Man convicted of conspiracy in Hawaiian Air fraud case


POSTED: Friday, November 21, 2008

A California pastor was convicted of conspiracy for a second time in a scheme over the 2003 bankruptcy of Hawaiian Airlines.

A federal jury in New York found William H. Spencer guilty of conspiracy Wednesday to commit bankruptcy fraud after an appeals court overturned his conviction in February, according to a statement by U.S. Attorney Michael Garcia. Spencer is pastor of the House of Truth in Oakland, Calif., Garcia said.

A different jury convicted Spencer, 77, and Paul Boghosian, 54, in October 2005 on the conspiracy count. Boghosian also was found guilty of commercial bribery. Spencer was sentenced to four years and three months in prison. Boghosian, of St. Louis, got two years, according to appeals court records.

On Feb. 26, the federal appeals court in New York threw out, and ordered a new trial on, the conspiracy charge against them, finding fault with part of the trial judge's jury instruction. It upheld Boghosian's commercial-bribery conviction.

Boghosian then pleaded guilty to conspiracy on Oct. 29. Spencer's retrial began with jury selection on Nov. 10. They each face a maximum penalty of five years in prison on the conspiracy conviction. Spencer did 18 months in prison before being released in March.

Spencer's lawyer, Jimmie L. Engram of New York, didn't immediately return a call for comment.

In July 2004, Hawaiian Investment Partners Group LLC, an entity controlled by Boghosian, filed a plan of reorganization for Hawaiian Airlines, which filed for bankruptcy protection in Hawaii in 2003 and had its own reorganization plan.

Spencer and Boghosian were charged with making false statements, including in depositions, concerning their ability to provide $300 million in new capital required for their plan.

They solicited others to falsely support and invest in the plan, according to the indictment. Boghosian agreed to pay a $500,000 bribe to an undercover agent of the Federal Bureau of Investigation posing as a New York hedge-fund manager in exchange for a $2.5 million loan from the fund, and Spencer executed a promissory note for the loan, according to prosecutors.

One document submitted was a letter from two people falsely claiming to be officials of Amsterdam-based ABN Amro Bank NV confirming that Spencer had an account with $500 million, according to the indictment.

Hawaiian emerged from bankruptcy in 2005.