Former Waipahu High School business manager Warren Harada had until Wednesday to pay back the nearly $500,000 he stole from the school in order to get the lighter of two penalties — five years of probation with 18 months of it behind bars.
Harada, 62, did not come up with the money.
So according to the terms of his plea agreement, state Circuit Judge Richard Perkins sentenced him to 10 years in prison for theft and money laundering.
The Hawaii Paroling Authority will decide how much of the 10 years Harada must spend in prison before he is eligible for parole.
Harada started serving his sentence Wednesday.
His lawyer, Scott Collins, said Harada’s family home is in escrow and that it will take another month for the sale to close. Even then, Harada may or may not be able to make full payment, he said.
The latest tax assessed value of Harada’s seven-bedroom, 31⁄2-bath home in Manoa is $971,000.
However, Harada took out a $598,500 mortgage on it in 2006, on which CitiMortgage moved to foreclose in March, according to state court records. Harada also took out a second mortgage on the property for $161,300 in 2007, according to documents filed at the state Bureau of Conveyances.
Harada stole the money by using school funds to purchase professional-grade camera equipment, computers and other electronics, then sold the merchandise at a discount, said Christopher Young, deputy state attorney general. He said Harada made more than 200 purchases worth more than $800,000 between 2005 and 2010.
"Unfortunately, because of (the lack of) record-keeping that Mr. Harada was responsible for, we were only able to verify the theft of $499,769," Young said.
He said Harada spent the stolen money not on necessities but on vacations and other leisure activities.
Keith Hayashi discovered Harada’s scheme shortly after becoming school principal in 2010.
"Mr. Harada broke the law. He knew what he was doing was wrong yet he keeps whatever investments of the money he stole and the memories of his vacations abroad while our educators, community and students are left to clean up the pieces of his fraudulent acts and deal with the impact of his self-serving choices for years to come," Hayashi said.
He said the money Harada stole was meant to support the students and to provide for their educational opportunities.
Harada declined the opportunity to make a statement before receiving his sentence.
He is the fourth public school employee since 2010 prosecuted for stealing school money but the first to go to prison. The other three were school secretaries who either got probation or were granted deferrals of their guilty pleas and given the chance to keep their criminal records clean.
