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Wednesday, July 23, 2014         

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Man pleads guilty to Ponzi scheme

By Nelson Daranciang

POSTED:



A Maui man accused of operating a Ponzi scheme under the guise of a loan and finance company pleaded guilty in state court yesterday to securities fraud and filing false statements with a state regulatory agency.

Lloyd Y. Kimura, 61, of Wailuku pleaded guilty to two counts each of engaging in prohibited securities practices and making false or misleading financial statements to the state Department of Commerce and Consumer Affairs' Financial Institution Division.

Kimura has agreed to accept the mandatory 20-year prison term for the securities fraud charge and maximum five-year prison term for the false-statement charge when Circuit Court Judge Joseph E. Cardoza sentences him in February, said Chris Young, deputy state attorney general.

Young said estimates of the size of the Ponzi scheme run between $7 million and $20 million. He said the state will let the U.S. Bankruptcy Court sort out how much Kimura owes people who gave him money.

When Kimura filed for bankruptcy in January, he estimated his assets were worth between $1 million and $10 million and liabilities between $10 million and $50 million.

Kimura also faces federal charges of mail fraud, bank fraud and theft of employee pension benefits.

Federal prosecutors said Kimura persuaded people to invest with him or his Maui Industrial Loan and Finance Co. from 1986 to this year under the false pretense that he was going to use their money to issue high-interest loans to others. In return he promised 8 percent and 12 percent rates of return.

Instead, Kimura used money from new investors to pay off earlier investors and even sent false financial statements, according to federal court records.

Federal prosecutors said that at no time was Maui Industrial Loan and Finance licensed by the state to accept deposits.

Kimura also made false statements to obtain lines of credits from two banks and stole $640,000 from the Lloyd Y. Kimura, CPA, Inc. Retirement Trust Account and 401K Profit Sharing Plan, federal court records say.

In addition to Maui Industrial and his accounting company, Kimura owns Wailuku Tire Center.






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