Oregon man sentenced in $3.2 million fraud scheme targeting trucking investors
An Oregon man was recently sentenced to eight years in prison and ordered to pay back over $3.2 million for his role in an elaborate fraud scheme while living in Hawaii.
Senior U.S. District Judge Helen Gillmor sentenced Neil Kauhi, 52, of Wilsonville, Oregon, to 97 months in federal prison and ordered him to pay more than $3.2 million in restitution in mid-December. He also consented to forfeit nearly $600,000 seized by the Federal Bureau of Investigation.
Kauhi previously pleaded guilty to one count of wire fraud in July 2019 in the U.S. District Court for the District of Hawaii.
Between 2012 and 2018, Kauhi siphoned millions from 33 investors, which he promised to invest in a trucking company, as well as precious metals, real estate and a solar energy company, while living in Oahu, Hawaii, according to court filings.
His wife, Lyndie Kauhi, 49, pleaded guilty to one count of misprision of a felony, the crime of knowing about but failing to report the commission of a felony. She was sentenced to 27 months in federal prison, which she is currently serving. Federal prosecutors claim she deposited and transferred the victims’ money into the couple’s personal accounts.
However, instead of investing the funds, prosecutors claim Neil Kauhi diverted most of the money to pay his family’s personal expenses, including travel, rent and utilities, personal vehicles and to fund his daughter’s wedding.
Court documents state Kauhi’s victims included the couple’s neighbors, family members, friends and church parishioners who invested between $7,000 and more than $500,000 in his fraudulent schemes. He also convinced some investors to take out home equity line of credit loans (HELOCs) that allows homeowners to borrow up to a specific amount of their home equity and repay the funds slowly over time. He directed others to set up self-directed individual retirement accounts (IRAs), according to prosecutors.
Once his victims transferred the money to Kauhi and his family members, he used the funds to pay off prior investors or for personal expenses.
“[Neil] Kauhi represented to these individuals that he was wealthy and successful in numerous business ventures, when in fact he knew at the time that was not true,” according to court filings. “Kauhi was only living off of other people’s investments as part of the scheme to defraud and did not have any personal wealth or other sources of income.”
Shortly after the FBI notified Kauhi and his wife that they were under investigation in Oahu in November 2017, the couple moved to Oregon, according to court filings. The couple was arrested nearly a year later in the state and ordered to report to the U.S. District Court in Honolulu in late September of 2018.
At Neil Kauhi’s sentencing, Judge Gillmor called his acts “heartless.”
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This article originally appeared on Freight Waves