Finances of accused Hawaii crime boss examined during racketeering trial

Michel Miske is facing several racketeering and conspiracy charges.

by Keya Rivera, Court House News, June 18, 2024

HONOLULU (CN) — As the racketeering trial against Michael Miske reached its 89th day in the U.S. District Court for Hawaii, an expert witness took the stand to defend the Honolulu-based businessman.

The witness, Kenneth J. Hines, is a former IRS criminal investigator, who was retained by Miske's team in 2019 to examine the financial records of Kama'aina Termite and other enterprises relating to Miske in anticipation of an indictment.

Prosecutors contend Miske's ran a criminal organization that infiltrated his legitimate businesses including a nightclub, termite company, plumbing operation, and fishing boat to launder money and maintain a facade of legitimacy

U.S. District Judge Derrick Watson substantially reduced a 19-count indictment against Miske earlier this month, after all 12 of Miske's former codefendants accepted plea bargains, making Miske the lone defendant proceeding to trial.

On day two of his testimony, Hines challenged prosecutors' claims of questionable finances among Miske's companies. In his declaration, Hines stated he found no evidence of "money being siphoned off to hidden or unknown entities" after reviewing records. This was disputed in court.

Lead defense counsel Lynn Panagakos questioned Hines about bank stubs showing several asterisks indicating uncashed, out-of-sequence checks. Regarding finances relating to Miske's fishing vessel, Hines clarified: "These guys are on a boat. You might write [their check] on the 15th of October, but they can't cash it till the 15th of November, they’re on a boat, so they don’t need cash. They might not cash it until December."

Panagakos asked why the bank flagged this as suspicious activity. Hines explained the bank took notice because the checks were not cashed immediately.

"But if you look at the dates of the checks it looks consistent with the payroll process," Hines said.

Panagakos asked if Hines would describe Miske's situation as "unique circumstances of lawful activity," to which Hines agreed.

U.S. District Attorney Aislinn Affinito questioned Hines as to bank teller reports relating to Miske. While legal, transactions over $10,000 require a currency transaction report (CTR) filing by banks to combat money laundering.

"To commit the crime of obstruction is to avoid the CTR, it doesn't necessarily have to conceal assets, just avoiding the CTR itself is illegal," Affinito told the jury. 

At least four incident reports documented tellers finding Miske's behavior suspicious, with one stating Miske took back a check after being told the total exceeded the $10,000 reporting limit and he needed to file a CTR.

"I wasn't aware that he was splitting them up," Hines admitted regarding the reports. "It could be an indication of obstruction."

In April, Ashley Wong testified about a 2015 crash involving Miske's son Caleb and her boyfriend Jonathan Fraser, shedding light on Miske's character. Prosecutors say the crash that severely injured Caleb and led to his death months later, prompted Miske to conspire to kidnap and kill Fraser in 2016.

Additionally, Jacob Smith, a former Miske enforcer, pleaded guilty in 2020 and confessed to crimes like arson, armed robberies, drug trafficking, chemical attacks, and murder plots he said he committed for Miske.

The trial is scheduled to resume on Thursday, with Hines set to continue his testimony. Prosecutors and the defense are expected to further scrutinize financial records and witness accounts as they build their respective cases.