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Wednesday
Jul132011

Mastermind of $20 Million Hawaii Ponzi Scheme Sentenced

A federal judge in Hawaii today sentenced a Maui accountant accused of operating a Ponzi scheme that cost investors at least $8 million in losses was sentenced to a nearly 12-year term in federal prison today. Lloyd Y. Kimura, 61, of Maui, was also ordered by United States District Judge David Ezra to pay restitution of $8 million to defrauded investors.  Kimura's sentence was nearly the maximum under federal sentencing guidelines, which recommended a term of ten to twelve-and-a-half years.

Kimura, who incidentally is the brother of the Hawaii County Prosecutor, was charged with mail fraud, bank fraud, and theft from an employee benefit plan in 2010.  He had faced a maximum of 135 years in federal prison, but pled guilty in January 2011 in which prosecutors agreed not to seek the maximum term.  Along with his twelve-year federal prison sentence, Kimura will also concurrently serve a twenty year sentence for convictions on state charges for the same scheme.  Judge Ezra, in handing down his sentence, noted the fact that the federal sentence may be more harsh due to the fact that the state sentence allowed for parole.

Authorities charged Kimura with operating Maui Industrial Loan & Finance Co. as a massive Ponzi scheme that spanned over a decade.  Starting in 1986, Kimura loaned out money at high interest rates ranging from eighteen to twenty-four percent.  Yet, instead of lending the money out, Kimura used funds from new investors to pay off old investors.  Authorities estimated that at least 50 victims suffered losses exceeding $8 million from Kimura's scheme.  Kimura subsequently filed bankruptcy in 2010 when the operation ran out of funds to sustain itself.

Following his release from prison, Judge Ezra ordered that at least 10% of Kimura's subsequent income be used to repay defrauded victims as part of the restitution order.  

 

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