SAIPAN — A mother and daughter were sentenced in federal court Tuesday for their roles in a procurement fraud and money laundering scheme that targeted the CNMI Public School System, the U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands announced.
Clarissa Adlawan, 55, was sentenced by U.S. District Court Judge Ramona V. Manglona to 48 months in prison for one count of conspiracy to commit an offense against the United States and one count of money laundering conspiracy, the office said. Adlawan is a lawful permanent resident originally from the Philippines.
Giselle Butalid, 34, was sentenced to 18 months in prison on the same two counts. Butalid is a naturalized U.S. citizen originally from the Philippines and a resident of Saipan.
Both defendants were ordered to serve three years of supervised release and complete 100 hours of community service, the office said.
The court ordered the defendants jointly and severally liable for $548,788 in restitution and ordered two properties they owned in the Philippines subject to forfeiture.
Butalid worked for PSS and had access to its procurement process, the office said. Adlawan and Butalid used their company, One Legacy LLC, to sell educational material to PSS while concealing the conflict of interest, according to court documents.
From October 2021 through August 2022, Butalid forged documents to conceal that several of the procurements were “ghost” purchases for materials PSS never ordered, investigators determined. The defendants pocketed the payments.
After receiving funds, the defendants frequently traveled to the Philippines, stayed in luxury hotels, withdrew large amounts of cash and built a nine-room house, according to court documents.
Examples cited in court documents include payments of $50,000 and $52,500 to One Legacy for online learning materials that were never procured, followed shortly by a trip to the Philippines and approximately $10,000 in cash withdrawals from ATMs.
A separate $113,020 payment for another fraudulent purchase was followed by cash withdrawals totaling roughly $65,000 before another overseas trip. That final payment came shortly after PSS confronted Butalid about her connection to the companies, prosecutors said. Butalid resigned but remained long enough to commit one last act of fraud.
Prosecutors commended the defendants’ early acceptance of responsibility and expressions of remorse, the office said. However, prosecutors argued that Adlawan failed to provide information about the nine-room house she had built in the Philippines using stolen PSS money. Adlawan’s plea agreement required her to provide information and help the government acquire the property so it could be liquidated and the proceeds applied toward restitution. The court agreed and denied Adlawan the benefit of accepting responsibility.
“The defendants’ conduct went beyond defrauding government agencies,” U.S. Attorney Shawn N. Anderson said. “Ultimately, children were deprived of educational resources and opportunities to learn. Any sense of justice required terms of imprisonment. We will continue to seek accountability through the repatriation of any foreign assets held by these defendants.”
Carrie Nordyke, Special Agent in Charge of IRS Criminal Investigation’s Seattle Field Office, said funds that would have benefited children instead financed the defendants’ “dream house.”
David A. House, Special Agent in Charge for the Department of Interior Inspector General Program Fraud Unit, credited the partnership between federal agencies and the CNMI Office of the Public Auditor.
David Porter, FBI Honolulu Special Agent in Charge, called the defendants’ actions “a profound betrayal of the students, teachers, and community who relied on them for honest public service.”
The CNMI Office of the Public Auditor said the case demonstrated what can be accomplished through coordinated oversight and teamwork.
The investigation was conducted by IRS Criminal Investigation, the Office of the Inspector General at the Department of the Interior, the FBI and the CNMI Office of the Public Auditor. The case was prosecuted by Assistant U.S. Attorney Eric S. O’Malley for the District of the Northern Mariana Islands.
