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Monday, May 13, 2024
Feds Sentence Another Hawaii Fraudster
By News Release @ 9:21 PM :: 1173 Views :: Law Enforcement

Former Hawaii Resident Sentenced to 57 Months in Prison for Defrauding Investors of $1.2 Million

News Release from U.S. Attorney's Office, District of Hawaii, Wednesday, May 8, 2024

HONOLULU – Newton Kaleo DeLeon, 48, of San Juan Capistrano, California, was sentenced by Senior District Judge Helen Gillmor today to 57 months in prison and three years of supervised release for wire fraud and money laundering related to a scheme to defraud at least 42 Hawaii and California victim-investors out of more than $1.2 million. DeLeon, a former Big Island resident, is required to pay $1,246,850 in restitution to the victims of the scheme. He also must pay a forfeiture money judgment of $1,194,650.

According to information produced to the court, from at least 2017 to December 2020, DeLeon solicited money from victim-investors, many of whom were friends and teachers, by falsely representing that the money they provided him was for his flower lei business, “leiorders.com.” Instead, DeLeon spent the money on his personal expenses, including gambling and luxury items, such as a Chevrolet Tahoe. DeLeon falsely told victim-investors that he needed investment funds to purchase flowers and supplies for lei purchase orders that he had already executed with third parties, such as well-known casino hotels in Las Vegas, Nevada.

To further his scheme to defraud, DeLeon then falsely promised that he would repay the principal investment loan within a short time frame and split the profit with the investors as a return. DeLeon created and signed loan agreements and promissory notes for investors to create the false appearance of legitimate financial transactions upon which investors could rely.

To further legitimize his scheme to defraud, DeLeon provided investors with fictitious and fabricated purchase orders, contracts, and other documents that he created with unauthorized and false branded logos and forged signatures to make it appear he had large business lei orders with third parties, such as well-known casino hotels in Las Vegas, Nevada, when he knew that he did not secure these orders.

“Holding people like DeLeon accountable for criminally defrauding multiple victims in Hawaii and elsewhere is a top priority of our office,” said United States Attorney Clare E. Connors. “And while we will continue our law enforcement efforts to bring such perpetrators to justice, we encourage everyone to be their own first line of defense against those who create and then exploit relationships of trust.”

"The FBI hopes this sentence sends a message to those who try to take advantage and victimize investors in these types of schemes for their own personal greed," said FBI Special Agent in Charge Steven Merrill. “We urge the public to remain vigilant and thoroughly research any investment. As the saying goes, if it sounds too good to be true, it probably is.”

“Our communities here, along with people all over the world, value leis as symbols of hospitality, of honor, of friendship. DeLeon, however, only saw and valued his own greed,” said Special Agent in Charge Adam Jobes, IRS Criminal Investigation (CI), Seattle Field Office. “Financial crime is not victimless, and DeLeon deliberately chose to dishonor and hurt those in our communities with his actions. Today’s sentencing is a start to making things right, and CI is continually committed to bringing justice to those who do wrong.”

The FBI, IRS-Criminal Investigation, Federal Deposit Insurance Corporation Office of Inspector General, and Orange County Sherriff’s Department conducted the investigation that led to the conviction. Assistant U.S. Attorney Rebecca Perlmutter handled the prosecution.

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