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The Honolulu Advertiser
Posted on: Wednesday, April 28, 2010

2 Kauai men convicted in federal fraud trial

Advertiser Staff

Two men convicted Tuesday in a federal fraud trial will be sentenced in August and face maximum penalties of 20 years in prison and $250,000 in fines.

Kevin Paik, 47, and James Alan Duarte, 48, both of Kaua'i, were convicted of running a fraudulent scheme in which Paik, a federal employee, secretly profited from government subcontracts he helped to oversee.

The work involved restoration and maintenance of the Hanalei Wildlife Refuge, where Paik was employed as an engineering equipment operator by the U.S. Department of the Interior.

According to evidence presented during a 13-day jury trial, Paik agreed with Duarte to submit bids for subcontracts that concealed Paik's personal involvement in the bids.

"Duarte obtained a Kauai contractor's permission to use the contractor's license number in return for a portion of the subcontract amount," U.S. Attorney Florence Nakakuni said in a news release.

"Paik then prepared a bid document purportedly from the contractor, but which contained the contact information of Duarte," according to the government.

"Duarte and Paik then performed the work, while making it appear as if it had been done by the Kauai contractor," Nakakuni said.

Paik was found guilty of four counts of mail and wire fraud, and one count involving a criminal conflict of interest. Duarte was convicted of four mail and wire fraud counts. Each man was found not guilty of three additional fraud charges.

Assistant U.S. Attorney Clare Connors prosecuted the case.

U.S. District Judge J. Michael Seabright presided over the trial.