ASG details allegations against former retirement fund director
Pago Pago, AMERICAN SAMOA — The government alleges in its criminal case against former executive director of the American Samoa Government Employees' Retirement Fund (ASGERF), Luatua Filisouaiga Ta’afua that the case came to light when an employee of ASGERF notified the former and now deceased board chairman of ASGERF, Fanene Scanlan of questionable vendor payments, where the checks were signed by Luatua.
The two government’s witnesses mentioned in the court affidavit are CW and CM, both employees of the ASGERF.
(Part 1 of the story can be found in last Friday’s Samoa News edition.)
On July 27, 2015 investigators met with CW where she stated that the defendant authorized CM to issue the checks against the Administrative Account to the two companies with CM’s name in parenthesis next to the company’s name in the payee line. CW further stated to investigators that the defendant signed all of the checks and used now deceased board chairman of ASGERF, Fanene Scanlan’s signature rubber stamp as the second signature. According to CW’s statement to investigators, the use of Fanene’s rubber signature stamp was done without Fanene’s knowledge or approval.
On Aug. 5th, 2015 CM was interviewed by investigators regarding the alleged incident. When asked about the invoices from Hardcore Cleaning Service (HCS) and Star Company (SC), CM explained that the invoices were given to him by employees of the companies.
Later, CM told the independent auditor, David Asay that the invoices were actually prepared by him. He stated that he would present the invoices to the defendant who approved them for payment. Bank of Hawaii (BoH) would not accept the first check CM attempted to cash because the company that the check was made out to did not have an account with the bank.
With the approval of the defendant, CM added his name to the checks alongside the companies’ names as the payee. CM confirmed to investigators that most of the checks were cashed and deposited to the defendant’s personal account at BoH.
CM further stated to investigators that ASGERF did not have any written contracts for cleaning services with either company. He also stated that both companies, HCS and SC were created and operated by the defendant.
On Aug. 12th, investigators met up with Fanene. When asked about the checks issued to HCS and SC that had his rubber stamp signature on them, Fanene stated that he did not approve those checks. Fanene further stated that when the eight checks were presented to him to sign he returned the checks without signing them. He also stated that prior to that occasion he was told by CW that the defendant had been using Fanene’s rubber stamp to sign checks without his authorization.
When Fanene confronted the defendant about this matter, the defendant said the use of the rubber stamp was normal practice from the beginning because of the large number of checks to be signed.
Between Jan. 8 and June 16, 2015, the defendant authorized the issuance of seven checks to fictitious vendors with Filiga common in the names for the total amount of $3,095, payable to the Filiga Electric Company (FEC), cashed from the ASGERF account.
On Sept. 14th, investigators met again with CM at his office where he was questioned about FEC. According to CM, Fialoa worked for the company that built the Centennial Building and has reset the elevator in the building only once. Fialoa showed CM how to reset the elevators. Since then, CM has been responsible for resetting the elevator. This is despite the fact that ASGERF had an elevator maintenance agreement in place for the same services.
Just like with HCS and SC, FEC does not exist. According to the Department of Commerce (DOC), neither FEC, HCS nor SC have been registered as businesses in American Samoa.
The invoices that were submitted to ASGERF for payment were prepared by CM at the direction of the defendant. Luatua would approve the invoices and issue checks to Filiga Fialoa. Fialoa in turn, would endorse and cash the checks. He would then give the money to CM, or would split it with the defendant.
At one point, CM suggested to the Luatua to make the checks payable to CM, so the process would be easier. Luatua told CM to not make any changes.
On Dec. 16, 2019, CM met with the Attorney General Office’s investigator John Seumanutafa during review of this case, where CM provided a written statement to Seumanutafa.
In his statement, CM stated that the director (defendant) asked him to make an invoice and cut the check and CM did what the defendant wanted him to do. CM further stated that the director wanted the checks to be cashed but since staff could not cash the checks, the director wanted CM to cash the checks.
CM said the teller at the BoH refused to cash the check since CM’s name was not on it and the teller told CM that the only way to cash the check is if CM’s name was on it. CM explained that to the director, who told CM to put his name on the checks. CM also stated that some checks he deposited straight into the director’s bank account, some CM cashed and gave to the director and some checks were cashed and most of it was given to the director.
A review of the ASGERF Administrative Account ledgers, bank accounts and defendant’s personal accounts showed that defendant would consistently issue the checks to the fictitious companies with CM’s name in parenthesis. Shortly thereafter the funds would be deposited into the defendant’s personal account with the BoH or simply cashed and all or part of the cash was given to the defendant.
On Feb.7, 2019, Acting Associate Justice Elvis P. Patea granted the government’s motion to dismiss the previous case against the defendant, almost 3 years after it was filed. Luatua was charged with over 20 criminal charges.
Former Assistant Attorney General Robert Morrison represented the government during this case while Luatua was represented by Gwen Tauiliili-Langkilde and co-counsel, David Vargas.
Morrison verbally asked the court to dismiss the case without prejudice against Luatua. No further explanation was offered. The defense attorneys did not voice any opposition. Patea then dismissed the case, without prejudice.
Morrison outside of the courthouse told Samoa News that he filed the motion based on the health condition of the government's primary witness, who was scheduled to depart the territory for medical treatment in Hawaii that same week.
Aside from the DPS investigation, a forensic auditor from Utah carried out a separate probe and an audit report found evidence that Luatua allegedly misappropriated about $112,000 of the Fund's money for his personal use. Luatua was placed on leave with pay for several months when the case surfaced in the beginning of 2015 and was later terminated in Jan. 2016.
The late Fanene, who was the Fund's board chairman when Luatua was executive director, initiated the probe to look at claims that Luatua approved travel and per diem payments for himself and other members of the staff, and issued checks to a janitorial company with which he was affiliated.