Plea Deal By Miske’s Ex-Business Partner Leaves Only 3 Defendants In Upcoming Trial

A last-minute guilty plea by a former business partner of accused racketeering boss Michael Miske Jr.’s means the upcoming trial of the former Honolulu business owner and his remaining co-defendants will be strictly a family affair.

Jason Yokoyama, 37, appeared before Judge Derrick Watson Friday to plead guilty to a new charge, a single count of wire fraud conspiracy, as part of a deal with prosecutors.

In exchange for his guilty plea, prosecutors agreed to drop the racketeering conspiracy charge Yokoyama was facing in the upcoming trial. They also agreed to recommend several downward adjustments when he is sentenced later this year.

Yokoyama is the 10th of Miske’s 12 co-defendants to plead guilty. Most, including Yokoyama, have agreed to testify against Miske and other former associates when their trial begins on Jan. 8.

Only three of the original defendants remain: Miske, 49; his half-brother, John Stancil, 36; and Delia Fabro-Miske, 29, who was married to Miske’s son Caleb. The only child died in March 2016 as the result of injuries received in an high-speed car crash several months earlier.

The three face a total of 22 counts spelled out in a third superseding indictment filed in December 2022. All three are charged with participating in a racketeering conspiracy that Miske controlled and directed.

Miske is named in the most serious charges, including six stemming from his alleged role in a plot to kidnap and murder Jonathan Fraser, whom Miske wrongly accused of being behind the wheel at the time of the accident in which Caleb Miske was critically injured. At least two of these charges carry a mandatory minimum sentence of life in prison.

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Stancil is charged in several drug offenses and crimes of violence. The drug charges include a minimum 10-year sentence if convicted. Fabro-Miske is also charged with bank fraud for allegedly filing false paperwork in support of a bank loan, as well as racketeering conspiracy.

Sentence To Include Restitution

Yokoyama, who has been free on bond since September 2021, faces a maximum possible sentence of 20 years in federal prison, although the likely sentence will be much lower because of his lack of any prior criminal record, absence of a history of drug of substance abuse and the sentencing adjustments recommended by prosecutors.

According to the terms of the plea agreement, Yokoyama will also be ordered to pay restitution to the government as well as interest on that amount, to be set at the time of his sentencing.

The new charge against Yokoyama was filed in federal court on Tuesday in a five-page Information, a method of bringing federal criminal charges without seeking a grand jury indictment. Usually, as in this case, charge via an information signals a plea deal is in the works.

Yokoyama’s sudden flip so close to the opening of the trial could explain why attorneys for the remaining defendants failed to file a joint trial memo that was due by Wednesday. Their failure to file the trial memo, or to provide any explanation of the failure to the court, drew a rebuke from the judge during a hearing later Friday, several hours after Yokoyama entered his guilty plea.

“In the future, if the parties do not comply with the Court’s Orders sanctions will be imposed,” Watson warned, after noting the remaining defendants had “neglected” to explain the absence of a trial memo.

Skimming Cash And Avoiding taxes

Yokoyama admitted to assisting Miske in “regularly and corruptly skimming funds” from the cash registers of Miske’s M Nightclub, which did business from mid-2011 to late 2016.

Yokoyama admitted he had agreed with Miske, and other unnamed co-conspirators, to “conceal funds and income from the IRS” by “filing false federal income tax returns” over a period of at least several years for Leverage Inc., which did business as the M Nightclub.

The plea agreement says tax returns for 2014, 2015 and 2016 “contained information both the defendant, and Miske, knew to be materially false in that the returns grossly underreported the Nightclub’s true income due to Miske regularly and corruptly skimming funds from Nightclub cash registers and accounts without lawfully reporting the income to the IRS.”

The plea agreement put the tax loss to the government at more than $550,000 and less than $1.5 million.

Yokoyama could be a very damaging witness against Miske, having been, at least on paper, general manager and majority owner of Miske’s M Nightclub and its parent company, Leverage Inc. Later, he also was the sole trustee for Miske’s revocable living trust.

Concealing Miske Interest In The Nightclub

Yokoyama was born in Seoul, South Korea, and arrived in Hawaii as a child in December 1986. He graduated from St. Louis High School in 2004, then served in the U.S. Navy before being injured by exploding ordinance while on active duty in a combat zone. He was discharged and now receives disability benefits stemming from that injury, according to the motion that resulted in his release on bond.

When the M Nightclub first applied for a liquor license in early 2011, Yokoyama signed the paperwork on behalf of Leverage Inc., which would do business as M Nightclub. In the license application, Yokoyama reported having no prior experience in the nightclub business, but nonetheless held the position of general manager and majority owner in Leverage Inc., holding 70% of the company stock.

Miske was reported to hold only 20% of the shares, which were reported to be “class B” shares that gave Miske “no decision-making powers with the company,” Honolulu Liquor Commission records show.

The government alleges this was a sham, and that Miske fully controlled the nightclub’s operations. It was necessary because Liquor Commission rules prohibit any convicted felon from controlling 25% or more of a licensed business.

According to Yokoyama’s plea agreement, Miske had directed him to set up a second cash register at each of the nightclub’s bars, creating a simple system for skimming cash.

“These second cash registers were not connected to the Nightclub’s primary point of sale system,” according to the plea agreement.

Miske then directed Yokoyama to take cash from these registers “and deliver it to him on a weekly basis.” Some weekly deliveries included more than $10,000.

As a result, the club’s gross sales as reported by its federal tax returns “were being significantly underreported … which resulted in the Nightclub failing to pay a significant amount of tax due and owing to the IRS,” Yokoyama admitted in his plea agreement.

In addition to the unreported income, “Yokoyama was also instructed by Miske to withdraw cash from the Nightclub’s bank account and expense those withdrawals as associated services,” according to the plea agreement. “Yokoyama did so, and then gave a portion of the cash withdraws to Miske.”

In addition to his position with Leverage and M Nightclub, Yokoyama was listed for several years as the registered agent for another Miske-controlled company, Hawaii Partners LLC, and held a salesman’s license with the company, which was licensed as a used car dealer. Hawaii Partners also held title to several jet skis used by Miske’s associates, as well as the 37-foot Boston Whaler, “Painkiller,” which the government has alleged was purchased in preparation for the kidnapping and murder of Jonathan Fraser.

Yokoyama was also listed as a member of Da Poke Shack Honolulu LLC, which used the Queen Street offices of Kamaaina Termite as its primary business address. The company operated a food truck selling poke outside of Home Depot in Iwilei for a short time.

Paid In Cash

Yokoyama’s admissions about skimming and tax avoidance provide support for prior allegations that Miske, Yokoyama and others “hid Miske’s true income from the IRS.”

For example, Miske’s longtime accountant, Tricia Castro, would reportedly classify Miske’s personal expenses used for construction of his luxury oceanfront home in Portlock as “normal business expenses.” These expenses were concealed by spreading them on the books of his different businesses, the government has alleged.

Castro pleaded guilty in June 2021 to conspiracy to defraud the government and conspiracy to commit bank fraud. She is awaiting sentencing and is expected to testify against Miske during the trial.

Castro reportedly confronted Yokoyama at some point “about $6,000 to $7,000 cash withdrawals that he would make each week, and which he would deduct as an
expense on Leverage Inc.’s tax return.”

Another former longtime employee of Kamaaina Termite told federal investigators construction workers at the Portlock home were paid in cash. He also reported seeing Yokoyama delivering envelopes of cash to Miske “on a regular basis,” according to the affidavit of an IRS investigator in support of several search warrants executed at the time of Miske’s arrest in July 2020.

Tax returns filed for Leverage Inc. and M Nightclub claimed the club lost money each year it was in business, and Miske never reported receiving a distribution from Leverage Inc. during that period, according to the agent’s affidavit.

Behind The Scenes

Several other defendants who pleaded guilty have said they could not communicate directly with Miske but were told to send and receive information to and from Miske through Yokoyama, adding to the potential importance of his prospective testimony.

For example, Lance Bermudez, a former La Familia gang member who was later associated with Miske, said he received a telephone call from Yokoyama asking him to come to the nightclub. Bermudez said when he arrived at the nightclub, Yokoyama said he needed help getting rid of a van, a white or cream-colored Toyota Sienna. They then drove to Hawaii Kai, where Yokoyama pointed out the van, then returned to the club.

Bermudez said he then broke the ignition and drove the van to Ewa Beach, where it was burned. He said he then returned to the nightclub, where he was paid $3,500 for destroying the van.

This occurred the evening of Jonathan Fraser’s disappearance.

Yokoyama would also have direct knowledge of what prosecutors allege were two separate and distinct security groups at the M Nightclub: “legitimate security hired by a respected security manager hired by the M nightclub, and ‘Mike’s guys,’ a group that included co-defendant John Stancil, Mike Buntenbah and others, who were notorious for looking for fights by escalating physical confrontations and disputes at the club rather than defusing them.”

“Beating ‘problematic’ patrons furthered the Enterprise’s reputation for violence,” prosecutors alleged in a recent legal memo.

And in several instances, Yokoyama allegedly purchased guns used in crimes from other Miske associates, which prosecutors say he was stockpiling for Miske’s use.

The Trial

A trial lasting six months or more? That’s the estimate that has been tossed around in recent court hearings, and it isn’t clear whether Yokoyama’s guilty plea will result in any shortening of the proceedings.

The trial of Miske and his remaining two co-defendants is scheduled to begin on Jan. 8, with two days of hearings during which attorneys will debate issues of whether certain specific evidence will be allowed to be introduced and under what conditions.

Then the process of jury selection will begin.

About 750 available jurors, culled from an initial list of about 2,000 prospective jurors who were sent questionnaires about the case, will be brought into court in groups of 10, and will then be subject to questioning by attorneys on both sides. The process will continue until 44 prospective jurors are selected.

Prosecutors have requested that the court should empanel a “semi-anonymous” jury in which jurors would be assigned a number, while their names and other identifying information would not be disclosed in court for their own privacy and protection.

In its trial memo filed this week, the government pointed to “consistent, repeated and unsolicited comments found in the returned juror questionnaires where potential jurors stated they would be in fear for their safety and of retaliation for themselves and/or their families if they were to serve as a juror in this case.”

Attorney Michael Kennedy opposed the semi-anonymous jury proposal during a final pretrial hearing on Friday, court minutes show. However, the judge ordered any written objections to be filed by the close of business on Tuesday, after which he will issue an order on the government’s request.