Contractor faces prison term
By Jim Dooley
Advertiser Staff Writer
A man whose construction company received nearly a half-billion dollars in federal contracts here since 1995 pleaded guilty yesterday to attempting to bilk the federal government out of $200,000.
Patrick Shin built Nan Inc., which also goes by the name of Ocean House Builders, into the largest locally owned federal contractor in Hawai'i, landing some 56 contracts worth $463 million since 1995.
Yesterday Shin admitted using "white out" to alter a subcontractor's price quote submitted to the Navy for repair of a pump at Pearl Harbor Naval Shipyard, increasing the price from $114,733 to $314,733.
Shin was acting on behalf of JHL Construction Inc., a company owned by his nephew, James Lee, when the false paperwork was submitted to the Navy, according to a criminal complaint and plea agreement filed yesterday in federal court.
Lee was not charged in the case, but his company was charged with the same offense as Shin. Lee entered a guilty plea on behalf of the company yesterday.
Shin faces a maximum sentence of five years in prison and a fine of $250,000.
It's not clear if the federal government will move to ban Shin from doing further work with the federal government, a process known as "debarment."
Shin would not comment on the case when reached by telephone for comment yesterday afternoon. Attorneys for Shin and JHL could not be reached for comment.
Assistant U.S. Attorney J. Michael Seabright, who prosecuted the case, would not elaborate on the case beyond the contents of the plea agreement, which states that the federal government is not prevented from taking additional administrative or civil action against Shin.
FBI agents raided the offices of Nan and JHL in October, seizing computers and business records. Federal agencies froze three new contracts worth $97 million awarded to Nan and JHL late last year.
The status of those contracts could not be determined yesterday.
Shin, 40, is a native of South Korea who received a Hawai'i general contractor's license and formed Nan Inc. in January 1995.
He told The Advertiser in 2000 that he had three employees and assets of $4,000 when he first went into business here.
Shin enrolled Nan in the federal Small Business Administration's 8(a) program, which gives business advice and assistance to small, disadvantaged firms, in 1995. By 2000, the company had grown too big for the program and graduated four years early.
According to a computer-assisted search of federal procurement records, Nan Inc. landed $91.6 million in federal construction contract awards here in 2002.
JHL Construction joined the SBA's 8(a) program in 2000 as part of a "mentor-protege" relationship with Nan.
JHL began landing large federal construction contracts, operating from a Hau Street warehouse in Kalihi owned by Shin.
Shin owns a $4 million home on the slopes of Diamond Head as well as other commercial and residential properties valued at more than $3 million.
Reach Jim Dooley at 535-2447 or at jdooley@honoluluadvertiser.com.
