A federal trial has been scheduled for two Hilo attorneys accused of receiving Hawaii County affordable housing credits and land conveyances worth at least $10.98 million, with no intention of developing affordable housing.
After at least two lengthy delays, Paul Sulla Jr., 78, and Gary Zamber, 55 — along with 64-year-old businessman Rajesh Budhabhatti — are set to stand trial starting May 12 before U.S. District Judge Jill Otake in Honolulu.
All three are charged with nine counts of conspiracy to commit honest services wire fraud and a single count of conspiracy.
In addition, Sulla is charged with one count of money laundering. Three of the wire fraud charges for each defendant were added to the original charges in August 2022.
Proposed jury instructions and verdict forms for the case were filed Friday.
Sulla called the charges “absurd.”
“I hope there’s no delay this time. I’ve been ready to go to trial each time, and there have been delays,” Sulla said Tuesday. He told the Tribune-Herald he thinks the trial will happen in May.
“I’ve been looking forward; it’s been a long, dragged-out thing. I’ve never seen any evidence that I did anything, and I still haven’t. So, I’ve been looking forward to getting this on.”
Zamber didn’t return a phone call in time for this story.
Prosecutors for the case are Assistant U.S. Attorneys Mohammad Khatib and Margaret Nammar. Defense attorneys are Birney Bervar for Sulla, Gary Springstead for Zamber, and Salina Kanai and Melinda Yamaga for Budhabhatti.
Alan Scott Rudo — a former housing specialist in the county Office of Housing and Community Development from 2006 to 2018 — pleaded guilty in August 2022 to conspiracy to commit honest services wire fraud by awarding affordable housing credits to false limited liability companies established by alleged co-conspirators, and then selling those credits to other developers for a profit.
Rudo’s share of that profit was at least $1.8 million. As part of his guilty plea, Rudo agreed to forfeit his interest in the recovered funds and housing credits, in addition to real estate connected to the charges. He’s also agreed to a monetary judgment of more than $2.1 million against him.
According to court documents and information presented in court, Rudo solicited and accepted multiple bribes and kickbacks from Sulla, Zamber and Budhabhatti while working for the OHCD.
Sentencing for Rudo, who is expected to testify for the prosecution, has been delayed numerous times. He’s now scheduled to be sentenced June 2 before Otake.
According to court documents, Rudo abused his official position with the OHCD to ensure the county approved three affordable housing agreements, or AHAs, involving Luna Loa Developments LLC, West View Developments LLC and Plumeria at Waikoloa LLC.
Authorities say those companies were variously owned, controlled and used by the defendants to obtain public benefits related to development projects in South Kohala, Kailua-Kona and Waikoloa.
Through the AHAs, the defendants fraudulently obtained at least $10.98 million worth of land and excess affordable housing credits, prosecutors allege.
The feds also contend that Sulla laundered the proceeds of the alleged conspiracy and scheme in an attempt to conceal, among other things, the source, location and ownership of those proceeds.
Conspiracy and committing honest services wire fraud carry a maximum penalty of 20 years imprisonment for each offense and a fine of $250,000 upon conviction.
Money laundering carries a maximum penalty of 20 years imprisonment and a fine of twice the value of the property involved in the transaction, which prosecutors say is more than $1 million.
Email John Burnett at jburnett@hawaiitribune-herald.com.
