Hawaii prosecutor is jailed for 13 years for forcing her grandmother to sell her home, framing her uncle for a crime and stealing $160,000 from two children under her care to fund a lavish lifestyle
A U.S. judge sentenced a former high-ranking Honolulu prosecutor to 13 years in prison Monday and her retired police chief husband to seven years, saying she stole money from her own grandmother and then used his law enforcement power to frame her uncle for a crime he didn´t commit - all to maintain the couple's lavish lifestyle.
Katherine and Louis Kealoha, now estranged, were once a respected power couple. Louis Kealoha agreed to retire amid a wide-ranging federal investigation. She later gave up her law license.
'This case has staggered the community in many ways,' U.S. District Judge J. Michael Seabright said.
Former Honolulu police chief Louis Kealoha, right, and his wife, former deputy prosecutor Katherine Kealoha have been jailed after being at center of a years long investigation into public corruption's, considered the largest public corruption trial ever in Hawaii
A jury convicted Katherine and Louis Kealoha of conspiracy in a plot to frame her uncle to keep him from revealing the financial fraud that funded their lavish lifestyle. The couple abused their positions in an attempt to silence a relative who could have exposed them
Honolulu deputy prosecutor Katherine Kealoha used her position as a prosecutor to turn a drug investigation away from her brother Dr Rudolph Puana, pictured
He described how Katherine Kealoha orchestrated a reverse mortgage scheme that forced her grandmother to sell her home, framed her uncle for stealing the Kealohas' home mailbox, stole money from children whose trusts she controlled as a lawyer, cheated her uncle out of his life savings, convinced her firefighter lover to lie about their affair and used her position as a prosecutor to turn a drug investigation away from her doctor brother.
'Truth can be stranger than fiction,' the judge said at Katherine Kealoha's sentencing.
Later, he told Louis Kealoha that while his wife was the mastermind, 'you did master the frame job that followed,' and the scheme couldn't have succeeded without the Honolulu Police Department.
A jury convicted the Kealohas last year of conspiracy, along with two former officers who are scheduled to be sentenced Tuesday.
Former deputy prosecutor Katherine Kealoha, center left, and husband, former Honolulu police chief Louis Kealoha, center right, pictured in June 2019. The Honolulu police chief and his wife pled guilty in a plot to frame a relative to keep him from revealing the financial fraud that financed their lavish lifestyle
This courtroom drawing shows attorney Gary Singh, left, with his client Katherine Kealoha
A judge sentenced Kealoha to 13 years in prison after saying the former high-ranking prosecutor used her husband's position as a police chief to frame her uncle for a crime he didn't commit and stole money from her own grandmother, all to maintain her lavish lifestyle
The case is especially shocking, Seabright said, because of the role a police chief of a 'major American city,' played.
'Think about that, the chief of police of one of the largest police departments in the country ... swears to tell the truth, the whole truth and nothing but the truth,' and lies, the judge said of Louis Kealoha's false testimony at the trial of his wife's uncle for stealing the couple's mailbox. The trial ended in a mistrial that prosecutors say the then-chief caused on purpose to thwart the investigation.
The Kealohas later pleaded guilty to bank fraud, saying they provided false information to obtain loans.
They went to great lengths to maintain a lifestyle they couldn't afford on public servant salaries, the judge said.
Katherine Kealoha, 51, also pleaded guilty to an identity theft charge, saying she got an officer to forge a police report she used to explain negative information on a credit report. She also pleaded guilty to a charge that involved protecting her brother from the drug investigation.
In a letter to the judge, she blamed a prescription drug addiction for clouding her judgment.
'My client was on drugs, her mind was not clear and she did a lot of bad things,' her lawyer, Gary Singh, said in court.
Kealoha apologized to her family in court and asked for forgiveness. 'To my uncle, especially,' she said. 'I know that he has been through so much pain and so much hurt.'
The trial heard how the couple used their positions to bilk clients and relatives out of hundreds of thousands of dollars to fund their lavish and overextended lifestyle and then used their power to target anyone who threatened them
Katherine Kealoha also used her position as a prosecutor to keep a prescription drug ring she and her brother were running, hidden from law enforcement
Kealoha said she would consolidate her debts and promised her uncle, left, and grandmother, right, that she would pay off the loan. She used the money to buy her uncle´s condo, but instead of paying off the loan, she spent the leftover money on luxuries, including $26,000 for an induction banquet when her husband became police chief and $10,000 on car payments
Kealoha's aunt, Charlotte Puana Malott, read a letter she said her 100-year-old mother, Florence Puana, wrote before she died in February about her granddaughter's 'ruthless scheme.'
Police Chief Louis Kealoha was Honolulu's Rolex-wearing police chief and his wife Katherine was the Maserati-driving prosecutor in charge of a unit targeting career criminals. The couple funded their lavish lifestyle by defrauding banks, relatives and children
'I was 90 years old in 2009 when I agreed to a reverse mortgage on my home, not really understanding what it meant. It seemed complicated, yet I trusted you, Katherine,' the letter said.
Kealoha came to Puana and her son Gerard Puana with an idea about taking out a reverse mortgage on her grandmother´s home to help buy a condo her uncle wanted. Kealoha said she would consolidate her debts and promised her uncle and grandmother that she would pay off the loan.
She used the money to buy her uncle´s condo, but instead of paying off the loan, she spent the leftover money on luxuries, including $26,000 for an induction banquet when her husband became police chief and $10,000 on Mercedes-Benz and Maserati car payments, the judge said.
'She perverted justice. And she did so for her own personal reasons,' said Michael Wheat, a special federal prosecutor. 'To facilitate a lifestyle and a facade and an image in this community.'
The couple are pictured walking into court in March 2019. The pair divorced soon after the scheme was revealed and Katherine was remanded in custody. The couple orchestrated the framing of a relative for a mailbox theft who threatened to expose their fraud
In this courtroom drawing, attorney Rustam Barbee stands next to his client, former Honolulu Police Chief Louis Kealoha, in Honolulu on Monday
Framing her uncle for stealing the Kealohas' mailbox was to make him less credible in the family financial dispute, the judge said.
Police Chief Louis Kealoha stands in court. A judge sentenced Kealoha to seven years in prison in Hawaii's biggest corruption case
'We still don't know sitting here today, who stole the mailbox,' Seabright said, adding that it clearly wasn't Gerard Puana.
He told Katherine Kealoha that she used the police 'to do your dirty work.'
Louis Kealoha, 60, filed for divorce after they were convicted.
He said at his sentencing that he's deeply sorry, ashamed and failed to live up to the standards of a police chief. 'This is the last place in my life I thought I'd be and I vow never to be here again,' he said.
Partly because of the COVID-19 pandemic, Seabright agreed to allow Kealoha to remain free on bond until he self-surrenders in April. His wife has been in the Honolulu Federal Detention Center since they were convicted.
Monday's sentencings come after several postponements. Concern about the spread of the coronavirus caused a delay in March, then a November 3 date was changed after officials realized it was Election Day.
'COVID has kept us from this date for quite a while,' the judge said.
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