Decades before Rick Blangiardi began his run for Honolulu mayor, he took part in financial schemes in Hawaii and Kansas that led him to file for bankruptcy and landed the scam’s ringleaders behind bars. 

The former television executive’s involvement got the attention of the Federal Deposit Insurance Corp., or FDIC, which sued him and others in 1985. The case was reported by local media at the time but hasn’t been reexamined since he announced his candidacy for public office.  

Blangiardi says he was an unwitting pawn in a scam and that his testimony helped put those who orchestrated it in jail. 

“It was a very scary time in my life,” he said in a recent interview with Civil Beat. “We were the victims here, not the perpetrators.” 

Honolulu Mayoral Candidate Rick Blangiardi.
First-time mayoral candidate Rick Blangiardi said he rarely talks about this period of his life. Cory Lum/Civil Beat/2020

But Blangiardi’s involvement in two financial deals – detailed in court records and news clippings – raises serious questions about the candidate’s judgment. At the time he was a licensed real estate broker in his 30s.

In a 1985 affidavit, Blangiardi admitted to receiving $1,500 in exchange for buying and mortgaging a condo on behalf of real estate broker Sam Daily. Blangiardi’s lawyer said in a court filing that his client was acting as a “strawman.” 

Blangiardi, a sales manager for KGMB at the time, told his mortgage lender that Daily also promised to buy more ads from KGMB and would let Blangiardi in on a future real estate deal, the lender said in court filings.  

That same year, the FDIC accused Blangiardi and others of fraudulently obtaining loans from Indian Springs State Bank in Kansas. The suit echoes the other case: It alleged that Blangiardi was one of several individuals who received $1,500 to act as straw borrowers for people who wouldn’t have been able to secure loans on their own. 

Ultimately, those loans were not repaid and Indian Springs was declared insolvent, leading it to shut down. The FDIC’s lawsuit demanded that Blangiardi pay back $100,000 plus interest and penalties, according to news reports.

Attorney Michael Manning sued Blangiardi and others on behalf of the FDIC in the 1980s. Screenshot:

Blangiardi was also a limited partner in two companies, Haiku Partners and Haiku Holdings, which were run by leaders of the ploy, a 1982 record filed with Hawaii Bureau of Conveyances shows. 

According to federal bankruptcy records of one of the perpetrators, those companies were part of a “tax shelter plan.”

The evidence undercuts Blangiardi’s claim that he was a blameless victim, said Mike Manning, a well-known Arizona attorney who discovered the fraud and represented the FDIC against Blangiardi and others involved. 

“It was a sophisticated scheme that had a lot of soldiers, a lot of captains and a few generals,” Manning told Civil Beat this week. “Blangiardi was one of eight to 12 (people) in Honolulu who made knowingly false statements under oath to a federally insured financial institution. So, that’s hardly an innocent dupe.” 

Plan Relied On Straw Borrowers

Many of the records about Blangiardi’s involvement in the real estate deal are not available for public review. Some of the files have been destroyed because of their age, and some records that still exist are in public records storage rooms that are closed because of COVID-19. 

According to Manning, Blangiardi was a minor player. Manning said the mastermind of the scheme was Mario Renda, a mob-connected real estate broker who eventually went to prison for defrauding 153 financial institutions.

Blangiardi found himself involved in a scheme that was later detailed in a New York Times bestselling book. 

The scheme was detailed in “Inside Job: The Looting of America’s Savings and Loans,” a book written by three journalists. 

According to the book, Renda joined forces in the early 1980s with Franklin Winkler, “an international wheeler-dealer” and con man.

“Franklin Winkler had been losing money on real estate investments in Hawaii, and he agreed to cooperate with Renda in a scheme that would benefit them both,” the book says. 

Renda would broker deposits into certain banks if those institutions agreed to make loans to Hawaii real estate partnerships fronting for Winkler and Renda, according to the book. The so-called “linked financing” arrangement was illegal because it was designed to circumvent the limit on loans one borrower could receive, the book says. 

The plan required ringleaders to recruit people to apply for loans and turn over their borrowed money to the scammers. In exchange, the so-called straw borrowers would receive a fee of 2.5% to 6% of the loan amount. Winkler told the straw borrowers not to worry about paying back their loans, according to the book.

“By sending in many straw borrowers, Winkler and Renda disguised the fact that all the loan money was really going to them,” the book says. “And when the loans went into default, the straw borrowers’ names – not Winkler’s or Renda’s – would be on the foreclosure papers and lawsuits.” 

Later on, Sam Daily, a retired Air Force colonel and Honolulu realtor, joined the scheme. Winkler, Daily and Renda began shopping for straw borrowers in June 1982, the authors reported.

While the book doesn’t mention Blangiardi by name, the FDIC made clear it believed Blangiardi was one of those straw borrowers, according to news coverage of the lawsuit.  A story made the front page of the Honolulu Star-Bulletin in August 1985. 

The news of the FDIC’s lawsuit against Sam Daily, Rick Blangiardi and others broke in the Honolulu Star-Bulletin on Aug. 17, 1985.

“The Federal Deposit Insurance Corp. has filed federal suits against former realtor Sam Daily, television executive Richard J. Blangiardi and three other isle men who allegedly participated in a scheme to get loans from a bank that was later declared insolvent and closed in 1983,” the Honolulu Star-Bulletin reported in 1985. 

Manning believes he settled that case against Blangiardi. He would’ve remembered a trial, he said. A list of the debts wiped clean by Blangiardi’s bankruptcy includes $100,000 he was ordered to pay the FDIC on behalf of Indian Springs plus another $160,000, according to court records.

Civil Beat was unable to obtain the FDIC lawsuit case file, which is located in a closed National Archives location in Kansas City, according to the U.S. District Court in Kansas.

A jury found Daily and associate Frederick Figge guilty of conspiracy to defraud two Kansas financial institutions, and they went to prison. Their convictions were later overturned. Winkler pleaded guilty to conspiracy to commit bank fraud and was sentenced to five years in prison. 

One of Blangiardi’s colleagues at KHNL as well as another Honolulu man each pleaded guilty to one count of submitting a false loan application. The Kansas U.S. Attorney’s office said it has no record of criminal charges against Blangiardi. 

Manning said many people involved were never charged because the government wanted to pursue the bigger fish. 

Blangiardi said he was not prosecuted because he was innocent. 

“They conned us into this deal,” Blangiardi said. “That’s why they went to jail, and I didn’t.”

Blangiardi and two other men who said they were victimized filed suit in 1984 against two Kansas financial institutions and the perpetrators of the scam. Screenshot

In April 1984, Blangiardi and two of his television colleagues sued Indian Springs State Bank, another Kansas financial institution, and Winkler, Daily and Figge, according to a report in a Kansas newspaper.

The plaintiffs alleged they were victims of fraud. What came of that case is unclear. Civil Beat was unable to locate subsequent news coverage of that lawsuit, and the case file – if it still exists – is located in a closed National Archives facility. 

‘Unclean Hands’

The Indian Springs State Bank loan wasn’t the only one Blangiardi secured in his dealings with Daily and his associates. 

In January 1982, Blangiardi applied for a $45,000 mortgage loan from GECC Financial Corp. for a two-bedroom unit at the Mokuleia Surf condominium on the North Shore.

In an affidavit, Blangardi said he was approached by Daily in early 1982 to “help him convey” the unit, which was then owned by Figge. He said he gave Daily three sets of documents: a completed and signed GECC loan application, his financial statement, and a signed – but blank – property sale agreement.

Blangiardi then signed and had notarized a GECC loan agreement in June 1982.


“Under the arrangement I made with Mr. Daily, I received $1,500 in return for what Mr. Daily referred to as ‘pulling mortgages,’” Blangiardi said in the affidavit. “Mr. Daily told me that this type of transaction was commonplace among developers, and that the property would be immediately reconveyed under a wrap-around agreement leaving me with no further involvement.” 

Blangiardi transferred the property’s deed to Figge’s company FAF Mokuleia Associates in April 1983, records show. But Blangiardi was still on the hook for the mortgage. 

Time passed, and Blangiardi never made a payment on the mortgage or property taxes. By December 1983, GECC sued Blangiardi to collect the debt. Court records show Blangiardi failed to respond to the suit, and the property went into foreclosure. GECC bought the unit at auction, but after that sale, Blangiardi still owed GECC more than $25,000, according to the foreclosure file. A deficiency judgment was filed in November 1984. 

Blangiardi didn’t pay that either. 

In June 1985, GECC moved to have Blangiardi’s wages garnished from KHNL where he was making $150,000 a year at the time, court records show. 

At that point, lawyers for Blangiardi stepped in to fight the $25,000 judgment

“I obviously would not have agreed to convey the property but remain liable on the promissory note if I had known that this was what I was doing,” he said in the affidavit. 

Blangiardi said he didn’t contest the foreclosure because a GECC representative told him it would be a “friendly foreclosure” in which the value of the property sale would cover what he owed. GECC denied this. 

Once the judgment was filed, Blangiardi said he visited GECC’s office and inspected his file, only to find that his documents had been “altered,” allegedly by either Daily or GECC.

Blangiardi contended that GECC knew all along that he was “a mere straw buyer” and that he shouldn’t have to pay the judgment. 

GECC’s lawyers, Lissa Andrews and David Ezra, who is now a federal judge, denied the institution had that knowledge. 

In a court filing, the attorneys said Blangiardi cannot “expect relief from allegations of fraud where he, by his own admission, engaged in fraud.”  

“Blangiardi cannot assert fraud, illegality or other misrepresentation on the part of GECC when Blangiardi himself has unclean hands,” the lawyers argued. 

Circuit Court Judge Edwin Honda ruled against Blangiardi.

Andrews declined to comment about the case this week. 

‘We Got Bamboozled’  

In an interview with Civil Beat, Blangiardi said he knew Daily because he was a frequent advertiser at KGMB. He said Daily approached him and two of his TV colleagues “to get us to be investors.” He said he doesn’t remember the initial pitch. 

“They tried to entice a bunch of us to go along with their scam,” he said. “They told us this is a legitimate deal, these are established real estate guys.” 

Honolulu Mayoral Candidate Rick Blangiardi.
Blangiardi said he thought he was just entering into a real estate investment. Cory Lum/Civil Beat/2020

Bill Riddle, who was a sales manager at KGMB in the 1980s, was among those who joined in. The FDIC would later sue him alongside Blangiardi. He said he did nothing wrong and that the scammers forged his signature on financial documents. 

Still, he feared he would go to jail. He said he and Blangiardi both testified against Daily. 

Blangiardi was “about as completely innocent as anyone could possibly be,” Riddle told Civil Beat recently. 

“Rick was a total gentleman, is as honest as the day is long, and we weren’t trying to do anything illegal,” said Riddle, who added he is no longer in touch with Blangiardi. “We got bamboozled and scammed.” 

Asked about the GECC Financial Corp. case, Blangiardi said he couldn’t remember foreclosing on a piece of property. He said he “never received any money.”

Blangiardi said when he found out the deals were not kosher, he was “very angry,” and he regrets his involvement. 

In the end, Blangiardi said he took a hit financially, but he bounced back.

He was vice president and general manager of KHNL until 1989 when he moved to Washington to lead a TV station in Seattle. He later held senior roles at stations in New York, San Francisco, Saint Louis and Los Angeles before returning to Honolulu in 2002. 

Most recently, Blangiardi was the general manager of Hawaii News Now. He resigned in January to run for mayor. 

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