In addition, Jerrold Y. Chun, 55, is a target of a civil complaint in which the state insurance commissioner alleges Chun was involved in the "improper diversion" of more than $6 million.

However, Chun, who is free on bail, has been charged in the criminal case only on three counts of theft in the first degree in connection with stealing more than $20,000.

Chun appeared in Honolulu District Court yesterday on charges that he diverted the money to himself from an entity, HUI/UNICO, on three occasions from June through July 2003, the attorney general’s office said.

Chun, a partner in the firm Chun and Nagatani, did not return calls for comment today.

The charges against him were based on an internal investigation by state insurance commissioner J.P. Schmidt, the attorney general said.

That inquiry also produced the civil case, filed in state Circuit Court. Schmidt said the inquiry showed that Chun negotiated substantially lower payouts for three claims and then kept the difference from the original claim amount.

In one instance, $5.7 million was sought, and Chun negotiated a $2.5 million disbursement and pocketed the $3.2 million difference, Schmidt said.

Chun allegedly took the money while he was hired by the commissioner to handle the liquidation of HUI/UNICO.

In 1992, Hawaiian Underwriters Insurance Co. and United National Insurance Co. were taken over by the state insurance commissioner after the number of their insurance claims exceeded their available financial resources because of Hurricane 'Iniki, the attorney general said.

The two firms became HUI/UNICO, and the insurance commissioner was in the process of liquidating their assets and using that money to pay off many of the remaining claims held by HUI/UNICO.