Audit Report Alleges Luatua Misappropriated Over $112,000

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The former Executive Director of the Retirement Fund Luatua Filisouaiga Taafua is filing a complaint against the Retirement Fund Board of Directors, alleging that he has been denied due process.

Luatua was fired last week, about six months after he was placed on leave with pay while under investigation for alleged fraud, misappropriation of funds and abuse of his position to benefit himself and people he was associated with.

The chairman of the Board of the Retirement Fund Vaanatiu Toafala Iafeta confirmed yesterday that the Retirement Fund Office and Board was served a copy of Luatua’s filing with the ALJ.

He is represented by Attorney Gwen Tauiliili Langkilde.

According to the Board Chairman, Luatua alleges that the board did not allow him due process when it moved to place him on administrative leave without allowing him an opportunity to give his side against allegations that gave rise to his removal.

His main aim for filing the complaint with ALJ is to clear his name and his record of employment with the Retirement Fund Office.

For nine years, Luatua, who is in his early 40’s headed the Retirement Fund being directly responsible for the more than $120 million pension fund for career service employees of the American Samoa Government.

A fraud examination report by Utah-based Squire & Company dated November 13 provides a mountain of evidence of fraud, misappropriation of funds, abuse of power and a scheme of enrichment by Luatua which went on for several years.

Says the report by Dwayne Asay, a certified public accountant fraud examiner, “over the course of three fiscal years, Luatua Filisouaiga Taafua the executive director in partnership with Chin Moananu, appears to have misappropriated more than $112,000 from the ASG Employees Retirement Fund. In addition, other inappropriate practices relating to travel for board members, employees and others have resulted in a reduction in the Fund’s retirement assets.”

Chin Moananu who’s mentioned is the Accounting Supervisor for the Retirement Fund.

The Squire fraud examiner found discrepancies in the gross salary amounts that the executive director received.

Luatua was paid $85,343 in fiscal year 2013, this went up slightly to $84,746 in Fiscal Year 2014 then in FY2015 it jumped to $114,100.

The report said the approved salary for Luatua, based on documentation and discussions with Deputy Director Caroline Wendt, former Chairman of the Board Fanene Scanlan and current chairman Toafala Iafeta were $65,000, $75,000 and $85,000 for the three fiscal years respectively.

This was an over payment in salary of $69,034.

The report states, “When the examiner asked Wendt about the discrepancy in salary, her response was consistent with the Commissioner of Public Safety’s report in that she said that she did ask Luatua about the extra pay and he told her it was for his paid leave.”

The Squire examiner also lists an unauthorized $35,000 loan by Luatua to himself.

Asay says on November 5, 2012, Luatua made a $35,000 deposit in the administrative account and had Wendt write out a check to him for the same amount.

On November 8, the check was returned by the bank.

This put the Fund short of $35,000.

On September 20, 2013, a payment was received for $5,280, followed by a payment of $25,000 made on November 3, 2014 and a final payment of $4,719 was made on November 14, 2014.

Wendt’ informs the examiner that Luatua’s explanation was that he had applied for a loan with the Navy Federal Credit Union and received a check for $35,000.

However his bank put a hold on the funds for a period of time.

And due to the delay, Luatua deposited the check in the Fund’s administrative account and had Wendt process a check back to him for the same amount so he could have immediate access to the funds.

However the deposit was returned three days late.

KHJ News is seeking an explanation as to whether this incident which happened in 2012 was ever brought to light by the deputy director before the audit report.

Other damming evidence noted in the report is that in fiscal years 2013 and 2014, checks amounting to $128,652 were issued to 11 relatives of Luatua that they were not entitled to.

The biggest amount is to Serafina Filipo, the receptionist and Luatua’s sister in law for $66,064. Second to that is checks issued to Maua Loto in the amount of $35,357.

The report says that according to Chin Moananu, payments made to Filiga Fiaola in the amount of $10,895 were cashed by Fiaola and given back to Moananu.

The audit report says the Commissioner of Public Safety’s report indicated that Moananu would split the money with the Executive Director.

There’s also evidence of checks issued to fictitious vendors, Hardcore Cleaning and Star co, which were approved using the signature rubber stamp of then Board chairman Fanene Scanlan without his knowledge.

Some of the checks were deposited in Luatua’s personal bank account.

There’s also evidence of exorbitant checks for travel and per diem not only for the executive director but board members, members of the Fono and staff, reimbursements for phone bills that the director paid to himself as well as payment in retirement benefits for some of his relatives that were more than what the relatives were entitled to.

The auditor from Squire made several recommendations for the management of the Retirement Fund to consider.

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