A former employee of a Kauai company who is accused of being involved in an nearly $12 million embezzlement scheme with several of his family members is purposely delaying the start of a trial with his recent filing for bankruptcy protection, alleges an attorney representing Kauai Aggregates and O Thronas Concrete Inc.
A trial was scheduled to be held in Kauai Circuit Court on Nov. 26 against Alva Blake of Koloa; his two sons, Kanan and Keoni; and Kanan Blake’s wife, Leena. The almost $12 million was allegedly embezzled between 1998 and 2007 by the Blakes from Kauai Aggregates, a family-owned rock products company, and O Thronas, a Kauai Aggregates client.
On Oct. 24 Alva Blake, former quarry manager and vice president of Kauai Aggregates, filed for bankruptcy protection. Also in October his son Kanan Blake and wife, Leena, filed for bankruptcy protection in Southern California, where they reside. Keoni Blake, who resides in Kauai, filed for bankruptcy in September.
The Blakes could not be reached for comment.
The federal bankruptcy court will hear a motion to dismiss Alva Blake’s bankruptcy protection on Monday. A petition for an emergency motion to dismiss Kanan and Leena Blake’s bankruptcy protection also was filed, according to attorney Michael Rudy, who is representing the two Kauai companies.
"We have alleged that they abused the bankruptcy process and have done this in bad faith," he said.
Attorney David Minkin, who is representing the Blakes, said he was flabbergasted that the civil complaint of the alleged embezzlement against his clients filed 2 1⁄2 years ago is of interest to the media.
"The case is stayed because of the bankruptcy filings," he said.
In a written statement to the Star-Advertiser sent by email, Priscilla "Ku‘ulei" Thronas, daughter of the late company founder and owner, Olaf Thronas, said, "We see Alva Blake’s filing for bankruptcy as a last ditch in his continued effort to prevent us from having our right to have this matter resolved by the judicial system."
Alva Blake’s bankruptcy filing continues to show "he and his family’s disregard for all the trust and loyalty shown through the years by my family and by our employees," she added.
In August 2009 O Thronas Inc. and Kauai Aggregates filed a civil complaint in federal and state courts against the Blakes for the alleged payroll embezzlement scheme, trying to recover some of the money. Alva Blake was accused of participating in the scheme with his late wife, Helen Blake, who worked with Kauai Aggregates as a bookkeeper and corporate secretary. The federal court dismissed the case because some of the alleged claims were not considered violations under the Racketeer Influenced and Corrupt Organizations Act.
The lawsuit alleges Helen Blake issued fraudulent paychecks or wire transfers totaling $11.9 million to herself, her husband, two sons, daughter-in-law and another family member between 1998 and 2007.
Priscilla Thronas became president of the company when her father died in November 2005.
In late August 2007 the company’s pension plan administrator discovered discrepancies in the payroll and notified Thronas that Blake and her family members were receiving "six-figure salaries," according to the lawsuit.
Thronas questioned why Kanan Blake was listed as a full-time employee with the company at the same time he was working full time as a police officer in Santa Ana, Calif.
Kanan and his wife allegedly received more than $2.9 million in unauthorized payments from the companies between 1999 and 2007. He and his wife allegedly purchased multiple luxury vehicles as well as properties in affluent neighborhoods.
Helen and Alva Blake allegedly received more than $7 million from the payroll scheme between 1998 and 2007.
According to the lawsuit, Helen Blake committed suicide at her home in September 2007 after Thronas confronted her about the discrepancies.
