Former Honolulu attorney Donna Leong accused of lying to FBI in Kealoha probe

The city’s former corpo­ration counsel lied to FBI agents on five occasions about who she talked to and how she structured a $250,000 separation settlement with former Honolulu Police Chief Louis Kealoha, according to the U.S. Department of Justice.

In a superseding indictment filed March 17, assistant U.S. Attorney Colin M. McDonald wrote that on Nov. 17, 2017, the city’s top attorney, Donna Leong, made “materially false, fictitious, and fraudulent statements and representations” to FBI agents investigating Kealoha’s payout.

Leong, the city’s corpo­ration counsel from 2013 to 2019, allegedly told FBI agents that the acting HPD chief at the time, Cary Okimoto, had nothing to do with the payout, never talked to her about it and did not complain until after it was completed, which the federal government claims is not true.

Leong also “falsely stated” to federal agents that she did not have any conversations with then HPD Assistant Chief William R. Axt about the payment to Kealoha.

Leong allegedly made a false statement to FBI agents when she said that deputy corporation counsel Duane Pang would not have been able to talk to anyone outside the Honolulu Police Commission about the settlement because she controlled the process “very tightly.”

It is not clear why the Justice Department elected to file the new allegations three months after the initial Dec. 16 indictment of Leong, former Managing Director Roy Amemiya and former Honolulu Police Commission Chair Max Sword.

Kelly Thornton, director of media relations for the U.S. Attorney’s Office of the Southern District of California, which is handling the case, declined comment.

Leong’s attorney, Lynn Panagakos, did not respond to a Honolulu Star-Advertiser email and phone message requesting comment. Neither the DOJ nor Panagakos responded to a question about whether Leong was offered a plea deal in exchange for cooperation.

Leong, Amemiya and Sword are accused of conspiring to defraud the government by paying Kealoha $250,000 to voluntarily leave HPD in January 2017. The trio turned themselves in to the FBI on Jan. 12 and have entered pleas of not guilty.

Their trial is scheduled for June 13 at 9 a.m.

On Friday, U.S. District Judge Leslie E. Kobayashi told the Justice Department and defense attorneys for Leong, Amemiya and Sword that she will be available from 4 to 6 p.m. Monday during the scheduled deposition of a critical witness in the case.

Kobayashi ruled Feb. 28 that former city Budget and Fiscal Services Director Nelson Koyanagi, who is fighting cancer, could be deposed in the case.

According to a letter from Koyanagi’s doctor, discussed in federal court Friday, he may not be able to comprehend or understand what is being asked of him, and his ability to make accurate statements may be severely impaired. Koyanagi may be suffering aphasia, which is the loss of ability to express or understand spoken words, according to discussions during Friday’s status conference.

Kobayashi reiterated that the deposition would be difficult, but she did not see any evidence that it cannot continue.

“He may or may not be able to comprehend. … He may not be able to physically formulate answers in his condition,” said Koba­yashi. She said the issue of admissibility of Koyanagi’s responses will be addressed following the deposition.

She reminded the defense that their duty to fight for their clients is “colliding” with compassion for another individual “who is clearly going through a very difficult time.”

If lucid, Koyanagi is expected to confirm the 2017 Kealoha settlement was legal and followed a structure similar to separation payout agreements with other former city department heads.

Prior to moving forward with the Kealoha payout, the city administration also considered a legal and policy memo authored by a deputy corporation counsel that found the arrangement legal and appropriate. A 2019 review of the settlement conducted by a San Francisco law firm, Farella Braun &Martel, contracted by the city, also declared its structure legal and in line with separation payment practices at the time.

“If I feel any difficulty of my client to respond … I will decline the court,” said Howard Luke, Koyanagi’s attorney.

Kobayashi also assured Lyle S. Hosoda, Amemiya’s attorney, and Luke that a request by assistant U.S. Attorney Janaki G. Chopra for the number of times defense attorneys met with Koyanagi was simply a request.

“We see it as a form of discovery, reciprocal discovery,” said Chopra, speaking in court Friday. “We understand at least one member of the defense has met with Mr. Koyanagi.”

Luke told the court he would not turn over any information about communications between Koyanagi, a witness and attorneys involved in the case, despite the government’s request.

He said he was concerned about “some issues that would arise with Koyanagi’s work product and attorney- client communications.

“She (Chopra) asked for it, and Mr. Luke said, ‘No, I’m not going to give it to you,’” said Kobayashi.

Kobayashi said she does not expect that a motion to compel Luke to turn over the requested material will be filed.