13 National Hockey League Players Scammed for $100,000 Each on Fake Big Island Real Estate Project

An indictment was unsealed this morning in federal court in Brooklyn charging Phillip A. Kenner, a former financial adviser to several former and current National Hockey League (NHL) players, and Tommy C. Constantine, also known as Tommy C. Hormovitis, a former professional race car driver, with wire fraud and wire fraud and money laundering conspiracies in connection with schemes involving fraudulent real estate and business investments.

Tommy Constantine and some Playboy models.

Tommy Constantine and some Playboy models.

Kenner is also charged with wire fraud involving a separate scheme to buy real estate in Sag Harbor, New York.

Phillip A. Kenner

Phillip A. Kenner

The defendants were arrested earlier today in Scottsdale, Arizona, by agents of the Federal Bureau of Investigation and Internal Revenue Service and officers of the Scottsdale Police Department, and a search warrant was executed at Kenner’s residence. The defendants are scheduled to appear later today before United States Magistrate Judge Bridget S. Bade at the federal courthouse in Phoenix, Arizona, for removal proceedings to the Eastern District of New York.

The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office; and Toni Weirauch, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Criminal Investigation, New York.

During his college years at Rensselaer Polytechnic Institute (RPI) in Troy, New York, Kenner became acquainted with one of the schemes’ victims, who played hockey at RPI before being drafted by an NHL professional team. In approximately 1994, Kenner was licensed as a financial adviser and, early in his career, worked at a firm in Boston, Massachusetts, where he built a client list of several NHL players before starting his own firm in 2003. Between 2002 and 2013, Kenner advised numerous hockey players on investments in a series of allegedly fraudulent schemes that he represented would earn significant profits for the players; however, the victimized players instead suffered losses exceeding $15 million.

The Hawaii Real Estate Investment Scheme

As alleged in the indictment and other court filings by the government, Kenner fraudulently solicited at least 13 players to invest $100,000 each in a real estate development project on the Big Island of Hawaii. In connection with this scheme, Kenner also convinced several NHL players to open lines of credit, to which Kenner was given access. Unbeknownst to the players, Kenner allegedly used their investments for purposes unrelated to the development of the Hawaii real estate project. Rather than investing the money as promised, Kenner and Constantine used it to fund personal real estate purchases, pay personal expenses, and pay down other debts necessary to conceal the scheme. Beyond the NHL players, in August 2006, Kenner and Constantine also allegedly defrauded Lehman Brothers Holdings Inc. of $2 million based on Kenner’s misrepresentations concerning the use of a real estate loan. In total, the victims of this scheme lost more than $13 million.

The Eufora LLC Scheme

Constantine operated Eufora LLC, a prepaid debit card business that he founded in 2002. Kenner informed the NHL players that Eufora was an up-and-coming company with great potential for growth. Between February 2008 and May 2009, players invested, at Kenner’s urging, approximately $1.4 million into Eufora. However, none of that $1.4 million was actually invested in Eufora; rather, the investment money was diverted to bank accounts that Kenner and Constantine controlled and was used to cover the costs of Kenner and Constantine’s personal mortgages, credit card bills, travel costs, jewelry, and other expenses. In December 2009, Kenner and Constantine fraudulently convinced an Eastern District of New York resident to invest another $200,000 in Eufora, the vast majority of which was later diverted to a Constantine-controlled account unrelated to Eufora. In total, investors lost more than $1.5 million as a result of the Eufora scheme.

The Global Settlement Fund Scheme

In May 2009 through February 2010, Kenner and Constantine persuaded NHL players to give approximately $4.1 million to fund an attorney’s escrow account, termed the Global Settlement Fund, or GSF, which was to be used to finance litigation related to Mexican land deals. However, only a small fraction of the players’ contributions to the GSF were used for litigation; rather, the vast majority of the money was allegedly transferred into bank accounts controlled by Constantine, and significant portions of the money were used by Kenner and Constantine for purposes unrelated to the GSF, including funding Kenner’s personal investment in a tequila company in Mexico, funding litigation in Florida related to a race car company owned by Constantine, and funding the transfer of Constantine’s Arizona home. The players lost more than $1 million as a result of this scheme.

The Sag Harbor Scheme

In a separate scheme, Kenner acquired a 25 percent interest in real property in Sag Harbor, New York, without using any of his own money. To achieve this result, Kenner took $395,000 from a player’s line of credit without that player’s knowledge or permission. Kenner also convinced another player to pay $375,000 for a 50 percent interest, when Kenner only gave him a 25 percent interest and pocketed the other half of the money. In early 2010, the investors realized Kenner had not contributed any of his own money, and they sold the property at a loss. Kenner has filed a civil lawsuit in Arizona against one of the investors in connection with the Sag Harbor property.

“As alleged, Phillip Kenner spun a web of lies, deceit, and broken promises that stretched from Hawaii to Mexico to the East End of Long Island. Kenner used his school connections to build a client list of NHL players. Once he gained their trust, he promptly betrayed it by steering them to fraudulent investment schemes that enriched himself and Constantine to the tune of millions at the players’ expense. Kenner allegedly abused his position as a trusted financial advisor and long-time friend to the victims, using fraud and outright lies concocted by Kenner and Constantine to pilfer bank accounts in order to live an extravagant lifestyle with money that belonged to and was earned by Kenner’s friends,” stated United States Attorney Lynch. “We and our law enforcement partners will vigorously pursue and prosecute to the fullest extent those who seek to profit by such fraud.”Ms. Lynch expressed her grateful appreciation to the FBI and IRS for their work on the investigation and thanked the Scottsdale, Arizona Police Department for their assistances.

Assistant Director in Charge George Venizelos stated, “As alleged, Kenner exploited his personal relationship with these players in pursuit of his own lucre. Player after player, time after time he and his partner, Constantine, stole from anyone they could find. This was an elaborate scheme of deception, trickery, and lies that victimized many. The FBI will continue to pursue anyone who believes using others’ savings as their personal piggy bank is acceptable behavior.

“It is not uncommon for investment fraudsters to target a specific group of victims and that group may even include the perpetrator’s own friends and acquaintances,” stated IRS Special Agent in Charge Weirauch. “The cooperation between IRS-Criminal Investigation, the U.S. Attorney’s Office, and the FBI should give the investing public confidence that investment fraud schemes will ultimately be uncovered and thoroughly investigated and that the scammers will be prosecuted. Nevertheless, always take care when entrusting money to others, including to investment professionals whom you already know.”

The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted the defendants face maximum sentences of 20 years.

The criminal case has been assigned to the Honorable Joseph F. Bianco, United States District Judge for the Eastern District of New York, in Central Islip, New York. The government’s case is being prosecuted by Assistant United States Attorneys Carrie Capwell, Demetri Jones, and Diane Leonardo.

Defendants:

Phillip A. Kenner
Age: 43
Residence: Scottsdale, Arizona

Tommy C. Constantine, a/k/a Tommy C. Hormovitis
Age: 47
Residence: Scottsdale, Arizona

 

Hawaii Prison Gang “USO Family” Indicted for Racketeering

A federal grand jury indicted 18 men on racketeering-related charges related to their membership or association with a criminal organization identified as the “USO Family,” in an indictment which was unsealed when several defendants were taken into custody on September 24, 2013.

US Department of Justice

The indictment alleges that the USO Family is the dominant prison gang in Hawaii and operates both inside and outside the State of Hawaii prison system.

Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that the indictment charged the following six defendants with a racketeering conspiracy consisting of multiple acts of fraud, methamphetamine and marijuana distribution, and bribery:

Charlie Esera, 46
Billy Wond, 38
Opherro Jones, 39
David Kahui, 34
Robin Lee, 52
Feso Malufau, 54

The indictment further charges the following 13 defendants with assaulting three different persons (in three different counts of the indictment) for the purpose of gaining entrance to or maintaining or increasing position within the USO Family:

James Moser, 24
Paul Togia, 33
Vaofele Iiga, 35
Clarence Butler, 34
Potaufa Ula, 27
Shadrach Unea, 28
Moses Thompson, 34
Daniel Kenolio, 28
Opherro Jones
William Shinyama, 43
Tineimalo Adkins, 33
Akoni Davis, 24
Travis Nishioka, 24

Defendant Lee is also charged with six counts of making false claims for income tax refunds for four of the other defendants. The indictment alleges that the filing of fraudulent tax returns for refunds is an activity the USO Family used to fund its operations, including bribing prison guards.

According to the indictment, the USO Family has evolved into an organized group with rules and regulations to ensure loyalty by members and participation by members in the criminal activities of the organization. The USO Family enterprise is alleged to have a defined structure, with leadership and “soldier” positions.

For each of the four racketeering-related counts, the defendants face a maximum period of imprisonment of 20 years and a fine of up to $250,000. The maximum penalties on each of the false claim charges are five years in prison and a fine of $250,000. An indictment is merely an accusation, and each defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

The investigation of this case was conducted by the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, the State of Hawaii Department of Public Safety, and the Honolulu Police Department. The prosecution is being handled by Assistant United States Attorney Michael Nammar.

 

FBI Swarms My Neighbors House – Removes Boxes From House

The FBI swarmed in on my neighbors house this morning located in Pahoa, Hawaii.

FBI

I first noticed something was going on when my dogs were barking loudly and I looked out my window and saw FBI Agents with large guns and bullet proof vests surrounding the house.  After the house was secured… they took off most of their clothes stating that they were FBI Agents.

FBI

One of the FBI Agents had a “Battering Ram” and I knew that something was about to go down so I grabbed my iPhone and started to take pictures.

FBI

I called Hawaii News Now Cameraman Darryl Lee and told him what was going on and that he might want to come check things out.

FBI

I asked Sergeant Scott Amaral what the heck was going on and he said he wasn’t able to comment on the matter, however, he assisted me in getting one of the FBI Agents to come out and talk with me for a few minutes.

FBI

They were inside the house for nearly two hours talking to the occupants of the house and then they started removing some boxes with what looked like some files in them.

FBI

I asked the FBI Agent that was sent out to talk to me about what was going on and he said he was not authorized to speak on the matter and gave me a number to the FBI’s media relations on Oahu.  I’ve tried calling the number several times and have left a message asking them to get back to me on the matter.

FBI

They were at the house for nearly two and a half hours before they packed up their stuff and left.  No arrests were made that I could tell of and only some property removed from the house.

FBI

It’s still a mystery to me as to why they were there… but I expect to find out soon enough since I gave an interview to Hawaii News Now.

Federal Grand Jury Indicts Eight In Connection With Big Island Gambling Business

Vida G. Bottom, Special Agent in Charge of the Federal Bureau of Investigation, Harry S. Kubojiri, Police Chief of the Hawaii Police Department, Kenneth J. Hines, Special Agent in Charge of the Internal Revenue Service – Criminal Investigation, and Florence T. Nakakuni, United States Attorney for the District of Hawaii, announced that law enforcement officers today arrested persons on the Big Island indicted by a federal grand jury in Honolulu on November 20, 2012, for operating an illegal gambling business and conspiring to do so.

Picture courtesy of KHON 2 News

Charged with those offenses are:

  • Eric Ford, age 45
  • Marlo Banasan, 34
  • Matthew Phillips, 39
  • Kendale Limahai, 47
  • Robert Bland, 35
  • Jonah Yardley, 37
  • Trevor Carter, 24

A Slot Machine shop in Hilo

The grand jury also charged Eric Ford and an eighth defendant, Barbara Ford, age 44, with 25 counts of structuring financial transactions for the purpose of evading federal reporting requirements, which include the filing of a Currency Transaction Report with the IRS by a financial institution in regard to any currency transaction over $10,000. All seven of the Big Island residents, everyone except Bland, now a resident of Arizona, were arrested today.

United States Attorney Nakakuni said that according to the indictment, Eric Ford operated an illegal gambling business from at least November 2009, until November 20, 2012, out of a water company business located in Kailua-Kona, Hawaii. The indictment alleges that the gambling operation consisted of sports betting and various gambling events, to include poker games and craps games, and used an offshore gaming website. The six other defendants, not including Barbara Ford, are alleged to have assisted Eric Ford in the taking of bets, collection of gambling debts, and payment of gambling winnings.

A Slot Machine shop in Hilo

If convicted of the gambling and conspiracy charges, each defendant faces a maximum term of imprisonment of five years on each count. Each of the structuring charges also carries a maximum penalty of five years in prison. The charges in the indictment are merely accusations and each defendant is presumed innocent until proven guilty.

The case resulted from an investigation initiated by the Hawaii Police Department’s Criminal Intelligence Unit. Through an established partnership among the Federal Bureau of Investigation, the Hawaii Police Department, and the Internal Revenue Service – Criminal Investigation, investigators were able to uncover the breadth of the illegal gambling enterprise. Assistant U.S. Attorney Michael Nammar is handling the prosecution.

Man Stranded in Hawaii Over No Fly List HEADING HOME NOW

Wade Hicks Jr. is now a free man.

Wade Hicks Jr.

34-year-old man from Gulfport, Miss., who was stranded in the islands this week after being told he was on the FBI’s no-fly list during a layover for a military flight from California to Japan is now heading home to Travis Air Force Base.

He uploaded this video stating that he got a call from Senator Thad Cochran’s office and that he had submitted papers stating he is FREE and Clear.

Hawaii Police Express Interest in Face Recognition Software

I am so against this for so many reasons!  Can you imagine walking into Walmart and having them immediately identify you by your face?

The FBI recently announced that it will distribute free facial recognition software to law enforcement agencies following a pilot program of the system, reported Slate.com. Police will be able to use the Universal Face Workstation (UFW) program, which grants access to a central database of about 13 million images. Police departments will also be able to submit and enhance their own image files to be cross-referenced with existing images in the database to identify matches.

UFW, which was piloted in February in Michigan, is part of a $1 billion biometrics FBI program called Next Generation Identification, which will create a database for scars and tattoos.

The program is expected to launch within a few weeks, while full operational capability for facial recognition is scheduled for summer 2014, according to a statement from the FBI. Officials in Hawaii, Maryland, South Carolina, Ohio, New Mexico, Kansas, Arizona, Tennessee, Nebraska and Missouri have expressed interest in participating in the facial recognition pilot program.

Amid recent news like the WikiLeaks report on the national TrapWire system, some are concerned with privacy issues surrounding facial recognition technology, but the FBI insists such technology is only being used to supplement current biometrics, such as fingerprinting, to identify criminals.

“The Facial Recognition Pilot provides a search of the national repository of photos consisting of criminal mug shots, which were taken at the time of a criminal booking,” wrote Jerome M. Pender, deputy assistant director of the Criminal Justice Information Services Division of the FBI, in a statement. “Only criminal mug shot photos are used to populate the national repository. Query photos and photos obtained from social networking sites, surveillance cameras and similar sources are not used to populate the national repository.”

Since the time of the statement, Pender was named executive assistant director of the FBI’s Information and Technology Branch.

The FBI’s Next Generation Identification program, of which the facial recognition system is part, is 60 percent deployed, according to a statement.

From Government Technology

Malware Monday – How Do I Know if My Computer is Infected?

How Do I Know if My Computer Is Infected?

You can check to see whether your computer is infected by clicking on this link, which is run by DNS Changer Working Group (DCWG).

If the page is green, you’re in the clear. If it’s red, your computer is infected.

Four Pipe Bombs Found in Puna Drug Bust Today

Hawaiʻi Police Department Area I Vice Officers discovered four pipe bombs at an Ainaloa residence this morning (November 4), while executing a search warrant. Christopher Robinson, the 39-year-old resident, was arrested after officers discovered an indoor marijuana growing operation, crystal methamphetamine or “ice”, the pipe bombs, and other bomb making materials at his residence.

The pipe bombs were neutralized by a Marine Explosive Ordinance Team currently stationed at the Pohakuloa Training Area.

Officers seized a total of 253 marijuana plants, ranging in height from 6 inches to 4 feet, one and a half pounds of dried, processed marijuana, .2 grams of crystal methamphetamine, marijuana and “ice” pipes, digital scales, and ammunition.

Another male party, 44-year-old Randy Pascal, of Puna, was also arrested after he was located on the property.

The investigation was the result of information from the public regarding the possible construction of the pipe bombs and the marijuana cultivating operation.

Robinson and Pascal remain in custody as police continue their investigation.

Assisting Hawaiʻi Police Department personnel during the execution of the search warrant were members of the Federal Bureau of Investigations, the Bureau of Alcohol, Tobacco, and Firearms, and the Hawaiʻi County Fire Department Hazardous Materials Team.