A federal jury has found Honolulu businessman Albert Hee guilty on seven counts of tax fraud for using his company to pay more than $4 million in personal expenses, including semiweekly massages and college tuition for his children.
Hee was convicted on one count that charged he “corruptly endeavored to impede the due administration of the internal revenue laws” and six counts of submitting a false tax return for the years 2007, 2008, 2009, 2010, 2011 and 2012.
According to the U.S. Attorney for the District of Hawaii, from 2007 to 2012, Hee caused Waimana Enterprises Inc. (WEI), a company incorporated by Hee and the stock of which is owned by Hee, to pay more than $4,063,294.39 of his personal expenses, including:
- Personal massage payments totaling $96,000 for two-hour massages given to Hee twice a week;
- $119,909 in credit card charges made for personal expenses, including trips to DisneyWorld, Tahiti, France and Switzerland made by Hee’s wife, children, and others, and a four-day family vacation at the Mauna Lani resort, which Hee falsely characterized as a “stockholder’s meeting;”
- College tuition and housing expenses totaling over $736,900 for Hee’s three children, who attended college on the mainland;
- Approximately $1,676,685 in wages and fringe benefits paid to Hee’s wife and three children, who did little or no work for Waimana; and
- $1,313,261.34 to buy a house in Santa Clara, Calif., used exclusively by Hee’s two children. The children were also allowed to rent rooms out to others, and to keep the money to fund their own expenses.
Hee falsely deducted the payments as if they were legitimate business expenses, the U.S. Attorney’s office said. According to the trial testimony, Hee also failed to report the value of the benefits which he received as income on his own income tax returns.
Hee faces up to three years imprisonment and a fine of up to $250,000 for each charge. He will be sentenced on Oct. 26.
WEI is the parent company of Sandwich Isles Communications, which provides telecommunications services for people living on homestead lands.
KHON2 reached out to the Department of Hawaiian Homelands to see how or if Monday’s verdict will affect their relationship. So far, we have not heard back.