When the federal government charged Louis and Katherine Kealoha in October 2017, the 42-page indictment included accusations of stunning malfeasance by two high-ranking officials in the criminal justice system.
Prosecutors claim the former Honolulu police chief and his deputy city prosecutor wife took money from her elderly grandmother and two children for whom she was acting as guardian, defrauded banks and used officers from a secretive police unit to cover up misdeeds through an elaborate scheme involving fabricated evidence and false statements to investigators.
The 20-count indictment charged not only the Kealohas, but also several police officers close to the couple: their nephew Minh-Hung “Bobby” Nguyen; Katherine Kealoha’s old friend Daniel Sellers; Derek Hahn, who was her partner in a solar energy business; and Gordon Shiraishi, a former police academy classmate of the ex-chief.
Next week, U.S. District Court Judge J. Michael Seabright is scheduled to decide whether to hold one big trial or two or more smaller ones. The May 3 hearing, for which the parties have submitted hundreds of pages of briefs, will establish something of a road map for how the case proceeds.
“The stakes are big,” says Ken Lawson, a former criminal defense lawyer who is co-director of the Hawaii Innocence Project at the University of Hawaii’s William S. Richardson School of Law. “The government doesn’t want to try these issues twice and get some of these same witnesses back to testify, and it’s probably easier for them to get a conviction if it’s just one trial.”
The defendants, meanwhile, have good reason to want to divide things up.
The allegations fall into three general categories: counts involving stealing money from Katherine Kealoha’s grandmother and uncle and a complex conspiracy involving police officers to cover it up; fraud committed against banks where the Kealohas took out loans; and the theft of money from trust accounts set up for Ransen and Ariana Taito, for whom Katherine Kealoha was serving as guardian when they were children.
From the defendants’ perspectives, all of these amount to separate matters that should be divided into two or more trials. Most of the defendants have filed motions asking the court to do just that.
But prosecutors argue everything falls under an overarching umbrella: “part of a common plan and scheme to fraudulently enrich the Kealohas, silence their victims through intimidation and deception, and conceal their crimes by whatever means necessary — falsifying records and testimony, coercing witnesses, committing civil rights abuses, and imprisoning opposition.”
To hold multiple trials, federal prosecutors argue, would “encumber the Court’s calendar for repeated lengthy periods, consume significant staff resources, require recruiting multiple sets of jurors, and force numerous witnesses to testify repeatedly about the same facts.”
The issue, some legal experts say, is how to balance this call for judicial economy and efficiency with the need to make sure every defendant gets a fair trial – that they aren’t essentially found guilty by association in the minds of jurors.
Particularly in a complex criminal case with multiple defendants and a variety charges, human nature could lead jurors to want to find people guilty, Lawson said.
“You don’t want a jury losing their way and becoming, for lack of a better word, pissed at the whole situation and out to convict someone,” he said.
Unfortunately for the defendants, the law generally leans against separate trials.
“Normally courts want to join matters in a single trial if it doesn’t unfairly prejudice defendants,” said William Harrison, a Honolulu criminal defense attorney. “Is it unfairly prejudicial; that’s what we’re getting at.”
Judges typically seek to use jury instructions to ensure jurors don’t find defendants guilty by association, said Brook Hart, another Honolulu criminal defense attorney.
“Judges can usually control the problem by giving proper instructions,” Hart said.
In addition to seeking separate trials, Katherine Kealoha has sought to keep certain information away from the jury. Specifically, her attorney, Cynthia Kagiwada wants to make two topics from the indictment off-limits:
• That Katherine Kealoha had a fictional personal assistant, Alison Lee Wong, an alias Kealoha allegedly used to cover her tracks.
• That Kealoha misappropriated the Taitos’ trust money.
“These allegations are neither material nor relevant to any of the charges,” Kagiwada argues in a brief. “Furthermore, all of these allegations are inflammatory and highly prejudicial.”
It’s true that the alleged misappropriation of roughly $150,000 in trust money was not material to any count in the original indictment – the section was more like an anecdote that simply made Katherine Kealoha look bad.
But that changed in January, when Ransen Taito pleaded guilty to lying to a federal grand jury to help Katherine Kealoha cover up the theft of the trust money. According to the prosecution, Kealoha told Taito that his mother would go to jail if he didn’t lie, and Taito believed her.
As for the Alison Lee Wong alias, prosecutors argue that Kealoha used the name to help deceive her co-counsel in the trust case and to deceive banks where she submitted false information to obtain loans.
Hart said the judge will likely reject the argument that Alison Lee Wong should not be mentioned during the trial.
“My sense it that the court will not support that argument because it seems the use of the alias was a key factor in her behavior,” Hart said.
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