Criminal indictments loom in case against Kealoha

Court documents filed by federal attorneys Wednesday indicate they intend to charge retired Honolulu police Chief Louis Kealoha and his wife, city Deputy Prosecutor Katherine Kealoha, as part of their two-year-long case alleging a criminal conspiracy at the Police Department.

Search warrants were executed by the FBI Wednesday morning at two homes where the Kealohas reside, their attorney Myles Breiner confirmed. The warrants were executed without prior knowledge of the Kealohas, said Breiner, adding he doesn’t know if the Kealohas will be indicted.

“Anything’s possible with the way this investigation has been proceeding the past two years,” Breiner said. “There seems to be a rush to judgment, a rush to get charges in this case, to justify two years of the government’s efforts to pursue charges against the Kealohas.”

The grand jury that’s been hearing evidence about the case the past two years is scheduled to end its work at District Court today, and at least one person with close knowlege of the details of the case believes indictments will come down against the Kealohas.

Alexander Silvert, the first assistant federal public defender, is expecting indictments to be issued by the grand jury and then handed to both Kealohas in the coming days.

“It would appear to me that the grand jury (today) will be asked to indict,” Silvert said.

Silvert said the case is not just about an investigation into a stolen mailbox. “This is about the abuse of power by very high-ranking police officers in positions of authority,” he said.

On Wednesday morning, Honolulu police Lt. Derek Hahn became the third current or former HPD officer arrested this week in what prosecutors say was a criminal conspiracy to frame Gerard Puana, the uncle of Katherine Kealoha, in a June 2013 mailbox theft. The Kealohas and Puana were involved in a family dispute over money at the time.

Federal attorneys, who accused Hahn of orchestrating the investigation of Puana, said in court documents that telephone records showed Hahn had repeated phone conversations and text message exchanges with “Co-conspirator 1” and “Co-conspirator 6” on June 22, 2013, the day the mailbox theft was reported by Katherine Kealoha, and in the days following.

The two co-conspirators are identified in other parts of the complaint as the owner of the house making the call and her husband, the “then chief of police,” respectively.

Hahn, 43, appeared in U.S. District Court on Wednesday afternoon and was released on a $50,000 signature bond.

Prosecutors allege Hahn falsified information, obstructed federal agencies investigating the matter and then lied about it.

Hahn was a lieutenant in HPD’s Criminal Intelligence Unit at the time it investigated the report of a theft of the Kealohas’ mailbox from in front of their Kahala home.

An HPD spokeswoman said Wednesday that Hahn is a 20-year veteran of the force now assigned to the Communications Division. He will be placed on leave without pay pending investigation, she said.

Federal attorneys accused Hahn of instructing an underling to not place a hard drive retrieved from the home into evidence, and then later instructing him to place into evidence only excised portions of data recovered from the hard drive.

At Hahn’s appearance in U.S. District Court on Wednesday, Special Attorney to the Attorney General Janaki Gandhi said, “This defendant (Hahn) in June 2013 played a pivotal role; he was calling the shots and moving the pieces for the arrest.”

Gandhi asked Magistrate Judge Richard Puglisi to require Hahn to sign a $75,000 bond co-signed by his fiancee. Gandhi also told Puglisi that Hahn poses a danger to himself or others because he owns eight registered firearms and, according to government surveillance, has mental health issues for which he has been seeking treatment.

But Puglisi set the bond at $50,000.

It was the same bail amount required for the release of Officer Ming Hung “Bobby” Nguyen and retired Maj. Gordon Shiraishi, who were arrested Sunday, spent the night locked up at the Federal Detention Center and then released Monday afternoon.

Nguyen, 43, was charged with conspiring with others to alter or falsify records, obstruct an official proceeding and make a false statement. At the time of the investigation, he was married to Katherine Kealoha’s niece and lived on the Kahala property, court records said.

Shiraishi, 61, was charged with obstructing an official proceeding.

Like Hahn, Nguyen and Shiraishi were in the Criminal Investigation Unit during the mailbox theft investigation.

Birney Bervar, Hahn’s attorney, said his client was being followed by four federal agents in three cars since Sunday. Then Hahn got a call from the FBI Wednesday morning instructing him to go home to be arrested, so he went home.

“My client should not have been arrested; neither should the other two, Bobby Nguyen and Gordon Shiraishi,” Bervar said.

“This was clearly a summons type of a case where you would send a summons and have people voluntarily appear in court,” Bervar said after the hearing. “We’ve been aware of this investigation for almost two years. Everybody’s represented by counsel.”

Bervar told Puglisi that Hahn is taking anxiety and stress medication because of the intimidation and bullying by federal investigators. “They’re the ones that caused all this stress, sending him a target letter and telling him he needs to cooperate,” he said.

Bervar said after the hearing that Hahn is not going to be intimidated and is going to stick with the truth that there was no conspiracy to commit any criminal offense.

Niall Silva, the former police officer who was allegedly instructed by Hahn to not hand over the entire hard drive and then to later lie about the details to federal authorities, pleaded guilty last year to contributing to the conspiracy in a deal with federal prosecutors in exchange for his cooperation.

Silva said under oath that he and others participated in the conspiracy in an effort to discredit Puana. At the time, Puana and his mother were embroiled in a family legal dispute in which they claimed that Katherine Kealoha had stolen $150,000 from them in connection with a reverse mortgage.

The Kealohas and Nguyen all identified Puana as the suspect in a video of the mailbox theft, a court document said.

Preliminary hearings for Nguyen and Shiraishi are scheduled for Nov. 1.

Breiner questioned the validity of the accusations, pointing out that much of it is based on information provided by Silva. “And he’s lied twice during the investigation — he’s lied to investigators and then he lied to the grand jury,” he said. “I think his credibility is definitely an issue.”

U.S. attorneys, led by Special Attorney to the Attorney General Michael Wheat, have been providing evidence about the case to a federal grand jury the past two years.

Wheat, who has consistently refused to discuss the case with news reporters, on Wednesday declined comment.

Silvert, the assistant public defender, represented Puana in the criminal case against him that ended in a mistrial. He said the evidence in that case pointed to a conspiracy against his client and that he turned over evidence to the U.S. Attorney’s Office.

People have wrongly focused on the mailbox theft investigation when there should be more attention on the fact that officers at the highest levels entrusted with ensuring public safety were committing crimes, he said Wednesday.

The complaint against Hahn bolsters the overall case because the phone records tie people and events involved, Silvert said. “That was something that we didn’t have the ability to do.”

FBI Special Agent in Charge Paul Delacourt, in a news release Wednesday, said “this investigation is not over and we will continue to follow the facts wherever they lead us.”

He added: “In order to restore the public’s trust in its law enforcement, we are required to root out all responsible parties.”

Derek Hahn complaint by Honolulu Star-Advertiser on Scribd