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Waikiki man accused of welfare fraud ordered held

    This image from Hawaii News Now shows Vaughn Sherwood, who is charged with defrauding the federal government out of more than $200,000 in assistance benefits.

A Waikiki man accused of welfare fraud despite having a Mercedes-Benz, a sailboat and an inheritance will remain behind bars until his trial.

U.S. Magistrate Judge Kevin Chang on Tuesday ordered that Vaughn Sherwood, 66, continue to be held without bail at the Honolulu Federal Detention Center.

Chang said he was “troubled” by Sherwood’s criminal history. According to court documents, Sherwood has felony convictions for possession of narcotic equipment in New Jersey in 1969, assault in Hawaii in 1975 and aggravated assault in Pennsylvania in 1977. Records also show misdemeanor convictions for driving under the influence of liquor in Hawaii in 1982, 1992 and 1996.

During a search of his condominium, agents said they found two rifles and four handguns, which he was barred from possessing.

A criminal complaint alleges Sherwood defrauded the government of more than $200,000 in welfare cash payments, food stamps, housing assistance and student financial aid under stolen identities and his own. The complaint says Sherwood owns a sailboat and a Mercedes-Benz S420 automobile.

Sherwood continued to receive food stamps and medical assistance even though he had inherited more than $300,000 from his parents, according to the complaint.

Assistant U.S. Attorney Ronald Johnson told the judge that even though Sherwood has two academic degrees, he received federal grants and loans for college classes under another identity.

“He has done nothing but commit fraud for the past 20 years,” Johnson said. The prosecutor added that agents found various forms of identification under different names at Sherwood’s apartment. “Who is he? He has about eight different personas, and he knows nothing but fraud.”

Defense attorney Marcus Sierra argued that Sherwood should be released, partly because his last felony is “quite old,” showing “that he can lead a law-abiding life.”

Sierra said Sherwood doesn’t live in luxury. He rents a “little, dingy apartment” with help from the government, the attorney added. He said that if Sherwood were released, he would continue to receive food stamps and medical benefits.

“He will be able to exist outside, relying on those benefits and Social Security,” Sierra said. “He’s not going to be able to run from this.”

Sierra said after the hearing that the benefits will cease while Sherwood is in custody.

He added that the Mercedes is old and worth only $3,000, the sailboat is 40 years old and the inheritance ran out long ago.

“I just don’t want people to judge him so harshly without knowing all the facts first,” Sierra said, adding that he’s not sure his client will be able to pay him.

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