IRS agent traces An Internal Revenue Service investigator testified yesterday that he traced hundreds of thousands of dollars in payments that went to union leader Gary Rodrigues' family members and associates.
payments to union
chief’s associates
The money trace is partly derived
from records of a defendantBy Debra Barayuga
dbarayuga@starbulletin.comThe payments came in the form of consulting fees that were built into medical, dental and life insurance contracts negotiated by Rodrigues for the 13,000-member United Public Workers allegedly without the knowledge and consent of the union's executive board.
The mailing and depositing of payments into accounts are what constitute the charges of mail fraud, health-care benefits fraud and money laundering filed against Rodrigues and his daughter, Robin Haunani Rodrigues Sabatini, who are on trial in U.S. District Court.
Lance Okamoto, special agent with the IRS's Criminal Investigation Division, summarized yesterday the payments made to Sabatini and others from Hawaii Dental Service, Pacific Group Medical Association or its sister company Pacific Equity Growth Management. The government contends Sabatini and others did no consulting work for UPW in connection with the union's benefit plans.
Okamoto said he obtained the information from HDS records, the financial statements and ledgers of Sabatini's two companies, and bank records.
According to Okamoto, HDS paid Al Loughrin, the father of Rodrigues' longtime secretary and girlfriend, a total of $14,430 from 1992 to 1994. In 1996, Pacific Equity sent nine checks totaling $146,361 to Sabatini's company Four Winds RSK Inc. From 1996 to 1997, HDS sent Four Winds eight checks totaling $91,684. From 1998 to 2000, consulting fees were redirected to Aulii Inc., Sabatini's other company, in the form of 30 checks totaling $214,536.
According to Okamoto, Sabatini received $58,000 from Four Winds from 1996 to 1998 for her personal benefit, with an additional $17,149 from Aulii Inc. in 1998.
In 1999 and 2000, Sabatini received nearly $139,000 from Aulii Inc. Records indicate Sabatini directed some of the money to fund her pension plan and to her sister Shelly Rodrigues, Okamoto testified. From 1996 to 1998, Four Winds and Aulii Inc. sent Shelly Rodrigues nearly $29,700.
The government alleges Gary Rodrigues embezzled union assets by causing consulting payments to be paid to medical, dental and welfare benefits providers and directing them to pay consulting fees to Sabatini and the now-deceased father of his former girlfriend. Prosecutors contend Sabatini and others did no such consulting work related to the union's benefit plans.
Doron Weinberg, Rodrigues' attorney, has argued that Sabatini did consulting work and was paid for her work and that union members got more if not better benefits for the premiums they paid.