Insurer's creditors
unlikely to get
anything

Unpaid bills of $18 million
are unlikely to be recovered from
PGMA's business manager

By Ian Lind
Star-Bulletin

Creditors of Pacific Group Medical Association, the nonprofit health insurer seized by the state last year, appear unlikely to recover any losses from the man who controlled the association's business.

PGMA left an estimated $18 million in unpaid bills, according to recent accountings filed in court by Insurance Commissioner Rey Graulty, court-appointed liquidator. Graulty and his special administrative assistant, Thomas E. Hayes, are trying to locate assets that can be sold to pay off PGMA's debts.

Although PGMA was a nonprofit mutual benefit society, state records show it conducted virtually all of its business through a network of for-profit firms controlled by Peter P. Wong.

But Wong, who has moved to California, is facing millions of dollars in federal tax liens as well as foreclosure actions against several homes he owned in Hawaii.

Wong could not be reached for comment and has not responded to telephone messages left with employees in his California office.

The IRS filed tax liens for $3,999,136.98 against Wong and his wife, Susan, just days after the state took over PGMA in March 1997, records show.

According to documents at the Bureau of Conveyances, the IRS said Peter Wong owed personal income taxes of $1,099,127.44 for 1994 and $1,904,517.65 for 1995.

An earlier lien claimed an unpaid balance of $37,243.94 dating to 1993.

Two mainland lenders have also gone to court to foreclose on homes owned directly or indirectly by Wong, court records show.

Countrywide Home Loans Inc. alleges that Wong's mother, Ling Fong Wong, defaulted on a $1.2 million mortgage loan used to purchase a $1.7 million Hawaii Loa Ridge home in 1994.

Peter Wong signed the mortgage documents as "attorney in fact" for his mother, according to records of the transaction disclosed in court, and the IRS liens allege she was acting as a nominee or agent for her son.

The home later served as the primary residence of Peter Wong and his family.

Court records show Wong also defaulted on another $817,500 loan used to purchase a $1 million Honolulu home in mid-1996.

Wong and his wife, along with George and Brenda Mingo, initially held a 95 percent interest in the house, with the remaining interest owned by PGMA Inc.

PGMA Inc. is a for-profit company owned by Wong that was legally separate from Pacific Group Medical Association, the nonprofit insurer that also used the "PGMA" name.

A refinancing months later gave Peter and Susan Wong a 90 percent share and left the Mingos with 10 percent, real estate records show.

Brenda Mingo is Susan Wong's sister, according to Dave Puder, one of the partners who sold the property to Wong. The Mingos moved here from California to work for Wong and intended to live in the home, Puder said.

"Wong was buying properties right and left and was very proud of making the deals," Puder said.

Wong, a licensed real estate broker, represented himself or his companies in some of these deals and received commissions on the transactions, court records show.

PGMA also purchased three condominium units owned by officers or employees of Wong's companies in separate deals during 1996, two of which remained unrecorded. These transactions were canceled by the PGMA board of directors in a special meeting March 20, 1997, two days after the state took over Pacific Group Medical Association.