A financial adviser pleaded guilty Tuesday to securities fraud and money-laundering charges related to swindling $2.5 million from 21 current and retired city employees.
When Circuit Judge Rom Trader asked Bruce M. Harada whether he had any sort of hesitation in entering the pleas, Harada said he did not.
After the hearing, Harada’s attorney, state public defender Edward Harada, said, “He’s taking the blame for what his actions were, and he knows he’ll be paying the price.” (Harada and his attorney are unrelated.)
Harada, 55, could be sentenced to 30 years in prison — 20 years for securities fraud and 10 years for money laundering, which the judge can order to be served consecutively — and a fine of up to $75,000.
Prosecutors said Harada was working as an independent financial adviser for ING North America Corp., managing deferred-compensation accounts of active and retired city employees, when he committed the crimes from April 2007 to May 2012.
“If the case had gone to trial, our evidence would have shown that the defendant … convinced 21 retirees to withdraw their deferred-compensation moneys on the promise, he said, that he would reinvest the money in a mutual fund,” deputy city prosecutor Chris Van Marter said during the plea change hearing.
“They did withdraw their money, gave the money to the defendant, and he kept the money and treated the money as his own personal property. During the period of five years, he defrauded 21 victims of $2.5 million.”
Harada initially pleaded not guilty to the charges June 28, and the case was scheduled to go to trial next month. Police first arrested him May 18.
Five days after Harada was arrested, Bank of America National Association filed foreclosure papers against him and his wife in state court, accusing them of defaulting on the $180,000 mortgage on their Kapolei home. According to the foreclosure filing, the Haradas signed the $180,000 note in March 2004 and have been in default since September 2007.
Van Marter said Harada spent the stolen money on cars, home renovations and other personal purchases.
Trader asked Harada, “Because the state doesn’t have an agreement with you, they can come in here in sentencing, and they can ask for whatever it is they want. You understand that?” Harada said he did understand.
Attorney Harada said he doesn’t know what motivated his client to commit the crimes.
“I don’t think we’ll ever know (why he did it), but unfortunately these things happen through society,” he said. “And Mr. Bruce Harada’s at an age where maybe it was a midlife crisis. I think that’s the best way I can explain what happened.”
He said the fact that his client was willing to cooperate with the investigation could help him during sentencing.
“He’s definitely remorseful, and that’s been clear to me from the beginning of this case when I first met him, and I’ve been impressed by his sincerity in accepting responsibility.”
Harada’s sentencing is scheduled for Jan. 14.
