LIHU‘E — A Lihu‘e woman is facing nearly two decades of prison time for running several multimillion-dollar financial fraud schemes on Kaua‘i.
Leihinahina Sullivan, 51, was sentenced Tuesday by U.S. District Judge J. Michael Seabright to 17 years in prison and three years of supervised release for three counts of wire fraud and one count of aggravated identity theft. She was also ordered to pay more than $5 million in restitution and penalties.
“Sullivan has spent the last decade spinning a web of lies, committing fraud and not caring who she hurt in the process,” said Special-Agent-in-Charge Bret Kressin of the Internal Revenue Service Criminal Investigation in the Seattle Field Office, which led the investigation. “But that ends today, as Ms. Sullivan faked it until she made it to a real-life prison sentence.”
In July 2021, Sullivan pleaded guilty to the charges for three separate schemes spanning the course of at least eight years and starting in 2011.
In the most brazen of these schemes, Sullivan used a nonprofit she operated, Mobile Native Hawaiian Health, Inc., to prepare and submit fabricated student loan, scholarship and financial aid applications on behalf of students, mostly located on Kaua‘i.
According to court documents, she would falsify financial information on scholarship applications, and would even write fake essays highlighting the poverty of the students’ living conditions.
She then communicated with the colleges and scholarship organizations as if she were the students, providing additional false information. Funding received from these applications was transferred to her own bank accounts and used for personal use on home construction, bills and retail purchases.
The primary victim appears to be the Gates Millennium Scholars program, a fund established by Bill and Melinda Gates Foundation to provide scholarships to underprivileged students of color. Kamehameha Schools was also the target of fraudulent applications.
In another scheme, she submitted false claims for tax credits under both her own and other peoples’ names, which were electronically deposited into her bank accounts. The operation involved more than $2.8 million in tax loss, according to prosecutors.
In a third scheme, she used the nonprofit to apply for business credit cards in other people’s names without permission. She then used the cards to pay her personal expenses, racking up more than $1 million in charges.
Originally arrested in 2017, Sullivan has largely represented herself in the proceedings, submitting dozens of often handwritten legal motions throughout the process.
Shortly after pleading to the crimes, she submitted a motion attempting to withdraw her plea, but that request was denied.
Sullivan’s sentence was lower than the 26 years requested by prosecutors.
Attorney Rustam Barbee, who recently began representing Sullivan, argued in a March 22 statement to the court that his client should receive a sentence that is “sufficient, but not greater than necessary,” to advance the policies and goals of sentencing.
While Seabright described the case as “staggering” in scope, length and complexity on Tuesday, he ruled the 17-year sentence was sufficient.
“This 17-year sentence holds Sullivan accountable for the damage she caused by her yearslong fraudulent schemes, the money she stole from individuals in her community and public and private institutions, and her repeated and willful rejection of the rule of law,” said U.S. Attorney Clare E. Connors.
“This sentence will stop Sullivan from continuing to prey on vulnerable members of our community who unwittingly trusted her manipulation and lies.”
The bulk of her restitution will be paid to the IRS ($1.93 million) and the state Department of Taxation ($790,000). About $140,000 will be paid to various financial institutions.
As a result of the scholarship scheme, $400,000 will go to the Gates Millenial Scholars program, $44,000 will go to Kamehameha Schools, and $92,000 will go to the U.S. Department of Education.
Guthrie Scrimgeour, reporter, can be reached at 808-647-0329 or firstname.lastname@example.org.
Source: The Garden Island