SUNDAY POST 12-27-2015
Paul Sulla Jr.
“The Charity Scam” or “Guess where your money went.”
Creating a trust fund to hold and manage your money can be beneficial when done for the right reasons and by a competent honest lawyer. But there can be a down side to this carrot . The downside is that your lawyer must be trustworthy because once the lawyer moves your money from your bank or investment fund you may no longer have absolute control of the funds and then become vulnerable to theft.
Its not easy to locate an honest attorney. Creating a trust can be beneficial but attorneys who do not reveal existing connections or associations with so called Charities, or non-profit charitable corporations are usually up to no good. Their associations are sometimes a maze of closely woven non-profit corporations, banks and even people in the local government who scratch each others backs in the search for innocent victims and the later theft of your funds. Lawyers know how to convince and steal your money without leaving evidence that they did anything illegal except point you in the wrong direction. That’s assuming you are still alive after the trust is in place.
The modus operandi of these lawyers is to contact wealthy people and sell them on the idea of protecting their money from the Federal Government Tax system. This in itself is not illegal but the non-profit or charity business is not always what it says it is. Just because they are legally designated as non-profit, or a religious corporation doesn’t mean they are not able and willing to steal. These corporations are not regulated as they should be and all too often the non- profit, non taxable Federal and State laws benefit and enable unscrupulous lawyers and their clients.
These laws make it possible to move millions of dollars from the gun sights of the IRS into the sights of Non-profit and or charitable corporations. The non profit law in itself enables these lawyers to steal and hide your money. The common denominator of all of these scams are banks. Stolen funds cannot be “washed” without the use of bank accounts. Banks are the first step to change the money from legal possession to illegal possession. A victims money must be diverted from the victims bank into an account controlled directly by either the attorney, or an organization that is controlled or “friendly” with the attorney such as a living trust. Usually when this happens the transfer of the money is also the transfer of ownership. The formattion of a living trust or regular trust can mean that a new owner (lawyer or trust) is now in control. A competent lawless attorney would never have his/her name on the first bank account stepping stone (that would be illegal) so instead your money is put in the name of one corporation or even transferred to a second Trust or Corporation and possibly even a third entity before individual names surface out of the fog of corporations..
It is alleged that Hawaii Attorneys, Nancy Budd, Katherine Lloyd, Paul Sulla Jr., and Joe Moss are examples of Hawaiian Trust Attorneys who have personally benefited (at their direction) from the distribution of funds to non- profit charitable corporations and non-profit corporations or to other non-profit organizations who they are either directly or indirectly associated with.
The alleged plan for these funds is to eventually line their pockets in the form of cash, gratuities such as car rentals, exotic trips etc; These are all percs that may be rewarded to them for locating and eventually transferring money into the bank accounts controlled by their colleagues in the charity business.
In the case of lawyer Paul Sulla it is alleged that client trust money was moved directly into “shell” companies owned or operated by him. He either was not sophisticated enough to hide his direct receipt of other peoples funds or considered himself “untouchable”.
Local banks who themselves may have investment legal departments available to their clients sometimes unwittingly or knowingly refer their customers to consulting lawyers who have obvious conflicts of interest and or a history of complaints, fraudulent activities and have colleagues who sit on the boards of directors of the banks used to hold the money.
In Kauai Here’s how it worked. Katherine Lloyd worked as legal counsel for the First Hawaiian Bank and so did Nancy Budd. First Hawaiian Bank has their own numerous trust corporations and when people deposit large amounts of money in this bank they are candidates for the formation of a trust to “Protect” the money in ways that the Bank legally cannot. Lloyd may refer the actual creation of a bank customer’s living trust to her colleague Nancy Budd or Nancy Budd may have been retained as an adviser for the client and recommend the use of the First Hawaiian Bank . Budd will draw up the Trust, name an executor to control the trust, name another attorney colleague as the executors adviser (on the trust payroll) and recommend a Charity to hold an interest in the trust such as the Hawaii Community Fund. Lloyd also worked for Hawaii Community Fund, until a conflict of interest complaint was made, and she resigned. To make things worse for the client and safe for Lloyd her husband, Hugh Jones, is an investigator for the Hawaii Attorney General’s office, Trust and Charity Department. When a conflict of interest was made to the Hawaii Attorney Generals office by one of Lloyds victims, Jones denied he had anything to do with the business of his wife Lloyd, except to say she is innocent of any wrong doing.
Once the trust is in place, in at least two cases investigated by Codefore, the trust contributor (retiree who possessed the original funds) unexpectedly died. The assets were immediately liquidated and funds deposited into a living trust where the administrators distributed the funds to themselves other trusts or charities. In this case the first deposit of liquidated funds went into the First Hawaiian Bank and the American Savings Bank.
(The CEO of the Hawaii Community Fund is on the Board of the American Savings Bank) Surviving relatives either received a small fraction of the trust (inheritance) or received nothing. Two of the survivors claimed that the Living Trust had been altered after the deceased death. The Kauai Police Department had possession of a Trust that none of them had ever seen before. The Kauai PD claimed they took the “Living Trust” from the deceased home for “safe keeping” In answer to the allegations, Ms. Budd stated ” I can tell you in no uncertain terms that there was nothing illegal or unethical done with respect to my representation of Mr. ……….. (or any client, for that matter). His children’s inheritance was not “taken from them illegally,” and I want to be clear that any such suggestion they have made to you is false.”
In another case investigated by Codefore, attorney Paul Sulla Jr. represented a seller in the sale of valuable property in Hawaii. Unfortunately, in this case, it was the property seller who died before the deed to the property could be transferred to the new owner. It is alleged that Sulla impersonated the seller, who was on his death bed, at an Arizona county registrar and filed a new deed to the property but the deed was not to the new purchasers but was to a Trust created and controlled by Sulla days before the seller’s death. Then Sulla claimed the property had never been paid for and tried to auction off the property. All of this information came out in a civil court of law, in front of a Circuit Judge who apparently didn’t think that Sulla had violated any criminal laws. The purchasers are still trying to either get their money back or the deed to the property.
An example of a money laundering structure is indicated in the below schematic. This chart is the exact chart used for legal purposes to explain how trust funds become invisible. (washed.)
In some cases the elderly are led to believe that a trust will insure that their surviving relatives will benefit after death by implementing a so called “living trust”. Little do they know that once the money is in the newly formed trust, or these attorney’s “favorite” non-profit charity, their money may be out of the grasp of the Federal Government but is now the control of non-profit organizations that that “wash” the money by moving it back and forth until there is no “paper trail” leading to the actual distribution. The money is then distributed and is usually not distributed to the poor or to charities who do charitable business. The “SALON” news organization says this:
“Another way the wealthy avoid paying taxes on their billions is to make charitable donations. If you donate property, you never have to pay income tax on that donation, whatever it costs you and how much it’s worth right now. Well you might say, at least someone benefits from the charity. Whether or not the charitable donation is a scam in whole or in part depends on the answer to that old question: qui bono? Aka, who benefits? That’s where the real scam takes place.”
“And there’s no legal requirement that a charity must spend its wealth. In fact, IRS rules require only that charities spend about 5 percent of their investment assets annually, and all or part of this amount can be spent on salaries and “expenses,” rather than devoted to the charitable purpose the charity purports to be serving. So, what happens with a charitable trust, set up by a billionaire, and controlled by one of the billionaire’s children? The child gets a job and a salary for life. Maybe a mansion to live in and entertain in as a fringe benefit. This is a great gig for the heir.”
Case in point is the “Hawaii United Way” a charitable non-profit corporation that receives money from a central clearing house Charity known as the “Hawaii Community Foundation.” A look at their “Annual Reports” Only list assets and contributions.
2015 Hawaii Community Foundation disbursements? ( not sure what these figures are since the report says that this is their “Position”
Donor Grants 2.7 Million
Scholarships 4.5 Million
Partner ships 8.2 Million
Donor advised grants 12.5 Million
HCF initiatives ??? 7.3 Million
Other Foundations: 7.3 Million
Other Grants: 4.1 Million.
The The United Way might well be listed in “Other Foundation” or “Partnerships” on the Hawaii Community Foundation but they most certainly received cash from the Hawaii Community Fund as the HCF is listed as a contributor on the United Way web site along with a list of approximately 30 other charitable organizations that the United Way either received money from or donates money to and each with a staff and Board of Directors etc: that presumably all receive money for their time. The United Way tax returns can be viewed on the internet at: https://www.auw.org/financial-information