HONOLULU (HawaiiNewsNow) - A company that receives heavy federal government subsidies paid more than $4 million for its founder's personal expenses, a new indictment alleges.
A federal grand jury Wednesday issued a 13-count indictment against Waimana Enterprises Inc. President Albert Hee, alleging that Waimana paid $1.7 million in false wages and bogus benefits for Hee's wife and children, $121,000 for Hee's personal credit card expenses and $92,000 for therapeutic massages.
The indictment also alleges that Waimana bought a $1.3 million home in Santa Clara, Calif. that's used exclusively by Hee's children.
Hawaii News Now first broke the story in September about the federal tax fraud case against the 59-year-old Hee, who is the younger brother of state Sen. Clayton Hee.
Hee was initially charged with not reporting about a quarter of a million dollars in income.
Today's indictment alleges that over a ten-year period Hee "corruptly" obstructed U.S. tax laws by not reporting the payments as income and by ordering Waimana staffers to conceal the payments as business expenses.
Some of those payments were later reclassified as loans.
Hee could not be reached but his attorney denied the allegations.
"Mr. Hee is innocent of the charges and we look forward to defending the matter in court," said lawyer Kurt Kawafuchi.
Hee founded Waimana Enterprises in 1988. It's the parent company of Sandwich Isles Communications, which provides telecommunications services for people living on Homestead lands.
Sandwich Isles -- whose board members include retired Adm. Robert Kihune and Kamehameha Schools trustee Janeen Olds -- has received more than $400 million in low-interest federal loans over the past 16 years.
The federal subsidies at one point were equivalent to about $13,000 per customer.
Hee is expected to appear in court on Tuesday for his arraignment. If convicted he faces up to three years in jail for each of the 13 counts.