BY MALIA ZIMMERMAN – Michael Lew stood outside U.S. District Court on Thursday dressed stylishly in a neatly pressed grey suit. To the casual observer, Lew appeared a successful businessman, but that day, he confided that he felt “guilty” and “stupid” for allowing himself to lose a small fortunate in a Ponzi scheme.
A close friend of Lew’s told him about a potential investment opportunity into a local concert promotion business run by Jason Pascua, a U.S. Army reservist and former Hawaii House of Representatives candidate.
While Lew did not know Pascua well either personally or professionally, Pascua managed to integrate himself into their close-knit circle of friends. Admittedly without checking into Pascua or his business, Lew and his friend agreed to invest into Pascua’s enterprise, J2 Marketing.
Lew took out a loan after Pascua promised him a 20 percent rate of return on investment. After Pascua missed a payment to Lew, Lew knew he had been scammed.
“When he (Pascua) missed his mark to pay, I realized, ‘Oh my God, I am so stupid,’” Lew said.
Lew had just attended the federal court hearing during which Pascua entered a plea of “guilty” and admitted to U.S. District Judge Leslie Kobayashi that he defrauded 29 investors of $1.4 million over three years.
Pascua conceded under oath he told his victims that he ran concert and nightclub promotion events in Honolulu and Las Vegas, but that it didn’t work out that way. According to a March 27 indictment, Lew told potential investors their money would be used for up-front costs and spread among multiple concert and nightclub events to mitigate risk. Pascua promised investors a 25-to-50 percent return, but instead used money from new investors to pay off earlier investors in a “Ponzi” scheme.
Some investors received no returns at all or partial returns, the federal indictment said. Pascua mainly spent money on his own extravagant lifestyle, including gambling and clubbing in Las Vegas.
While Pascua admitted in court he had 29 victims, FBI Special Agent Tom Simon, who investigated the case, said new victims have come forward since the indictment, increasing the number defrauded to 34.
“Thirty-four Hawaii families gave the defendant $1.6 million, and not a dime of that money went into any kind of income-producing business venture. Instead, it appears that much of the money was spent at Las Vegas nightclubs and casinos,” Simon said.
“The largest victim is a single mother who invested her entire life savings of $225,000 with Pascua only to lose it all. She now has nothing, and she has to start over. Other victims were military reservists who served with the defendant,” Simon added.
Pascua is a former Kaneohe resident who attended Maryknoll School and Hawaii Pacific University, and subsequently took leadership roles in politically powerful organizations including the Filipino Chamber of Commerce and Japanese Chamber of Commerce and he joined the Hawaii Democratic Party. He served as the marketing director of Hawaii Central Credit Union and the Japanese Chamber of Commerce.
In 2010, Pascua announced he’d run on the Democratic Party ticket for House District 48 – and he promised “real change.” However, after party officials challenged his qualifications on the basis that he had not been a member of the party long enough before becoming a candidate, Pascua’s name never made it to the ballot.
In the society pages, Pascua managed to get himself photographed with Honolulu Mayor Mufi Hannemann and prominent Democratic activist Amy Agbayani. House Speaker Joe Souki had “Liked” Pascua’s campaign page on his Facebook page and many other politicians are listed as his “friend” on Facebook.
Besides politicians, Pascua was often photographed at parties and events surrounded by a bevy of beautiful women – photos that ended up on several social media pages.
Pascua also joined the U.S. Army Reserve and was based at Fort Shafter.
When he is sentenced on September 11, Pascua faces up to 20 years in prison and a $250,000 fine – and he has been ordered to pay full restitution to his victims.
“To his credit, Mr. Pascua came into court today and admitted his wrongdoing. Unfortunately there is just no money left to pay back his victims,” Simon said.
“I hope he gets the maximum sentence. It is going to take me that long to pay back the debt,” Lew said.
Pascua, who has been living with his wife in Arizona, refused to speak to the media either after his indictment or after his hearing Thursday in federal court.
Besides facing 20 years in prison and a lifetime of debt to pay off, Pascua is facing other problems.
According to Pascua’s federal public defender Alexander “Ali” Silvert, Pascua’s wife recently suffered a mental breakdown and was hospitalized.
Silvert told Judge Kobayashi that Pascua’s wife accused him of attacking her when in fact she was “hallucinating.” Pascua was only taking her to the hospital, Silvert said.
No End to Financial Fraud in Hawaii
Just minutes after Pascua pleaded guilty in federal court, a father and daughter on Maui were indicted for running an $8 million Ponzi scheme.
According to a statement from the U.S. Attorney’s office, a federal grand jury indicted George Lindell, 65, and his daughter, Holly Hoaeae, 39, on 17 counts of operating an alleged pyramid or “Ponzi” scheme between January 2005 and November 2010. They allegedly took more than $8 million from their victims.
“The past four years have seen an epidemic of Ponzi schemes plaguing the Hawaii economy,” Simon said. “Hopefully, this latest case will serve as a lesson to the people of Hawaii to investigate before they invest.”
This is the third case involving fake concert promoters that Simon and the FBI have investigated in recent months.
Peter Heckmann, 53, was indicted by federal grand jury in Honolulu in 2007 on seven counts of wire fraud.
Heckmann operated a Ponzi scheme, convincing Kauai residents to invest $1.2 million in his failing recording studio in exchange for returns of between 10-to-15 percent within two weeks.
While he fled the country after he learned of his indictment, Heckmann turned himself in to authorities this April after the FBI launched a worldwide manhunt in January 2013.
The third recent scam involving concert promotions hit Hawaii in 2012.
The University of Hawaii athletic department planned a concert with Stevie Wonder last year, but after university officials wired a $200,000 deposit to promoter Epic Talent LLC in Florida, they learned they had been scammed.
Simon, who investigated that case, arrested two men, Sean Barriero, 44, of Miami, Florida, who owned EPIC Talent LLC and Marc Hubbard, 44, of North Carolina.
Barriero plead guilty in November 2012 and Hubbard is awaiting trial scheduled for this August.
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