Former Soka official guilty of embezzlement

Former finance director and chief investment officer Kiyoshi Hatanaka was convicted of embezzling more than $1.7 million from Soka University of America and its former campus near Calabasas.

Hatanaka was convicted of the theft on Oct. 27 and sentenced to 37 months in federal prison, according to Assistant United States Attorney Lawrence Kole.

The 52-year-old Hatanaka is from Aliso Viejo where Soka's Orange County campus is located. He was sentenced in Santa Monica's federal court before United States District Judge James V. Selna.

In addition to his prison term, Hatanaka was ordered to pay back the entire amount that he embezzled, which amounted to $1,756,000. The theft took place over a period of seven years.

Hatanaka reportedly funneled money through bogus Soka bank accounts, which he had created with the intent to steal, Kole said. "It's a pretty significant amount of prison time for someone who has no prior criminal record," Kole said, but as he poined out, "In the federal system there is no parole, so defendants serve their entire term. There is no early release, unlike the state system."

As the top financial official at Soka, Hatanaka had access to Soka's bank accounts and was responsible for managing the school's investments. He had the ability to transfer and withdraw funds from the Soka accounts, as well as accounts that held long term investments, according to a media report.

Hatanaka's embezzlement scheme was hatched in 1999 and continued until early January 2006. He transfered the money from Soka's bank and investment accounts to his personal accounts established at California Bank and Trust.

The embezzlement was discovered when Soka's bank began seeing suspicious activity. Soka officials contacted the Federal Bureau of Investigation, which launched an investigation that found Hatanaka had been embezzling funds from the school for seven years.

Soka University of America operated a campus on a 588-acre property in the heart of the Santa Monica Mountains for decades.

In April, 2005, a consortium of state and local agencies, including the National Parks Service, California State Parks, the Santa Monica Mountains Conservancy, and the Mountains Recreation and Conservation Authority, purchased the property from the Japanese-owned university for $35 million.

Once ownership changed hands, environmental groups reverted to calling the property by its former name, King Gillette Ranch, in honor of the razor baron King C. Gillette, who purchased the property in 1926.

Soka University of America relocated to Aliso Viejo, Calif. where they built a state-of-the-art billion-dollar 103-acre campus for an incoming class of 120 students.

Not long after it opened, the school was sued by professor Linda Southwell, alleging that the school had fraudulently portrayed itself as a nonsectarian, equal-opportunity employer. After negative publicity and student protests on campus, Soka paid Southwell a settlement said to be around $4 million.