Ex-isle banker Businessman and former isle banker Sukamto Sia faces up to 40 months in federal prison and fines of as much as $1.5 million after pleading guilty to bankruptcy fraud and wire fraud.
Sia pleads guilty
He faces jail time on fraud charges
By Debra Barayuga
dbarayuga@starbulletin.comSia, 43, pleaded guilty yesterday in U.S. District Court under an agreement that ends all criminal proceedings against the former director and shareholder in the now-defunct Bank of Honolulu.
He also agreed to pay more than $2 million in restitution before he is sentenced on March 11.
Sia had faced a total of 22 charges, including bankruptcy fraud, bank fraud and wire fraud. If convicted of all counts, he could have been sentenced to 24 years and nine months in prison.
William McCorriston, Sia's attorney, said his client takes full responsibility for what he called "a series of mistakes in judgment" and will be held accountable.
Sia admitted to participating in a scheme to defraud Bank of Honolulu by obtaining loans in the name of borrowers without their knowledge. He had the money wired to his accounts or to companies with which he was affiliated and used the proceeds for his benefit.
He also admitted to concealing his 1991 and 1996 state tax refund checks (totaling $757,249) from the bankruptcy trustee during personal bankruptcy proceedings that began in November 1998.
Sia deposited both checks into his bank accounts and had $300,000 wired to a Las Vegas casino for his use. He also purchased $325,000 diamond earrings for his girlfriend, Kelly Randall.
Assistant U.S. Attorney Craig Nakamura said Sia knew before October 1996 that his brother, Suwardi Sukamto, obtained loans from Bank of Honolulu without the consent of the borrower, identified only by the initials "J.K." Sia had $3.6 million from the loans transferred to his accounts.
Also in 1997 and 1998, he and his brother again obtained loans in the name of J.K. and another individual, "P.S.," Nakamura said. They had Bank of Honolulu advance a $1.5 million line of credit to Sia's bank account in Hong Kong for his personal use.
"I was wrong and I accept responsibility," Sia said.
Under the terms of the agreement, the government at sentencing will drop all remaining criminal charges against Sia in the second superseding indictment and all charges that were filed against Randall and another brother, Sumitro Sukamto.
Brook Hart, attorney for Randall (who had been charged with conspiracy in the bankruptcy fraud), said she is pleased with the outcome.
Sia agreed to pay restitution of $1.3 million to the Federal Deposit Insurance Corp., which took over the Bank of Honolulu in October 2000. He also will repay the $757,249 in state tax refunds to the Chapter 7 bankruptcy trustee. The amounts are due 30 days before he is sentenced.
Nakamura said the government will oppose any request to reduce the 20- to 40-month incarceration as stated in the plea agreement.
U.S. Attorney Elliot Enoki called the agreement an "appropriate disposition of the case" and said the penalties Sia faces reflect the criminal conduct to which he pleaded guilty.
While he is not privy to the full extent of claims against Sia in his bankruptcy proceedings, the $2 million restitution sought by the government in the plea agreement is a "considerable amount," Enoki said.
Sia's prosecution does not end his financial woes. His personal bankruptcy case, in which he claimed $296 million in debts and $9.3 million in assets, has since been converted to Chapter 7 liquidation. In August, Sia's wine collection was auctioned off to help pay creditors.