Wednesday, December 17, 2014
HONOLULU – A federal grand jury today indicted Albert S.N. Hee of Honolulu on seven counts of corrupt interference with the administration of the Internal Revenue laws and six counts of submitting a false tax return for the years 2007, 2008, 2009, 2010, 2011, and 2012. The indictment superseded a prior one-count indictment in September 2014, which had charged the false tax return for 2007 alone.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said the superseding indictment alleges that:
- from 2002 to 2012, Hee caused Waimana Enterprises Inc. (WEI), a company incorporated by Hee and the stock of which is owned by Hee, to pay a total of $4,063,294.39 of his personal expenses, including $718,559.09 used to pay for tuition, books and rent payments for Hee’s three college age children; a purchase of a house in Santa Clara, CA for $1,313,261.34 and used exclusively by Hee’s two children; $33,523.00 of college tuition payments for Hee’s child; $92,000.00 in payments for personal massages for Hee; $121,878.87 in personal credit card charges by Hee; $722,550.39 in false wages paid to Hee’s three children who did no work for WEI; $590,201.56 of false wages paid to Hee’s wife who did no work for WEI; $443,103.64 of false employment benefits paid on behalf of Hee’s three children and wife who did no work for WEI, and $28,216.50 of cash withdrawals by Hee.
- Albert Hee instructed an employee of WEI to pay some of these expenses, and classify them as business educational expenses. Hee’s return preparer then reclassified the expenses as loans.
- Albert Hee did not claim the $4,063,294.39 in personal expenses that WEI paid, which should have been reported as income on his personal tax returns filed for the years 2002 to 2012, resulting in personal federal taxes due in the amount of $425,988.00.
- Because Hee improperly deducted some of the personal expenses as business expenses, WEI underpaid its Federal corporate taxes in the amount of $140,651.00.
If convicted, Hee faces up to three years imprisonment and a fine of up to $250,000 on each of the 13 charges. The charges and allegations contained in the superseding indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
The investigation of this case was conducted by the Internal Revenue Service -- Criminal Investigation. The prosecution is being handled by Assistant U.S. Attorney Leslie E. Osborne, Jr.