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Former ASCA employees claim back pay from CIC

Samoa News has learned that Native Hawaiian Holding Company acting under the umbrella of a string of different companies both in Hawai’i and on the U.S. mainland  — most notably CGC Digital, owes local employees and vendors for unpaid services.


It appears from Internet research and talking to former employees that the tangled web starts with an entity called Certus Group of Companies LLC registered in California.  Members of the LLC are Quin Rudin, David Cuevas, and Joshua Van Ginkel, who are also the principals in CGC Digital LLC, the entity named as the company Rudin used in the alleged bilking of Cisco Systems and for which he was indicted last month.


(The Justice Department press release cautions that federal charges against Rudin are only allegations and he is innocent until proven guilty.)


CGC Digital lists three offices: 4695 MacArthur Ct, floor 11, Newport Beach, CA; 1088 Bishop St. - Ste 3205, Honolulu, HI; and 100 Pago Plaza, Pago Pago, American Samoa, which is the new location of the Community Development Credit Union (CDCU) and is also the main office for CIC (Community Investment Corporation), the Rudin company that is believed to have taken over a number of businesses, including American Samoa Culinary Academy (ASCA) — although local NHHC/CIC manager Mike McDonald says they were only acting as a payroll company.


In responding to Samoa News queries, as to why NHHC/CIC has yet to pay ASCA employees and local vendors, McDonald said that NHHC/CIC has no affiliation with ASCA. “CIC was providing a service (payroll services) for ASCA and does not have any ownership in ASCA; these services have since stopped as ASCA is now closed due to financial difficulties.”


However, Samoa News has email correspondence between Paula McDonald and ASCA employees that appears to indicate that CIC took over ASCA.


Chef Sualua when asked for a comment told Samoa News, via email, “CIC provided more than just a payroll service they took ownership of ASCA.”


He further stated that he was not aware of the equipment that was leased to ASCA by the government being moved from the Malaeimi Restaurant to a different location. In the meantime, local employees told Samoa News that CIC/NHHC, owed them in the neighborhood of $11,403 in salaries and $22,000+ to vendors when they took over ASCA on January 24, 2013.


Former employee of the NHHC, who then transferred to ASCA, Karalina Prendergast, told Samoa News that they were called into a meeting by Paula McDonald and her husband Michael McDonald who declared they had taken over ASCA.


This past Saturday, employees of ASCA who have yet to be paid for over a period of two months met at Maliu Mai and will be heading to the Human Resources Office for assistance, because they were hired under an American Samoa National Emergency Grant (ASNEG) and were paid with grant proceeds.


Samoa News understands that CIC is a sister company with NHHC, ASCA and EMLA Aviation, working closely with each other at the time several job fairs were conducted last year. According to ASCA administrative employees who were working with EMLA Aviation, this company was in charge of interviewing managers that were placed with ASCA, NHHC and CIC.  


EMLA Aviation was also led by Rudin and a former ASG director, who was highly involved in ASNEG/NHHC projects.


Samoa News obtained documents that indicate that this former director was interviewing employees and was signing off on the interview sheets in the hiring of these managers who had since worked with ASCA.


One ASCA manager informed Samoa News that he was interviewed by this former director, Chef Sualua Tupolo and the director’s assistant.


Samoa News had since sent queries to the director via email, however as of press time the director has yet to respond and we have been unable to independently verify the validity of the statements.


In the meantime, the local government also has grave concerns about the indictment of Rudin and is moving to refer everything pertaining to the NHHC and the ASNEG to the Attorney General’s office, says Human Resources Director Le’i Sonny Thompson.


The HR Director noted Rudin is a signatory to the contract between NEG and NHHC.


Le’i, in a letter sent last week (which Samoa News obtained) informing Dennis Kanahele, the Native Hawaiian Holding Company CEO of this move says, from now on that any correspondence to Human Resources pertaining to their contractual obligations with the NEG must be sent to the AG’s office.


“Among the crimes with which he (Rudin) is charged is aggravated identity theft involving CGC Digital, a company named in the NEG program, to be acting on behalf of NHHC. Among the disputed expenses included in the invoices NHHC submitted to NEG are over $2.3 Million charged to the NEG by CGC Digital,” says Le’i in his letter.


The HR Director also informed Kanahele that his previous letter (which Samoa News published March 25, 2013) was received by HR and has also been turned over to the Attorney General’s office.


Among others who were cc’d on this letter was Rosemary Cowen, Chief Workforce Investment Division, US Department of Labor; Janice Shordike Federal Project Officer, US Department of Labor; Michael McDonald NHHC local Manager and Attorney General Afoa L Su’esu’e Lutu.


Le’i is holding off on making the last payment of $1.5 million to the NHHC citing “questionable costs and failure to comply with condition of contract” for the $3.2 million that was already paid out.


More tomorrow on the moves former employees are making to obtain back pay from CIC, also about vendor payments, and what is allowable and not allowable as far as grant compliance goes.


The latter was noted by Kanahele in his response letter to Le’i, when the director stopped further payment on the NHHC contract. Kanahele claimed the rules were not included in the contract they signed with the Department of Human Resources while Le’i maintains that all grant funds have ‘compliance’ rules, as a matter of course.