HONOLULU (HawaiiNewsNow) - The state is cracking down on a Maui businessman accused of running a bogus investment scheme. According to investigators, he scammed people out of thousands of dollars by promising profits from his water companies.
Nelson Waikiki Jr. and his businesses, Opunui Water Company and Opunui Land and Water Company, face a preliminary order to cease and desist issued by the state securities commissioner. The former Maui mayoral candidate allegedly scammed investors and took the money for his personal use. Waikiki is accused of swindling at least seven investors out of $73,000 from October 2008 through December 2011.
"He really didn't have the water company going. He made a lot of promises to these people. He oversubscribed over 200% of the company profits," explained Tung Chan, state commissioner of securities.
According to Chan, Waikiki made false claims about securing permits for a "water selling system" that was endorsed by powerful politicians.
"Like Barack Obama was his partner in this and that the U.S. Congress was about to pass a bill that would require all land developers and all private companies to go through Opunui Water Company for water usages throughout the state," Chan said.
Chan said her office launched an investigation after a complaint came in. According to her, most of the investors are from Maui, but there may be other victims.
"These kinds of investment frauds happen to everyone, so if it's happened to you don't feel embarrassed, but contact us so we can help you," Chan said.
The state is seeking punishment including a civil penalty of $200,000 and restitution for investors. Waikiki and his companies have 30 days to request a hearing. After that, the cease and desist order could be made final.
Chan declined to comment on any other legal action that could be taken against Waikiki since there is an on-going investigation.
Anyone who has been solicited by Nelson Waikiki Jr. or his companies is urged to contact the State Securities Enforcement Branch.
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