PGMA founder denies
financial fraud charges
The founder of a local insurance company that collapsed, prompting investigations into labor leader Gary Rodrigues, has pleaded not guilty to charges that he misled regulators about his company's financial health.
Peter Posang Wong appeared in U.S. District Court yesterday for his arraignment on a 16-count indictment that alleged he made false statements about the operations of the now-defunct Pacific Group Medical Association.
Federal Magistrate Kevin Chang set Wong's bail at $75,000 and ordered him to surrender his passport.
Chang also restricted Wong's travel to Oahu and California, where he now lives, and barred him from conducting any financial transactions of more than $10,000 without court permission. Wong also cannot hold a job that places him in a fiduciary capacity, Chang ruled.
Wong's trial has been set for Feb. 24 before U.S. District Judge David Ezra.
Assistant U.S. Attorney Florence Nakakuni said that Wong "poses a financial danger to the community," and cited a number of civil lawsuits against the former insurance executive relating to the collapse of PGMA.
Wong recently filed for bankruptcy protection in California, and his attorney, Michael Green, argued that the bail conditions would create financial hardships.
Wong was indicted by a federal grand jury in July for making numerous false statements to the state Insurance Division, which seized PGMA in March 1997 with debts of more than $17 million.
Federal prosecutors have alleged that thousands of PGMA's customers wound up losing medical coverage, while dozens of isle doctors and health care providers were not paid as a result of Wong's alleged deception.
Subsequent investigations into PGMA's collapse uncovered questionable payments to a Kauai company headed by Robin Haunani Rodrigues Sabatini, daughter of Gary Rodrigues, the former head of the United Public Workers union.
Last November, a federal jury convicted Rodrigues on 101 counts of mail fraud, money laundering and embezzlement stemming from a kickback scheme involving payments from PGMA and Hawaii Dental Service.
Sabatini was convicted on 95 counts.
