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The Honolulu Advertiser
Posted on: Saturday, January 17, 2004

Labor leader calls for case to be dismissed

By David Waite
Advertiser Courts Writer

Lawyers for Hawai'i labor leader Anthony "Tony" Rutledge and his son Aaron are asking that their tax evasion charge be thrown out of court, claiming there was misconduct by the federal prosecutor formerly assigned to the case.

A request filed in U.S. District Court by the Rutledges' attorneys claims the U.S. attorney's office in Honolulu spent most of the past 10 years trying without success to find a reason to indict the senior Rutledge for some crime.

The Rutledges are charged with skimming hundreds of thousands of dollars from a corporation they headed and filing false tax returns on behalf of Star-Beachboys Inc., a beach equipment rental company.

The defense request is scheduled to be heard by U.S. District Judge David Ezra on Feb. 11. If the charges are not dismissed, the two are scheduled to go to trial Feb. 24.

Assistant U.S. Attorney Marshall Silverberg spearheaded the government's investigation into the Rutledge family affairs. But after at least three grand jury proceedings, none of the investigations resulted in an indictment of Rutledge except the last one, which is "leaky as a sieve," according to Jeffrey Rawitz and William McCorriston, lawyers for Tony Rutledge Sr.

Rawitz and McCorriston claim Silverberg browbeat or berated witnesses called before federal grand juries on several occasions, disclosed secret grand jury documents to lawyers involved in a civil lawsuit being heard in state court, and tried to drive a wedge between Unity House and the lawyer who represented the labor support organization.

Unity House was founded by Tony Rutledge's father, Arthur Rutledge. Tony Rutledge serves as its executive director.

Silverberg could not be reached yesterday for comment.

Assistant U.S. Attorney Elliott Enoki, in response to a request to comment on the defense motion filed Jan. 6, said: "It would be inappropriate for us to comment on an issue presently before the court."

But Edward Groves, a federal prosecutor with the Tax Division of the Justice Department who is now overseeing the case, said at a court hearing last month that the indictment of the Rutledges had been based on evidence presented to a new grand jury and did not rely on witnesses or evidence presented by Silverberg to previous grand juries.

The federal indictment returned Aug. 20 alleges that the defendants and the late Art Rutledge, Tony's father who died in 1997, skimmed more than $350,000 in daily cash receipts from the Star-Beachboys concession in 1992 to 1997 and put the cash in four safe deposit boxes.

Tony Rutledge issued a statement saying his family, friends and associates had to tolerate more than a decade of disruption from the "ongoing, ever-changing probe into our lives."

Reach David Waite at dwaite@honoluluadvertiser.com or 525-8030.