LIHU‘E – A 5th Circuit judge will decide whether a defendant with an unusually large restitution agreement is a victim of circumstance or is willfully evading responsibility. Jon F. Anderton, 57, faces a state’s motion to modify the terms and
LIHU‘E – A 5th Circuit judge will decide whether a defendant with an unusually large restitution agreement is a victim of circumstance or is willfully evading responsibility.
Jon F. Anderton, 57, faces a state’s motion to modify the terms and conditions of his five-year felony probation. After pleading guilty to three of seven counts of first-degree theft on July 20, 2011, he was sentenced to three weeks time-served in jail and a five-year felony probation on Oct. 5, 2011.
The court noted it agreed to the restitution order as part of the deal, in which Anderton agreed to pay $1,257,684.39 to four victims in annual 25 percent installments of $314,421.10. They are due in April of each year through 2016.
“This is a highly unusual case with substantial restitution,” Judge Kathleen Watanabe said in court.
When it comes to restitution, Watanabe said the court sets a repayment schedule that is based in part on the ability to pay. She also stated that restitution is designed to make the victim whole, and not as part of the punishment in the sentencing.
According to the Exchange Accommodations website, Anderton’s firm at the time, he dealt in domestic and international investment property sales that profited from deferred capital gains or losses.
The Kaua‘i man was convicted of taking more than $1 million in deals and failed to make required payments to investors from 2006 through 2008.
Deputy Attorney General Debbie Lyn Tanakaya said the defendant should appreciate the position of the victims.
He reportedly lost more than $5 million to the late James Lull in his Ponzi scheme.
One of the victims addressed the court and expressed concern that Anderton still appears to be living a good life while not making restitution.
The victim asked the court to consider having Anderton “look at the hill rather than the mountain” and allow for smaller restitution payments on a weekly or monthly basis as an alternative.
Tanakaya said the defendant agreed to a carefully crafted plea deal that was designed to keep him out of jail and in a position to pay restitution to the victims.
The terms were specific and Anderton was aware of the consequences for failing to make restitution payments, she said.
The state could have asked for the maximum allowable 18-month jail sentence with felony probation, Tanakaya said.
The state did not, in the interest of allowing the defendant to work and repay the victims, she added.
Anderton needs the jail time as a reminder of the consequences of failing to meet the terms of his probation, she added.
State Deputy Public Defender Samuel Jajich said Anderton made about $15,000 in restitution and by falling short of the annual amount is subject to resentencing to a three-month jail term.
Failing to make restitution levels in subsequent years would result in a six-month jail term for a second violation, and a nine-month term for failing to pay for a third year.
The defendant would be required to include the previous year’s restitution in addition to the new amount, he said.
If Anderton has not paid the entire amount of restitution by April 5, 2016 he stands to face the full 10-year prison sentence.
According to Tanakaya, at the time of the plea deal the defendant had the means to earn the income required to make the payments.
He is no longer earning a large income, she said, but that he still has assets including stocks and a million dollar home.
Anderton stated in court that his house fell into foreclosure with the bank. His stocks are held in trust by attorneys involving debt in other matters, he said.
Jajich said Anderton may have agreed to the restitution agreement but that he did not knowingly waive his rights regarding the consequences of nonpayment, imprisonment for contumacious nonpayment, or summary collection as outlined under Hawai‘i Revised Statutes: Section 706-644.
“This judgment is illegal when the deal is controvertible,” Jajich said.
Anderton agreed to this deal at a time when he was making big money at the height of the real estate bubble.
Today, he claims to be earning less than $4,000 a month as a self-employed business owner and tax preparer who rents a home and is raising a family.
The defendant does not have the means to repay and the state cannot essentially create a debtor’s prison scenario that would repeat itself annually, Jajich said.
Watanabe said the hearing would be continued to allow the court to determine if the defendant’s default on the restitution payments are the results of contumacious behavior, or from changing circumstances that amount to an inability to pay.
• Tom LaVenture, staff writer, can be reached at 245-0424 or tlaventure@thegardenisland.com.
