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The latest round of litigation in a sordid story of alleged fraud, sex and suicide involving perhaps the largest charitable trust in the United States has come to Delaware. A California businessman suing Hawaii’s Bishop Estate says trustees of the scandal-ridden trust fund ruined his business by promising startup investments, then funneling the money back to themselves and others as kickbacks. In a lawsuit filed in Delaware Superior Court, Dean S. Jensen says he lost $100,000 of his investment plus $20 million in potential profit when Bishop Estate trustees withdrew their support for his company. The lawsuit says trustees agreed to invest $1.5 million in KDP Technologies of Irvine, Calif., a Delaware limited liability company, trying to develop innovative software programs that allow casting directors and producers to obtain clips and photos of actors and models over the Internet. But trustees forced KDP to pay high salaries, consulting fees and other perks to themselves, relatives and friends, according to the lawsuit. All trustees named in Jensen’s suit resigned or were removed from office in 1999 after the Internal Revenue Service threatened to withdraw the estate’s charitable status. “The trustees laundered trust funds through their control of legitimate business enterprises and paid those funds out to themselves, their relatives and their other accomplices in the form of exorbitant salaries, kickbacks and like payments,” Jensen claims in the lawsuit. “The instant action involves on such fraudulent ‘investment.’” “The incredible part about this case is that these trustees’ salaries were about $1 million a year,” said George Seitz, Jensen’s lawyer, “and that still wasn’t enough money for them.” KDP collapsed, and Jensen resigned from the company last October, the lawsuit says. Founded by a Hawaiian princess for education of children, the Bishop Estate reportedly owns 8 percent of the land in Hawaii, 4.7 percent of Goldman Sachs Group Inc. worth $1.5 billion, and an investment empire stretching from Wall Street to Beijing. “The trustees manage a profit earning corpus valued at more than $6 billion,” according to the lawsuit. The estate has been under state and federal investigation since 1997 over charges of financial mismanagement. Jensen filed the civil suit against the estate, five former trustees and two associates of the ex-trustees. Jensen wants a jury trial and seeks damages, including punitive, which will be determined at the time of trial. Jensen levies civil counts that include fraud, conspiracy to commit fraud and breach of fiduciary duty against some or all of the defendants. Perhaps the low point in the estate’s history came in March 1999 when one of the defendants, Gerard Jervis, was found by security guards having sex in the men’s restroom of a hotel with Rene Kitaoka, one of the estate’s lawyers and a married woman. The next day Kitaoka killed herself. About a week later, Jervis overdosed on sleeping pills, but survived, according to the London Times. Seitz and Patricia P. McGonigle of Seitz Van Ogtrop & Green in Wilmington, Del., and Ronald Rus and Randall S. Smith of Rus Miliband & Smith in Irvine, Calif., represent Jensen. The case is Dean S. Jensen v. Kamehameha Schools Bernice Pauahi Bishop Estate, et al., CA No. 00C-08-065.

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