Judge grants court-appointed attorneys to Kealohas

Debt played a key role Thursday in determining that Louis and Katherine Kealoha will be assigned court-appointed attorneys to defend them on public corruption charges.

“It’s clear their debt exceeds their assets,” Hawaii Chief District Judge J. Michael Seabright said in granting a motion from the Kealohas’ attorneys to assign them court-appointed attorneys. “It’s clear there isn’t cash available to pay for counsel.”

Seabright said he will assign the former Honolulu police chief and his deputy prosecutor wife new attorneys from a list of pre-approved Hawaii attorneys who would be paid at court rates.

Seabright said he hopes to have new attorneys appointed by “Monday or Tuesday next week.”

The Kealohas, along with four current and former members of the Hono­lulu Police Depart­­ment’s Criminal Intelligence Unit, were charged in U.S. District Court last month with conspiring to frame Katherine Kealoha’s uncle, Gerard Puana, for the theft of the mailbox from the couple’s home, and then covering it up.

The Kealohas, additionally, are accused of defrauding individuals and financial institutions of more than $1 million by, among other things, fabricating documents, misrepresenting facts, forging signatures, using aliases and stealing a police officer’s identity.

The Kealohas each filed financial affidavits Thursday that Seabright ordered sealed, meaning even prosecutors won’t know exactly how much debt they have.

Seabright then closed his courtroom for about 20 minutes — and even excluded the U.S. attorneys — to go over the Kealohas’ financial disclosures with them in private.

When Seabright ordered his courtroom unlocked, he alluded that the Kealohas have options to generate more cash — including the sale of their $1.24 million home in Hawaii Kai.

The Kealohas’ attorneys wrote in a court filing that the Kealohas are financially unable to pay to defend themselves in a case that federal prosecutors estimated will involve “a quarter of a million pages of evidence, some 500 witnesses and a trial consuming four months.”

Seabright agreed.

He said the Kealohas’ attorney fees “will be substantial. There’s no doubt about that.”

After reviewing their finances, Seabright said the money for attorney fees “just isn’t there. It just isn’t there.”

The couple’s financial obligations include undisclosed mortgage payments on their home, a home equity loan and another mortgage — or lien — to one of their attorneys for up to $700,000 worth of attorney fees.

On Wednesday, the Kealohas’ attorneys told Seabright that the couple are living only on Louis Kealoha’s pension and have a daughter in college.

If the Kealohas were to apply for a loan, Seabright told the couple, “the court will work with you on that. … That option is there.”

Selling their home also would relieve the Kealohas “of that monthly burden, which is quite high,” Seabright said.

In the meantime, Seabright said the Kealohas’ mortgage “eats up so much of Mr. Kealoha’s pension.”

Seabright was presented with separate motions to remove the Kealohas’ attorneys — one from the three attorneys themselves and the other from U.S. attorneys — to remove two of them citing conflicts of interest.

Myles Breiner has been handling Katherine Kealoha’s case while Gary Modafferi was recently retained by Louis Kealoha to fight the criminal charges against him. Kevin Sumida has been handling the civil cases involving the Kealohas.