City fraud gets
Honolulu man
6 months in jail

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By Debra Barayuga
Star-Bulletin

A Honolulu businessman was sentenced to five years' probation and six months in prison for moving work he never performed at the city's Ewa Villages and Middle Street redevelopment projects.

"I did make a mistake. I did trust too many people, and I'm sorry about that," said Claude Hebaru, who has claimed he was duped by former city housing official Michael Kahapea.

Hebaru, one of the first to come forward and admit his involvement in the biggest fraud in the city's history, was also ordered to pay restitution of $407,781 -- the portion he received for work allegedly performed by his company, Titan Moving & Hauling.

Although Hebaru cooperated with investigators early on and admitted his role in helping Kahapea launder city checks in the Ewa Village and Middle Street projects, the state sought probation and at least a 10-year jail term. This was partly because of the nature of the fraud that occurred and because he lied to investigators and on the witness stand about certain matters.

Kahapea was convicted of being the mastermind behind a bid-rigging scam in which the city paid $5.8 million to various companies -- some existing only on paper -- to perform moves at inflated prices or not at all.

Hebaru, a self-employed pest exterminator, told investigators that he got involved with Kahapea with Ewa Villages because he had an affair and needed money to support two families.

But evidence showed he was involved with Kahapea even earlier, with the Middle Street scam and even before he was involved with the other woman, said Deputy Prosecutor Randal Lee.

Also, Hebaru testified under oath at Kahapea's trial last August that he had received $200,000 from the city for the work he allegedly did and that he had no knowledge of where Kahapea had gotten the forms used to provide false invoices to the city.

Hebaru later admitted during questioning that he had provided Kahapea with papers that were blank except for the Titan Moving letterhead. The company only existed on paper, and the address given belonged to another business.

The investigation showed, however, that Titan Moving received payments from the city of $1.9 million, of which Kahapea received $1.3 million in the form of cashier's checks Hebaru had made at his bank.

Of the remaining $584,407 unaccounted for, the state asked the court to order Hebaru to pay half.

In the Middle Street moves, Titan received a total $231,155 from the city and Hawaii Meat Co., one of two businesses asked to move from the area. The state sought half that amount, or $115,577, from Hebaru.

David Gierlach, Hebaru's attorney, said his client has been a contributing member of the community for the past 20 years, owns a pest extermination company and has no criminal history.

Hebaru had no criminal intent to deceive anyone and was confused because the transactions involved large amounts of money and occurred over a period of several years, Gierlach said.

He said Hebaru told him he received only $65,000 from the deal, and that would be a more reasonable restitution amount.

Hebaru has 30 days to bring his business affairs in order and turn himself in so he can begin serving his six-month term.