Katherine Kealoha to be a witness in case targeting her brother

The trial of a Hawaii island doctor accused of writing opioid prescriptions for his friends to sell or trade to fuel their cocaine consumption opened Thursday with federal prosecutors labeling him a drug dealer and the defense arguing he was an addict legally treating people in pain.

Dr. Rudolph B. Puana, a double board-certified anesthesiologist and pain doctor, was accused by the Department of Justice in 2019 in a 53-count indictment of health care fraud and conspiracy to distribute oxycodone and fentanyl. On Tuesday, Puana pleaded guilty to a single count of being a drug addict in possession of a firearm.

Puana’s sister, former Honolulu Deputy Prosecutor Katherine Ke­aloha, was named as a co-defendant in a Sept. 19, 2019, superseding indictment. The now-imprisoned Kealoha pleaded guilty to using her job to shield her brother from an investigation and accepting prescriptions that she traded for cocaine.

Kealoha is listed as one of the government’s 48 witnesses against Puana.

Also on the government’s witness list is Honolulu police officer Daniel Sellers. Sellers faced felony charges for breaking into and searching Kealoha’s uncle’s residence and lying about it to a grand jury and FBI agents during the public-corruption investigation that ended with a 13-year federal prison sentence for Kealoha and a seven-year sentence for her estranged husband, former HPD Chief Louis Kealoha.

The prosecution is being managed by the same team of assistant U.S. attorneys from Southern California that handled the 2017 case against the Kealohas and continues to investigate corruption allegations involving members of Hawaii’s political and business communities.

“Licensed to deal … that’s what brings us here today,” said Assistant U.S. Attorney Michael Wheat during his opening statement. “Dr. Puana was using illicit drugs with people to whom he was writing medical prescriptions with no legitimate basis.”

Puana’s attorney, F. Clinton Broden, said in his opening statement that Puana’s name came up because the special prosecutor was investigating Katherine Ke­aloha. Kealoha fixed a drunken driving arrest for her brother’s childhood friend Christopher McKinney, who has been given immunity for his cooperation in the case against Puana.

“They bring Puana in because that is the way to get to Kathy Kealoha,” Broden said. “(After receiving immunity), that’s when (McKinney) tells them … what they want to hear, that Kathy Kealoha’s brother was giving him prescription medication to be sold on the streets even though there is no corroborating evidence of that.”

Using a digital presentation shown to jurors on iPads mounted in front of them, Wheat detailed Puana’s background, including his medical school education at Creighton University and the circumstances that made him a “very experienced physician.”

Puana and his ex-wife, Dr. Lynn Welch Puana, developed close friendships with Joshua Derego and his wife, Elena Rodriguez Derego, after the couples met when their kids attended Hawaii Preparatory Academy together. The defendant treated both Deregos for chronic pain but then allegedly wrote prescriptions for oxycodone without a legitimate medical purpose, according to Wheat.

“It was like a brotherhood; they golfed, drank beer and partied with cocaine substances,” Wheat told jurors. “Their relationship was so close the Puanas decided to provide tuition support for the Derego children.”

The tuition support was made in $2,500 payments but ended when the Puanas’ marriage deteriorated, Wheat said.

The Deregos, at Rudolph Puana’s direction, allegedly sold the oxycodone pills prescribed to them for $15 to $20 each to raise money for their children’s tuition. In all, Puana gave the Deregos 4,260 pills through 31 prescriptions, according to Wheat.

Broden countered in his opening statement that medical records, both digitized and scribbled in a spiral- bound notebook, outline legitimate pain management plans and treatments for the Deregos and others.

Puana “is a very, very good doctor, and he had very, very human failings,” Broden said.

Puana and his Mid-Pacific Institute classmate McKinney collaborated on a book titled “The Red Headed Hawaiian” and went on a book tour together in 2014. McKinney allegedly traded excess oxycodone prescriptions from Puana for cocaine, Wheat said.

“To fund that cocaine, Dr. Puana, much like he had done with his friend Mr. Derego, for his friend Mr. Mc­Kinney, he wrote prescriptions for oxy to sell,” he said. “Those prescriptions were written to fund their cocaine binges. Month after month after month, those prescriptions were written.”

McKinney sold the pills for $15 to $20 each, Wheat said, and altogether received 3,190 oxycodone pills from Puana through 24 prescriptions.

But Broden told jurors, “There is not one text message about selling pills for cocaine because Dr. Puana, the evidence will show, didn’t know Chris McKinney was selling his pills for cocaine.”

In the summer of 2015, Puana allegedly reconnected with Sellers, the police officer, whom he also knew from Mid-Pacific, at a Keeaumoku Street bar. Sellers was serving as a plainclothes detective in HPD’s now-disbanded Criminal Intelligence Unit.

Wheat said Puana told Sellers there were some corrupt HPD officers that he had learned about from alleged narcotics distributor Tiffany Masunaga. According to the prosecutor, Masunaga traded cocaine for fentanyl patches and bottles of the antidepressant Xanax that Puana reportedly gave to McKinney.

Sellers later met with Puana at his rented Imperial Plaza penthouse to ask for more details. At that meeting, Puana allegedly cut a line of cocaine on the bar with Sellers in the room.

“He was appalled. His childhood friend, the esteemed doctor, was using cocaine. He told him if he ever saw him do that again, he would kick his ass,” Wheat said.

The pair went out for drinks at Uncle Bo’s in Kapahulu, where Puana told him about then-HPD officer Alan Ahn, who was allegedly “the muscle” who rode in Masunaga’s Maserati while she dropped off drugs around Oahu, according to Wheat.

Sellers wrote a memo to his superiors with the information Puana provided and told Katherine Kealoha, whom he dated in high school, that her brother was all “f—d up,” Wheat said.

HPD began an investigation into Ahn and Masunaga, and when detectives raided Masunaga’s apartment, they found the fentanyl patches Puana allegedly gave McKinney, Wheat said. Kealoha assigned the case to herself to protect her brother.

Broden told the court that Puana reported Ahn and Masunaga to Sellers after witnessing Masunaga driving 100 miles an hour while pregnant and doing cocaine.

“You think he would tell them about Tiffany Masunaga if he thought his drugs would be found in Tiffany Masunaga’s house?” Broden mused, to which the government objected.