Executive Summary
- Attorney Gary Zamber received a 70-month prison sentence for conspiracy to commit honest services wire fraud.
- The scheme, involving $11 million in assets, exploited Hawaii County’s affordable housing credit system.
- U.S. District Judge Jill Otake cited the breach of public trust and the lawyer’s role in legitimizing the fraud.
- The investigation, dubbed "Operation Reverse Robinhood," has led to significant reforms in county housing oversight.
- Zamber was ordered to pay restitution and plans to appeal the conviction.
Gary Zamber, a Big Island attorney, was sentenced Friday to 70 months in federal prison for his role in a conspiracy to defraud Hawaii County’s affordable housing system. U.S. District Judge Jill Otake presided over the hearing at the federal district court in Honolulu, where she also ordered Zamber to pay a $1,000 fine and forfeit $124,270 in proceeds derived from the scheme. The sentencing marks the first prison term handed down in connection with the investigation known as "Operation Reverse Robinhood."
According to court records, the fraud spanned from 2014 to 2021 and involved the exploitation of loopholes in the county's method for awarding affordable housing credits. Prosecutors stated that the scheme was facilitated by former county housing specialist Alan Rudo, who used his official position to award valuable credits and land to limited liability companies controlled by himself, Zamber, attorney Paul Sulla, and businessman Rajesh Budhabhatti. These entities subsequently sold the credits and land to other developers for profit without constructing the required affordable housing units.
During the sentencing hearing, Judge Otake acknowledged that Zamber appeared to be the "least culpable" of the four defendants, noting he personally pocketed approximately $177,000—significantly less than his co-conspirators. However, the judge emphasized that Zamber’s status as a lawyer lent a veneer of legitimacy to the fraudulent operation. "Crimes like this make affordable housing even less reachable," Otake stated, highlighting the severity of the offense amidst the state's ongoing housing crisis.
Evidence presented by FBI investigators indicated that the conspirators fraudulently obtained land and housing credits valued at nearly $11 million. One specific transaction cited in court documents involved Luna Loa Developments LLC, which received 212 housing credits in exchange for a promise to build 106 units; instead, the company sold credits for at least $350,000 without breaking ground. Zamber, Sulla, and Budhabhatti were convicted last June of conspiracy to commit honest services wire fraud and multiple counts of wire fraud. Sulla was additionally convicted of money laundering.
Zamber addressed the court during the proceedings, expressing regret for his failure to verify the legality of the deals but attributing his actions to errors in judgment rather than criminal intent. "I did not ask enough questions," Zamber told the judge. His defense attorney, Gary Springstead, indicated that Zamber maintains his innocence and intends to appeal the conviction. Zamber has been ordered to surrender to federal authorities by March 13.
Judicial Ramifications and Systemic Reform
This sentencing underscores the significant legal consequences for white-collar professionals who facilitate public corruption, even when their financial gain is secondary to the primary conspirators. The case has prompted immediate administrative changes within the Hawaii County Office of Housing and Community Development, which has since segregated the duties of granting credits and enforcing compliance to eliminate the oversight gaps exploited in this scheme. While Zamber has been sentenced, co-defendants Paul Sulla and Rajesh Budhabhatti await their sentencing hearings, and Zamber actively pursues an appeal. It is important to note that the appellate process allows for the review of the conviction, and legal judgments are subject to such judicial recourse.
