New suit over isle CPA, firm seeks millions – The Maui News


Complaint claims Kimura used account access to loot couple
By HARRY EAGAR, Staff Writer

POSTED: February 10, 2010

WAILUKU – Another creditor has filed a million-dollar lawsuit against Wailuku certified public accountant Lloyd Kimura. Unlike previous claims, this one also names his accounting firm, Lloyd Y. Kimura CPA.

Kimura filed for bankruptcy two weeks ago, listing debts of about $23 million. His wholly-owned industrial loan company, Maui Finance, also filed for bankruptcy.

Among the creditors in both bankruptcies were Ronald and Miriam Jacintho, owners of Rojac Trucking, Rojac Construction and Jacro Lowbed Services, who were listed as $1 million creditors of Maui Finance. In their lawsuit filed earlier this month in 2nd Circuit Court, they claim their losses were higher, although the complaint did not disclose the total.

This complaint, filed for the Jacinthos and their Dairy Road Property LLC by attorney Lyle Hosoda, differs from other lawsuits by also alleging that Kimura, as their accountant, had access to their accounts and looted them. It says that during a period of "several tragic events" in the Jacinthos’ personal lives, Kimura encouraged them to transfer $1 million from a bank account to him, in return for a promissory note.

Kimura’s attorney, Phil Lowenthal, was asked for comment but was in meetings and not available Tuesday.

According to the complaint, the Jacinthos had used Kimura’s firm as their accountant since 1992 and since 1993 had given it access to their accounts in order to pay monthly bills, including payments on mortgages owed by their real estate investment company, RM.

In 2002, the Jacinthos formed Dairy Road, also to buy real estate, and also had Lloyd Kimura CPA manage their monthly payments.

That year, while they were celebrating their wedding anniversary in Las Vegas, the Jacinthos’ eldest son died unexpectedly. In 2004, their younger son was so seriously injured in a car wreck that Miriam Jacintho spent many months in Los Angeles while he was in the hospital. And two years later, she was diagnosed with a late stage of cancer.

"Due to plaintiffs’ R. and M. Jacinthos’ personal and professional commitments, including several tragic events, plaintiffs . . . entrusted defendant Kimura and LYKCPA fully to manage plaintiffs’ daily financial affairs," the complaint says.

It alleges that in June 2008, Kimura told them "it did not make sense to be earning such low interest (in a bank savings account) when they could receive a guaranteed 12 percent interest instead" by placing $1 million with Maui Finance (also known as Maui Industrial Loan and Finance). It says they were told the money was guaranteed and would be used to buy real estate, which would be secured with mortgages.

Maui Finance accounts are not insured, and promissory notes included as exhibits in other lawsuits state this. It also was not authorized to accept deposits, and the state issued a cease and desist order to prevent it from taking deposits in November.

November was also the month when the Jacinthos received a notice from their lender, Central Pacific Bank, that payments on their Dairy Road mortgage were in default. The lawsuit says they had been receiving $10,000 per month from Kimura in 2008 but that payments stopped in 2009.

It does not say when, but other creditors have alleged that payments stopped around the middle of the year.

In December, the Jacinthos also got a letter from the state Department of the Attorney General saying that Kimura was under criminal investigation. They are cooperating with that investigation.

Also in December, the complaint says, the Jacinthos learned that Kimura was using his access to their accounts to withdraw money to pay his creditors and make unauthorized transfers to Maui Finance.

The lawsuit asks for a jury trial. It alleges breach of contract, misappropriation and conversion, unjust enrichment, fraud, breach of a duty of loyalty, breach of fiduciary duty, unfair competition with other financial institutions, deceptive trade practices, aiding and abetting, civil conspiracy and negligent infliction of emotional distress.

New suit over isle CPA, firm seeks millions – | News, Sports, Jobs, Visitor’s Information – The Maui News

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