Tuesday, June 18, 2002

Former trustee pleads
guilty to laundering

She could get 1 year in jail

By Rick Daysog

Former Kamehameha Schools trustee Lokelani Lindsey pleaded guilty to federal money-laundering and conspiracy charges yesterday, just as her bankruptcy fraud trial in Las Vegas was set to begin.

Appearing before U.S. District Judge David Ezra, Lindsey pleaded guilty to charges that she helped hide her sister Marlene Lindsey's assets after her sister filed for bankruptcy in January 1995.

Under the plea agreement, federal prosecutors will drop charges of bankruptcy fraud and conspiracy to commit bankruptcy fraud against Lokelani Lindsey.

Lindsey -- who was removed as a $1 million-a-year Kamehameha Schools trustee in 1999 -- z prison for charges that carry a maximum sentence of 10 years of imprisonment and a fine of up to $250,000.

Ezra has scheduled an Oct. 16 sentencing hearing in Las Vegas. If Ezra rejects the deal, Lindsey can withdraw her plea and opt for a trial.

Lindsey becomes the first member of the Kamehameha Schools board to be convicted of a felony. In 1999 an Oahu grand jury indicted former trustees Henry Peters and Richard "Dickie" Wong on charges of theft, but those charges were thrown out by Circuit Judge Michael Town.

Lindsey made no comment yesterday, and her attorney William Harrison also could not be reached.

But Harrison told the Associated Press in Las Vegas that his client wanted to spare her husband, Stephen Lindsey, the pain of a two-week criminal trial.

Stephen Lindsey has been confined to a wheelchair due to a spinal affliction that has required surgery during the last year, he said.

"She wants to ask the court to be allowed to care for her husband," Harrison said.

A federal grand jury indicted Lindsey in December 2000 for conspiring with her sister Marlene Lindsey, a local real estate agent and hairstylist, to hide assets from bankruptcy trustees and creditors.

Marlene Lindsey filed for bankruptcy in January 1995 but failed to disclose that she owned 100 shares of stock in a local freight-forwarding company, Atlantic Pacific International Inc.

Marlene Lindsey pleaded guilty in February in Las Vegas to filing a false income tax return. She had been due to testify against her sister. The indictment was the result of an IRS investigation.

Lindsey, who became a Kamehameha Schools trustee in 1993, was the first female appointed to the board of the 118-year-old charitable trust, whose mission is to educate children of native Hawaiian ancestry.

Her micromanagement of the $6 billion trust's Kapalama Heights campus set in motion the three-year legal and political controversy that culminated in the removal of former trustees Peters, Wong, Oswald Stender and Gerard Jervis.

The Associated Press contributed to this report.

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