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Wednesday, July 30, 2014         

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Man pleads guilty to fraud charges in multimillion-dollar Ponzi scheme

Kimura surrenders after admitting that he bilked up to $20M from various investors

By Nelson Daranciang

POSTED:



A Maui man who previously pleaded guilty to violating state financial securities laws in connection with his operation of a multimillion-dollar Ponzi scheme pleaded guilty in federal court yesterday morning to mail fraud and bank fraud.

As part of his agreement with the federal prosecutor, Lloyd Y. Kimura, 61, of Wailuku turned himself in yesterday afternoon pending sentencing in June.

Kimura pleaded guilty yesterday to four counts of mail fraud, two counts of bank fraud and three counts of theft of employee pension benefits.

"I took money from people I knew and did not pay them back," he said.

Kimura faces maximum 20-year prison terms for the mail fraud and bank fraud and five-year prison terms for the thefts when a federal judge sentences him in June. He faces a mandatory 20-year prison term for securities fraud when a state judge sentences him next month.

State and federal prosecutors have agreed that Kimura will serve his state and federal sentences at the same time in federal prison.

Kimura has agreed that the people who "invested" money with him lost between $7 million and $20 million.

His lawyer, Philip Lowenthal, said the U.S. Bankruptcy Court is doing the accounting to determine exactly how much each investor lost and expects to have a total figure by this summer.

U.S. District Court officials will do their own research to determine how much Kimura owes in restitution, U.S. Magistrate Judge Barry Kurren said.

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

He instead used the money from new investors to pay off earlier investors, according to federal court records. His loan and finance company was never licensed by the state to accept deposits.

Kimura is the brother of Hawaii County Prosecuting Attorney Jay Kimura.






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