BY MALIA ZIMMERMAN – HONOLULU – David “Kawika” Buchanan lived a life of fantasy. That is until his virtual house of cards came crashing down in U.S. District Court Monday, Aug. 25, when he was sentenced to 24 months in federal prison for fraud.
The 47-year-old isn’t employed, lives with his parents and reportedly is taking government benefits, but he’s lived the life of a millionaire.
Previous to his conviction in Hawaii, Buchanan stole millions of dollars from acquaintances in Washington State, and used their money to purchase a Jaguar automobile, expensive jewelry, gifts and real estate. He and his former bride held a lavish wedding reception, and made a down payment toward the purchase of a golf course.
Buchanan, who is about 600 pounds, told his investors he was a Dallas Cowboys player, had become wealthy through trading foreign currency and was affiliated with the Federal Reserve Bank, all false stories he used to further his scam.
In the Hawaii, Buchanan convinced his neighbor, Vickie Stahlberg, to invest $40,000 with him with the promise of a 600 percent return. Buchanan said the money would go into Molokai’s Finest, a company he planned to open.
Instead, Buchanan dumped thousands of dollars into a subscription for the online video game Evony, which features virtual scantily clad women who call on their “lovers” or their “lords” to “build their empire” and “rule the world.”
He also spent money on a real online girlfriend in the Philippines who he was sending money to via Western Union.
When he ran short of money, Buchanan asked Stahlberg, a retired federal employee, for another $5,000, claiming it was for taxes, but he instead used the money for himself, court records show.
Stahlberg told U.S. District Chief Judge Susan Oki Mollway during sentencing Monday that Buchanan stole more than her money – he also took her confidence in herself and trust in others.
Although the U.S. Attorney’s office requested a prison term between 36 and 60 months, Mollway sentenced Buchanan to 24 months in federal prison. Buchanan must perform 100 hours of community service and pay $55,000 in restitution.
Mollway said she took the extremely “rare” step of sentencing Buchanan to a term 50 percent above the recommended federal guidelines because he had committed almost this exact crime before, except on a much larger scale.
In the Washington case, which occurred between 1999 and 2003, Buchanan took as much as $5.7 million from multiple victims, convincing them to invest with his company, Buchanan Investments LLC., on the promise of extraordinary and quick returns.
In April 2004, Buchanan was sentenced to 57 months in prison on wire fraud charges for that investment scam.
Mollway said she is concerned that Buchanan always seems to try to “get rich fast” and “live beyond his means” but “without a lot of effort on his part.” She noted Buchanan preys on people who cannot afford to lose money and spends their money on “non-essential activities.”
Buchanan apologized to the judge and to Stahlberg, and at his lawyer’s prodding, stood up a second time, and promised to repay Stahlberg.
In the Washington case, Buchanan was ordered to pay $2.5 million in restitution, but so far has repaid his victims just $3,000.
That reality has Stahlberg doubting she’ll ever get repaid, despite Mollway’s order to Buchanan to pay restitution.
Assistant U.S. Attorney Ken Sorenson said Buchanan’s pledge isn’t credible, because Buchanan is a “sociopath” who had no concern for his victims.
“I think he (Buchanan) is one of those individuals who has forfeited the right to have other individuals ever believe him. When you have spent your life spinning tales to take people’s money, you have a life based on fraud and lies,” Sorenson said.
It’s difficult to recover from the kind of “economic violence” that Buchanan’s victims suffered, Sorenson explained.
“People have a really hard time for years bouncing back financially, bouncing back emotionally, they feel completely violated. If you are a retiree and you’ve lost a good portion of your savings that you want to take you into retirement, that is incredibly stressful and does incredible violence to that person’s life,” Sorenson said.
FBI Special Agent Tom Simon investigated the Buchanan case and was in court Monday.
“In court today, we heard an emotional statement from the victim who was clearly traumatized by the abuse of trust inflicted on her by the defendant. After he was released from prison for a multimillion dollar ponzi scheme, Mr. Buchanan came back to Hawaii and started doing it all over again. Hopefully this new stint of incarceration will put him on an honest path,” said Simon.
“While we can all have compassion for investment fraud victims, it is important for people to remember that investment opportunities offering high rates of return coupled with low risk just don’t exist in the real world,” Simon said.
Buchanan, who is no longer with his first wife or online girlfriend from the Philippines, has recently remarried. He will begin his two-year prison sentence on September 29 at 10 a.m. at the Honolulu federal prison, after which he will be on supervised release for three years.