Federal court documents have revealed that Native Hawaiian Holding Company (NHHC) president Quin Ngoc Rudin is an alleged co-conspirator in a new criminal case filed last month at the federal court in San Francisco, Calif.

Rudin pled guilty in February this year in the first case against him, a three count indictment handed down last year at the federal court in San Francisco. In this new case, Rudin is accused of defrauding Cisco Systems Inc. and its subsidiary Cisco Systems Capital Corporation and Altura Pharmaceuticals, Inc. — through his own company called CGC Digital.

The plea agreement, along with other court filings in the case, is sealed by order of the court.

There is no date in electronic court records as to when Rudin will be sentenced for the first case but federal prosecutors in a motion filed Oct. 3 say that a grand jury indictment handed down Sept. 23 this year naming Michael Q. Mai as a defendant and the case relates to a scheme to defraud Oracle America, Inc., a subsidiary of California based Oracle Corporation.

The two count indictment alleges conspiracy to commit mail fraud and wire fraud, and engaging in a monetary transaction with criminally derived funds, said prosecutors, adding that Rudin is alleged to be a co-conspirator with Mai in this new case.

Prosecutors say the first case against Rudin and the second one against Mai are two related cases because they “concern one or more of the same defendants”. And although Rudin is named as a defendant in the Mai case, he is nevertheless alleged to be a co-conspirator and a participant in the scheme to defraud in that case, court documents state.

Prosecutors also say that the government expects that Rudin’s activities will be at issue in the Mai case. For this reason, it will be more efficient for the judge who will ultimately sentence Rudin  to preside over the Mai case, they say.

U.S. District Court Jon S. Tigar has not issued a ruling on the prosecutor's request to combine the Rudin and Mai cases.  In the meantime, Mai is scheduled to be arraigned later this week before a magistrate judge in San Francisco. 

In the Mai indictment, the grand jury alleges that Rudin, who resides in Southern California, held himself out as being an associate of Dearborne Circle, LLC, which is owned and controlled by Mai.

Rudin is also an associate of Certus Solutions Inc.

The indictment alleges that Mai, Rudin and an individual with initials “C.K” agreed that they would fraudulently induce Oracle to permit Dearborne and Certus to re-sell Oracle software, licenses and technical support services to Pension Benefit Guaranty Corporation (PBGC), a federal agency.

However, the trio would then fail, decline and refuse to pay Oracle for such software, licenses and technical support services, even after Dearborn/Certus had received payment from PBGC, the indictment alleges, and noted that the fraud scheme occurred between August and October 2009.

It also alleges that in August 2009, PBGC accepted Dearborne’s bid to sell software, licenses and technical support services for $908,504 and a PBGC employee—along with Mai—signed the purchase order for the same amount.

However, Dearborne was not an authorized Oracle partner or re-seller, it said and alleged that the trio received the funds but never paid any of the money to Oracle, which was in the business of providing data base and application software to businesses and organizations, among other products.

Samoa News should point out that the two federal cases do not give any indication that Rudin is an official with NHHC.

BACKGROUND

Rudin, along with NHHC’s CEO Dennis Kanahele, CGC Digital, Community Investment Corporation and others are named as defendants in a close to $4 million civil suit file in April this year by the local Attorney General’s Office at the High Court of American Samoa.

NHHC was contracted in 2011 by ASG to provide training and employment in the contact center industry for 900 NEG participants, and authorized it to operate job placement and supportive services in a setting that would serve as part of the Workforce Investment Act  Workforce System which was overseen by Human Resources.

However, a federal audit found unallowable costs of $2.53 million, in which the U.S. Department of Labor is seeking repayment from ASG.  (Details of the lawsuit are found in the Apr. 7 edition of Samoa News)

ASG’s lawsuit alleges fraud, failure to pay taxes, compensatory damages, exemplary punitive damages, and unjust enrichment.