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Saturday, April 28, 2001



Credit counselors
suspected of money
laundering

But so far the pair has been
charged only with being drug
users in possession of guns


By Debra Barayuga
Star-Bulletin

The owners of a well-known credit-counseling business are alleged to have used their business as a front to launder the proceeds of illicit drug sales.

Michael Haxton, president of the nonprofit Hawaii Credit Counseling, and his wife Yvonne, treasurer, are facing charges in U.S. District Court of being unlawful users of a controlled substance while in possession of firearms, a federal violation.

Both have pleaded not guilty to the charges, and trial is set for June. Michael Haxton was indicted this week on an additional charge of being a drug user in possession of a firearm after federal authorities recovered a firearm in the false bottom shelf of a closet in his office on April 12.

The Haxtons operate Hawaii Credit Counseling Services, in Kalihi, which helps individuals manage their debts.

According to court documents unsealed earlier this month, federal authorities have been looking into the Haxtons' suspected involvement in drugs and money laundering since December 2000 after they arrested an unnamed individual on federal drug offenses. That individual has since pleaded guilty to federal drug charges and has provided information about the Haxtons to authorities.

According to one of the informants, Hawaii Credit Counseling Services requested cash payments from its clients, and it was not uncommon for clients to pay in $100 denominations.

"Michael and Yvonne Haxton exchanged large denominations of U.S. currency received from clients for small denominations of U.S. currency supplied by drug dealers," said Frank M. Okamura, a senior special agent with the U.S. Customs Service in Honolulu in an affidavit.

"Based on their predominantly cash business, Michael and Yvonne Haxton had the capability to disguise or conceal the true source and nature of illegal cash proceeds from drug sales as legitimate business funds."

Sam King Jr., attorney for Yvonne Haxton, declined comment on the allegations, saying she has not been charged with money laundering.

The only charges she and her husband currently face are being drug users in possession of firearms. Drug users are prohibited from owning or possessing firearms.

In a search of the couple's home at 1019 Kainui Dr. and the business at 1803 N. King St. in December, federal authorities seized 15 firearms and some drug paraphernalia.

At least five of the firearms were not registered in the state. Two additional firearms have since been turned over by Michael Haxton.

Two more firearms registered in Yvonne Haxton's name have not yet been recovered. Her husband claims they were stolen from his house in 1999, but he did not report it to police.

The couple were indicted in February on the firearms charges along with three other individuals who are charged with federal drug-smuggling offenses.

According to Yvonne Haxton, she had rented her father's house to one of these individuals, a Mexican male who was involved in selling heroin. She said she had purchased heroin from the man and that she and her husband had smoked heroin in October or November 2000.

Haxton also admitted she had exchanged drug money -- $20 bills for $100 bills -- to her tenant using funds from their business, the last time just days before he was arrested, according to the affidavit.

According to another informant, Yvonne Haxton charged $100 for every $10,000 exchanged.Honolulu police were investigating the Haxtons earlier. Last July, the Haxtons had reported to police that someone had broken into their Lincoln Navigator and stolen $200,000 in cash. The couple later claimed it was more like $315,000.

Police began looking into suspected money laundering by the Haxtons a month later because the couple were vague in explaining where the $315,000 came from and their business practices.

An anonymous caller to CrimeStoppers had reported the Haxtons were heavily involved in laundering money from drug trafficking, were receiving large amounts of cash from drug dealers and depositing the money into their business's bank account. The caller also said the Haxtons carried loaded firearms because of their known involvement with drug dealers.

The business collected anywhere from $20,000 to $40,000 a day from clients, according to the employee, but the Haxtons did not deposit the money into the bank daily.David Bettencourt, attorney for Michael Haxton, declined to comment on the allegations.

"It's in my client's interest to catch the government's witnesses in their lies at trial."

He said the confidential informants are believed to have been a former employee who left and is now starting a competitive business and another who is involved in organized crime.

Bettencourt said the only evidence that Haxton is a drug user is that he admitted in December to using drugs, but has since passed all drug tests.

"He's not a user," he said.

The Haxtons collected guns, and the reason why some had not been registered was that they were antiques and did not need to be registered, he said.

Jerry Ruthruff, attorney for Hawaii Credit Counseling, said the Haxtons are no longer officers and directors of the company. New management has been installed, and customers are being taken care of, he said.

"We have no knowledge about the truth or falsity of the allegations the government has made," Ruthruff said.

Nevertheless, the case brought against the Haxtons is "surprising and troubling," he said.

"The board of directors and management wants to assure all customers that accounts are being properly handled, and all funds paid by clients will be applied to their debts."

Hawaii Credit Counseling Services has about 1,000 clients at this time.Michael Haxton is being held without bail. Arraignment on the latest charge is set for May 3 at 10:30 a.m. before U.S. Magistrate Kevin Chang.

Earlier this month, Yvonne Haxton was allowed to enter a Sand Island drug treatment facility pending trial after posting a $50,000 bond.But so far the pair has been charged only with being drug users in possession of guns

By Debra Barayuga

Star-Bulletin

The owners of a well-known credit-counseling business are alleged to have used their business as a front to launder the proceeds of illicit drug sales.

Michael Haxton, president of the nonprofit Hawaii Credit Counseling, and his wife Yvonne, treasurer, are facing charges in U.S. District Court of being unlawful users of a controlled substance while in possession of firearms, a federal violation.

Both have pleaded not guilty to the charges, and trial is set for June. Michael Haxton was indicted this week on an additional charge of being a drug user in possession of a firearm after federal authorities recovered a firearm in the false bottom shelf of a closet in his office on April 12.

The Haxtons operate Hawaii Credit Counseling Services, in Kalihi, which helps individuals manage their debts.

According to court documents unsealed earlier this month, federal authorities have been looking into the Haxtons' suspected involvement in drugs and money laundering since December 2000 after they arrested an unnamed individual on federal drug offenses. That individual has since pleaded guilty to federal drug charges and has provided information about the Haxtons to authorities.

According to one of the informants, Hawaii Credit Counseling Services requested cash payments from its clients, and it was not uncommon for clients to pay in $100 denominations.

"Michael and Yvonne Haxton exchanged large denominations of U.S. currency received from clients for small denominations of U.S. currency supplied by drug dealers," said Frank M. Okamura, a senior special agent with the U.S. Customs Service in Honolulu in an affidavit.

"Based on their predominantly cash business, Michael and Yvonne Haxton had the capability to disguise or conceal the true source and nature of illegal cash proceeds from drug sales as legitimate business funds."

Sam King Jr., attorney for Yvonne Haxton, declined comment on the allegations, saying she has not been charged with money laundering.

The only charges she and her husband currently face are being drug users in possession of firearms. Drug users are prohibited from owning or possessing firearms.

In a search of the couple's home at 1019 Kainui Dr. and the business at 1803 N. King St. in December, federal authorities seized 15 firearms and some drug paraphernalia.

At least five of the firearms were not registered in the state. Two additional firearms have since been turned over by Michael Haxton.

Two more firearms registered in Yvonne Haxton's name have not yet been recovered. Her husband claims they were stolen from his house in 1999, but he did not report it to police.

The couple were indicted in February on the firearms charges along with three other individuals who are charged with federal drug-smuggling offenses.

According to Yvonne Haxton, she had rented her father's house to one of these individuals, a Mexican male who was involved in selling heroin. She said she had purchased heroin from the man and that she and her husband had smoked heroin in October or November 2000.

Haxton also admitted she had exchanged drug money -- $20 bills for $100 bills -- to her tenant using funds from their business, the last time just days before he was arrested, according to the affidavit.

According to another informant, Yvonne Haxton charged $100 for every $10,000 exchanged.Honolulu police were investigating the Haxtons earlier. Last July, the Haxtons had reported to police that someone had broken into their Lincoln Navigator and stolen $200,000 in cash. The couple later claimed it was more like $315,000.

Police began looking into suspected money laundering by the Haxtons a month later because the couple were vague in explaining where the $315,000 came from and their business practices.

An anonymous caller to CrimeStoppers had reported the Haxtons were heavily involved in laundering money from drug trafficking, were receiving large amounts of cash from drug dealers and depositing the money into their business's bank account. The caller also said the Haxtons carried loaded firearms because of their known involvement with drug dealers.

The business collected anywhere from $20,000 to $40,000 a day from clients, according to the employee, but the Haxtons did not deposit the money into the bank daily.David Bettencourt, attorney for Michael Haxton, declined to comment on the allegations.

"It's in my client's interest to catch the government's witnesses in their lies at trial."

He said the confidential informants are believed to have been a former employee who left and is now starting a competitive business and another who is involved in organized crime.

Bettencourt said the only evidence that Haxton is a drug user is that he admitted in December to using drugs, but has since passed all drug tests.

"He's not a user," he said.

The Haxtons collected guns, and the reason why some had not been registered was that they were antiques and did not need to be registered, he said.

Jerry Ruthruff, attorney for Hawaii Credit Counseling, said the Haxtons are no longer officers and directors of the company. New management has been installed, and customers are being taken care of, he said.

"We have no knowledge about the truth or falsity of the allegations the government has made," Ruthruff said.

Nevertheless, the case brought against the Haxtons is "surprising and troubling," he said.

"The board of directors and management wants to assure all customers that accounts are being properly handled, and all funds paid by clients will be applied to their debts."

Hawaii Credit Counseling Services has about 1,000 clients at this time.Michael Haxton is being held without bail. Arraignment on the latest charge is set for May 3 at 10:30 a.m. before U.S. Magistrate Kevin Chang.

Earlier this month, Yvonne Haxton was allowed to enter a Sand Island drug treatment facility pending trial after posting a $50,000 bond.



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