Fraud, conspiracy, ID theft: A summary of the allegations against the Kealohas

Here are the main allegations against retired Honolulu Police Chief Louis Kealoha and his wife, Katherine, a deputy prosecutor, that are contained in the federal indictment:

>> Katherine Kealoha, while a private attorney and trustee for two minor children, in 2004 established trust funds totaling more than $167,000 for the two children, then 10 and 12, and from May 2004 to February 2012 used almost all the money in those accounts to pay personal expenses of her and her husband. The expenses included mortgage payments, home refinancing costs and loan payments. The couple misappropriated nearly $150,000 from the two accounts. Katherine Kealoha created an alias, Alison Lee Wong, to carry out the scheme.

>> Katherine Kealoha used $25,000 that her uncle, Gerard Puana, gave to her in 2007 to invest in an investment hui for personal expenses instead. To carry out the ruse, Kealoha would periodically withdraw $600 in an account holding Puana’s money and give it to him as a “return” on his investment. Those payments prompted Puana to give Kealoha $70,000 in additional funds. Instead of investing that, the Kealohas used more than $45,000 to pay personal expenses. Puana got back $23,739 as “investment returns.”

>> As power of attorney for her grandmother, Katherine Kealoha helped her get a reverse mortgage on the the home of her elderly grandmother, Florence Puana, in October 2009 as part of a series of transactions meant to purchase a condo for the elderly woman’s son. Through the reverse mortgage, the grandmother borrowed about $513,000 to buy the condo, pay expenses and consolidate the Kealohas debts so they could purchase the condo from the grandmother and then sell it to her son. But instead of using some of that money to make payments on the woman’s reverse mortgage, Katherine Kealoha used it to pay more than $92,000 in personal expenses for her and her husband. The expenses included $10,663 in car payments for a Mercedes Benz and Maserati, $2,161 for Elton John concert tickets, $7,800 to install air conditioning at their home, $3,000 in charity donations, $3,596 in travel costs and $956 at Disneyland in California.

>> The Kealohas while acting “under the color of law” and in a conspiracy with the other suspects deprived Honolulu residents of their constitutional rights to be free from unreasonable searches and seizures, and destroyed and concealed records to obstruct an an official proceeding. They also altered and falsified records and tangible objects with the intent to impede a federal investigation.

>> The Kealohas improperly used their authority as public officials to prevent the discovery of their precarious financial condition and prior malfeasance involving the trust accounts and the dealings with her grandmother.

>> The Kealohas and the other conspirators would target members of the community, including Gerard and Florence Puana, who threatened the power and financial condition of the Kealohas. They also fabricated evidence against Puana, who had been accused of stealing the Kealohas’ mailbox, and conspired to present false testimony and evidence against him.

>> They attempted to obstruct the subsequent FBI investigation and federal grand jury probe into the Puana case.

>> The Kealohas devised schemes to defraud American Savings Bank, Hawaii USA Federal Credit Union and Hawaii Central Federal Credit Union to obtain funds through false and fraudulent representations, including in 2013 submitting a forged police report claiming they were victims of identity theft in an attempt to explain derogatory information on their credit reports.

>> Katherine Kealoha was charged with aggravated identity theft for using another person’s name in 2013, 2014 and 2016 as part of a federal bank fraud violation.

The Kealoha Case: Key Players & Key Dates by Honolulu Star-Advertiser on Scribd