Former Hilo Man Sentenced to 87 Months in Prison

A former Hilo man who pleaded guilty to defrauding people out of $1.2 million has been sentenced to more than seven years in federal prison.

Justin Wade Smith, 32, was arrested last August on 39 counts of wire fraud in connection with a scheme in which he fraudulently collected “advance fees” from people while promising to repay them back with substantial interest.

Prosecutors said Smith falsely claimed that he would repay them with money he would inherit from a large family trust and that he was a contractor for a law enforcement agency and could generate large fees through drug seizures.

The scheme netted him more than $1.2 million from 2006 through 2012 in Hawaii and elsewhere. In court, Smith admitted he used the proceeds from the scam to support his lifestyle.

Smith pleaded guilty in federal court in December to two counts of wire fraud and to failing to file a tax return in 2012, during which he received approximately $234,000 from the scheme. He also admitted failing to report total income of $1.02 million between 2007-2012 with a resulting tax liability of more than $185,000.

US District Judge J. Michael Seabright sentenced Smith Monday to 87 months on the wire fraud and 12 months for failing to file a tax return, with the terms to run concurrently.

Seabright also ordered Smith to pay restitution of more than $1.2 million to the 33 victims of his scheme and to pay the back taxes.

Smith has been in custody since his arrest on Aug. 22, 2013.