GISELLE Butalid and her mother, Clarissa Adlawan, pleaded not guilty Monday to multiple charges, including conspiracy, theft of federal funds, money laundering, and structuring financial transactions, during their initial appearance and arraignment in the District Court for the NMI.
Both defendants appeared in the custody of the U.S. Marshals Service and waived the formal reading of the indictment through their court-appointed attorneys.
Chief Judge Ramona V. Manglona accepted their not guilty pleas and scheduled a jury trial for Oct. 21 at 10 a.m.
Assistant U.S. Attorney Eric O’Malley informed the court that Adlawan, a Philippine national, has an active Immigration and Customs Enforcement detainer. O’Malley also filed a motion seeking the detention of both defendants pending trial, arguing they are a flight risk and pose “a serious risk [they] will obstruct or attempt to obstruct justice, or threaten, injure, or intimidate…a prospective witness or juror.”
In support of detention, Katharine Kovacek, a special agent with the U.S. Department of the Interior’s Office of Inspector General, filed an affidavit stating that Butalid and Adlawan are likely to flee if released.
She noted that both were arrested on Aug. 15, 2025, at their apartment in Sandy Beach Homes, Chalan Kanoa, pursuant to an indictment issued the day before. “At the execution of the warrant, defendants were not responsive to law enforcement requests to open the door. It took multiple attempts over several minutes before they finally opened, as officers were preparing to breach,” Kovacek wrote.
A separate warrant authorized a search of the apartment. According to the affidavit, the defendants attempted to mislead agents during the search. For example, Adlawan claimed she had closed a safe deposit box and no longer had the keys. However, agents later discovered two safe deposit keys.
Kovacek said both defendants were born in the Philippines. Adlawan remains a Philippine citizen, while Butalid is a recently naturalized U.S. citizen who may still hold dual citizenship and a Philippine passport. Both regularly travel to the Philippines, own multiple properties there, and have transferred substantial funds overseas, including as recently as this month.
“Defendants withdrew more than $14,000 in cash in July alone, and tens of thousands more in previous months,” Kovacek added, noting that they likely maintain a large undisclosed cash reserve. “To the degree defendants have ties to this community, they also have ties to the Philippines, including family, real estate, and possibly businesses.”
Judge Manglona said a detention hearing will be scheduled later this week.
Attorney Mark Scoggins was appointed to represent Adlawan, while attorney Richard Miller will represent Butalid.
According to the indictment, Butalid, formerly employed with the Public School System’s Office of Curriculum and Instruction, and her mother, Adlawan, used their company, One Legacy LLC, to defraud PSS of tens of thousands of dollars in federal grant funds.
The company, registered in January 2021, allegedly funneled federal money through falsified procurement documents. The indictment stated that Butalid abused her position at PSS to forge documents, create fake vendor quotations, and authorize sole-source procurements for One Legacy, which then received payments for educational materials that were never delivered or falsely represented.
The indictment further stated that the defendants laundered proceeds through cash withdrawals, ATM transactions in the Philippines, and luxury purchases, including stays at high-end hotels and shopping sprees at Prada and Louis Vuitton.
Butalid is charged with one count of conspiracy, five counts of theft concerning programs receiving federal funds, and one count of money laundering conspiracy.
Adlawan is charged with one count of conspiracy, five counts of theft concerning programs receiving federal funds, one count of money laundering conspiracy, one count of illegal monetary transaction, and four counts of structuring.
Prosecutors are also seeking forfeiture of assets linked to the alleged crimes or substitute property if the original assets cannot be recovered.
Giselle Butalid and her mother, Clarissa Adlawan
