Katherine Kealoha, a former deputy prosecutor, pleaded guilty today to three felony charges for her role in a bank fraud scheme and a separate drug-related case.
Later in the day, her husband, former Honolulu police Chief Louis Kealoha, pleaded guilty to one count of bank fraud.
Their pleas today were part of a separate deals they made with federal prosecutors
Appearing before U.S. District Chief Judge J. Michael Seabright, Katherine Kealoha this morning pleaded guilty to single counts of bank fraud, aggravated identity theft and for failing to report a felony as a law enforcement officer.
After a federal investigation that began in 2015 over an alleged mailbox theft that eventually transformed into one of the largest public corruption probes in state history, Katherine Kealoha for the first time admitted in court that she committed multiple offenses while holding a position of public trust.
Among those offenses was concealing information from detectives who were investigating a drug-distribution ring that involved her brother, Dr. Rudolph Puana, according to Kealoha and court documents. As a deputy prosecutor, Kealoha had been assigned to the case and concealed the information to try to protect her younger sibling, she said.
“I already had these alarm bells going off. I already had information that I should’ve taken to federal authorities,” she told Seabright.
She also admitted to providing false reports to financial institutions to obtain loans, including a document that indicated she was the owner of an account that belonged to two minor children she represented while in private practice as their guardian. Another document, she acknowledged, was an email Kealoha wrote but signed as Alison Lee Wong.
Prosecutors accused her of fabricating Wong to further her schemes.
As part of the plea deal, she agreed to pay restitution of nearly $290,000 to her grandmother, Florence Puana, and her grandmother’s son, Gerard, whom Katherine and Louis Kealoha, tried to frame for a crime he didn’t commit to discredit him in a family financial dispute.
Prosecutors said the Kealohas committed many of the crimes to pay for a Mercedes-Benz, a Maserati, a trip to Disneyland and other expenses, including utility bills and a $23,976 breakfast at the Sheraton Waikiki to celebrate Louis Kealoha’s selection as chief.
A federal jury in June found the Kealohas and two police officers guilty of conspiracy and obstruction of justice in that case.
Seabright’s approval of the plea deal means Katherine Kealoha will not face trial in January for bank fraud and another trial in May for the drug-related charges.
As part of the plea deal all other charges against Katherine Kealoha will be dismissed.
Louis Kealoha pleaded guilty this afternoon, also in Judge Seabright’s courtroom, to a single count of bank fraud. Seabright accepted his guilty plea.
All three cases stemmed from the public corruption investigation that is continuing.
As part of the plea deals, the Kealohas are agreeing to cooperate with investigators.
Louis Kealoha recently filed for divorce.
Toward the end of her responses to Seabright elaborating on her guilt, Katherine Kealoha said, “I just want to be upfront with the court and make sure I’m telling you everything that occurred.”
Following her morning court appearance, Katherine Kealoha issued this statement through her attorney, Gary Singh: “Today I took responsibility for my actions and I sincerely hope that the court and the community will see that Louis had no part in my criminal conduct.”
No sentencing date has been set for Katherine Kealoha, who remains in jail until she is sentenced.