O.C. Businessman Sues Hawaii Trust Over Investment

An Orange County businessman says his fledgling technology firm was driven out of business by the trustees of Hawaii’s scandal-plagued Bishop Estate, which promised to provide his company with start-up financing but then used it to funnel kickbacks to themselves, their friends and relatives, a lawsuit filed Wednesday alleges.

Dean S. Jensen, a veteran corporate finance specialist, claims he lost $100,000 of his investment and more than $20 million in potential profits when the Bishop Estate trustees abruptly withdrew their support last year for KDP Technologies. The Irvine-based company was attempting to develop a computer video technology that would allow casting directors and producers to review photos and clips of actors and models via the Internet. In a lawsuit filed in Orange County Superior Court, Jensen, 38, a former managing director at Costa Mesa-based Geneva Cos., said the trustees promised to invest $1.5 million in the venture. But instead of using the money to develop and market the video technology, Jensen claims trustees forced KDP to funnel exorbitant salaries, consulting fees and other perks to themselves, their friends and relatives.

In one instance, KDP was required to award a $500,000 consulting contract to Randy Stone, former head of casting for Twentieth Century Fox Studios and the brother-in-law of one of the Bishop Estate trustees, Richard “Dickie” Wong, the suit claims. Another time, the company had to pay for a lavish junket for Wong, fellow trustee Marion Mae Lokelani Lindsey and their friends to the January 1997 Super Bowl in New Orleans.

“‘It didn’t matter to the trustees whether the company succeeded or not,” said Ron Rus, attorney at Rus, Miliband & Smith, who is representing Jensen. “It was just another opportunity to have money siphoned back to them.”

Representatives for the Bishop Estate, one of the world’s richest charitable trusts, did not return phone calls Wednesday.

A spokeswoman for Twentieth Century Fox said Stone no longer works for the company, but declined to comment further.

The Bishop Estate, founded under the will of a Hawaiian princess to ensure the future education of the island’s children, has been the target of state and federal investigations since 1997, when allegations surfaced about self-dealing and financial mismanagement by the prominent trustees that ran the trust. The $10 billion trust owns 337,000 acres of Hawaii land and a stake in investment banker Goldman Sachs & Co.

Wong was indicted in April over allegations that he and his family engaged in a real estate kickback scheme. A month later, Lindsey was ousted, in part over her role in the KDP deal. Other trustees also were removed.

In his suit, Jensen claims he quit his job as head of the capital markets division at Geneva Cos. in 1996 to work full-time for KDP and its video technology, called STAR*BOOK. He eventually invested $100,000 in the company and received no salary for two years, Rus said.

In November 1996, one of Jensen’s partners, Benjamin Franklin Bush III, suggested that the company raise capital from the Bishop Estate, according to the suit. Bush had previously worked with one of the trustees, Lindsey, in a failed gold bullion investment program.

Bishop Estate eventually invested about $1.3 million in KDP, according to court papers filed in Hawaii.

But by early 1998, the company began to unravel. In January, Bush was indicted on federal charges--unrelated to KDP--of money-laundering and wire fraud, and later pleaded guilty and went to prison, according to the suit.

Meanwhile, the growing controversy over the Bishop Estate’s financial mismanagement caused trustees to withdraw their financial support for KDP.

“‘KDP collapsed and Jensen was left holding the bag,” the suit claims.

Jensen claims his 25% stake in KDP would have been valued at more than $20 million had the company not lost its funding. He resigned from KDP in October 1998.