When the U.S. attorney’s office filed an amended indictment last week against former Honolulu Police Chief Louis Kealoha and his wife Katherine Kealoha, some defense lawyers for other defendants in the case thought the prosecutors have given their clients a gift.
Conspicuously absent from the indictment filed Thursday was any mention of a conspiracy involving a stolen mailbox and several current or former Honolulu police officers.
Instead, the indictment focused on allegations of bank fraud, identity theft and obstruction of justice involving only the Kealohas. So was the prosecution tossing out the whole mailbox caper?
“All the defense attorneys were a little surprised when it came down,” said Rustam Barbee, who represents Louis Kealoha. “Upon further research, it appears those (mailbox charges) are still active.”
Earlier this month, U.S. District Court Judge J. Michael Seabright ordered prosecutors to divide into two trials what the government had presented as one sprawling matter.
Seabright said one trial should focus on an alleged conspiracy in which the Kealohas supposedly enlisted several members of a special police unit to stage the theft of a mailbox from the Kealohas’ home and frame Katherine Kealoha’s uncle for the heist.
The Criminal Intelligence Unit at the center of the allegations has been disbanded. Meanwhile, three of the officers facing trial — Bobby Nguyen, Daniel Sellers and Derek Hahn — have been assigned to nonpolice duties, while a fourth, Gordon Shiraishi, has retired.
The second trial, under Seabright’s order, would involve a series of financial crimes, specifically bank fraud and identify theft, that prosecutors allege the Kealohas committed.
The amended indictment filed Thursday, known as a “second superseding indictment,” includes only the financial allegations along with additional counts related to alleged theft of funds from a trust account for which Katherine Kealoha was trustee.
Cynthia Kagiwada, Katherine Kealoha’s attorney, said that in federal court in Hawaii, superseding indictments normally replace previous versions much the way an amended complaint in a civil case would become the operative document.
“What the U.S. attorney is telling us is that he can pick and choose which indictment to go forward on, and he doesn’t have to decide until trial,” Kagiwada said.
Michael Wheat, the assistant U.S. attorney in charge of the case, declined to comment.
Rules governing the procedures lawyers are supposed to follow in federal criminal cases generally require prosecutors to obtain the court’s permission to dismiss charges that have been filed.
The idea that “a superseding indictment that omits a charge against a defendant is essentially the same as dismissing that charge is inconsistent with criminal procedure,” the 9th U.S. Circuit Court of Appeals ruled in a 2009 case that addressed a similar issue.
“An original indictment remains pending until it is dismissed,” the court said.
May has shaped up as a sort of spring cleaning time in the Kealoha case, and a schedule for the trials is taking shape.
After ordering the financial counts to be separated from the mailbox conspiracy charges, Seabright set a trial date of Nov. 14 for the financial crimes case.
The prosecution has proposed holding a second trial, on the mailbox conspiracy counts, starting March 19, 2019, but Seabright has not issued an order on that. Prosecutors estimate their case in that trial could take six to eight weeks to present to jurors, while defense counsel have estimated they’ll need another two to four weeks.
Meanwhile defense attorneys are waiting to see whether there will be another superseding indictment.
“We’re going to wait and see what comes next,” Kagiwada said.
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