WAILUKU – The state attorney general has charged Maui businessman Lloyd Kimura with two counts of prohibited securities practice and two counts of making false or misleading financial statements.
The complaint was announced in a news release Thursday evening. It had been filed in 2nd Circuit Court on Monday.
Kimura’s attorney, Phil Lowenthal, said he had been talking with prosecutors for months to reach a settlement in the collapse and bankruptcy of Kimura’s businesses.
Kimura waived a grand jury, so the charges were presented as an information, not an indictment.
Kimura, 61, is president of Maui Industrial Loan & Finance Co. and for many years operated Lloyd Y. Kimura Inc., a certified public accounting firm.
The complaint alleges that between June 30, 2008, and June 30, 2009, Kimura filed false or misleading statements and omitted statements required by law on behalf of Maui Industrial Loan. These had been filed with the Financial Institutions Division of the Department of Commerce and Consumer Affairs.
The complaint also alleges that between February 2007 and June 2009, Kimura, in connection with the offer, sale or purchase of any security, employed a scheme to defraud people in amounts greater than $100,000.
Prohibited securities practice is a class A felony with a maximum penalty of 20 years or a fine of $50,000 or both. Making false financial statements is a class C felony with a maximum penalty of five years or a fine of $20,000 or both.
Arraignment, plea and a change of plea are scheduled at 8:30 a.m. Tuesday before Circuit Judge Joseph Cardoza.
Kimura’s businesses failed when the state, in November 2009, ordered Maui Industrial, also known as Maui Finance, to stop taking deposits. He filed for business and personal bankruptcy in February, listing liabilities of about $23 million. In November, the bankruptcy trustee sued 25 people who allegedly had received interest payments on deposits to reclaim the money.
In that complaint, the trustee said Kimura had admitted in depositions that he had been operating a Ponzi scheme, not a real business making loans.
He also has been sued by several people who took promissory notes from him, some claiming to have lost from $1 million to more than $2 million.