Molokaʻi Man Charged With Alleged Investment FraudApril 24, 2014, 2:07 PM HST · Updated April 25, 1:55 PM 0 Comments
By Wendy Osher
A Molokaʻi man was charged with wire fraud charges for an investment scheme in which he allegedly spent funds obtained on personal items including credit card payments, an online girlfriend in the Philippines, and an online adventure video game, according to the FBI.
The charges against David “Kawika” Buchanan, 47, of Molokaʻi come following a five-month investigation conducted by the Honolulu FBI and the State of Hawaiʻi Department of Commerce and Consumer Affairs Securities Enforcement Branch.
Special Agent Tom Simon of the FBI said, “Joint investigations between state securities regulators and the FBI combine investment expertise with criminal authority in the greater interest of justice for fraud victims. This case will serve a model for cooperation in the future in hopes of putting investment schemers out of business in Hawaiʻi.”
According to charging document filed in Hawaiʻi US District court, the US Attorney alleged that the scheme took place from around June 2012 to October 2013. It states, “the defendant knowingly devised and intended to devise a scheme and artifice to defraud, and to obtain money from others, by means of materially false and fraudulent pretenses and representations, promises, and omissions.”
According to the document, the US Attorney further alleges that in one instance, the defendant promised that he could return a $40,000 investment into $300,000, which translates to a 650% rate of return. The charging document states that the alleged victim withdrew money from her retirement savings and invested an initial $40,000 with the defendant, and an additional $5,000 for taxes.
Instead of investing the money in securities or income-producing venture as represented, the US Attorney alleges Buchanan spent the money on, “personal travel, an online strategy video game called Evony, Western Union wire transfers to an internet girlfriend in the Philippines, online shopping, credit card payments and miscellaneous personal expenses of the defendant and the defendant’s brother.”
Although the defendant has been charged with wire fraud, he has not been arrested by the FBI, according to Agent Simon.
Simon further indicated that the defendant will surrender prior to his initial appearance scheduled for 10:30 a.m. on May 8, 2014, in Honolulu US District Court before Judge Susan Oki Mollway, as per prior negotiations with his attorney.
Authorities say the statutory maximum penalty for wire fraud is 20 years in prison.
FBI officials say the public is reminded that criminal charges are merely an accusation and that all defendants are presumed innocent unless or until found guilty in a court of law.