“Ed Kubo Image”

Last year, President George W. Bush sent a clear message to every dishonest corporate executive in America.

I echo the essence of that message today when I say that if you do business in Hawaii — be honest.

Because if you are dishonest — and it detrimentally harms others — You will be caught, you will be held accountable, and you will be punished.

Although being a business executive may be empowering — no business executive in Hawaii is above the law.

Today, a Federal Grand Jury Indicted Peter Po Sang Wong with making false statements in connection with the Defendant’s operation of the Pacific Group Medical Association, known as “PGMA.”

The Defendant Wong is charged with 16 federal counts, each offense occurring between March 1996 and January 1997, a 10 month period.

During this time, the Defendant knowingly made false statements surrounding PGMA’s assets and liabilities to the state of Hawaii Insurance Division of the Department of Commerce and Consumer Affairs — and to other persons, with the intent to deceive them about the financial condition and solvency of PGMA.

By withholding material information about the horrendous financial state of PGMA, and by lying about its financial condition, the Defendant deceived and mislead the state and others into believing that the company was sound and successful, — when in fact, the company was virtually bankrupt due to Peter Wong’s manipulation of the company’s payment of claims.

PGMA was a non-profit insurer who provided health insurance coverage to more than 26,000 people, and, with almost half of its enrollment being members of the public employee unions United Public Workers union and the Hawaii Government Employees Association.

Because of its disastrous state of affairs, PGMA was eventually seized by state insurance regulators in March, 1997. At that time, it is my understanding that the company’s debts were estimated at well over $15 million.

More importantly, however, is the fact that as a result of the Defendant’s fraudulent activities, thousands of decent and hard working employees, their doctors, and other health care providers in Hawaii suffered financially. — What the Defendant did was wrong, and his actions will not be condoned.

Thus, we are treating this as a very serious federal offense. If convicted, the Defendant faces a maximum sentence of 10 years in federal prison and a fine of $250,000 for each count in this indictment.

Therefore, if convicted and sentenced consecutively, the Defendant could serve up to 160 years in prison.

This case was investigated by:

*The U.S. Department of Labor, Office of Inspector General;

*The Department of Labor, Employee Benefit Security Administration;

*The Internal Revenue Service; and

*The Federal Bureau of Investigation.

And, I would like to congratulate each of them on a job well done.

Finally, I have assigned this important Federal Prosecution to Supervisory Assistant U.S. Attorney Florence Nakakuni, who is an experienced trial prosecutor in these types of complex investigations — and, I have the utmost respect and trust in her to aggressively prosecute this case in Federal Court. As you know, Ms. Nakakuni previously prosecuted and convicted Mr. Gary Rodrigues.

”’Ed Kubo is the U.S. Attorney for the Pacific region, which includes Hawaii.”’

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