EXCLUSIVE: FBI investigating Maui mortgage scam

EXCLUSIVE: FBI investigating Maui mortgage scam
Published: Oct. 13, 2015 at 10:56 PM HST|Updated: Oct. 13, 2015 at 11:52 PM HST
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The FBI is investigating a mortgage fraud scam that victimized nearly two dozen homeowners on Maui.

Hawaii News Now has also learned that a federal bankruptcy judge has ordered an Aiea man at the center of the case, Henry Malinay, to repay $74,000 in restitution along with a stiff fine.

"Because his conduct was considered so egregious, so outrageous, the bankruptcy court awarded the state $200,000 in penalties," said Stephen Levins, executive director of the state Office of Consumer Protection.

Many of the victims were Filipino-American homeowners, who alleged that Malinay and others promised to cut their mortgage payments in half.

Hilaria Taborada, of Lahaina, said she was first told not to make payments for five months. "After two months, (the banks) sent their letter that they're going to foreclose on my house. And I don't want to lose my house," she said. "I had to borrow money from my mom."

Malinay's attorney said he's not the ringleader.

"He was clearly a victim in this case. He was drawn in by a couple of sharp businessmen," lawyer Peter Hsieh said.

"The real culprits are still out there. The main guy made him a patsy."

Hsieh is referring to Anthony Williams, who heads an entity known as Mortgage Enterprises.

Williams is a member of the sovereign citizens movement on the Mainland and calls himself a private attorney general for the Common Law Office of America.

According to the state, he and Malinay told homeowners that they the could reduce mortgage payments by attaching what's known as Uniform Commercial Code statement to their mortgages in the state's Bureau of Conveyances.

"Filing these UCC statements are just frankly nonsense. It's not going to stop the foreclosure," Levins said.

More details on the FBI investigation weren't immediately available.

See the federal bankruptcy judgment against Malinay here.

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