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Jurors convicted four defendants Thursday in a Honolulu police corruption case involving allegations that former Honolulu Police Chief Louis Kealoha and his prosecutor wife, Katherine Kealoha, framed her uncle with the help of several officers in an attempt to settle a family score over money.
The jury found the Kealohas and HPD officers Derek Hahn and Minh-Hung “Bobby” Nguyen guilty of federal conspiracy charges after one and a half days of deliberation.
The defendants were also found guilty of three counts of obstruction of justice. All of them were acquitted of charges of lying to the FBI.
A fifth defendant, retired HPD Major Gordon Shiraishi, was found not guilty of all charges.
For the Kealohas, the verdict Thursday is just one piece of their legal troubles.
The Kealohas, Hahn and Nguyen are scheduled for sentencing in October. Katherine and Louis Kealoha face a second trial that same month related to a series of financial crimes, including bank fraud and identity theft.
Then, Katherine Kealoha faces another trial in January for allegedly running a prescription drug trafficking ring with her younger brother, Rudolph Puana, who is an anesthesiologist.
Federal prosecutors also haven’t completed their investigation into public corruption and abuse of power within Hawaii law enforcement.
Katherine Kealoha’s former boss, Honolulu Prosecuting Attorney Keith Kaneshiro, has received a target letter indicating he is suspected of participating in criminal activity. Honolulu Mayor Kirk Caldwell’s top civil attorney, Donna Leong, also received a target letter.
Earle Partington, Katherine Kealoha’s co-counsel, said after the verdict, “I’m afraid that the government’s smearing job on Katherine Kealoha was very effective.”
Louis Kealoha told reporters, “There’s still a lot to take in. I just want to thank the community for all their love and support.”
The government prosecutors asked the judge to remand Katherine Kealoha back into custody. A bail hearing is set for 10 a.m. Friday.
The other defendants and their attorneys declined to comment.
The jurors were among the last to leave the courthouse. They shuffled out one by one without speaking to the media.
After the verdict, Robert Brewer, the U.S. Attorney for the Southern District of California, which prosecuted the corruption case, said in a prepared statement, “The Kealohas’ extraordinary greed inspired astonishing corruption…These two were supposed to be the good guys. They were supposed to enforce the law — not break it.”
HPD Chief Susan Ballard, who succeeded Kealoha, issued a statement that said, “The damage caused by this small group of individuals hurt both the community and the department. But the men and women of the HPD have been working hard this past year and a half to restore HPD’s reputation and the public’s trust.”
Honolulu Mayor Kirk Caldwell also released a brief statement: “The jury has reached a verdict and I respect the process and their decision. It’s time to move on.”
The Kealohas were accused by the U.S. Justice Department of framing Katherine Kealoha’s uncle, Gerard Puana, for the theft of their mailbox on June 21, 2013 in retaliation for a lawsuit he and his mother, Florence Puana, filed against Katherine several months before.
That lawsuit, filed in state court, accused Katherine Kealoha of fraud and financial elder abuse.
In particular, the Puanas said Kealoha duped them out of hundreds of thousands of dollars via a shady investment deal and reverse mortgage scheme.
Attorneys for the Justice Department argued during 18 days of trial that the dispute over money was the driving force behind the Kealohas’ attempts to frame Puana for the mailbox theft.
Prosecutors also argued that the couple couldn’t have done it alone. The Kealohas needed the help of Hahn and Nguyen to carry out the scheme and subsequent cover-up, which included lying to federal investigators once they started probing the suspected frame job.
After Thursday’s verdict, two lawyers noted that the case has caused widespread pain and ruined reputations.
Alexander Silvert was public defender for Katherine Kealoha’s uncle, Gerard Puana, who was initially accused of stealing the Kealoha’s mailbox.
He’s credited, along with his investigators, of figuring out the mailbox theft charges were a frame job and convincing federal investigators his client was the victim of a police conspiracy. He was a witness for the government in the case against the Kealohas.
“It was the right verdict,” Silvert said. “My client was set up and framed by the highest officials in law enforcement in the state. That’s unforgivable.
“This is a message to the entire law enforcement community that this kind of behavior can’t be tolerated. The fact that this was a quick verdict sends that message.”
Silvert read a statement to the press from the Puanas that was written by Gerard’s sister, Kay Hartsell.
“On behalf of Florence Puana and the Puana ohana, we find no joy or comfort in the outcome of the mailbox trial. Our family losses have been tremendous. Florence’s home will never be restored to her,” the statement read.
“The years of humiliation, heartache, tears and sorrow inflicted on Florence, Gerard and our family won’t be assuaged or erased. Some family relationships have been completely, perhaps forever, severed while others still remain tenuous. Yet through it all, our ohana has survived strong and united. We will eventually recover as we continue to look after each other.”
Honolulu defense lawyer Victor Bakke said the fact that Shiraishi was found not guilty should give the public confidence in the trial outcome.
It also shows the government that its case was not as air-tight as prosecutors might have suspected when they first charged the defendants.
As for the Kealohas, who face additional criminal charges, Bakke said their reputations in the community are forever tarnished. He predicted the next trial involving allegations of financial wrongdoing should be much easier to prove, in large part because it’s based on documents.
Civil Beat reporter Suevon Lee contributed to this report.
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