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The Honolulu Advertiser

Posted on: Saturday, May 25, 2002

Two fined in scheme involving auto parts

By David Waite
Advertiser Courts Writer

Two brothers who bilked the city of thousands of dollars by submitting false invoices through their Kaimuki auto parts business were each fined $2,500 yesterday and ordered to pay $3,333 in restitution.

Also, Circuit Judge Richard Perkins placed Vernon Isono, 46, and John Isono, 44, on conditions similar to probation for the next five years. If the two stay out of trouble during that period, they will avoid a criminal record.

Each of the men had pleaded guilty to a single count of second-degree theft for their role in helping two civilian employees of the Honolulu Police Department defraud the city.

City Deputy Prosecutor Randal Lee said that from 1993 to 1999, the Isono brothers, who operated Larry's Auto Parts in Kaimuki, billed HPD for standard automobile parts to cover the cost of high-performance parts the two were providing to Victor Hasebe, former HPD automotive equipment superintendent, and former HPD storekeeper Winston Owan.

Owan pleaded no contest to a theft charge in November, and Hasebe is expected to sign a plea agreement soon, bringing the case to a close, Lee said.

Lee said Owan and Hasebe formed an arrangement with the Isono brothers to substantially overprice the goods sold to the city to maintain police vehicles.

In return, the parts store provided "kickbacks" to Hasebe and Owan in cash, parts and travel, Lee said.

In addition to the kickback scheme, Lee said Owan and Hasebe were accused of falsifying invoices to have the city pay for about $10,000 worth of high performance automobile parts that were never used on HPD vehicles, but which went to the two men for their own use.

Although Owan and Hasebe were indicted on theft charges accusing them of stealing approximately $35,000 from the city, Lee said investigators believe the HPD actually purchased more than $800,000 in goods from Larry's Auto Parts from July 1993 to August 1999 at prices that were inflated by about 30 percent.

That would put the overall loss to the city at about $240,000, Lee said.

But selling goods to the city at inflated prices — in and of itself — is not a crime, he said.