabral had encouraged Unity House to invest $10 million in. The investment was made by buying so-called "prime European bank notes and was part of a phony offshore investment scheme, according to prosecutors.

Neither Cabral nor Rodriguez was indicted in the scam. But four other men, including former state Campaign Spending Commission executive director Jack Gonzales and lawyer Rodney Kim were sentenced to 15-year prison terms in connection with the scheme.

Prosecutors claim Cabral attempted to evade paying federal taxes by using her brother's social security number and then the name of another person to set up a checking account at First Hawaiian Bank in the name of Honua Group LLC although she had sole control over the account and used it for personal items.

Cabral used the checking account from July 1997 to August 2000, prosecutors said, resulting in the two tax evasion counts.

The agreement signed by Cabral does not require her to cooperate with federal officials, Groves said.

Tony Rutledge could not be reached yesterday to comment.

In an October 2000 interview with the Advertiser, Rutledge accused federal prosecutors of waging a vendetta against him, contending that Cabral and Rodriguez were indicted in hopes they could be made to implicate him in either the TV movie kickback scheme or phony bank note scam.

Groves would not comment when asked if Rutledge is the focus of an ongoing federal investigation.

Advertiser staff writer Kapono Dowson contributed to this report.

Reach David Waite at 525-8030 or dwaite@honoluluadvertiser.com.