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2 indictments, 1 guilty plea in Wonder blunder fraud case

By Gregg K. Kakesako & Ken Kobayashi

POSTED:
LAST UPDATED: 06:22 p.m. HST, Nov 08, 2012


One of two men indicted Wednesday on charges related to the bungled Stevie Wonder concert pleaded guilty today in a Honolulu federal court to a felony count of transporting $200,000 taken by fraud from the University of Hawaii.

Sean Barriero, 44, of Miami, is cooperating with federal authorities, U.S. assistant attorney Les Osbourne told the court. Barriero, who was released on a $50,000 unsecured bond, faces up to 10 years in prison when he is sentenced Feb. 21 in federal Judge Leslie Kobayashi’s court.

The U.S. attorney's office and the FBI officials announced earlier today that a grand jury returned indictments Wednesday against Marc Hubbard, 44, of North Carolina, for wire fraud, and Barriero for transporting $200,000 taken by fraud.

FBI officials said the UH cash appears to be unrecoverable at this time.

Hubbard turned himself to authorities at the federal court house in Charlotte, N.C. today and will be extradited later, officials said. If convicted, Hubbard faces up to 20 years in prison.

Barriero, who is a British citizen, entered his guilty plea before U.S. Magistrate Kevin Chang this afternoon. 

Vida G. Bottom, Special Agent in Charge of the Honolulu office of the Federal Bureau of Investigation, told reporters this morning that its investigation cleared UH  officials on any criminal wrong doing. Bottom described the university as the "prime victim."

"In fact, the university officials we spoke to during this investigation were open, honest, and available to us — without precondition — throughout our investigation," Bottom said.

The university also allowed the FBI to secretly record a telephone conversation with Barriero during the investigation.

 Hubbard will face a detention hearing in Charlotte on Tuesday where a federal magistrate there will determine when and how he will be transported to Hawaii. The FBI said the extradition will take several weeks.

A Hawaii investor previously had transferred $50,000 to Barriero in May 2012 to secure the concert, $27,500 of which was transferred to Hubbard, the indictment states.

The indictment further alleges that in July 2012, an authorized agent for Stevie Wonder reported that neither he nor his management had any knowledge of the concert. None of the $250,000 was transmitted to Stevie Wonder or his management.

Hubbard, a concert promoter and club operator from Mecklenburg County, N.C., was also arraigned last week in Spartanburg, S.C., on securities fraud and forgery charges for allegedly soliciting $700,000 from a victim in 2008 to promote an Alicia Keyes concert.

In June, the UH transferred $200,000 to one of Barriero's personal bank accounts in Florida.

According to U.S. attorney Florence T. Nakakuni, the $200,000 the UH sent as a downpayment for the Aug. 18 Stevie Wonder concert was divided in the following manner: $120,000 went to Hubbard; $11,250 was wired to woman in Europe, and Barriero kept $68,750.

Bottom said the FBI investigation reveals that there is no cash to recover at this point.

But the FBI seized and impounded a black 2010 SUV Mercedes which Sannise Crosby apparently paid $25,300 as a down payment. The Mercedes in being held by federal officials in Miami after it was seized on Sept. 13.

Crosby, the FBI affidavit states, purchased the 2010 Mercedes on June 30 for $50,255 using a check from Epic Talent, which is managed by Barriero. The FBI found the Mercedes parked at a Miami address for Barriero.

Bob Peyton, the Honolulu promoter who initially approached UH officials about coordinating a Stevie Wonder concert to benefit UH athletics, told the Star-Advertiser in July that he had wired the UH's $200,000 concert deposit and $50,000 of his own money to Epic Talent in Florida. The Star-Advertiser also reported in July that Epic did not have an actual office in the Miami building where it received mail.

Hubbard told Barriero he had a relationship with Wonder's management to book the UH concert, according to court records.

The nine-page indictment also revealed that a  July 16 phone call between Barriero and an UH official was secretly recorded by the FBI with UH's consent. The UH official is not identified in the indictment.

"During the phone call, Barriero assured the UH official that the UH's $200,000 deposit had been sent to Stevie Wonder's management and that Barriero had not taken his fee," according to the indictment.

The indictment said none of the funds that the UH wired went to any escrow business accounts, but all ended up in Barriero's personal Bank of America account in Florida.

The indictments were announced at a news conference this morning at the Prince Kuhio Federal Building in Honolulu.

In a written statement afterward, UH President M.R.C. Greenwood thanked the FBI and the U.S. Attorney.

"We trust this will help the university move past the failed concert episode and move forward with its many important missions," Greenwood said.

She said the university looks forward to the prosecution of those charged and hopes to get some restitution.

The Wonder concert saga began in June when university officials announced that the pop star had agreed to an Aug. 18 performance to benefit the UH athletics department. Ticket sales were well under way by July 10 when then-UH athletic director Jim Donovan announced that there would be no concert after all because Wonder and his representatives had not authorized the event. About 6,000 ticket holders had to be refunded.

UH officials said they had paid $200,000 to a Florida company that purported to be authorized to book the star. Wonder's representatives later contacted UH officials to say they had not authorized the concert nor received any payment. 

Greenwood acknowledged that the university was apparently a victim of fraud.

The debacle led to a special state legislative panel to investigate the incident and its aftermath.

 UH officials announced in July that then-Athletic Director Jim Donovan and Stan Sheriff Center arena manager Rich Sheriff were placed on indefinite paid administrative leave while an investigation of the canceled Stevie Wonder concert was conducted. 

Sheriff was reinstated and Donovan, whose athletic director's contract was to expire in March, was re-assigned to a new, vaguely defined marketing role in the UH-Manoa chancellor's office in a three-year deal that pays him more than $200,000 annually. Documents released to the Star-Advertiser under the state's open records law showed that the UH agreed to the deal in return for Donovan agreeing not to sue the school.

The legislative panel that investigated the debacle has yet to release its findings.

A UH Board of Regents task group, made up of five regents and four accounting and business professionals, is conducting its own investigation. The group hired the accounting firm of KMH LLP, under a $50,000 contract, to look at the accounting procedures and controls at the athletic department and UH system to see if procedures were violated and to see if changes need to be made to prevent a similar incident from happening again.

Wonder blunder indictment







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joseph007 wrote:
This comment has been deleted.
on November 8,2012 | 07:42AM
zhawaii wrote:
Another uneducated comment. Who else do you think gets involved when an INTERSTATE crime happens? The FBI brainiac.
on November 8,2012 | 08:14AM
Venus1 wrote:
Thank you!!!
on November 8,2012 | 10:14AM
cunfuzd4 wrote:
Shh! He thinks he's a secret agent jurisdiction does not apply. Don't confuse him with facts or he'll have a seizure. How about helping the braddah out by buying him one of those shiny pointy aluminum foil hats to keep him happy?...
on November 8,2012 | 05:56PM
RetiredWorking wrote:
joseph, you're looking for opportunities to denigrate the State government. Please pick intelligently, or you'll come across as a real doofus.
on November 8,2012 | 08:40AM
busterb wrote:
I think it's lready too late for that advice... DOOFUS it is.
on November 8,2012 | 09:01AM
loquaciousone wrote:
Yes, the State Government doesn't need any help looking stooopid. Every two years they have an election.
on November 8,2012 | 10:52AM
Graham wrote:
Its not the State Government that is stoopid...it is we the electorate...
on November 8,2012 | 11:14AM
SandBar wrote:
Well...it those that did not bother to vote.
on November 8,2012 | 12:24PM
Fred01 wrote:
I disagree. It was apparently those who DID vote!
on November 8,2012 | 01:07PM
cunfuzd4 wrote:
Well those that did not vote just allowed someone else to make the choice for them. If they have an issue they should start and end their blame on themselves
on November 8,2012 | 05:29PM
peanutgallery wrote:
B-I-N-G-O!
on November 8,2012 | 06:00PM
Maneki_Neko wrote:
Is there such a thing as a charge of criminally stupid?
on November 8,2012 | 08:18AM
WesleySMori wrote:
YUP "LUCKYCAT"!!! "YUP"!!!!!!!!!
on November 8,2012 | 10:48AM
walaau808 wrote:
Please remove your head from that tight cavity above your thighs...
on November 8,2012 | 08:22AM
IEBuzzin wrote:
Tight?
on November 8,2012 | 09:04AM
walaau808 wrote:
Just a guess...LOL
on November 8,2012 | 10:48AM
kennie1933 wrote:
What would be interesting is if Hubbard is convicted and somehow the $200,000 is returned to UH. We've already spent over a million dollars in our own investigation. Spend over a million and get back $200,000. Sounds like a winning formula!
on November 8,2012 | 08:34AM
GooglyMoogly wrote:
By the tone of your comment, you're suggesting that UH (and by extension, the state gov't) should've just let that money go, without making an attempt to find a) the money and b) those responsible. That ALSO sounds like a winning formula. It sounds like Bob Peyton, who is a reputable local promoter, was approached by these charlatans, and HE was the one who approached UH. If there had been a working relationship between UH and Peyton in the past, you can see how some corners might've been cut in the interest of getting things done quickly...even moreso if it were a good working relationship. Jokes about common sense aside, no organization wires a quarter of a million dollars to an unknown entity on a moment's notice. UH might've been the ultimate mark, but Peyton was the one these guys worked over and played.
on November 8,2012 | 01:27PM
Nevadan wrote:
....goes to show UH is hurt more by their own administration than by professional criminals. Solution: unload the UH incompetents.
on November 8,2012 | 01:32PM
peanutgallery wrote:
U.H salaries are at least 75% higher than they need be. The University employs the same failed logic as the state. "You have to spend the really big bucks to get talent". What a load. The only people that subscribe to that ridiculous theory are the ones who have no confidence in their ability to recognize talent when it's standing in front of them. Brian Schatz is a classic example.
on November 8,2012 | 06:06PM
Nevadan wrote:
No. You don't need to pay big bucks to get talent. There are proven entities in Hawaii, who could be persuaded to serve as UH president . These guys are multi-millionaires early retirees from Silicon Valley, now living in Hawaii. They are proven young executives and hi-tech giants. They would be more interested to pay back to society than demanding $60K to live on Waikiki. These are not the types politicians can threaten. Think about it, folks.
on November 8,2012 | 07:20PM
loquaciousone wrote:
You mean Stevie Wonder is not coming? What am I going to do with the 10 tickets I bought yesterday on Craigslist from this guy who said he was from Nigeria? I got them real cheap..only $50 bucks each.
on November 8,2012 | 08:42AM
kennie1933 wrote:
Wow, you got a deal! You still have his email? You know, what would be really nice thought probably impossible, is if Stevie Wonder, who I'm sure heard about this (I almost said READ about this) volunteered his time to play a benefit concert in Hawaii anyway.
on November 8,2012 | 09:09AM
loquaciousone wrote:
It's ripleysbelievitornotfromnigeriaconmenconsolidated@yahoo.com
on November 8,2012 | 09:22AM
Mythman wrote:
would you nigerian contacts be interested in a contract to run an elevated railroad system?
on November 8,2012 | 09:46AM
Graham wrote:
Give it to Obama and his fdamily when they come for Christmas...
on November 8,2012 | 11:15AM
serious wrote:
On the outset of the "discovery" the FBI was brought in according to the media, I wondered what happened. Once again if you wire money it doesn't just evaporate. Where was McGarret all this time???? Book 'em!!!!
on November 8,2012 | 08:53AM
Bumby wrote:
Our so called educated leaders at UH and our state government seems incompetent. From the beginning they should of had the FBI look into and investigate the matter due to it being an interstate matter and have them do their job as the results are starting to show. Why did they not have the patience like when they do the hiring of a coach or an athletic director as they are doing now. As I stated before let the subordinates do their jobs and stop micromanaging. Too many leaders want to push their weight around. Yeah I am the "man" or I am the "woman" do not mess with me. Time to make a whole new set of rules for our government leaders and UH leaders if as they say is a state university. By the way Donna K did not get anyone to divulge who gave the approval of wiring the check. Come on after all that more money wasted.
on November 8,2012 | 09:14AM
E_Ogawa wrote:
The FBI would not have jurisdiction to review UH internal controls and policies and procedures, and UH would not have jurisdiction to review interstate fraud. That is why there needed to be two separate investigations. If someone at the UH was found to have been involved, that portion of the investigation would have been turned over to the feds, but still, they would not advise or intervene in internal UH business.
on November 8,2012 | 09:38AM
Mythman wrote:
The blunder was so astonishing, it had to be ruled out that no one on the inside at U of H was working the scam doing his or her part......
on November 8,2012 | 09:48AM
csdhawaii wrote:
Uhhh...kinda contradicting yourself, aren't you? Letting the subordinated do their job is what got UH into this mess in the first place. System interference in Manoa issues; and Legislative interference in University issues are ongoing and definitely happened AFTER the debacle occurred, but interference did not create the Wonder Blunder.
on November 8,2012 | 10:46AM
Nevadan wrote:
It was Donovan's department. He was responsible.
on November 8,2012 | 01:39PM
Bdpapa wrote:
This is where the investigation and hearings should have begun.
on November 8,2012 | 09:25AM
loquaciousone wrote:
This is definitely a CONSPIRACY by the Star Advertiser. Who else would have come up with a mega star whose name rhymes with blunder?
on November 8,2012 | 10:05AM
kainalu wrote:
Marck Hubbard is actually on the document presented to the AD by local promoter, Bob Peyton. If anyone at UH would have simply googled Marck Hubbard's name, they would have had multiple hits indicating that this guy was bad news. Tell you what - I'll review contracts for UH from my home at half the salary they're paying the guy now to review such contracts. Are you kidding me? While the Board of Regents recently ruled Donovan can still milk the tax-payer, please don't give him any authority over tax funds.
on November 8,2012 | 10:25AM
Gene_Park wrote:
lol No kidding huh? Amazing how many people just don't simply use Google for background checks on people. Jeezumcrow!
on November 8,2012 | 02:42PM
Bdpapa wrote:
Google? Gimme a break!
on November 8,2012 | 07:25PM
Sunny wrote:
These accounting firms hired to look at accounting procedures and controls are often staffed with "accountants" that were hired right out of college and have never had any business experience, managing an accounting department and/or managing anyone. Firms pay these folks to tell them how to "properly" run their business and implement controls. Oftentimes these controls sound great on paper but are not always practicle and don't cover all situations. Business managers and administrators often have to make exceptions based on their experience which these hired accountants don't have.
on November 8,2012 | 10:36AM
zhawaii wrote:
Maybe this guy needed money to fix his scalp.
on November 8,2012 | 11:10AM
loquaciousone wrote:
He looks like he ran into an Indian with a dull scalping knife.
on November 8,2012 | 11:43AM
TheKagawas wrote:
Hey!!!! Free trip to Hawaii! :)
on November 8,2012 | 11:12AM
SUPrman wrote:
About time, good news from UH
on November 8,2012 | 11:22AM
sloturle wrote:
aw look at his head!!!
on November 8,2012 | 11:55AM
Fred01 wrote:
What is wrong with that guy's scabby head? Yuck!
on November 8,2012 | 01:06PM
cunfuzd4 wrote:
You know how some people, when they're completely bewildered start scratching their forehead?...
on November 8,2012 | 05:33PM
lowtone123 wrote:
Now we're getting to the "Bottom" of this.
on November 8,2012 | 01:11PM
rayhawaii wrote:
If convicted, Hubbard faces up to 20 years in prison and Barriero up to 10 years..........So let me ask my 4 year old son to do this math problem. 20 10 = 30 x $50,000.00 = $1,500,000.00 of our hard working tax payer money to keep them in prison. Plus $200,000.00 missing and about $2,000,000.00 in courts cases. Lucky we pay tax or these guys would go free.
on November 8,2012 | 01:16PM
rayhawaii wrote:
Out of all of this if I were Mr. Wonder I would give a free concert.
on November 8,2012 | 01:18PM
nodaddynotthebelt wrote:
This creep probably has a long rap sheet. He'll probably get a couple of years and then be out to do his thing again. They should have mandatory ten year sentences for repeat offense of this type. It seems like our laws are very soft on fraud. It does not deter thieves from even thinking twice about doing it. It can end up being lucrative as they steal several thousands which they couldn't possible earn in a couple of years and they are out after only a couple of years. The end result of their fraud is that they made several thousands of dollars for only a short amount of time in prison with three square meals and medical care.
on November 8,2012 | 01:23PM
gobows wrote:
Book'm Danno!
on November 8,2012 | 02:06PM
lynnh wrote:
Umm, did anybody catch that? We have been told since this matter surfaced that it was $200,000. Now all of a sudden another $50,000 comes into the total that was withheld from public knowledge.
on November 8,2012 | 02:40PM
turbolink wrote:
No, that wasn't UH money, it was Bob Peyton's portion.
on November 8,2012 | 03:44PM
Iuki wrote:
Didn't anyone in the UH athletic department--not to mention the Chancellor's office--know how to use google? A quick check of Stevie Wonder would have quickly revealed that he had absolutely no connection with U.H., and that he only appeared at really huge venues: for example, Queen Elizabeth's celebration this year in London. Anybody with an ounce of common sense should have known he was not going to come all the way to Hawaii to do a benefit concert for UH athletics.
on November 8,2012 | 03:03PM
Venus1 wrote:
I agree!!!! Before sending $200,000 I could have checked the process!!!!!
on November 8,2012 | 04:03PM
environmental_lady wrote:
Learn a lesson here. No more fund raisers that have to book performers from outside the state. So who was at fault altogether?
on November 8,2012 | 03:08PM
3962 wrote:
Who is going to be responsible for this mess from the University of Hawaii?
on November 8,2012 | 03:43PM
false wrote:
UH is still in a hole. Athletics is shot. Not going to recover from the fiasco. Minus twelve thousand and counting.
on November 8,2012 | 04:07PM
LKK56 wrote:
Great news. Now it is time to focus on the UH football team QB issue. If the QB is not changed, the bleeding will continue.
on November 8,2012 | 04:07PM
serious wrote:
Let the people who are in charge of elections for Hawaii sort this out!!! Once again, education is great, but common sense that one gets when you run a business, have to meet a payroll--these are the people that should run things!!!
on November 8,2012 | 04:48PM
Senior_Researcher wrote:
"In fact, the university officials we spoke to during this investigation were open, honest, and available to us — without precondition — throughout our investigation," the FBI said. Yet, when called to account here in Hawaii, UH spent tens of thousands of dollars on lawyers to avoid giving meaningful answers to any questions, including what action would be taken against UH personnel that let this happen. Cut $200,000 from UH's budget next year and let THEM recoup it from the personnel involved.
on November 8,2012 | 05:30PM
ejkorvette wrote:
Please Prosecute with extreme prejudice.
on November 8,2012 | 05:35PM
cunfuzd4 wrote:
Great, they caught the guys that took the money. How about determining who in the UH administration knew about the attempt to organize the concert and FIRE THEM!!!
on November 8,2012 | 05:49PM
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