Kealohas clear Hawaii Kai home as feds prepare to sell off property

Thursday was the deadline for retired Honolulu Police Chief Louis Kealoha and his former deputy prosecutor wife Katherine Kealoha to move out of their Hawaii Kai home to allow the government to sell it.

The Kealohas could be seen at the home Thursday afternoon, loading belongings into a pickup truck.

U.S. Magistrate Judge Richard L. Puglisi granted the federal government’s request on Sept. 27 to sell the Mariner’s Cove home and gave the Kealohas 14 days to move out and remove all of their personal property.

The Kealohas had asked Puglisi to clarify his order because they said they installed custom furniture that would enhance the value of the home. Puglisi denied their request.

His order directs the government to hold on to the proceeds of the sale pending the outcome of the criminal case against the Kealohas. They are charged with bank fraud for lying on their loan application to secure the $1 million mortgage loan. The government claims the home is a proceed of a crime and should be forfeited.

The Kealohas and four former members of the Honolulu Police Department’s elite Criminal Intelligence Unit are also charged with crimes that accuse them of framing Katherine Kealoha’s uncle with stealing the Kealohas’ mailbox and lying to federal investigators when they were asked about it.

The bank fraud trial is scheduled for next month. Katherine Kealoha is asking to push the trial date back. A hearing on the request is scheduled for Oct. 23.

The mortgage holder, Hawaii Central Federal Credit Union, filed for foreclosure in February claiming that the Kealohas stopped making mortgage payments and were in default. The government asked the court for permission to sell the home to stop the Kealoha’s indebtedness from growing, and said it plans to make sure the credit union gets all of the money it is owed.

At the time the credit union sued for foreclosure, the property’s tax assessed value was $1,382,200.