HONOLULU, 19 FEBRUARY 2019 (MARIANAS VARIETY) – A high-level FSM government official who was arrested in Honolulu on February 10 on a money laundering charge was ordered by a US judge to stay on Oahu pending his preliminary hearing February 22 in US federal district court in Honolulu.
Master Halbert, the assistant secretary of civil aviation in the Federated States of Micronesia Department of Transportation, Communication and Infrastructure, was arrested on one count of money laundering in relation to a bribery prosecution of Hawaii-based engineering firm owner James “Jim” Lyon. Lyon pled guilty late last month to bribing at least two Micronesian government officials, including Halbert, and one Hawaii state official to gain contracts worth over US$10 million in both locations.
Federal Magistrate Judge Richard Puglisi on Thursday released Halbert on US$25,000 bond at his arraignment over the objections of Katherine Raut, attorney for the Fraud Section of the U.S. Justice Department’s Criminal Division.
Raut argued that Halbert was a flight risk since he is a citizen of the FSM and not a Hawaii resident. Halbert is the son of a former long-time FSM senator from Pohnpei and son-in-law of FSM President Peter Christian.
Halbert’s wife, Annjanette Christian, put up the $25,000 bond and Puglisi ordered that he reside at her parent’s apartment in Honolulu pending the outcome of the case. Halbert was represented at the court hearing by federal public defender Max Mizono. Following the hearing, private Honolulu-based attorney Myles Breiner took over representing Halbert. Breiner’s law firm’s website describes him as “An established name in Honolulu criminal defense.”
A preliminary hearing is scheduled for Feb. 22. A preliminary hearing is used by courts to determine if there is good cause to proceed to trial.
Charges against Lyon Associates Inc. owner Jim Lyon say that he bribed Halbert and at least one other FSM government official to obtain $7.8 million worth of contracts in the FSM between 2006 and 2016. Late last month, Lyon pled guilty to the charge and is cooperating with U.S. Justice Department investigators. He also pled guilty to bribing a Hawaii state official to secure a $2.5 million contract in Hawaii.
“In connection with his plea, Lyon admitted to paying bribes to FSM government officials, including Halbert, to obtain and retain contracts and to obtain contract payments for (Lyon Associates Inc.) from the FSM,” said the nine-page complaint against Halbert filed in sealed form with the U.S. federal court on Jan. 24 and unsealed following Halbert’s arrest.
In response to Halbert’s arrest in Honolulu, the FSM government issued a media release Thursday stating that when the initial bribery charge was filed against Lyon in mid-January, the FSM formally requested the U.S. government provide details of the situation. This past Thursday, the U.S. government informed the FSM that it “has approved the sharing of information related to this case that can be released, given the nature of this ongoing criminal investigation,” said the FSM president’s office in a statement. “The United States, under the Amended Compact of Free Association, is required to inform the FSM when FSM citizens are detained anywhere on U.S. soil.”
The FSM president’s office added: “Despite currently having limited official information related to this case, the national government is nonetheless taking appropriate steps necessary to ascertain the extent of FSM laws that may have been breached or broken.”
The nine-page complaint against Halbert refers to emails between Halbert and Lyon Associates officials regarding money for personal trips and shopping, and about the purchase of a vehicle in Hawaii.
The complaint says that in June 2015, Halbert and Lyon “instructed Co-Conspirator 1 to draft a request for qualification document seeking bids for an FSM project management contract (PMU Contract), including drafting selection criteria to favor Engineering Company (Lyon Associates Inc.) in order to obtain an improper business advantage and win the PMU Contract.” The following month, Lyon was awarded the PMU Contract by the FSM government. The FSM PMU is in charge of managing hundreds of millions of dollars in US-funded infrastructure grants through the Compact of Free Association.
The Justice Department said the month after Lyon won the PMU Contract in 2015, Halbert sent an email to Lyon with the subject line, “2014 Chevy Silverado,” stating, “Please get this truck. It is my cash so when I need to pay back anyone, I can sell it or this will be my ride forever. If you can, lift it 6 and put on black rims.”
Later in 2015, however, relations soured between Halbert and Lyon Associates, according to emails included in the complaint against Halbert.
The complaint provides details of several emails, starting Nov. 15, 2015, when Halbert is said to have sent an email to a Lyon Associates official requesting that the company book and pay for a hotel room for Halbert and members of his family for a trip to Guam. The Lyon official responded that “at this time” the company was approving “only project reimbursable travel requests,” according to the court complaint.
The next day, Halbert emailed three Lyon Associates employees, “This is to inform you that I am closing your office starting tomorrow until further notice.”
The day after that, Halbert sent an email to a Lyon official, stating, “I’m greatly offended and hope this is the last time you will contact me. You have no business talking as you don’t understand and appreciate how Lyon got this job… You’re very disrespectful and insulting. For this, Lyon will never get another job in the FSM. I can make that happen.”
