In a recent development, four individuals have been charged in a corruption scheme related to affordable housing on the Big Island. The indictment alleges that Paul Joseph Sulla, Jr. and Gary Charles Zamber, both attorneys residing on the island, have been charged with six counts of honest services wire fraud and one count of conspiracy. Additionally, Alan Scott Rudo, a former Housing Specialist, and Rajesh P. Budhabhatti, a private businessman, have been charged separately with conspiracy to commit honest services wire fraud. The defendants are accused of deceiving the public while using their official positions to obtain money and kickbacks in exchange for performing official acts. The indictment reveals a lengthy conspiracy that spanned over six years and involved fraudulent practices worth millions of dollars.
Overview of the Case
The case involves a corruption scheme related to affordable housing on the Big Island of Hawaii. Four individuals have been charged in connection with the scheme, which involved bribery, kickbacks, fraudulent obtaining of land and affordable housing credits, and money laundering. The defendants are alleged to have deceived the public and abused their official positions to enrich themselves.
Charges and Indictments
A federal grand jury returned an eight-count indictment against Paul Joseph Sulla, Jr. and Gary Charles Zamber on July 21, 2022. Both defendants are charged with six counts of honest services wire fraud and one count of conspiracy. Sulla is also charged with one count of money laundering. Alan Scott Rudo and Rajesh P. Budhabhatti were charged separately with conspiracy to commit honest services wire fraud.
Defendants and their Alleged Actions
Paul Joseph Sulla, Jr. and Gary Charles Zamber, both attorneys residing on the Big Island, are accused of engaging in a conspiracy and scheme to deprive the public of honest services. They are alleged to have solicited and accepted bribes and kickbacks from Alan Scott Rudo, a former Housing Specialist for the Hawaii County Office of Housing and Community Development, and Rajesh P. Budhabhatti, a private businessman. The defendants deceived the public by portraying Rudo as working on their behalf to provide affordable housing, while he was actually using his position to obtain money from Sulla, Zamber, and Budhabhatti.
Duration of the Corruption Scheme
The corruption scheme is said to have spanned more than six years, indicating a long-term effort to enrich the defendants at the expense of the public. The indictment alleges that the defendants conspired to deceive the public and abuse their official positions during this extended period.
Deception of the Public
According to court documents and information presented in court, the defendants deceived the public by creating the false impression that Rudo was diligently working to provide affordable housing. In reality, Rudo was using his official position to obtain bribes and kickbacks from Sulla, Zamber, and Budhabhatti. The defendants abused their positions of trust and authority to enrich themselves, while the public believed their efforts were focused on affordable housing initiatives.
Introduction to the Affordable Housing Corruption Scheme
The affordable housing corruption scheme centered around the abuse of the official positions of the defendants to enrich themselves and deceive the public. The defendants allegedly conspired to defraud the public by misusing public resources and engaging in illegal activities related to affordable housing initiatives.
Involvement of Paul Joseph Sulla, Jr. and Gary Charles Zamber
Paul Joseph Sulla, Jr. and Gary Charles Zamber, both attorneys residing on the Big Island, were key participants in the corruption scheme. They are accused of soliciting and accepting bribes and kickbacks, as well as conspiring to commit honest services wire fraud. Sulla is additionally charged with money laundering.
Role of Alan Scott Rudo and Rajesh P. Budhabhatti
Alan Scott Rudo, a former Housing Specialist for the Hawaii County Office of Housing and Community Development, and Rajesh P. Budhabhatti, a private businessman, are also alleged to have played significant roles in the corruption scheme. They are charged with conspiracy to commit honest services wire fraud for their participation in the scheme.
Abuse of Official Position with the Hawaii County Office of Housing and Community Development (OHCD)
The corruption scheme involved the abuse of official positions within the Hawaii County Office of Housing and Community Development (OHCD). Alan Scott Rudo, in his role as a Housing Specialist, allegedly used his position to ensure the approval of affordable housing agreements (AHAs) that benefited the defendants. The defendants are accused of using various companies and development projects to fraudulently obtain land and affordable housing credits.
Details of the Corruption Scheme
Bribes and Kickbacks
The corruption scheme involved the solicitation and acceptance of multiple bribes and kickbacks by the defendants. Paul Joseph Sulla, Jr. and Gary Charles Zamber are alleged to have provided these illicit payments to Alan Scott Rudo in exchange for official acts and preferential treatment.
Approval of Affordable Housing Agreements (AHAs)
Alan Scott Rudo used his position within the Hawaii County Office of Housing and Community Development (OHCD) to ensure the approval of affordable housing agreements (AHAs) that were beneficial to the defendants. The defendants used various companies and development projects to fraudulently obtain public benefits, including land and excess affordable housing credits (AHCs).
Fraudulent Obtaining of Land and Affordable Housing Credits (AHCs)
Through the approved affordable housing agreements (AHAs), the defendants fraudulently obtained at least $10,980,000 worth of land and excess affordable housing credits (AHCs). These ill-gotten gains were a result of their deceptive practices and abuse of their official positions.
Money Laundering Charges
Paul Joseph Sulla, Jr. is additionally charged with money laundering. He is alleged to have laundered the proceeds of the corruption scheme in an attempt to conceal the source, location, and ownership of those proceeds. Money laundering is a serious offense that carries significant penalties.
Guilty Plea by Alan Scott Rudo
Alan Scott Rudo, one of the defendants in the case, pleaded guilty to the charge of conspiracy to commit honest services wire fraud. His guilty plea was entered before United States Magistrate Judge Rom A. Trader on July 18, 2022.
Upcoming Plea by Rajesh P. Budhabhatti
Rajesh P. Budhabhatti, another defendant in the case, is scheduled to enter a guilty plea to the charge of conspiracy to commit honest services wire fraud before United States District Judge Jill A. Otake on August 1, 2022. This plea will mark another significant development in the legal proceedings.
Sentencing for Alan Scott Rudo
The sentencing for Alan Scott Rudo, who pleaded guilty to the charge of conspiracy to commit honest services wire fraud, is scheduled to take place before United States District Judge Jill A. Otake on October 31, 2022. The sentencing will determine the penalties and sanctions imposed on Rudo for his involvement in the corruption scheme.
Potential Penalties for the Defendants
The crimes of conspiracy and scheme to commit honest services wire fraud carry a maximum penalty of 20 years imprisonment and a fine of $250,000. Money laundering, with which Paul Joseph Sulla, Jr. is charged, carries a maximum penalty of 20 years imprisonment and a fine of twice the value of the property involved in the transaction, which in this case exceeds $1,000,000. The defendants will face these potential penalties if they are found guilty beyond a reasonable doubt.
Recovery of Criminal Proceeds
Amount Recovered by the United States
As part of the investigation into the corruption scheme, the United States has recovered over $2.3 million in criminal proceeds. This represents a significant step towards holding the defendants accountable for their actions and preventing them from benefiting financially from their illegal activities.
Forfeiture of Interest and Assets by Alan Scott Rudo
As part of his guilty plea, Alan Scott Rudo has agreed to forfeit his interest in the recovered funds and assets. This includes 45 affordable housing credits connected to the charges, as well as other real estate that is linked to the corruption scheme. By forfeiting these assets, Rudo is dispossessed of the ill-gotten gains and contributes to the recovery of criminal proceeds.
Money Judgment Against Alan Scott Rudo
Alan Scott Rudo has also agreed to a money judgment against him in the amount of $2,114,170. This judgment represents the monetary value associated with his involvement in the corruption scheme. It serves as a form of restitution that requires Rudo to repay a portion of the funds he obtained through illegal means.
Involvement of the Federal Bureau of Investigation (FBI)
The investigation into the corruption scheme was conducted by the Federal Bureau of Investigation (FBI). The FBI played a critical role in gathering evidence, uncovering the extent of the criminal activities, and ensuring the prosecution of the defendants. Their efforts were instrumental in exposing the corruption and holding the individuals involved accountable.
Prosecution by Assistant U.S. Attorneys Mohammad Khatib and Sydney Spector
The prosecution of the corruption case is being handled by Assistant U.S. Attorneys Mohammad Khatib and Sydney Spector. These experienced attorneys are responsible for presenting the evidence, arguing the government’s case, and seeking justice on behalf of the public. Their expertise and dedication are crucial in ensuring a fair and effective prosecution.
Contact Information for Press Inquiries
For press inquiries regarding the Big Island affordable housing corruption scheme case, interested parties can contact Elliot Enoki at Elliot.Enoki@usdoj.gov. This contact information allows members of the media to obtain accurate and up-to-date information about the case and its proceedings.
Sentencing of Another Official in a Bribery Scheme
In a separate case related to bribery, a Department of Planning and Permitting Supervisor was recently sentenced to 60 months in prison. This sentencing highlights the seriousness of corruption offenses and emphasizes the commitment of law enforcement to hold individuals accountable for their actions.
Sentencing of a Former Hawaii State Representative
A former Hawaii State Representative was recently sentenced to 24 months in federal prison for undisclosed offenses. This sentencing serves as a reminder that public officials are not above the law and will face consequences for engaging in illegal activities.
Sentencing of a Former Maui County Official for Honest Services Wire Fraud
A former Maui County Official was sentenced to ten years in federal prison for honest services wire fraud. This case demonstrates the severity of the crimes committed in connection with the corruption scheme and reinforces the importance of preserving the integrity of public positions.
Main Office of the United States Attorney’s Office (USAO) in Hawaii
The main office of the United States Attorney’s Office (USAO) in Hawaii is located at 300 Ala Moana Blvd., #6-100 Honolulu, HI 96850. This office serves as the central hub for prosecuting federal criminal cases and upholding the law in the state of Hawaii.
Email Address for USAO-HI
For general inquiries or requests for information, interested parties can reach out to the United States Attorney’s Office (USAO) in Hawaii via email at USAO-HI.Email@email.com. This email address allows for efficient and convenient communication with the USAO-HI.
Phone Numbers for USAO-HI
The United States Attorney’s Office (USAO) in Hawaii can be contacted via phone using the following numbers:
- Honolulu: (808) 541-2850
- TDD Line: (808) 541-1830
These phone numbers provide an avenue for direct communication with the USAO-HI, allowing individuals to seek information, report criminal activity, or address any concerns they may have.