honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Wednesday, November 13, 2002

Rodrigues seeks dismissal of union fraud charges

By David Waite
Advertiser Courts Writer

Arguing that the prosecution failed to present sufficient evidence, lawyers for United Public Workers union leader Gary Rodrigues and his daughter yesterday asked for a dismissal of their charges of mail fraud, conspiracy to defraud a healthcare benefit program and money laundering.

Gary Rodrigues, leader of the Hawai'i public workers union, is charged with several counts of fraud and money laundering.

Advertiser library photo

In addition, Rodrigues' lawyer, Doron Weinberg, told federal Judge David Ezra that charges of embezzling labor organization assets and accepting kickbacks in connection with an employee welfare benefit plan, which were brought against Rodrigues alone, should also be dismissed.

A federal prosecutor, however, told Ezra that the evidence supported the charges and the trial should continue.

Ezra said he intends to rule today on the matter. If all of the charges are not dismissed, the defense is scheduled to begin presenting its case.

Rodrigues is accused of accepting cash kickbacks from a life insurance agent who sold policies to UPW members. But after nearly three weeks of trial, the prosecution has failed to present any evidence that the state or county governments played any role in establishing the benefit for union members or exerted control over the benefit plan, Weinberg said.

And while Rodrigues negotiated with the Pacific Group Medical Association, the government presented no evidence that he asked the healthcare insurance provider to set aside a percentage of the premiums paid to the company so he could hire his daughter, Robin Sabatini, as a consultant, Weinberg said.

The money laundering charges should be dismissed because there was never any attempt by Rodrigues to conceal the fact that consulting fees from union dental and health insurance plans were being paid to the Sabatini-owned companies Four Winds RSK Inc. and Aulii Inc., Weinberg said.

"Anyone who wanted to ask could have found out who Four Winds RSK was," Weinberg said.

The only evidence the government presented during the nearly three weeks of trial was that checks were sent to Sabatini's companies, the checks were deposited and money from the company accounts was spent, Weinberg said.

The prosecution contends that Rodrigues used consultant fees that were derived from the union's health insurance plans to steer contracts to his former girlfriend's father in one case and to his daughter, and that the union received little or nothing in return.

Lynn Panagakos, an assistant U.S. attorney with the Organized Crime and Racketeering section of the Department of Justice in Washington, told Ezra the jury should decide if the state and county governments had a role in sponsoring the life insurance plan that was offered to UPW members.

And the evidence produced during the trial has shown that Rodrigues used union assets first to hire Al Loughrin, his former girlfriend's stepfather, and then Sabatini, Panagakos said.

Loughrin's widow testified that her late husband did no consulting work in exchange for the money he was paid, Panagakos said. Other evidence produced at trial shows that Sabatini's company wasn't formed until February 1996 and received a $25,000 check later that year for consulting work supposedly done in 1994 and 1995, Panagakos said.

"If that doesn't show lack of services rendered, I don't know what does," Panagakos said.

But Sabatini's lawyer, Richard Hoke, said the prosecution's assertion that Sabatini was paid with union money but did no work was refuted by testimony that UPW workers occasionally saw Sabatini working at a computer station at the union hall.

Other witnesses testified that Sabatini worked on billing discrepancy reports, helped out during health plan open enrollment periods, and worked on special projects for a private company that later administered the union's various benefit plans, Hoke said.

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