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The Honolulu Advertiser

Posted on: Monday, May 2, 2005

Nine plead guilty in theft of scrap metal

By Ken Kobayashi
Advertiser Courts Writer

Suspecting irregularities with the sale of Pearl Harbor scrap metal and also wanting to catch culprits stealing valuable ship parts at the shipyard, federal authorities set up a major sting operation three years ago at a Mapunapuna recycling business.

An undercover FBI agent posed as a scrap metal dealer, and cameras and recording devices were set up at the storefront operation.

The result is a former supervisor at the Navy's Recycling Program has pleaded guilty to getting money from the undercover agent, illegal scrap metal sales and accepting bribes involving the sale of scrap metal.

Two recycling businessmen have pleaded guilty to bribery charges.

The operations also led to six other people pleading guilty to the unauthorized sale of Navy property after the storefront began purchasing stolen ship parts from the shipyard for pennies on the dollar.

The investigation, dubbed Operation Tin Man, a joint effort by the FBI and the Naval Criminal Investigative Services, made a "significant contribution" with the Pearl Harbor recycling program now being run honestly, Assistant U. S. Attorney Larry Butrick said.

In addition, shipyard workers now know that "people are watching and action will be taken if you misappropriate property," he said.

Butrick said federal authorities took the theft of ship parts seriously because there were cases that affected the ships returning to sea. "You have a warship that comes in and needs to be prepared to get back to sea and it sits at the pier because the parts are stolen," he said.

The operation started after Navy authorities received information about supervisor Robert C. Aguigui getting payoffs and the theft of ship parts, Butrick said.

Aguigui, 50, of Kapolei, is no longer with the Navy recycling center. He pleaded guilty this week to participating in fraud and bribery when he was a public official with the center. He admitted he accepted money from the undercover agent for selling scrap metal without authorization, and has agreed to pay federal authorities about $20,000 of the $25,000 he received from the undercover agent. His lawyer said he has paid back $5,000.

In addition, Aguigui admitted that he arranged for the sale of scrap metal to two recycling businesses. The businesses would pay the Navy for only a portion of the scrap, and pay Aguigui for the rest, he acknowledged.

Aguigui admitted receiving $120,000 from the businesses that should have gone to the Navy. He also agreed to pay the Navy that amount.

The money from the Navy's sale of the scrap metal is used for parks and other activities for Navy personnel and their dependents.

First Assistant Federal Public Defender Alexander Silvert, Aguigui's lawyer, said his client took full responsibility and cooperated "to the fullest" with authorities. As a result, prosecutors learned about the two companies and prosecuted the other two men, Silvert said.

"Mr. Aguigui has fully comprehended that he committed a serious violation of the law and is doing everything he can to atone for his conduct," Silvert said.

Silvert, however, said his client is facing several years in prison when is sentenced Sept. 15.

In connection with Aguigui's case, In Young Chong, owner of CM Recycling, pleaded guilty to a bribery charge and Chin-Yu Lu, former general manager of Primetal Group Inc., pleaded guilty to a less severe bribery charge involving an illegal gratuity.

Chong's lawyer, Rustam Barbee, said he believes Chong was a victim of Aguigui, who approached scrap metal dealers and proposed that they pay him for the scrap instead of the Navy. "Mr. Chong felt pressure to cooperate with Aguigui to keep the Navy's business," Barbee said.

Chong, 44, is scheduled to be sentenced later. Barbee said he hopes the court will consider Chong's "excellent reputation and the circumstances of the case in giving him a lenient sentence."

Lu's attorney, Howard Chang, declined to comment until after his client's sentencing also later this year.

Butrick said the reasoning behind setting up the storefront was that there would be no legitimate market for people to sell the ship parts. They might end up trying to selling the parts for scrap, he said.

It turned out that the storefront purchased hundreds of thousands of dollars of ship parts, although the agent paid only a fraction of the value to the sellers.

According to the court file, the items sold to the storefront ranged from specialized valves and connectors to pipes worth hundreds of thousands of dollars, all purchased for their scrap value in nickel, brass, copper and other metals.

Butrick said the six others were ice users and sold the parts to support their habit.

The six included former shipyard workers Wayne John De Young Jr. and Carl Graham Roberts Jr.; former maintenance worker James J. Carreira and Pama Kanehailua, Virginia Lee Johnson and Darnell K. Johnson.

Kanehailua's lawyer, Art Ross, said his client sold the parts to the storefront for Carreira. Kanehailua pleaded guilty after he was caught on the videotape selling the parts. "He was caught red handed," Ross said.

Kanehailua, who has received three years' probation, admitted he sold two stop check valves worth $6,000 for the scrap value of $68.25.

Lawyers for the other defendants could not be reached for comment.

Darnell Johnson and De Young were also placed on probation. The other three will be sentenced later.

Butrick said the storefront has shut down, but the investigation is continuing.

Jason Holm, Pearl Harbor shipyard spokesman, said the shipyard has added other measures to prevent thefts. The measures included random inspections of cars and people going through the shipyard gates, he said.

Reach Ken Kobayashi at kkobayashi@honoluluadvertiser.com or 525-8030.