Two Hilo lawyers and a Big Island businessman were convicted Wednesday by a federal jury in Honolulu in connection with a scam in which the trio received Hawaii County affordable housing credits and land conveyances worth at least $10.98 million, with no intention of developing affordable housing.
After three days of deliberation following a three-week trial before U.S. District Judge Jill Otake, the jury found 78-year-old Paul Joseph Sulla Jr., 55-year-old Gary Charles Zamber, both attorneys, and 65-year-old businessman Rajesh P. Budhabhatti guilty of conspiracy to commit honest services wire fraud and nine counts of honest services wire fraud.
Sulla was additionally convicted of money laundering.
Sentencing is scheduled for Oct. 7 for Zamber, Oct. 8 for Budhabhatti and Oct. 21 for Sulla.
All three were permitted to remain free on bail pending sentencing.
Alan Scott Rudo — a former housing specialist in the county Office of Housing and Community Development from 2006 to 2018 — pleaded guilty in August 2022 to conspiracy to commit honest services wire fraud by awarding affordable housing credits to false limited liability companies established by the co-defendants, and then selling those credits to other developers for a profit.
Rudo’s alleged share of that profit was $1.93 million.
As part of his guilty plea, Rudo agreed to forfeit his interest in the recovered funds and housing credits, in addition to real estate connected to the charges. He also has agreed to a monetary judgment of more than $2.1 million against him.
According to court documents and information presented in court, Rudo solicited and accepted multiple bribes and kickbacks from Sulla, Zamber and Budhabhatti while working for the OHCD.
Rudo abused his position with the OHCD to ensure the county approved three affordable housing agreements, or AHAs, involving Luna Loa Developments LLC, West View Developments LLC and Plumeria at Waikoloa LLC.
Sentencing for Rudo, testified for the prosecution, was delayed numerous times. He’s now scheduled to be sentenced Aug. 13 before Otake.
Honest services wire fraud and conspiracy to commit honest services wire fraud carry a maximum sentence of 20 years imprisonment, while money laundering carries a maximum sentence of 10 years behind bars.
“(Wednesday’s) verdict reiterates our unwavering message to those who bribe and attempt to buy the discretion of Hawaii’s public officials at the expense of the public’s trust and the integrity of our public institutions — you will be federally prosecuted and brought to justice,” Acting U.S. Attorney Ken Sorenson said in a statement.
FBI Honolulu Special Agent-in-Charge David Porter said Sulla, Zamber, Budhabhatti and Rudo “defrauded their own community for personal financial gain.”
“The corruption of government officials corrodes public trust and weakens our communities,” Porter said.
The FBI investigated the case, and charges were brought after Big Island journalist Pat Tummons reported in her newsletter Environment Hawaii irregularities she found examining OHCD records.
In a statement, Mayor Kimo Alameda called the verdict “an important step toward accountability” and added it “reinforces the importance of integrity in public service.”
“We understand the impact this case has had on our community and remain committed to restoring trust,” Alameda said. “Since the initial findings, the Office of Housing and Community Development has taken concrete actions to strengthen internal controls, improve oversight, and ensure that public resources are managed responsibly and transparently.”
Email John Burnett at jburnett@hawaiitribune-herald.com.
