In a federal indictment unsealed Tuesday, former deputy city prosecutor Katherine Kealoha and her brother, Big Island Dr. Rudolph Puana, face new charges of selling powerful opioid painkillers illegally prescribed by Puana, covering it up from police and thwarting the prosecution of the case.

In a 56-count indictment, federal authorities lay out what they say is Kealoha’s leading role in a small, multi-island drug ring nourished with unlawful prescriptions for oxycodone, fentanyl and Xanax authorized by Kealoha’s brother. 

Four other co-conspirators with personal or business ties to Kealoha and Puana are alleged to have sold the drugs on multiple islands, sometimes using the proceeds to line their pockets or to buy cocaine for themselves or Puana.

Retired HPD Chief Louis Kealoha Katherine Kealoha leave District Court.
Former deputy city prosecutor Katherine Kealoha has been charged with distributing drugs along with her brother, a Big Island doctor. Cory Lum/Civil Beat/2018

Civil Beat first reported about the alleged drug operation and Kealoha’s involvement with it in December, soon after federal investigators interviewed Puana’s ex-wife about the case.

Between 2010 and 2018, Puana owned and operated pain management clinics on Oahu, Maui and the Big Island. Not only did he write the prescriptions and sometimes transport the drugs himself on interisland airplanes, he also advised Kealoha and other co-conspirators on how to fill the illegal prescriptions without arousing suspicion at the pharmacy, the indictment alleges. 

Kealoha distributed at least some of her share of the drugs to people in Hawaii and New York, according to authorities.

At least one of the co-conspirators would fill oxycodone prescriptions authorized by Puana using Medicaid benefits and then make false claims for reimbursement, according to the indictment. Puana, who knew of this scheme to wrongfully reap insurance benefits, is charged with defrauding Hawaii’s Medicaid program.

The anesthesiologist also faces a charge for possessing six firearms and ammunition while being an addict.

When a police officer notified Kealoha that her brother and a co-conspirator were buying and using cocaine, she “arranged to have herself assigned as the prosecutor” of the investigation into the six-person drug distribution ring, the indictment said.

That allowed her to “steer law enforcement scrutiny away from her brother’s felonious conduct in that drug conspiracy,” by measures including stopping HPD detectives from questioning drug ring participants about the source of the controlled substances they had spent years distributing, the indictment said.

She then gave favorable plea deals to others involved “to reduce the likelihood they would reveal that her brother had distributed controlled substances,” the document states.

Kealoha also used an encrypted mobile messaging app to cultivate a friendship with one of the drug distributors, swaying him from revealing to the cops Puana’s role as supplier, authorities allege.

It was understood among all members of the drug ring that Kealoha would use her power as prosecutor to ensure that Puana could continue illegally prescribing sedatives and narcotics despite the police investigation, according to the indictment.

Puana is scheduled to appear in federal court Wednesday.

He co-wrote a memoir with novelist Chris McKinney that tells his life story of growing up a red-headed Hawaiian, who despite struggling through school, went to Creighton University School of Medicine and worked at various hospitals before returning to Hawaii with a mission to help people.

Investigators have focused on 114 skin patches of fentanyl — a powerful opioid painkiller — that were seized during the 2015 drug raid that Kealoha helped orchestrate and execute.

Federal prosecutors have also subpoenaed records from Puana’s former Big Island pain clinic.

The new indictment comes amid a widening federal corruption investigation that has resulted in indictments or criminal charges against Katherine Kealoha, her husband and former Honolulu police chief Louis Kealoha and five current or former officers. Two officers have already pleaded guilty in the case.

The Kealohas and three of the officers are scheduled to go to trial next month on charges that they carried out an elaborate scheme to frame Katherine’s uncle, Gerard Puana, for the federal crime of stealing the Kealohas’ mailbox in order to gain leverage in a high-dollar civil dispute between Katherine Kealoha and Gerard Puana.

The Kealohas also face a second trial slated for June involving bank fraud and financial malfeasance relating to money that was allegedly stolen from Gerard Puana and his mother as well as two children Katherine Kealoha had financial responsibility for.

The new indictment came on the same day that Hawaii Attorney General Clare Connors filed a petition with the state Supreme Court asking that city prosecutor Keith Kaneshiro be suspended until the ongoing federal corruption probe has been resolved. Kaneshiro has received a target letter in the investigation but has refused to step aside or even acknowledge that he is a target.

Read the latest indictment:

Puana Kealoha (Text)

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