Federal prosecutors are moving forward to have the Hawaii Kai home of former Honolulu Police Chief Louis Kealoha and his city prosecutor wife Katherine Kealoha forfeited to the government.
They filed papers in U.S. District Court Tuesday to prevent the Kealohas from selling or transferring ownership of their Mariner’s Cove property.
On Friday, Kealoha and his deputy city prosecutor wife, Katherine Kealoha, were arrested on charges that included bank fraud, conspiracy and obstruction of justice stemming from a family fight between Katherine and her uncle over money. They were released that day on $100,000 bond each.
The indictment charging the Kealohas lists their home as a proceed obtained directly or indirectly through the charged crimes, therefore subject to forfeiture upon conviction.
The indictment says the Kealohas submitted a forged HPD report with their loan application to explain away some negative information on their credit report and secure a $980,000 mortgage from Hawaii Central Federal Credit Union for the 2,123-square-foot, four-bedroom, three-bath home.
According to documents filed at the state’s Bureau of Conveyances, the Kealohas bought the Hawaii Kai home in August 2013 for $1.23 million after they sold a Kahala home, where they reported their mailbox had been stolen two months earlier, for $1.7 million.
The Hawaii Kai home has a tax assessed value of $1.24 million, according to the latest property tax records.
Should prosecutors ask a judge to order the forfeiture of the home to the government, they will have to contend with claims from Hawaii Central Federal Credit Union, which holds the $980,000 mortgage and a $90,000 home equity loan it granted the Kealohas in July 2014, and a possible claim by Kevin Sumida, one of the Kealohas’ lawyers.
The Kealohas signed a mortgage on their Hawaii Kai home to Sumida’s law firm this past June to secure the law firm’s services and to guarantee payment of legal fees, costs and expenses up to $700,000.
The federal court record lists Sumida as one of the Kealohas’ lawyers in the criminal case. The other is Myles Breiner. Neither responded to requests for comment.
Honolulu Police Department Form – Report No. 09-278361 by Honolulu Star-Advertiser on Scribd
