Restitution paid in city
contracting scam

By Debra Barayuga
Star-Bulletin

A friend of fired city housing official Michael Kahapea has paid $69,000 in restitution for monies he allegedly received to move a Middle Street business to make way for the city bus system's headquarters.

Richard Chung, as part of a plea agreement with the state, made the restitution in two payments earlier this month, weeks before a Dec. 31 court-imposed deadline.

The money was turned over to the city's Finance Department yesterday. Under the plea agreement, Chung, 71, will testify against Kahapea. Chung pleaded guilty to first-degree theft, second-degree forgery and money laundering in September and faces 10 years in prison when sentenced next year.

Chung created a bogus company called RC Movers which was contracted by the city to move a meat-packing company from Middle Street in the early 1990s. The city paid RC Movers for the move, but RC Movers did not do the work.

Chung and Shiro Aoki, who headed RC Movers, are accused of receiving several checks from Kahapea, cashing them and kicking back the money to Kahapea and Kahapea's friends, prosecutors said.

Of the $600,000 the city paid for the Middle Street relocation project, $69,000 was directly connected to Chung.

Chung's attorney, William Harrison, has said his client had been asked by Kahapea to help out on projects but was used by the former housing official.

Aoki earlier this year entered into a plea agreement and pleaded guilty to similar charges. He also will testify against Kahapea and will pay $1,460 in restitution.

Kahapea is accused of masterminding a scam in which he had friends and relatives create bogus companies which billed the city to relocate businesses from Middle Street, Ewa Villages and West Loch to make way for city projects.

The work was done at inflated costs or was never done, according to prosecutors.