Michael Furukawa of MF Masonry and Wesley Uemura of Wes' Contracting pleaded innocent yesterday and remain free on $50,000 bond.

A 33-count federal grand jury indictment filed June 30 charges the two with conspiracy and mail fraud in connection with inflated bids sent through the U.S. mail from 1998 to 2001. Prosecutors say the two set up dummy companies in a scheme that ensured they would win the contracts.

Attorneys for both defendants declined to respond directly to the charges.

"Mr. Furukawa and Mr. Uemura are presumed innocent and we're looking forward to the opportunity at trial to respond to the government's allegations," said Cliff Hunt, attorney for Uemura.

Howard Luke, attorney for Furukawa, said they have requested some of the government's evidence and will respond in court.

An investigation into rigged airport contracts began two years ago and has led six people to plead guilty in state court. Furukawa and Uemura are the first suspects in the probe to be prosecuted in federal court.

The two Honolulu building contractors were charged with being major participants in what state and federal authorities describe as a long-running conspiracy to rig bids and inflate values of more than 400 Honolulu International Airport repair contracts worth "millions of dollars."

Former state airport officials Dennis Hirokawa and Richard Okada, identified in state criminal and civil cases as alleged participants in the scheme, have not been charged criminally, but state Attorney General Mark Bennett said last week that the investigation won't be concluded "until all of those responsible for airport bid rigging are brought to justice."

Hirokawa, the former head of maintenance at the airport, and Okada, former head of the statewide airport visitor information program, retired from state employment after they were arrested by state investigators in 2002. Neither has been charged, and both deny wrongdoing.

Furukawa and Uemura face up to 20 years in prison and fines of up to $250,000 if convicted, according to U.S. Attorney Ed Kubo.

Kubo said the alleged conspiracy involved so-called "small" airport repair and maintenance contracts worth no more than $25,000 each. In awarding contracts under that threshold, state officials follow a less-formal bidding procedure than is required for larger jobs. They can solicit price quotations over the telephone from at least three competing contractors.

The indictment alleged that Furukawa and Uemura conspired with unnamed state employees to ensure that their companies got the contracts at inflated prices.

Phony competing bids were submitted to make it appear the Furukawa-Uemura companies offered to do the work at the lowest prices, the indictment said.

Kubo and Bennett said the investigation may be expanded to cover possible improprieties in the award of much larger public-works projects at the airport.

State Deputy Attorney General Larry Goya said the state two years ago froze investment accounts controlled by Furukawa that contained more than $1 million allegedly generated by the bid-rigging scheme. Because of the favorable stock market, those accounts have grown to more than $2 million, Goya said.

The state has filed a civil lawsuit against Furukawa, Uemura, Hirokawa, Okada and others to recover money gained from the alleged conspiracy.

That suit, filed in state Circuit Court, alleges that 171 contracts worth more than $1.25 million were fraudulently awarded.

The civil suit has been put on hold because of the federal criminal investigation, and Bennett said last week that it may continue to be delayed.

Several state contractors have admitted involvement in the bid-rigging scheme in state criminal cases and agreed to cooperate in the larger federal probe.

Some of those contractors have said in plea agreements that they worked in concert with Furukawa and Uemura and made cash kickbacks to Hirokawa and Okada.

One contractor, Arthur Inada, said in state court last year that he paid $129,000 in kickbacks, including $40,000 in "political contributions" to Okada and Hirokawa.