South SGV News

U.S. Attorney's Office for the Southern District of California issued the following announcement on Oct. 22.

Former Honolulu Deputy Prosecutor Katherine Kealoha pleaded guilty in federal court to bank fraud, aggravated identity theft and drug charges, while her husband, former Honolulu Police Chief Louis Kealoha, pleaded guilty to bank fraud, in separate hearings today.

The pleas resolve all outstanding charges that were pending against the Kealohas following their corruption conviction in another case by a federal jury in June 2019. U.S. District Judge J. Michael Seabright’s acceptance of the guilty pleas means the Kealohas will not face a second trial in January 2020 on the bank fraud charges, and Katherine Kealoha will not face a third trial in May 2020 on the drug charges.

In June 2019, the Kealohas were convicted by a federal jury for abusing their power by conspiring with two police officers to frame Katherine Kealoha’s uncle, Gerard Puana, for a crime he did not commit in a desperate attempt to discredit his claim that the Kealohas stole a substantial amount of money from him and his 100-year-old mother – Katherine’s own grandmother – Florence Puana.

As part of the guilty pleas today, the Kealohas also entered into sentencing agreements in the case where the jury found them guilty of conspiracy to frame the uncle.  In the sentencing agreements, the Kealohas agreed to waive their appellate rights.  The parties also agreed to recommend that the Court order the Kealohas to pay $289,714.96 in restitution to the victims of their fraud, including $46,261.00 to Gerard Puana and $243,453.9 to Florence Puana.                             

In her plea agreements today, Katherine Kealoha resolved two cases with admissions that she was involved in an elaborate bank fraud scheme and a drug trafficking conspiracy with her brother, anesthesiologist Rudolph B. Puana, who wrote medically unnecessary prescriptions for controlled substances such as oxycodone and fentanyl in order to resell them. When the brother came under police suspicion, Katherine Kealoha used her law enforcement position to take control of the investigation and ensure that she and her brother were not prosecuted. Moreover, Katherine Kealoha also admitted that she obtained fraudulent loans from several banks and credit unions and stole more than $165,000 inheritance of two children, Ransen Taito and Ariana Taito, for whom she served as financial guardian. In her plea agreement, the parties agreed to recommend that the Court order Katherine Kealoha to pay restitution $165,269.82 to the Taitos and to forfeit $63,476.97 from the sale of the Kealohas’ home.

Both Kealohas admitted in plea agreements that they defrauded banks with elaborate schemes in order to obtain loans to fund their extravagant lifestyle. Louis Kealoha’s plea agreement said the couple spent more than $591,000, which was derived from: (1) stolen proceeds from a reverse mortgage obtained by Florence Puana; (2) stolen funds belonging to the Taito children; and (3) loan proceeds obtained through banks and credit unions. In his plea agreement, Louis Kealoha agreed that the Court order him to pay $165,269.82 to the Taitos and to forfeit $63,476.97 from the sale of the Kealohas’ home.

 The Court will reset all of the sentencing hearings at a status hearing scheduled for next week. 

DEFENDANTS                                                                   

Katherine P. Kealoha                          Age: 49                       Honolulu, Hawaii

Louis M. Kealoha                               Age: 59                       Honolulu, Hawaii

SUMMARY OF CHARGES

Katherine Kealoha                           CR No. 17-00582-JMS-WRP

Conspiracy, in violation of 18 U.S.C. § 371

Maximum Penalty: Five years in prison, $250,000 fine

Obstruction of Official Proceeding, in violation of 18 U.S.C. § 1512(c)(2)

Maximum Penalty: Twenty years in prison per count, $250,000 fine per count

Katherine Kealoha                           CR No. 18-00068-JMS-WRP

Bank Fraud, in violation of 18 U.S.C. § 1344

Maximum Penalty: Thirty years in prison, $1 million fine

Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A

Maximum Penalty: Mandatory term of imprisonment of two years, to be served consecutive to the sentence imposed for any underlying charge; fine of up to $250,000

Katherine Kealoha                           CR No. 19-00015 JMS-WRP

Misprision of Felony, in violation of 18 U.S.C. § 4

Maximum Penalty: Three years in prison; fine of up to $250,000;

Louis Kealoha                                   CR No. 17-00582 JMS-WRP

Conspiracy, in violation of 18 U.S.C. § 371

Maximum Penalty: Five years in prison, $250,000 fine

Obstruction of Official Proceeding, in violation of 18 U.S.C. § 1512(c)(2)

Maximum Penalty: Twenty years in prison per count, $250,000 fine per count

Louis Kealoha                                   CR No. 18-00068-JMS-WRP

Bank Fraud, in violation of 18 U.S.C. § 1344

Maximum Penalty: Thirty years in prison, $1 million fine

AGENCY

Federal Bureau of Investigation

Honolulu, Portland, and San Diego Divisions

Original source can be found here.