Posted on: Friday, November 1, 2002

Ex-Unity House worker jailed

By David Waite
Advertiser Staff Writer

A former Unity House consultant was sentenced to 10 months in federal prison yesterday for wire fraud and tax evasion.

Roberta "Robby" Cabral, 44, made thousands of dollars by getting the labor organization to invest in a phony European bank note scheme and by padding production cost estimates for a proposed made-for-TV movie.

Cabral also was ordered by visiting federal Judge Manuel Real to repay Unity House $25,000 and perform 2,500 hours of community service helping indigent people.

Cabral pleaded guilty in June to 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.

Unity House, a $60 million nonprofit organization, was established by the late 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.

"This has been a nine-year ordeal for me, my family and my friends, and I'm just elated its over," Cabral said after being sentenced.

She described herself as a "development promoter" and said she intends to serve her sentence and then come back and "serve my community all over again."

Cabral said government investigators "harassed me for more than nine years" hoping she would implicate Tony Rutledge in some form of criminal activity.

"I'm proud to say that during those nine years, the government could not get me to ... endorse their theories" having to do with Tony Rutledge, Cabral said.

Rutledge did not respond to a request yesterday to comment on Cabral's statements.

Edward Groves, a special attorney with the U.S. Justice Department's Tax Division, who prosecuted the case against Cabral, also did not respond to the assertion that the government was using her to try to bring an indictment against Rutledge.

He would not say if Rutledge is the subject of an ongoing investigation.

"No one to my knowledge forced (Cabral) to plead guilty to the tax charges, it was clearly her choice," Groves said. "The government would have taken her to trial and presented evidence on all 14 counts against her if not for her guilty plea and the plea agreement," Groves said.

Cabral's lawyer, Michael Green, called the 10-month jail term "a really fair sentence."

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

But Real sentenced Cabral to the lowest sentence called for under federal sentencing guidelines.

He based the sentence on her lack of a prior criminal record, her guilty plea and acceptance of responsibility, her cooperation with prosecutors in helping convict others involved in the phony bank note scheme and a finding that Cabral did not engage in a "sophisticated scheme" to try to hide commission earnings on Unity House's investment in the bank note scheme.

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."

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 in which Cabral had encouraged Unity House to invest $10 million. 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.

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