Bad Company: The final days of Baron Dorcy, Maui Millionaire

Dorcy meets with Petro Hoy at Maui's Sandalwood Cafe, the scene captured in a frame from a secretly recorded video.

On a sunny Thursday in Tahiti last September, friends of the late Laurence H. Dorcy boarded a Polynesian-themed catamaran named the Leaky Tiki and motored onto Cook’s Bay to scatter Dorcy’s cremated remains on the water. A Tahitian priest and a Hawaiian kahuna said some words. Flowered headbands and lei were tossed into the sea atop the ashes. Toasts were made and a bottle of Hinano beer was poured overboard in honor of the man his friends affectionately called “Baron.” ¶ Baron Dorcy declared in his will that he wanted his ashes spread in Tahiti, and he wanted his old friend Carl Geringer, whom he called “Gilligan,” to handle the arrangements. “This truly was what he wished,” says Geringer. ¶ Yet fulfilling Dorcy’s final wishes was far from simple.

Baron Dorcy, a collector of classic cars, at the wheel of his 1941 Skylark.

When he died at Straub Clinic & Hospital in June 2011, at the age of 76, he left behind an estate estimated at $70 million. Exactly who he intended to leave it to was the question at the heart of a trust-inheritance dispute that involved two conflicting wills, a rewritten trust, and allegations of undue influence, elder abuse and fraud.

On one side were beneficiaries of Dorcy’s original will, which included 32 charitable causes and a couple of dozen friends and relatives. On the other side was Hans Michael Kanuha, a former medical billing clerk, who, in a simple form will created four months before Dorcy’s death, stood to inherit virtually everything.

Kanuha maintained that Dorcy, who had no children, loved him the way a father loves a son. Beneficiaries of the first will alleged that Kanuha and an associate, Petro Hoy, were scam artists who brazenly attempted to seize Dorcy’s fortune. Their alleged scheme involved a handful of co-conspirators and an elaborate charade in which Hoy is accused of impersonating well-known Maui rancher and retired Bank of Hawaii executive Henry Rice.

The case had plenty of odd twists, including Kanuha’s briefly successful bid to become Dorcy’s adopted son while Dorcy lay in a coma. Ultimately, it was settled out of court, hours after a judge ruled that, for Kanuha to prevail, he would have to prove he did not exert undue influence over Dorcy. A criminal investigation by the Maui County prosecutor into the circumstances surrounding Dorcy’s death and into questions of theft and fraud is currently underway.

From a review of the voluminous court record, and through additional reporting, a picture has emerged of Dorcy as a good-hearted but guileless man whose physical and mental health were in decline as he grew increasingly entangled in the alleged plot to swindle him. What follows is an overview of the case and a glimpse into the life of the offbeat millionaire at the center of it.

Dorcy and Petro Hoy visit the Hawaiian Chieftan in San Francisco.

The Ultimate Trustifarian  

Dorcy was born in San Francisco in 1935, the great-grandson of James Jerome Hill, the Gilded Era railroad tycoon who built the Great Northern Railway, and one of the richest men of his day. Early on, Dorcy developed a passion for great mechanical contraptions and conveyances, and throughout his life he immersed himself in one grand technical challenge after another, from rebuilding classic cars to salvaging an enormous steam engine from a sugar mill and restoring it to pristine condition.

For much of his life, Dorcy spent part of the year in the Bay Area and part in Honolulu. Besides serving in the Strategic Air Command as a young man, he never had a job. He lived largely off the proceeds of a 1917 trust his grandfather had established, which provided Dorcy with a few million dollars a year. After his mother died in 1997, and he inherited a larger share of the trust, he began building a lavish home on 25 acres in Kula, Maui, a project that took eight years to complete.

It was around 2002, while visiting Maui to check on construction, that Dorcy met Hans Kanuha, who was working at an old country service station, just down the road from Dorcy’s property.

The Poor Little Orphan and the International Metaphysician

When Dorcy spent the first night at his Kula estate in 2007, he threw a combination house-warming and Christmas party, and invited Kanuha to attend. According to testimony by Dorcy’s personal assistant, Nancy Paulic, Kanuha told a tear-filled story that night of his upbringing as an orphan raised by an abusive family.

Hans Kahuna at Dorcy's 2007 Christmas party.

Kanuha was not really an orphan, as he admitted in his own deposition. But Dorcy was convinced, multiple witnesses testified, that he was. And Dorcy was impressed with his gumption. He told one friend that Kanuha held a degree from Cornell University (he did not), then said, “not bad for an orphan.”

Dorcy had a soft spot in his heart for the disadvantaged, especially orphans, and on Christmas day—the day after the party—when Kanuha announced he suddenly had the opportunity to purchase on old Kula general store, the Morihara Store, Dorcy agreed to put up $800,000 to help. The deal obligated Kanuha to a $10,000-a-month mortgage. Kanuha made a few payments, then attempted to erase the debt through participation in Ko Hawaii Pae Aina, a fraudulent mortgage immunization scheme, wrapped up in Hawaiian sovereignty theory. Kanuha would later describe himself as a “stupid victim” of the scam, which had bilked numerous Native Hawaiians before a federal criminal investigation brought it down. Two of the key figures in the organization were Petro Hoy and his wife, Leatrice Lehua Hoy. She acted as secretary, and he purported to be a “special ambassador to the United Nations,” giving lectures on international law and sovereign immunity to prospective victims. Previously, Hoy had managed a Polynesian dance show in Europe, and promoted himself as a motivational speaker. He also claimed to be a psychiatrist and, in a decades-old film that surfaced on YouTube, in which he is seen walking on hot coals and puncturing his face and throat with skewers, he’s identified as an “international metaphysician, psychic and philosopher.”

The Inner and Outer Circles

If the $800,000 loan fiasco should have been a red flag for Dorcy, it wasn’t. Dorcy had a sharp wit, read avidly and had what friends called an encyclopedic memory, at least for things that interested him, such as military history and early U.S. railways. Yet he had little aptitude for business and could be strikingly inattentive to his personal finances. For much of his life, before Paulic came onboard in the mid-1990s and imposed financial discipline, Dorcy depended on quarterly distributions from the 1917 trust to cover even his most basic living expenses. Sometimes, between distributions, he found himself broke.

In the summer of 2008, around the same time Kanuha was attempting to rid himself of his debt to Dorcy, Dorcy was ridding himself of Nancy Paulic. The two had a difficult relationship. She was acerbic and domineering, while he would go out of his way to avoid confrontations. She oversaw construction of his Kula estate, and routinely overrode Dorcy’s design preferences in favor of her own. He would complain to everyone around him, but not to her. Dorcy “had still not gone beyond being a little boy,” she testified. “He did not like change. He did not like being alone. He wanted to have father figures telling him what to do.”

Dorcy and friends at the helm of the Hawaiian Chieftan.

In addition to handling his business affairs, Paulic also managed his social life. Dorcy had, in effect, two circles of friends. The broad, outer circle had to pass through Paulic to reach him. The small, inner circle had direct access. The inner circle included Dorcy’s beloved Tahitian groundskeeper and housekeeper, Tiri and Elsa Hoffsten, the son and daughter-in-law of a friend from his carefree beachbum days on Moorea in the early 1960s. It included Gilligan, who had been a confidant since the 1980s, when he helped Dorcy build and sail a 103-foot replica of a late 18th century merchant ship, the Hawaiian Chieftain. It also included Johnny Baldwin, scion of Maui’s venerable Baldwin family, and one of Dorcy’s neighbors.

With a handful of exceptions, such as Baldwin, both circles were filled with blue-collar types, friends with whom Dorcy might share his appreciation for classic cars or, perhaps, the curative powers of cannabis. But Dorcy had a longstanding desire to associate with others from socioeconomic strata similar to his own. When Baldwin died in 2009, a huge void opened in this department.

Dorcy had an idea for creating a foundation that would, after his death, manage a koa forest planted on his Kula property for the benefit of future generations. He knew of Henry Rice—descendant of one of Maui’s original missionary families and owner of the 10,000-acre Kaonoulu Ranch—and wanted Rice on his foundation’s board. As it turned out, Kanuha allegedly claimed to have a close relationship with Rice, and he was willing to serve as a liaison between the two men.

Henry Rice—the real Henry Rice—testified that, while he knew of both Kanuha and Dorcy, he never spoke to either of them. Nonetheless, starting in December 2010, Dorcy was on the phone regularly with someone he believed was Henry Rice—someone beneficiaries of the first will say was actually Petro Hoy—and the two men were hitting it off.

This “Henry Rice” was worldly, urbane and had a magnificent accent, which Dorcy thought sounded like Sean Connery’s. Although “Henry Rice” was from an old kamaaina family, he had hardly spent any time in Hawai‘i, and, like Dorcy, he knew few people on Maui. He needed a companion to shoot pool with, just as Dorcy needed someone with a well-developed vocabulary to challenge at Scrabble. Back in California, Dorcy allowed the caretaker of his Los Altos home, Raymond Castro, to listen to the speakerphone during some of his early conversations with “Henry Rice.”

Near the end of his life, Dorcy became preoccupied with planting koa trees.

“He would refer to Dorcy as his ‘brother,’ and they would talk about meeting and getting together for lunch and that sort of thing,” Castro testified. Whenever a meeting was scheduled, though, something would come up and “Rice” would cancel at the last minute.

Closed Gate. Open Letter

Meanwhile, Nancy Paulic had left, with a sizable severance package, and Dorcy recruited an old friend from California, Ann Pettigrew, as his assistant. Pettigrew and Dorcy had known each other since they were schoolmates in the 1940s. She was part of the crowd of young Californians in Waikiki with whom Dorcy ran in the 1950s. She helped to care for Dorcy’s mother when, in his mother’s later years, she needed a companion to shop with and, generally, keep her entertained. But Pettigrew lacked Paulic’s clout. She could not hold back the outer circle as Paulic could. Although Pettigrew quickly concluded that Hans Kanuha shouldn’t be hanging around, there was little she could do about it.

Kanuha knew how Pettigrew felt, and he knew she wasn’t alone. Foremost among Dorcy’s other friends with misgivings about Hanzi, as Dorcy called him, was Gilligan. This tension boiled over in an incident at the gate to Dorcy’s Kula estate on Father’s Day, 2010. Or so Dorcy was led to believe.

Johnny Baldwin had an annual tradition of hosting a Father’s Day car show at his home. In 2010, with Baldwin gone, Dorcy held the event on his own sprawling lawn. He hoped Kanuha would bring Henry Rice, whom he had yet to meet, but neither man turned up. Later, Dorcy heard a rumor that Rice and Hanzi had tried to attend but were denied entry. Dorcy was furious, and he posted a sternly worded open letter on his refrigerator, where his entourage would be sure to see it. In part, it read: “On Father’s Day I had invited my business associate, partner and friend to take some time to come by; when he did, he was turned away—PARTICULARLY HANZI—at the gate. In the truck was Hanzi and Mr. Henry Rice who discretely avoided any confrontation asking Mr. Kanuha to move along, commenting ‘It’s a good thing that Rupert [Murdoch] wasn’t along or the scene would have been, indeed, a scene.’

“Now when I have future occasion of the pleasure of meeting Mr. Henry Rice it will not be to pay my respects but to offer humble apology for having on my team someone who knows what is (and WHO is) good for me—and take initiative to order the gate welcoming committee to my new house and grounds to ban acceptance to the man whose friendship being real, poses some sort of threat from which I must be ‘protected.’”

Dorcy concluded by saying he wasn’t looking for confrontations or  confessions, but rather a 180-degree “attitude change—and possibly a crew change from this squadron.”

"The Man" Whose Name Shall Not Be Spoken

Dorcy’s crew understood the Rupert reference to mean Rupert Murdoch. “Henry Rice” was shaping up to be a real name dropper. Dorcy came to believe that “Rice’s” identity as a rancher and retired banker were, as incredible as it sounded, merely cover for the secret work he did for the U.S. State Department and the CIA. “Rice” was regularly jetting off to secret meetings with major figures on the world stage, offering his counsel to General David Petraeus, or negotiating the resignation of Egyptian president Hosni Mubarak.

Not only did this “Henry Rice” want to serve on Dorcy’s koa tree foundation, he wanted to broaden its scope, and he pledged to donate hundreds of acres of his own ranch to the cause. But, because of the sensitive nature of his work, his name could not be used in connection with the foundation. In fact, Dorcy would have to stop using his name altogether. “Henry Rice” was a shameless name dropper, but the one name he wanted dropped from the conversation entirely was Henry Rice’s. So Dorcy came up with a code name: “The Man.” He understood The Man’s need for secrecy. The only problem was, he was terrible at keeping secrets.

In the mornings, Dorcy regularly smoked pot, then called friends on the phone, often talking until lunch. In one conversation after another, from December 2010 into 2011, he chatted about The Man and his life of intrigue, sometimes divulging that The Man was Henry Rice, and regularly pointing out that nobody was supposed to know any of this. He also revealed that he and The Man were creating a foundation that, although he couldn’t yet divulge the detail, would “change the world.”

Throughout this period, friends noticed that Dorcy wasn’t his usual articulate self. John M. McManus, for instance, an old friend who had lunch with Dorcy in Honolulu near the end of 2010, said Dorcy was “hazy, weak and in an obvious deteriorating state.” McManus never saw Dorcy again after that luncheon, but the two talked on the phone. “He would call me, rambling and incoherent,” McManus said. It didn’t help that Dorcy’s budding relationship with The Man was sounding crazy even if Dorcy wasn’t rambling incoherently. Dorcy told another old friend, Judith Godshall, that The Man had given him a $13,000 Rolex watch, and that The Man was going to pay off the $3 million mortgage on Dorcy’s home. In turn, Dorcy was going to give The Man a couple of his classic cars, including a 1932 Auburn, worth a few hundred thousand dollars. When Godshall asked Dorcy why The Man would do these nice things for him, he replied: “I don’t know. He just likes me, I guess.”

After several aborted appointments, cancelled by The Man at the last minute, he and Dorcy finally met in December 2010—the first of what would become a series of meetings, which often involved Dorcy signing stacks of documents. Dorcy was elated by these get-togethers, but they were raising eyebrows among outside observers. Dorcy told friends he had to meet The Man in a secret location and, for security, had to travel blindfolded and through alleyways to get there. With Dorcy’s new tendency toward incoherent rambling, these stories might have been written off as delusional, except for one thing: the eye witnesses.

Employees at the Sandalwood Cafe, a sparsely-frequented Kula lunch spot, which turned out to be the top secret location for the first “Henry Rice”-Dorcy meetings, were surprised one day to see an elderly man sitting blindfolded in a car before being led into the restaurant. At subsequent meetings, they saw the same man at a table with a white-haired man, signing documents. When the Dorcy case hit the news and they recognized Dorcy as the elderly man in the blindfold, they came forward, as did a customer at the Sandalwood with a similar story. At first, the attorneys litigating the case weren’t sure what to make of this development—high-profile cases sometimes draw crackpot claims. Then the Sandalwood employees showed them the videos they had secretly recorded. There sat Dorcy, in the Sandalwood, apparently signing papers, as a white haired man and a woman, who clearly appear to be Petro and Leatrice Hoy, look on.

The Crew Change

Another courtesy The Man extended to Dorcy was a thorough vetting of Dorcy’s personal staff and professional advisers, an investigation that turned up “irregularities” with most of them, and led to their mass firing. On Dec. 30, while Dorcy sat at the Sandalwood with his new friend, Kanuha went to Dorcy’s home to begin serving termination notices. He was assisted by “Elle,” who Dorcy believed to be Henry Rice’s personal and executive secretary, on loan to him. In reality, Elle was Leatrice Hoy.

Dorcy and "Gillian" on a voyage to Tahiti.

Pettigrew’s head was the first to roll. She was given two hours to clear off the property and forbidden to contact Dorcy again. Bookkeepers, a lawyer, an accountant and others were dismissed. Even Gilligan, who wasn’t an employee of Dorcy’s, was faxed his termination notice. Elsa, the Tahitian housekeeper, who survived the bloodletting, wanted to know who gave Kanuha and Elle the authority to fire everybody. “Both of them said, ‘We are just doing what Baron told us to do,’” Elsa testified.

To replace Pettigrew as Dorcy’s caregiver, Kanuha brought in Gale Kehaulani Kuaea, who allegedly claimed to have a nursing degree from Johns Hopkins University, but actually had no higher education at all. What she did have were close ties to the Hoys, as Leatrice’s cousin and Petro’s ex-wife. Kanuha also hired a new accountant, and, in the final addition to Dorcy’s new team, a lawyer, Glenn Kosaka. Within a week and a half, Kosaka had Dorcy’s signature on documents that gave Kanuha power of attorney, named Kanuha as his sole beneficiary, and amended his trust so that Kanuha, his brother-in-law and Kosaka himself were primary officers. The day after gaining power of attorney, Kanuha began writing checks on Dorcy’s account, the first for $25,000, which he said Dorcy authorized for the purchase of refrigerators for the Morihara Store.

The Nosey Doctor

On Jan. 24, 2010, Dorcy and his new caregiver, Kehaulani, flew to California. There he met The Man and gave him a tour of the Hawaiian Chieftain, the tall ship Dorcy had built and since sold. Dorcy also showed The Man the 1932 Auburn, one of the prized classic cars he was giving away as a token of their friendship.

While there, Dorcy developed trouble breathing, and ended up in the office of his personal physician, Dr. Bradford Rabin. Kanuha and Leatrice had since joined Dorcy and Kehaulani in California, and they all accompanied Dorcy to Rabin’s office, after failing to secure a prescription from Rabin over the phone. Rabin was alarmed by Dorcy’s condition. Not only was he having difficulty breathing, he was also struggling to finish sentences and express coherent thoughts. But, during the hour that Rabin talked to him, Dorcy managed to reveal that a secret person had taken him under his wing, given him a gold watch and was managing his finances. When Rabin pressed him on this person’s identity, Dorcy told him about Henry Rice. Rabin summoned Kanuha, to try and shed light on the situation. “Hans explained to me that he knew this Mr. Rice and was absolutely confident that he had Larry’s best interest at heart and that he would be taking good care of him,” said Rabin, who was hardly reassured and suspected elder abuse.

Rabin sent Dorcy to the hospital, where he was admitted overnight and suspected to have overdosed on painkillers. Before Dorcy was released, Rabin got a call from Kosaka, the new lawyer, informing him that, per Dorcy’s instructions, he was dismissed as Dorcy’s doctor.

In The Ambulance

Six weeks later, Dorcy was back in the hospital, this time in Hawaii, and this time for good. For three days in March, Elsa had been arguing with Dorcy’s new team about Dorcy’s health. Dorcy appeared to her to be incoherent, his eyes were unfocused and he was patting his chest and moaning a lot. “I told Kehaulani and Hansi that Mr. Dorcy is really sick and that I had never seen him this sick before,” she testified. “Kehaulani said not to worry, he was fine. I told her: ‘He is not fine. Are you blind?’” Petro Hoy, who was now coming by regularly under a new code name, “C.V. Hansen,” wanted to take Dorcy out to do business, but Elsa refused to let him go. On the morning of March 26,  after she found Dorcy on his bed in the fetal position, struggling to breathe, she insisted he get medical attention. She testified that Kanuha, Kehaulani and the Hoys shut themselves in Dorcy’s room for several hours, before finally agreeing to call an ambulance.

A young Baron Dorcy with Linda Leilani Dorcy Sanford, a cousin, circa 1950.

Kanuha forbade Elsa from telling anyone Dorcy was hospitalized, she testified, but she could not keep that secret. She called Pettigrew and Dorcy’s cousin, Linda Leilani Dorcy Sanford, who lives in Honolulu. Sanford, who had been on the phone with Dorcy in recent weeks, arrived and confronted Kanuha and Kosaka, demanding answers about Henry Rice. At the mention of that name, she testified, “Mr. Kosaka jumped out of his chair, went ballistic and shouted, ‘There is no Henry Rice, there is no Henry Rice.’”

Dorcy’s Honolulu physician, Dr. Stephen Arnold, testified that he, too, had an unsettling interaction with Kosaka. While Dorcy lay in bed under sedation, with a feeding tube up his nose and a respirator down his throat, Kosaka called asking to have the sedation withdrawn so Dorcy could sign documents. The doctor refused, and recommended in his medical note that Adult Protective Services be notified.

The legal wheels began to turn. Pettigrew went to court and wrested medical guardianship of Dorcy away from Kanuha. Hans went to court, told the judge that Dorcy had raised him, and won an unusual adult adoption, which the judge later rescinded, stating “there was a lot of misrepresentation as to how that adoption was granted in the first place.” The state attorney general got involved to protect the charitable beneficiaries named in Dorcy’s first will. Meanwhile, a federal grand jury indicted Leatrice and Petro Hoy, along with three others, on fraud and other charges in the Ko Hawaii Pae Aina case. (Leatrice has since pleaded guilty; Petro is still under indictment.)

Three days after the indictments, on June 2, 2011, Dorcy died.

That same day, Kosaka revealed the will naming Kanuha as sole beneficiary. This brought Jeff Peterson, a beneficiary under the first will and Dorcy’s longtime trust adviser from Minneapolis, where the 1917 Hill trust was based, out of retirement to challenge the new will. During discovery, Kosaka took the Fifth Amendment during one deposition, then had a change of heart and fielded questions during a second. Petro Hoy struggled with his memory during his deposition, then grew indignant at the questioning and walked out of the proceedings. A fire broke out in Kanuha’s office, destroying records he had been ordered to turn over.

After the sealed, out-of-court settlement was reached in February 2012, Kanuha’s attorney, James Krueger, told the Honolulu Star-Advertiser that his client felt “vindicated” by the settlement. HONOLULU Magazine was unable to reach either Kanuha or Kosaka for comment. Some of the beneficiaries of the first will, however, who were neither privy to the terms of the settlement nor bound to refrain from talking about it, have told HONOLULU they are certain Kanuha did not inherit any money at all from Dorcy.

Meanwhile, the criminal investigation continues. Stay tuned.