Kauai woman pleads guilty in federal court to multiple fraud schemes

A 49-year-old Lihue woman pleaded guilty Tuesday in U.S. District Court to three counts of wire fraud and one count of aggravated identity theft related to multiple long-running fraudulent schemes.

Leihinahina Sullivan will face up to 20 years’ imprisonment and a fine of up to $250,000 for each of the wire fraud charges and a mandatory sentence of two years in prison plus any other sentence imposed by Chief U.S. District Judge J. Michael Seabright and a fine of up to $250,000 on aggravated identity theft when she is sentenced Dec. 2.

According to a news release from the U.S. Attorney’s Office in Hawaii, court documents and information provided in court described three fraud schemes perpetrated by Sullivan.

Beginning as early as Jan. 31, 2011, through at least Aug. 23, 2017, she obtained tax refunds from the Internal Revenue Service and the State of Hawaii that she and other individuals were not entitled to receive by filing false returns that included fictitious expenses, claims for credit and other items Sullivan knew were false when made.

She did not review the tax returns with the individuals before she filed them in their names, the release said.

Sullivan then transferred the fraudulent tax refunds into several bank accounts she had access to and controlled, including her personal bank accounts and those of friends and family members, along with a nonprofit entity she controlled. Sullivan then spent the tax refunds on personal expenses for herself, her family and friends, federal prosecutors said.

The second scheme began Jan. 8, 2011, and lasted through at least Feb. 1, 2017, when Sullivan prepared and submitted false student loan, grant, scholarship and financial aid applications and documents for college-bound students that requested money from public and private educational-based financial assistance and aid providers, the release said.

She then transferred some money from students’ financial aid applications to her personal bank accounts and other bank accounts she controlled, spending the money on her own personal and other expenses, such as for home construction, store purchases and bills, according to the release.

The final fraud scheme had Sullivan using personal information such as Social Security numbers and birthdates to apply for and use credit cards in other peoples’ names without their authorization. In one instance, she submitted an electronic credit card application for an individual whom she knew died on the same day she sent in the application, the release said.

“Sullivan’s fraud was wide-ranging and lasted for years,” said acting U.S. Attorney Judith A. Philips in the release. “Her web of lies and manipulation ends with this case. She will be held accountable for the damage she caused by her fraudulent schemes and the money she stole from friends, family, individuals in her community, and public and private institutions.”

IRS-Criminal Investigation acting Special Agent in Charge Corinne Kalve said Sullivan admitted to defrauding the community and taking money from taxpayers, students and financial institutions for her own personal profit. “This guilty plea is a reminder that IRS-CI will continue to follow the money and investigate those who prey on their communities,” she said.

The conviction is the result of an investigation led by IRS-CI and involving the U.S. Department of Education, Office of Inspector General and the FBI. Assistant U.S. Attorneys Rebecca A. Perlmutter and Mohammad Khatib of the District of Hawaii are prosecuting the case.