Kawika Buchanan declines to speak to or look at reporters as he leaves the federal court house May 8
Kawika Buchanan declines to speak to or look at reporters as he leaves the federal court house May 8
Kawika Buchanan declines to speak to or look at reporters as he leaves the federal court house May 8

BY MALIA ZIMMERMAN – HONOLULU – David “Kawika” Buchanan, 47, has spent much of his time in the virtual world lured by an exorbitantly priced video game featuring busty babes that look as if they should be in a Hooters advertisement. But after pleading guilty on Thursday, May 8 in U.S. District Court to a wire fraud charge, the 600 lbs ex-convict will have to face real world consequences.

FBI Special Agent Tom Simon said Buchanan ripped off his neighbor, a retired federal employee, who like Buchanan, settled on Molokai.

Buchanan convinced his neighbor to invest $40,000 with him with the promise of a 600 percent return. Instead of investing the money into an idea for a company he wanted to form called Molokai’s Finest, Buchanan admitted in court Thursday that he spent the money on himself and lied to her about what he’d done. He then asked his neighbor for another $5,000, claiming it was for taxes, when in fact he spent the money on himself.

“The means by which he spent the money were a bit unusual in this case. He spent the money on a video game called Evony that has recurring payments, which goes to the players, as well as an online girlfriend in the Philippines who he was sending money to via Western Union. Obviously the investor had no idea what was going to be happening with her money, and had she known, she would have never given her money to this man in the first place,” Simon said.

No one he’s investigated over the years for investment fraud has spent thousands of dollars on a video game, Simon said.

“We do a lot of investment fraud cases here in Hawaii and the money gets spent in any number of ways.  Often times there is a vice involved such as gambling or drugs or some sort of illicit girlfriend who ends up sucking a lot of money out of it. I’ve never in 18 years of investigations seen anyone spend this amount of money on a video game. So in that sense, it is very unusual,” Simon said. “To someone who is not into video games myself, I didn’t know there was such a thing as video game that could cost thousands of dollars.”

http://www.evony.com/
http://www.evony.com/

To anyone who knew Buchanan’s history, the investment scheme itself was no surprise. He’d committed almost this exact crime before. Between 1999 and 2003, Buchanan stole as much as $5.7 million from multiple victims by convincing them to invest with his company, Buchanan Investments LLC. Buchanan promised them extraordinary – and quick – returns on their investments.

Buchanan used audacious lies to sway his investors, court records show. He said he was a player for the Dallas Cowboys, had become wealthy through trading foreign currency and was affiliated with the Federal Reserve Bank, none of which was true.

In 2004, he admitted money he took from his victims had not been invested on their behalf, rather Buchanan enhanced his own lifestyle by purchasing a Jaguar automobile, expensive jewelry, gifts and real estate for himself and his family. He held a lavish wedding reception for himself and his bride, and made a down payment toward the purchase of a golf course in Washington State.

After he was arrested in January 2004, Buchanan pleaded guilty to wire fraud and was sentenced in April 2004 to 57 months in prison.

“It is important to note that he had just recently gotten out of prison for running a multimillion dollar similar investment fraud scheme in the state of Washington. So this is a guy did not learn his lesson the first time, and we hope that this case here will be a wake up call so he just stops doing this to people,” Simon said.

It was likely while he was on supervised release from the 2004 conviction that Buchanan once again initiated a similar scam to allegedly defrauded two other investors, Simon said. Two additional investors on Molokai were allegedly defrauded after he moved to the island.

Buchanan has not yet admitted in court to swindling those three other people, including one resident of Washington D.C., another in Massachusetts and a third in Molokai.

FBI Special Agent Tom Simon
FBI Special Agent Tom Simon

“The plea agreement that this defendant entered into with the government indicated that the government will maintain at the time of sentencing that there are three more victims that push the losses up above $100,000. Now the defendant maintains that is not part of the same course of conduct. So ultimately the judge will have to decide if these other victims will come in and be folded into this case,” Simon said.

Assistant U.S. Attorney Ken Sorenson prosecuted the case, which was investigated by Simon.

Buchanan could be sentenced up to 20 years in federal prison, and be ordered to pay as much as $250,000 in fines plus restitution when he goes to court August 23.

His attorney asked U.S. District Judge Susan Oki Mollway to delay Buchanan’s sentencing until after Thanksgiving, because he is getting married in June, and wants to spend time with his new bride.

Mollway refused to grant the delay.

When pressed by media after the hearing Thursday, Buchanan declined to comment on his case or apologize to his victims.

Simon said it is important for investors to do due diligence before entrusting someone with their money.

“This defendant represented himself as a professional financial adviser to the victim and I would like to get the word out there to the people of Hawaii that if anyone ever offers you an opportunity like that, you can refer on line to the state of Hawaii Security Enforcement Branch to see if this person truly is licensed to do business. In this case, he wasn’t, and that one check would have saved this victim a lot of money,” Simon said.

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