A Hilo attorney convicted in a federal affordable-housing fraud case is now behind bars, after a judge yanked his bond and ordered him held without bail. Paul J. Sulla Jr., 79, who was found guilty earlier this year in a Honolulu federal trial, was transported to the federal detention center in Honolulu and will stay there while his case inches toward sentencing and potential appeals.
Magistrate found probable cause to revoke bond
U.S. District Chief Magistrate Judge Kenneth Mansfield found there was probable cause that Sulla violated the terms of his release, including allegations that he continued practicing law while out on bond. Mansfield ordered Sulla detained without bail, and U.S. Marshals immediately took him into custody, according to the Honolulu Star-Advertiser.
What he was convicted of
A federal jury on June 4 convicted Sulla of conspiracy to commit honest-services wire fraud, nine counts of honest-services wire fraud, and a money-laundering count. Prosecutors say the scheme involved bribes and kickbacks tied to Hawaii County affordable-housing agreements that generated about $11 million in land and housing credits, according to a press release from the U.S. Attorney’s Office.
Prosecutors say he misled a client and failed tests while on release
In a motion to detain, Assistant U.S. Attorneys Mohammad Khatib and Margaret Nammar allege that while out on bond, Sulla took $2,700 from a California woman who hired him as a probate attorney, then provided photocopies instead of original property deeds and refused to return the retainer. They argue that this conduct violated his release conditions.
The same filing says Sulla failed court-ordered drug tests, testing positive for THC and CBD, and that those issues factored into the magistrate’s decision to revoke bond. The details are laid out in court documents described by Hawaii Free Press and echoed in other local coverage.
Defense denies wrongdoing and filings are pending
Sulla’s attorneys fired back in an opposition brief, disputing the government’s version of events. They say Sulla reimbursed the client and remains willing to return any remaining funds, according to the filings. In the broader case, Sulla, his co-defendant attorneys, and a businessman have also filed motions asking for a new trial or for the convictions to be tossed, setting the stage for a legal tug-of-war in front of U.S. District Judge Jill Otake.
Next steps and timing
The court has laid out a schedule for motions and sentencing, with Sulla’s sentencing currently set for late January and hearings for his co-defendants to follow, according to local court reporting. Until then, Sulla stays in federal custody in Honolulu while prosecutors and defense lawyers battle over motions that could shape when, and how, the case heads into any appeal or final punishment.
