Though I have yet to see one of these flatworms, it is a rather common sight for my fellow snorkelers.  The have found it out on the reef and in the sand (in broad daylight) in the North Kihei and Ma’alaea Bay area of Maui.  Approximately 1″ or 25 mm in 6-15 ft (2-5 m) of water.  For more photos and information see John Hoover’s site devoted to the flatworms of Hawaii.