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Woman gets
17 months in
welfare fraud case

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By Debra Barayuga
Star-Bulletin

Peninatautele Fiamate had told welfare officials she hadn't lived with her husband for nine years, but he was seen driving a new Ford Expedition with vanity plates that read "Penina."

That's the tip that came in to the state's hot line that set investigators onto Hawaii's biggest welfare fraud case.

Saying welfare fraud "won't be tolerated in our society," U.S. District Judge Helen Gillmor yesterday ordered Fiamate to serve 17 months behind bars for pleading guilty to two counts of mail fraud and one count of food stamp fraud.

"This was not based on need, but greed," said Gillmor. "This is a dishonest act, over and over and over again."

Fiamate, a mother of seven living at the state's Palolo Homes housing project, was indicted last year for submitting false applications for public assistance over a period of nine years. She failed to disclose that her husband was living with her and that he was working, making at one time as much as $80,000 a year as a truck driver.

According to the the government, Fiamate applied for and fraudulently obtained $118,769 in financial assistance, $72,108 in food stamps, $56,195 in medical benefits, $13,103 in child-care assistance and $92,482 in housing assistance.

Her attorney, Rodney Ching, had argued that the benefits Fiamate received were not used "frivolously, illegally or selfishly." She hadn't used the money to buy drugs or alcohol or for gambling, but for the basic needs of her seven children.

While the amount of financial assistance she is charged with receiving is a large amount, when spread out over nine years it comes to about $1,000 a month -- which isn't much to support seven children, he said.

Fiamate has no criminal record and presents no danger to society, Ching said. She has taken responsibility for her actions and pleaded guilty.

Six months before her indictment last year and upon receipt of a statement from the state saying she owed $350,000, she began repaying the money. Since January 2000 she has repaid $3,000, or $250 a month.

Fiamate is now working as a cashier at a fast-food restaurant and has been offered a promotion, he said.

A tearful Fiamate asked the court for leniency and a chance to pay back the state as numerous family members and supporters, including her husband and a few of her children, looked on. "I am truly sorry for what I did wrong."

Assistant U.S. Attorney Michael Seabright disputed Ching's contention that Fiamate didn't use the benefits "frivolously," saying part of the money she received went to the lease of the sports utility vehicle for $650 a month.

Besides the tax benefits they enjoyed from not reporting their true income, the couple were making "extraordinary money" -- well over $100,000 while paying less than $300 a month for rent, he said.

And while she began making restitution a month after she was approached by a state investigator, just two months later she applied for subsidized housing in Palolo and again failed to disclose her husband's income, Seabright said.

Eric Weyenberg, chief investigator for the Department of Human Services, said taxpayers and those who really need assistance are the ones who ultimately have to pay for Fiamate's crime.

Gillmor also ordered Fiamate to pay restitution in excess of $350,000. After she completes her prison term, she will be on supervised release for up to five years.

Fiamate had nothing to say as she left the courthouse shielded by family members.

Fiamate will surrender to U.S. marshals on Feb. 15.

Her husband was sentenced just last week in state court to five years' probation for housing fraud.

The state had only enough to charge Lipiia Fiamate, 36, with housing fraud, which is a state offense, Deputy Attorney General Rick Damerville said last week.

Fiamate failed to disclose his income and that he was living with his wife and children from 1995 to 1999, resulting in her paying only $260 a month in rent for their three-bedroom apartment.

"He may have benefited from her making false statements, but he didn't help her or participate as far as we could prove," Damerville said.

The judge ordered Lipiia Fiamate to pay restitution to the state of $41,382 -- the fair rental value of the apartment, less the amount they actually paid -- and ordered him to complete 150 hours of community service.

The Fiamates no longer live in public housing. The car was returned.