Convicted
UPW chief
will learn fate
soonGary Rodrigues could get
up to seven years in federal prison
after sentencing tomorrow
Former United Public Workers union leader Gary Rodrigues faces up to seven years in federal prison when he is sentenced tomorrow for defrauding the union.
Rodrigues, 61, was convicted in November on 101 counts -- including mail fraud, embezzlement, conspiracy to launder money and money laundering -- for negotiating consulting fees for the union's medical and dental contracts and funneling the fees to his daughter without approval of the executive board.
Rodrigues was also found guilty of accepting $117,000 in kickbacks from an insurance agent for the union's life insurance carrier.
His daughter, Robin Haunani Rodrigues Sabatini, 38, an accountant, was convicted on 95 counts, including mail fraud and money laundering.
Those charges stem from more than 50 checks mailed from Hawaii Dental Service, Pacific Group Medical Association and sister company Pacific Growth Equity, to two companies owned by Sabatini. The payments were allegedly for consulting work that prosecutors say Sabatini did not perform.
Rodrigues, UPW state director for more than three decades, contends he was wrongly convicted and is asking to be released on bail pending an appeal to the 9th U.S. Circuit Court of Appeals.
Based on court papers, assistant U.S. Attorney Florence Nakakuni is expected to oppose the request and ask that Rodrigues begin serving his term immediately. Nakakuni declined to say how long a prison term the government is recommending, noting it will be revealed at sentencing.
While the courts usually give defendants convicted of white-collar crimes several weeks to get their affairs in order, prosecutors contend Rodrigues has had nearly a year since his conviction to do so.
The government contends the scheme to defraud began as an attempt to use United Public Workers' assets to repay a personal loan from the stepfather of Rodrigues' long-time girlfriend and snowballed into a bogus consulting fee scheme that benefited Rodrigues and his family members.
Testimony at trial revealed Rodrigues had borrowed $24,000 from now-deceased union member Allan Loughrin to install a water sprinkler system at property Rodrigues purchased in Bend, Ore., where he and Loughrin's stepdaughter planned to retire.
The scheme began in June 1992, when Rodrigues negotiated contracts with Hawaii Dental Service, and continued until December 2000, when the last of the consulting fees were laundered in Sabatini's company accounts.
Money from Sabatini's accounts went to fund her pension plan, to her sister and mother, and for the purchase of a truck under Rodrigues' name, prosecutors said.
In court papers, Doron Weinberg, Rodrigues' attorney, argues that Rodrigues is neither a flight risk nor a danger to the community.
Rodrigues and his daughter have remained free on $50,000 bail since they were both indicted in March 2001 and after they were found guilty. Rodrigues has complied with every condition imposed by the court, including removing himself from the union's affairs.
Rodrigues also has strong ties to the community and financial incentive to remain.
He maintains a home on the property where he was raised on Kauai. Both his daughters and granddaughter live here, and he recently married longtime companion and former secretary Tani Olaso, who is also from Hawaii.
Rodrigues is also in the midst of a lawsuit seeking payment of retirement and owed sick leave and unused vacation from the union, so he has strong incentive to remain so he can pursue those claims, Weinberg argues.
Rodrigues also contends that his appeal is not to delay his sentence but raises substantial questions of law or facts that are likely to result in a reversal of his conviction, or a new trial.
The appropriate sentence, even if some or all the charges are upheld, would be for a prison term "less than the expected duration of the appeal process," his motion said.
Observers say that it could take up to two years to appeal the case. Both cases have been consolidated for purposes of appeal, and notices to the 9th Circuit won't be filed until after Sabatini is sentenced in December.
In opposition papers, the government notes that Rodrigues has not proven that he is not a danger nor likely to flee after sentencing and that he is only trying to delay going to prison.
All the charges Rodrigues was convicted of involve economic harm to the union and the community, the government said.
The trial proved that Rodrigues is a "manipulator who has refused to take responsibility for his conduct with respect to the union to which he owed a fiduciary duty and with respect to his daughter," the government said. Weinberg and Rodrigues could not be reached for comment.
Among the issues Rodrigues expects to raise on appeal is whether the union's life insurance plan was subject to the federal Employee's Retirement Income Security Act, which prohibits the receipt of gifts and gratuities.
Count 102, which accused Rodrigues of accepting kickbacks in connection with an employee welfare benefit plan, was the "most inflammatory and prejudicial charge" in the indictment, "painting him as avaricious and stealthy," the defense argued.
Childhood friend Herbert Nishida, an agent with Transamerica, testified he had given Rodrigues cash payments averaging $25,000 over a five-year period in appreciation for UPW's business and the help he had received from Rodrigues over the years.
Rodrigues contends trying him on the kickback charge together with the remaining 101 counts was a major factor in his decision not to testify at trial, "a decision which obviously prejudiced him in the trial of the remaining counts," the defense said.
Just as prejudicial, Rodrigues says, is the health care fraud charge, where prosecutors alleged Sabatini had received $146,000 from PGMA. There was no evidence connecting the money to UPW or that Rodrigues was responsible for obtaining the payments for his daughter, the defense said.
The government says all of the issues Rodrigues raises are old arguments that Chief Judge David Ezra, who presided over the case, had already ruled on in denying their joint motions for acquittal or for a new trial.
While Ezra had dismissed a remaining count that would have required the Rodrigueses to forfeit $308,080 in consulting fees that went to Four Winds RSK and Aulii Inc., the court could still impose restitution and fines. The government had earlier indicated it would likely seek those actions.
Two days after his conviction, Rodrigues was stripped of his $202,000-a-year post by the union's mainland parent, the American Federation of State, County and Municipal Employees.
Sabatini's sentencing was continued to allow her new attorney, Paul Cunney, more time to prepare.
