A former Honolulu deputy prosecuting attorney caught up in a wide-ranging corruption scandal is scheduled to stand trial in April on new charges that she and her brother illegally sold opioid painkillers and then used her position to help cover up the crimes.

The order by U.S. Magistrate Judge Richard Puglisi marks a third federal trial that Katherine Kealoha will face with a close family member as a co-defendant. In March, Kealoha is scheduled to stand trial with her husband, former Honolulu Police Chief Louis Kealoha. The Kealohas face another trial for bank fraud.

The latest twist centers on a set of charges against the former high-level prosecutor that were made public Tuesday when the court unsealed a 54-count indictment.

Former deputy city prosecutor Katherine Kealoha with Louis Kealoha arrive at Federal Court house.
Former deputy city prosecutor Katherine Kealoha and her husband, former Police Chief Louis Kealoha, arrive at U.S. District Court on Wednesday for her court appearance on drug charges. They are scheduled to stand trial together in March on other charges. Cory Lum/Civil Beat

In the new case, the federal government alleges Katherine Kealoha and her brother, Dr. Rudolph Puana, took part in a scheme to illegally sell opiod painkillers including fentanyl and oxycodone out of a clinic Puana ran on the Big Island. The government also alleges she used her position as a prosecutor to steer an investigation away from her and her brother.

On Wednesday, Colin McDonald, an assistant U.S. attorney, asked Puglisi to detain Puana pending the trial and to impose tougher release terms on Kealoha. The judge denied the request and released Puana on $25,000 bail; Puglisi also said Kealoha would have to undergo routine drug testing and be restricted to traveling only on Oahu.

Prosecutors didn’t ask that Kealoha be put in jail, in part because she is scheduled to appear in a federal conspiracy trial March 18.

The new indictment against Kealoha and Puana also mentions several unnamed co-conspirators and an unnamed individual. They apparently include Tiffany Masunaga and former Honolulu Police Officer Alan Ahn, who in 2015 were charged with a series of crimes related to possession of cocaine, marijuana and other prescription drugs, including fentanyl.

Ahn pleaded no contest to the charges in February 2017 and was sentenced to 60 days in jail three months later. Masunaga’s case, meanwhile, has stalled, with prosecutors neither dismissing the charges nor putting her on trial.

Katherine and Louis Kealoha were indicted in October 2017. They face federal trials for bank fraud and for a conspiracy in which they allegedly used city resources and police officers to frame a relative who was in a dispute with the Kealohas over money. The conspiracy trial is the one scheduled for March 18. Four Honolulu police officers have also been indicted; two have pleaded guilty.

The federal government’s widening investigation continues to ensnare government officials. Last month, Honolulu’s top attorney, Corporation Counsel Donna Leong, went on paid leave after being notified by federal prosecutors that she is a target in the corruption probe.

In addition, Katherine Kealoha’s former boss, Honolulu Prosecuting Attorney Keith Kaneshiro, also has received a target letter. On Tuesday, Hawaii Attorney General Clare Connors petitioned the Supreme Court to temporarily suspend  Kaneshiro’s law license, which would prevent him from working as prosecutor.

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