A Kailua woman earned more than $500,000 working as a prostitute from 2008 to 2013 and hid her earnings by transferring and transporting the money to her husband in New Jersey, according to a federal grand jury indictment.
The indictment charges Khemwika Ernst, 38, and Michael Paul Ernst, 43, with tax fraud, interstate transportation of money in aid of prostitution and conspiracy. It also puts the Ernsts on notice that the government intends to seek the forfeiture of $543,147 and a home in New Jersey.
The Ernsts are scheduled to appear in U.S. District Court on April 13 to answer to the charges.
The indictment says Khemwika Ernst earned hundreds of thousands of dollars in cash working as a prostitute while living in Kailua. The government says Ernst is also known as Khemwika Duangnujai, Gigi, Sky, Cindy and Apple.
Ernst deposited the money she earned into a Kailua Navy Federal Credit Union account she held jointly with her husband. Her husband then transferred the money to a mainland bank account he controlled, according to the indictment.
When credit union officials questioned Ernst about the large cash deposits, she started sending the cash to New Jersey by Federal Express, the indictment says. Ernst sent the cash to her husband and another person who deposited the money into a bank account her husband controlled.
On Sept. 25, 2013, according to the indictment, federal officials seized a Federal Express package Ernst had sent to New Jersey containing $7,400 in cash.
The Ernsts are also charged with filing false income tax returns for 2008 to 2013. According to the indictment, the Ernsts filed a joint tax return claiming that their income was $30,316 in 2008 and $34,903 in 2009 when they knew their income was substantially higher than that.
