Special Attorneys Michael Wheat (619) 546-8437, Joseph Orabona (619) 546-7951, Janaki Chopra (619) 546-8817, and Colin McDonald (619) 546-9144
NEWS RELEASE SUMMARY – November 30, 2020
HONOLULU, Hawaii – Former prosecutor Katherine Kealoha and former
police chief Louis Kealoha were sentenced during separate hearings in
federal court today to 13 years and seven years in prison, respectively,
following a number of convictions, including conspiring to frame a
relative with a crime to conceal their own fraud.
Chief U.S. District Judge J. Michael Seabright of the District of
Hawaii also ordered the Kealohas to pay $454,984.78 and $237,698.56,
respectively, in restitution to their victims, and ordered forfeiture of
property representing proceeds of fraud, including the Kealohas’ former
home in Honolulu, a Rolex watch, and $228,746.79. Katherine Kealoha is
already in custody; Louis Kealoha was ordered to report to prison on
April 12, 2021.
Judge Seabright rebuked the Kealohas for their “grotesque deprivation
of civil rights,” which “staggered the community in many ways” and had
“truly shaken confidence in our governing institutions.” He further
remarked that “the Kealohas used their power to nurture, feed, and
conceal their corrupt activity.”
The sentences imposed today mark the end of a series of criminal
cases against the Kealohas. In June 2019, after six weeks of trial and
one day of deliberation, a federal jury in Honolulu convicted the
Honolulu power couple and Honolulu police officers Derek Hahn and
Minh-Hung “Bobby” Nguyen of conspiracy and attempted obstruction of
justice pertaining to the false arrest and prosecution of Katherine’s
uncle, Gerard Puana. The evidence at trial established that the Kealohas
used their considerable power, including commandeering the Honolulu
Police Department’s elite Criminal Intelligence Unit, to frame Gerard
with stealing their mailbox. To accomplish this, the conspirators
prepped the mailbox to be “stolen,” selectively edited grainy
surveillance video to conceal their preparatory acts, falsely identified
Gerard as the culprit captured by the video, falsified police reports,
withheld and destroyed evidence, and repeatedly lied about their
activity to investigators, the federal grand jury, and the District
Court for the District of Hawaii.
The Kealohas’ motive for framing Gerard was to discredit and
intimidate him after he accused Katherine Kealoha of fraud. Trial
evidence established that Katherine stole over $200,000 from him and
Katherine’s elderly grandmother, Florence Puana. Acting as her
grandmother’s “attorney,” Katherine convinced Florence—who was 89 years
old at the time—to place a reverse mortgage on Florence’s family home.
Katherine promised Florence that she would pay off the reverse mortgage
after using some of the proceeds to consolidate the Kealohas’ debt.
Instead, unbeknownst to Florence, Katherine funneled the reverse
mortgage proceeds into a bank account that Katherine controlled. And
within seven months, the Kealohas drained the account dry—spending over
$148,000 on various personal expenses, including mortgage payments,
Elton John concert tickets, Mercedes and Maserati car payments, a trip
to Disneyland, and a $23,976 brunch tab at the Sheraton Waikiki to
celebrate Louis Kealoha’s induction as Honolulu Police Chief in 2009. In
the meantime, Katherine made no payments on the reverse mortgage,
allowed the balance to balloon out of control, and diverted mortgage
statements away from Florence’s mailbox to keep Florence from finding
out. Once Florence did find out—almost a year and a half later—she was
forced to sell her family home.
After they learned of the missing money and ballooning mortgage,
Florence and Gerard confronted Katherine Kealoha about her actions.
Katherine responded indignantly, threatening in a letter to seek “the
highest form of legal retribution against ANYONE and EVERYONE who has
written or verbally uttered those LIES about me!” True to her word,
after Florence and Gerard filed a civil lawsuit against her, Katherine
attempted to have Florence declared legally incompetent, and Katherine
and her co-conspirators had Gerard arrested for a crime he did not
commit. At Gerard’s theft trial, Louis Kealoha testified falsely that
Gerard was the person displayed taking the mailbox in the grainy
surveillance video. “That’s what makes this case so shocking: this could
not have succeeded but for you and your position,” Judge Seabright told
Louis Kealoha.
“Today, after years of manipulating the levers of justice to shroud
their own crimes, justice was delivered to two corrupt public
officials,” said U.S. Attorney Robert Brewer. “This was a flagrant and
stunning abuse of power that victimized an entire community by
undermining public confidence in its leaders and the rule of law. If not
for the initial dogged investigation by former First Assistant Federal
Defender Alexander Silvert, who brought this matter to the attention of
federal authorities, followed by incredible work by FBI agents and
prosecutors Michael Wheat, Joseph Orabona, Janaki Chopra and Colin
McDonald, the Kealohas would still be manipulating justice, not meeting
it.”
“Our citizens entrust public servants with great powers and
authorities. It is our responsibility to serve our community with
integrity and authenticity – with truth and justice as our hallmark,”
said Special Agent in Charge Eli S. Miranda. “The Kealohas betrayed this
trust for their own selfish entitlements, using deception and breaking
the same laws they swore to uphold. The FBI will enthusiastically
continue to investigate any corrupt public official who willfully and
maliciously abuse their office.”
Today’s sentences also accounted for separate crimes committed by the
Kealohas. In October 2019, Katherine pleaded guilty to misprision of a
felony after using her position of authority within the city
prosecutor’s office to actively conceal the drug distribution activities
of her brother, Rudolph B. Puana, an anesthesiologist in Hawaii. In her
plea agreement, Katherine admitted she arranged to have herself
assigned as the prosecutor overseeing the investigation of her brother’s
co-conspirators and that she cultivated a close relationship with one
co-conspirator—a defendant Katherine was then prosecuting—to reduce the
likelihood that the individual would reveal Rudolph Puana’s role in the
drug conspiracy. “I always got ur back, I love you and will protect you
always!!!” read one private text message Katherine sent to the defendant
she was prosecuting. “GO TEAM!!! Can’t wait for this s*** to be over,”
read another, to which the defendant replied, “Ditto[.] Then we’re
free[.]”
Finally, in October 2019, the Kealohas pleaded guilty to bank fraud.
As part of their pleas, the Kealohas admitted that between January 1,
2009 and December 31, 2014, they spent more than $591,000 derived from
stolen funds or loan proceeds obtained through fraud. Their bank fraud
scheme included falsely claiming assets that belonged to others
(including money belonging to children over whom Katherine had been
appointed guardian), falsely inflating their monthly income, and falsely
denying derogatory information on their credit. To legitimize their
denial of poor credit, the Kealohas submitted a forged police report in
loan applications that purported to document Katherine’s false claims of
identity theft. The act of forging the police officer’s signature on
the report was itself identity theft, for which Katherine pleaded
guilty. Katherine further admitted using an alias “Alison Lee Wong” to
facilitate the bank fraud. This alias also played a role in Gerard
Puana’s claims of fraud. As evidence at trial established, in 2009,
Katherine used the “Wong” alias to notarize and create a fraudulent
trust in Gerard’s name. And in 2008, under the customer name “Kathryn
Aloha,” Katherine ordered a notary seal for “Alison Lee Wong” from the
American Association of Notaries and had it mailed to the State of
Hawaii’s Office of Environmental Quality Control, where Katherine served
as Director. As Judge Seabright stated today, Katherine “perverted
justice over and over and over and over again.”
The Kealohas’ co-conspirators, Derek Wayne Hahn and Bobby Nguyen, are
scheduled to be sentenced on December 1, 2020 for their involvement in
framing Gerard Puana. Katherine Kealoha’s brother, Rudolph B. Puana, is
currently facing drug distribution and firearm charges, and is scheduled
for trial in April 2021.
DEFENDANTS
Katherine P. Kealoha Age: 50 Honolulu, Hawaii
Louis M. Kealoha Age: 60 Honolulu, Hawaii
SUMMARY OF CONVICTIONS
Katherine Kealoha
CR No. 17-00582-JMS-WRP
Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison, $250,000 fine
Obstruction of Official Proceeding – Title 18, U.S.C., Section 1512(c) (three counts)
Maximum penalty: Twenty years in prison, $250,000 fine
CR No. 18-00068-JMS-WRP
Bank Fraud, in violation of 18 U.S.C. § 1344
Maximum Penalty: Thirty years in prison, $1 million fine
Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A
Maximum Penalty: Mandatory term of imprisonment of two years, to be
served consecutive to the sentence imposed for any underlying charge;
fine of up to $250,000
CR No. 19-00015 JMS-WRP
Misprision of Felony, in violation of 18 U.S.C. § 4
Maximum Penalty: Three years in prison; fine of up to $250,000;
Louis Kealoha
CR No. 17-00582-JMS-WRP
Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison, $250,000 fine
Obstruction of Official Proceeding – Title 18, U.S.C., Section 1512(c) (three counts)
Maximum penalty: Twenty years in prison, $250,000 fine
CR No. 18-00068-JMS-WRP
Bank Fraud, in violation of 18 U.S.C. § 1344
Maximum Penalty: Thirty years in prison, $1 million fine
AGENCY
Federal Bureau of Investigation
Honolulu, Portland, and San Diego Divisions
