Six-month sentence given in fraud case

Jace Radke

Friday, Oct. 18, 2002 | 9:24 a.m.

A former trustee in Hawaii's Kamehameha schools trust was sentenced Wednesday in federal court in Las Vegas to six months in prison.

The trustee was also ordered to pay $35,000 in restitution to the government for two money-laundering charges.

Both Lokelani Lindsey and her sister, Marlene Lindsey, will spend six months at a California prison camp after being sentenced by U.S. District Judge David Ezra.

The sisters were indicted in 2000 on charges of bankruptcy fraud, conspiracy and money laundering after conspiring to hide more than $100,000 from bankruptcy court officials. Lokelani Lindsey was then paid $35,000 out of the money by her sister for her assistance in hiding the money, according to court documents.

At the time of the crime Lokelani Lindsey was making more than $800,000 a year as a trustee.

"This crime was so absolutely unnecessary," Ezra said. "Eight hundred thousand dollars is more than three times what the president of the United States makes, and she engages in this type of fraud.

"This shows an arrogance, a feeling that the law just doesn't apply to me. This court cannot excuse this type of behavior."

Lokelani Lindsey will also be required to complete three years of probation, while her sister was ordered to pay a $1,000 fine and serve one year of probation.

Lokelani Lindsey asked Ezra to be given home confinement instead of a prison term so that she can be with her husband, who is suffering from a spinal affliction for which he is scheduled to have surgery in November.

Ezra refused to make the departure, saying that Lindsey would be treated like any other defendant who comes before him.

Lindsey, a former schoolteacher, was a prominent member of the Honolulu community.

"We don't have two systems of laws with one operating for the rich and one for the poor," Ezra said.