KAILUA-KONA — Pablo M. Rivera, chief financial officer of the University of Nations/Youth with a Mission, has been charged with wire fraud for allegedly embezzling at least $1.5 million from the organization over a period of more than two years.
KAILUA-KONA — Pablo M. Rivera, chief financial officer of the University of Nations/Youth with a Mission, has been charged with wire fraud for allegedly embezzling at least $1.5 million from the organization over a period of more than two years.
Assistant United States Attorney Michael Nammar, the prosecutor handling the case against Rivera, confirmed Rivera, 41, made his initial court appearance Wednesday afternoon in Honolulu. Rivera’s detention hearing is set for Monday morning at 10 a.m.
The investigation into Rivera’s alleged criminal activity was handled by Special Agent Gregory Turner of the Federal Bureau of Investigation, a certified public accountant and certified fraud examiner, assigned since 2014 to the white collar crime squad at the FBI’s Hawaii Field Office in Honolulu.
Turner’s deposition, included in a criminal complaint that served as the basis for the arrest of Rivera and the subsequent criminal proceedings, was unsealed Wednesday.
According to court documents, “(Rivera) sent a series of false and fictitious invoices to UON (University of Nations) which purported to reflect the true costs and labor charges of work performed by contractor KJ Walk. In truth and fact, however, Rivera was submitting altered KJ Walk invoices to UON, which falsely inflated the actual costs and wages for work performed by KJ Walk.”
UON contracts KJ Walk, Inc., the home offices of which are based in Savage, Minnesota, for maintenance and construction work on the UON campus in Kailua-Kona — one of the largest UON facilities in the world.
WHT was unable to reach ownership and management at KJ Walk for comment by press time on Wednesday.
As a direct result of the falsified invoices emailed by Rivera, UON made several wire transfers from its checking account to a corporate account accessible by both KJ Walk and Rivera, after which Rivera made several withdrawals for his “personal benefit,” according to court documents.
After being confronted by the owner of KJ Walk, Rivera reportedly said, falsely, that the withdrawals were made to pay subcontractors — namely Westside Electric, an electrical subcontractor in Kailua-Kona.
The UON is a Christian-based, missionary organization that offers those who enroll training and inspiration to develop their own personal relationships with God while preparing them to spread the Christian faith and its principles through missionary work across the globe.
UON has to date established 600 locations across 142 countries worldwide.
“University of the Nations Kona was recently made aware of possible fraudulent activity against our organization and a third-party contractor committed by an individual. The person of interest was a volunteer in a financial role. We take allegations of this nature very seriously, and provided full support to law enforcement,” Jill Thornton, a media relations officer for the UON, said in an email Wednesday.
“As of Tuesday afternoon, we understand a suspect was taken into custody by federal authorities. Though we are relieved that justice is being served, we are deeply saddened by the crimes committed against us. Given this remains an active investigation, we are unable to comment further at this time and refer all questions to the FBI.”
Timeline
Rivera began working as the CFO for the UON in December 2014. He was based out of Colorado Springs and did not work directly on or from the UON site in Kona.
According to court documents, Rivera’s intent to devise a scheme to defraud the UON began at the latest in September of 2014 and continued on through or around January 2017 — indicating Rivera had hatched and begun implementing his plans even before officially assuming the role of CFO roughly three months later.
The charge of wire fraud stems from an email concerning KJ Walk invoices sent by Rivera from a Gmail account he controlled in Colorado to the UON financial services manager on Dec. 19, 2016 — which was classified in the criminal complaint under the category of “writings, signs, signals and sounds in interstate commerce.”
Because Rivera worked in Colorado and not Hawaii, the emails he sent from his Gmail account “moved in interstate commerce,” constituting the charge of wire fraud.
Turner said he had further confirmed with other federal agents that Gmail has no servers in Hawaii.
Included in the email were what Turner described as invoices altered by Rivera, bearing the same invoice numbers and dates as the originals sent from ProService Human Resources, Inc., a payroll entity, to both Rivera and KJ Walk.
Several examples were cited in the criminal complaint. One in particular was Invoice #091113-1, dated Dec. 9, 2016, which listed an original payment of $2,422.75. The altered invoice Rivera sent to UON listed a payment in the amount of $16,281.24.
On Jan. 24, 2017, the owner of KJ Walk, who was unnamed in court documents, met with UON management to discuss what was described as “an excessive amount of money” being deposited by UON and moved through KJ Walk’s joint account with Rivera.
Rivera was reportedly added as an authorized signer on the account at Central Pacific Bank after Rivera told KJ Walk ownership such was necessary due to Hawaii regulations.
The owner of KJ Walk specifically mentioned payments Rivera claimed to have made from that account to Westside Electric, Co.
“The owner of KJ Walk told UON that the work that Rivera claimed Westside had completed was, in reality, never performed or even authorized by KJ Walk,” according to the criminal complaint.
KJ Walk ownership told investigators that nearly two weeks prior, on Jan. 11, 2017, its vice president had inquired about the excessive amount of money flowing into the account. Rivera subsequently sent an excel spreadsheet to the vice president via email “including, but not limited to,” six checks “purported to be payable to Westside Electric.”
The six checks, issued between July 2016 and December 2016, were written for a combined total of $285,510.
On Jan. 25, 2017, the security director at UON reported to the FBI that Rivera had embezzled between $1.5 and $2 million. He further advised that Rivera was scheduled to soon travel to Sierra Leone, Africa.
The following day, the owner of KJ Walk informed the FBI that he’d reached out to Westside Electric, which said it hadn’t engaged in any work at the UON between July 2016 and December 2016, as Rivera had claimed.
The FBI confirmed this fact on the same day after speaking with the licensed contractor for Westside Electric, who told agents no work was ever performed and that no money was ever received.
According to the criminal complaint, agents subsequently accessed KJ Walk’s corporate account and examined returned checks “… and found that the purported disbursed checks to Westside that were referenced … never occurred. Instead, the returned checks revealed Rivera wrote checks to himself in amounts that corresponded to the purported Westside payments.”
The amounts matched up exactly — $285,510. Those checks were deposited into a Bank of Hawaii account, a bank with which UON does not conduct company business.
Later on Jan. 26, FBI agents interviewed an accounting specialist at UON who had been previously instructed by management to audit invoices Rivera had sent via email.
After reviewing the audit, it was determined that between July 1, 2016, and Sept. 1, 2016, UON sent payments to KJ Walk totalling $ 276,944 at Rivera’s behest. The original KJ Walk payment invoice indicated the real amount was $40,832.86 — equalling a total discrepancy of $236,111.64.
Between Sept. 9, 2016, and Nov. 11, 2016, the discrepancies added up to $336,312.04.
From Nov. 18, 2016, through Dec. 23, 2016, total discrepancies equalled $327,731.93
The following is the transcription of the email sent on Dec. 19, 2016, from Rivera to the UON financial services manager, complete with attached invoices, which is the basis for the charge of wire fraud. It has been altered only with two minor grammatical changes.
“Please see reconciled KJ Walk invoices. Please wire $206,837.71 to the Hawaii account on Monday.
Thanks,
Pablo”
A spokesperson from the Federal Bureau of Investigation’s Hawaii Field Office in Honolulu said it was too early in the proceedings for the FBI to make an official statement and refrained from doing so in the interest of maintaining the integrity of the case.
But Turner wrapped up his deposition with a definitive statement.
“Based on the forgoing, I respectfully submit there is probable cause to believe that Rivera committed wire fraud, in violation of 18 USC 1343.”
