Painters Union Business Agent in Hawaii Sentenced

painters-union-logoFor 17 years, Raymond Fujii routed client money to his own pockets. But the deception couldn’t be maintained forever. On May 13, Fujii, formerly executive director for the Painting & Decorating Contractors Association of Hawaii, was sentenced in U.S. District Court for the District of Hawaii to 42 months in prison, to be followed by three years of supervised release, for conducting an elaborate fraud scheme against the association and a related Painters union entity, the Hawaii Painters Trade Promotion & Charity Fund, that totaled nearly $1.5 million. He also had been charged with federal income tax evasion. Fujii had pleaded guilty on January 27, one week after being charged. The actions follow a joint probe by the IRS and the U.S. Labor Department’s Office of Labor-Management Standards.

Raymond Fujii, now 68, a resident of Kailua, Hawaii, performed services for both management and labor. On one hand, he was executive director of a unionized trade association, the Painting & Decorating Contractors Association of Hawaii (PDCA). On the other hand, he was administrator of the Hawaii Painting Industry Trade Promotion and Charity Fund (TP&C), a trust fund set up by International Union of Painters and Allied Trades (IUPAT) District Council 50. The fund, paid out of member dues, provided funds for the PDCA. Fujii was in charge of preparing meeting minutes and financial statements of both organizations. One didn’t have to be a genius to see the vast opportunities for self-dealing. And Fujii took full advantage of them. According to federal prosecutors, during February 1997-May 2014 he wrote checks to two companies that he owned, Account Executives Inc. and RHF Inc., forging or fraudulently obtaining the signatures of PDCA or TP&C board members on checks. He then deposited the checks in a personal account. All told, he defrauded his clients out of $1,483,800. In addition, he failed to report income on his federal and state income tax returns, resulting in respective tax losses of $315,829 and $135,565.

The scheme eventually unraveled when suspicious PDCA and TP&C board members reported missing funds to the U.S. Department of Labor, triggering a DOL investigation. Recognizing his predicament, Fujii quickly sold his personal residence and used the proceeds to reimburse the PDCA in the sum of $564,915. At sentencing, U.S. District Judge J. Michael Seabright termed Fujii’s scheme a “naked betrayal” of PDCA trust. Dues-paying members of Painters District Council 50 certainly would concur.