Posted on: Friday, December 31, 2004
$500,000 added to bail for Rutledges
By Jim Dooley
Advertiser Staff Writer
Deposed labor leader Tony Rutledge Sr. and his son Aaron, facing trial on federal fraud and tax evasion charges, must post an additional $500,000 bail and have their movements tracked by satellite, a U.S. magistrate ruled yesterday.
The new restrictions were imposed in the wake of additional federal charges filed against the Rutledges this month, including allegations of financial abuse at Unity House Inc., the labor organization where they worked until IRS agents seized it Dec. 14.
Federal Magistrate Leslie Kobayashi ruled that the Rutledges must post property worth $500,000 as bail, and be fitted next week with electronic devices that track their movements via communications with government "global positioning satellites."
Kobayashi said the men cannot leave O'ahu or go anywhere near the airport or Unity House's offices on Ala Wai Boulevard in Waikiki.
Special U.S. Attorney Ted Groves, lead prosecutor in the case, said in court that a court-appointed receiver now running Unity House has discovered evidence of "other financial abuses at Unity House" and questioned whether the 51-year-old non-profit will be able to survive.
"The assets are in worse shape" than was originally believed and are now worth "less than $42 million," Groves said.
Groves didn't elaborate, saying the receiver is preparing a financial report for submission to the court.
Outside court, Tony Rutledge disputed Groves' description of Unity House financial problems, saying the non-profit's assets "are all invested."
His lawyer, Jeff Rawitz, said the government's goal is "eradicating the existence" of Unity House.
"We feel the real losers here are the beneficiaries of Unity House," Rawitz said.
Unity House resembles a labor union, holding money and administering programs for the benefit of organized laborers, but it is not a union.
Groves, the federal prosecutor, argued for increased bail and electronic monitoring because, he said, the Rutledges committed new criminal offenses while out on bail awaiting trial on earlier charges.
"Clearly they didn't get it," Groves said. "Additional measures need to be taken."
Rawitz said in court that increased bail or electronic monitoring of Tony Rutledge are not necessary because he is not a risk to flee the jurisdiction.
The government has frozen all of Rutledge's assets, Rawitz said.
"He couldn't flee even if he wanted to. Where would he go? How would he get there? His whole life is here," he said.
Rutledge intends to prevail at trial and regain control of Unity House, the lawyer said.
"He wouldn't leave this fight for anything," Rawitz said.
Outside court, Rutledge said the federal government has been investigating him for "at least 10 years. I just want to get this done and then I can finally say what I want to say."
Trial is set to begin Jan. 11 but a motion to delay proceedings, given new charges in this month's re-indictment of the Rutledges, will be heard Monday. Also pending is a government motion to disqualify Rawitz from the case for an unspecified conflict of interest.
Reach Jim Dooley at 535-2447 or at jdooley@honoluluadvertiser.com.
