FBI serves search warrants in alleged Hawaiiloa Foundation bond scam

I've been following with some interest the Advertiser's coverage of the investigation of an alleged bond scam. Yesterday the paper reported that the FBI has served search warrants on four homes, taking computer records, boxes and files. According to the paper -

The bogus bonds...purport to represent ownership in a fictitious Hawaiian nation named Ko Hawaii Pae Aina, sponsored by the Hawaiiloa Foundation.

Back on November 18 the paper reported an interview with Douglas Gillman -

...a 78-year-old retiree from Waialua [who] gave $2,500 to a woman on Maui claiming to be an officer of the Hawaii Loa Foundation, a Native Hawaiian group with "ownership rights" to swaths of local land.
...
He was initially offered a $1 million bond that would cover any outstanding mortgage. He told the woman the lands were paid off and she responded by saying she could ensure that his annual property tax bill of $4,000 would disappear if he paid her $2,500.

Gillman accepted and gave her the money while filling out paperwork that he filed with the city. He said he is flying to Maui on Thursday to meet with her to discuss using the $1,000,000 bond to pay off five credit cards.

He said he has become skeptical of the scheme since he learned of the FBI probe.

"If they send a $1 million bond to the companies I owe, that's not going to work. I'm not sure the property tax exemption is going to work," said Gillman. "We'll see Thursday what they say in the meeting."

Apparently they worked something out in the meeting because there's featured on the Ko Hawaii Pae Aina website a turgidly legalistic disclaimer that purports to be a letter from the 78-year-old retiree to the Hawaiiloa Foundation stating:

I, Douglas Neddles Gillman, Sr., do hereby rescind, retract and revoke the statements and the mention that I made of the Hawaiiloa Foundation that I have made in relation or connection with the articles printed by the Honolulu Advertiser, published on the dates on [sic] November 17 and November 18, 2008.

I sincerely apologize for any injury that may have been caused by my misstatements that were not true, as I did in person to the volunteer staff at the Hawaiiloa Foundation on November 20, 2008 on Maui.

There's also posted a hand-written letter, also purportedly from Mr. Gillman that says, "I am very sorry for the mistake I made to the Honolulu Advertiser...I don't know who I was talking to, because I cannot hear good," and "P.S. I just received your letter this morning[.]"

On the same web page is also posted a "Declaration of Non-Responsibility, Truth and Verified Facts" that appears to have been published as a "legal notice" in local papers and which claims that the Hawaiiloa Foundation "does not take responsibility for persons who manipulate information shared in free classes...and does not sell bonds and does not participate in mortgage scams."

According to yesterday's Advertiser story -

[H]omeowners, many of whom are Native Hawaiian, were charged between $2,500 and $10,000 to attend seminars or counseling sessions on avoiding foreclosure, and were told they would receive bonds worth $1 million that could be used to pay off the outstanding balance of their mortgage.

Officials said the bonds were bogus and that no mortgages were paid off.

The schemes also promise to block property taxes and override credit card debt.