Press Release
U.S. Department of Justice
United States Attorney
District of Hawaii
PJKK Federal Building (808) 541-2850
300 Ala Moana Blvd., Room 6-100 FAX (808) 541-2958
Honolulu, Hawaii 96850
October 5, 2007
For Immediate Release
P R E S S R E L E A S E
Four defendants were sentenced to terms of imprisonment for their participation in a bid rigging and kickback scheme from 1997 to 2002 which the court found resulted in overbillings of $4,508,731 to the State of Hawaii for repair and maintenance contracts at the Honolulu International Airport. United States District Judge David A. Ezra sentenced Michael Furukawa, age 62, Dennis Hirokawa, age 65, and Richard Okada, 66, yesterday to terms of 75, 108, and 60 months imprisonment, respectively, one day after he sentenced Wesley Uemura, age 62, to 42 months imprisonment. Hirokawa and Okada were also ordered to pay the State of Hawaii $5,198,416 in restitution, while Furukawa's and Uemura's sentences included restitution of $4,623,301 and $4,577,629, respectively, all of which included not only the amount of the overbillings, but also investigative costs of $689,685 incurred by the State. The four defendants were convicted after a four-week jury trial in October 2006.
Under Hawaii state law, public contracts having a value of less than $25,000 could be awarded via purchase orders. State officials were required to obtain three independent bids from qualified contractors, and to award the job to the low bidder. Hirokawa was State maintenance superintendent for the airport and controlled the award of the "small purchase" jobs. Furukawa and Uemura were contractors who received a number of the jobs. Okada was the head of the State's Visitor Information Program, which provided services to tourists and visiting dignitaries. At trial, the government showed that Hirokawa pre-selected contractors to receive jobs, and that the contractors then submitted packages of three bids on each job -- one bid at an inflated price, and two false bids at higher prices from companies which had no intention of bidding on the work. Between 1997 and 2002, Furukawa and Uemura owned various companies which received approximately $4.8 million in small purchase contracts. The work was for small repair projects such as filling cracks in terrazzo flooring, repairing broken ceramic tile, and repairing cracks in concrete walkways.
During the trial, the government presented evidence that the reasonable value of the work was less than what was charged. A construction expert reviewed 44 specific contracts, and found that the value of the work was approximately ten percent of the billed amounts. The government's evidence also consisted of testimony from contractors who pled guilty to theft charges in State court, and agreed to cooperate in the federal proceedings. Those contractors testified that, in return for obtaining jobs at inflated prices, they paid kickbacks or provided gratuities to Hirokawa or Okada. One contractor testified that during a two year period he provided cash and goods having a value of $129,000 to the two State employees, including two cash payments of $20,000 each to Okada, which Okada said was for "political contributions" to unspecified public officials.
Edward H. Kubo, Jr., United States Attorney for the District of Hawaii, said that the convictions and sentences demonstrated the severity of offenses involving abuse of the public trust, both by public officials and private contractors involved with them.
All four defendants were ordered to surrender on January 15, 2008 to begin service of their sentences. The United States Bureau of Prisons will designate the particular facilities to which defendants are to report.
The investigation of the case was initiated by the State of Hawaii, Department of Attorney General, which later turned the matter over to the Federal Bureau of Investigation. The prosecution was handled by Assistant United States Attorney Lawrence Tong and State of Hawaii Deputy Attorney General Lawrence Goya.
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