Ex-legislator guilty in fraud case
By Peter Boylan
Advertiser Staff Writer
Former state Rep. Nathan Suzuki pleaded guilty yesterday to a federal charge that he participated in an offshore tax fraud scheme, parts of which he conducted from his office at the State Capitol.
In a plea agreement accepted by U.S. District Judge Edward Rafeedie, Suzuki admitted his role in creating secretly held corporations and bank accounts in Tonga and Hong Kong to hide more than $3 million in assets of Honolulu businessman Michael Boulware, for whom Suzuki did accounting work.
Boulware was convicted in 2001 of nine counts of tax evasion and sentenced to 51 months in federal prison.
Suzuki's guilty plea yesterday reversed his previous plea of not guilty to six criminal counts. In exchange for Suzuki's guilty plea to one count of conspiracy to commit tax fraud, the government dropped five other charges: three counts of filing false income tax returns and two counts of failure to disclose an interest in a foreign bank account on his tax returns.
Suzuki, 56, faces up to five years in jail and a $250,000 fine when he is sentenced July 28.
Despite the dropping of five charges, Suzuki still faces about the same amount of prison time under federal sentencing guidelines, said Edward Groves, a special attorney with the U.S. Justice Department's Tax Division.
"We're not really giving up that much because that is probably what he would have gotten anyway," Groves said.
Suzuki, when reached at home yesterday afternoon, declined comment. He was indicted in June 2002 while still in office. The Democrat represented the 31st House District (Salt Lake, Moanalua) from 1992 to 2002, when he did not seek re-election.
His attorney, Michael Green, said that while Suzuki admitted to conspiracy to commit a crime, in the end no crime was actually committed.
"We can contest that there was any tax loss by the government," Green said.
The charges against Suzuki are related to the work he did for Boulware, head of Hawaiian Isles Enterprises, an $80-million-a-year Hawai'i coffee distribution and vending machine company.
Boulware was convicted of nine counts of tax evasion and filing false tax returns. According to the charges, Boulware failed to report nearly $10 million of income.
As part of the plea, Suzuki admitted that he filed false personal income tax statements from 1995 to 1997 by not disclosing an interest in bank accounts in Hong Kong and Tonga.
He also admitted he failed to file a required form as part of his federal tax returns that would have listed an interest in those foreign accounts.
Suzuki, licensed as a certified public accountant and income tax preparer, admitted in the plea agreement — and again in open court — his role in the creation of secretly held offshore corporations and bank accounts in the Kingdom of Tonga and Hong Kong that were designed to throw off a criminal investigation conducted by the Internal Revenue Service.
Suzuki further admitted that Boulware transferred approximately $3 million from his company to accounts held by Suzuki's Hong Kong company, Harvest International King Coffee.
Suzuki admitted in the plea to sending faxes authorizing the transfer of funds from a foreign currency account in Tonga from his fax machine in his office at the Capitol.
Suzuki was paid $250,134 between 1995 and 1997 through Boulware's Los Angeles-based attorney, Barney Shiotani.
Reach Peter Boylan at 535-8110 or pboylan@honoluluadvertiser.com.
