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The Honolulu Advertiser
Posted on: Tuesday, October 14, 2003

Attorney accused in insurance theft arraigned

By Curtis Lum
Advertiser Staff Writer

A Honolulu attorney was arraigned yesterday on charges that he stole from two former insurance companies in June and July.

Jerrold Y. Chun, 55, who is free on bail, appeared in Honolulu District Court yesterday. He was charged by the state attorney general with three counts of theft in the first degree.

Chun is accused of diverting more than $20,000 from an entity, HUI/UNICO, to himself on three occasions from June through July 2003, the attorney general's office said.

Chun, a partner in the firm Chun and Nagatani, could not be reached for comment yesterday.

However, TV station KITV reported last night that an internal investigation by state insurance commissioner J.P. Schmidt found that Chun had stolen millions of dollars.

The station said Chun negotiated substantially lower payouts for three claims and then kept the difference from the original claim amount. In one instance, KITV said, $5.7 million was sought, and Chun negotiated a $2.5 million disbursement and pocketed the $3.2 million difference.

"It's hard to understand why he would do this," Schmidt told the TV station.

Chun had been retained by HUI/UNICO.

The charges against him were based on Schmidt's investigation, the attorney general said.

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.

Chun is scheduled to appear at a preliminary hearing Nov. 10.

'Iniki hit Sept. 11, 1992, and devastated Kaua'i with wind up to 150 mph. It destroyed or damaged more than 10,000 homes and businesses, killed five people and injured more than 100 others.

Damage was estimated at roughly $2 billion.

The Associated Press contributed to this report. Reach Curtis Lum at culum@honoluluadvertiser.com or 525-8025.