Kapua Keolanui used religion to hook longtime friends and relatives into a Ponzi scheme, telling them that "Jesus Christ had given her the gift of finding the money" and that she wanted to share her blessing with them, federal prosecutor Les Osborne Jr. said Friday.
U.S. District Judge David Ezra called Keolanui’s behavior callous Friday and sentenced her to 33 months in prison for one count of wire fraud, the maximum term suggested under federal court sentencing guidelines.
Keolanui, 36, will begin serving her prison term next month, after Thanksgiving. Ezra also ordered her to repay her victims $837,160.
One of the victims, Christina Bishaw, said, "This experience is a continuing nightmare to me and my family."
Bishaw said she took out a mortgage on the Kailua home her in-laws purchased in 1956 and gave Keolanui most of the money. At first, she said Keolanui paid her regular "returns" on her "investment." But when the payments stopped, Bishaw said she defaulted on the loan and she and her family were forced to move out in October 2010.
"I loved you as a daughter," Bishaw told Keolanui in court Friday.
Bishaw’s daughter Misty Kaniho said she intended to pass on the home to her children. She urged Ezra to impose the maximum jail term because when the payments stopped, Keolanui, "never offered to help save our home or pay back the money she stole from us. She continued to live as if she never wronged anyone."
Keolanui apologized to Bishaw and Kaniho and promised to work the rest of her life to pay them back.
Her lawyer Rustam Barbee said Keolanui was also drawn into the Ponzi scheme by Perry Jay Griggs, and his wife, Rachelle Griggs, with religion.
"She believed what she was doing was right. That’s why she offered it to her friends and family," Barbee said.
Ezra rejected any suggestion that Keolanui was an innocent victim.
Osborne said she spent more than $629,000 she collected on "scatterbrained business schemes."
According to federal court records, Keolanui spent the money on startup business ventures for her family including coin-operated video gambling machines, a dump truck business and a tractor-trailer business.
Keolanui admitted collecting money for the Griggses, who helped her start her own Ponzi scheme.
When the Griggses started the Ponzi scheme, Perry Griggs was serving time in a prison in Nevada for running another Ponzi scheme in California. He and his wife targeted fellow inmates from Hawaii and their families.
Perry Griggs is serving a seven-year prison term and Rachelle Griggs is serving a four-year prison term for stealing nearly $2 million from the Hawaii inmates and their families.