- Special Projects
Each time Gerard Puana steps through the front door of his Salt Lake condominium he looks south to the Federal Detention Center, where his niece, Katherine Kealoha, awaits sentencing.
“She’s not my problem anymore,” he said. “And she’s not my family’s problem either.”
On June 27, a jury convicted Kealoha, a former Honolulu city prosecutor, on a series of federal felonies stemming from her attempt to frame Puana for the 2013 theft of her mailbox.
Kealoha’s husband, retired Honolulu police chief Louis Kealoha, and two of his officers, Derek Hahn and Minh-Hung “Bobby” Nguyen, were also found guilty of conspiracy and obstruction of justice for taking part in the set-up.
A third officer, retired HPD major Gordon Shiraishi, walked free. Two other HPD officers pleaded guilty to other charges in connection with the federal investigation.
For Puana, the convictions brought a sense of vindication, but not closure.
He still owes Kealoha $658,000 from a verdict in a state civil case that the federal government says was won through fraud, deceit and manipulation. She also still has her name on the deed to his condo.
His mother, Florence Puana, turns 100 later this month yet no longer has a home.
She was forced to sell it after she says she was duped by her granddaughter into getting a reverse mortgage. Kealoha’s lawyers then garnished what little money she had left over.
At 99, Florence is living with her daughter in Kailua, sleeping on a bed in the living room.
“We just got screwed in every direction,” Gerard Puana said. “It’s unbelievable what she did, and the tragic part is that she did it to family.”
One of the biggest challenges facing the Puanas today is the verdict in the civil lawsuit they filed against Katherine Kealoha.
The federal government said the lawsuit was the motive behind the frame job. The Puanas had accused Kealoha in March 2013 of bilking them out of hundreds of thousands of dollars via a shady reverse mortgage on Florence’s home and a sham investment scheme.
The Puanas received more than $500,000 from the reverse mortgage. Most of the money — about $360,000 — went toward buying the Salt Lake condominium for Gerard. The rest was supposed to be used by Katherine and her husband to consolidate their debts.
Instead, the Puanas lawsuit said, they used it to enrich their lives.
They spent the money on a Maserati and a Mercedes Benz. They purchased trips to Disneyland and bought Elton John concert tickets. They even threw a $24,000 party at the Sheraton Waikiki to celebrate Louis’ promotion to police chief.
By the time the Puanas discovered what was happening with their money it was too late.
The balance on the reverse mortgage — which Katherine had promised to payoff — had ballooned.
Florence sold her house to get out from under the debt and recover what money she could rather than give everything over to the bank. She also decided to fight back.
Federal prosecutors say the Puanas’ lawsuit had the potential to ruin the Kealohas’ image in the community as well as reveal a series of other financial crimes, including bank fraud and identity theft. The couple is scheduled to go on trial on those federal charges in January.
“It’s a mess. The only thing we have is justice.” — Gerard Puana
In February 2015 — after the FBI began investigating the Kealohas — a state court jury sided with Katherine Kealoha in the lawsuit and awarded her $658,000 in damages.
More than a year later, the judge in the case, Virginia Crandall, who’s since retired, allowed Kealoha’s lawyers to garnish $108,000 from Florence Puana’s bank account to cover their attorney fees.
The Puanas’ attorney, Gerald Kurashima, has appealed the verdict, but he says the criminal conspiracy case likely won’t have any bearing on the decision.
Kurashima said the Puanas’ civil case is already in the appellate court process and that the evidence presented during the criminal trial cannot be added to the record.
He is exploring another option, however, to request a new civil trial based on “the extent of the fraud that was committed in the civil case.”
“It was just a snow job,” Kurashima said. “Katherine Kealoha is a very convincing liar.”
The civil trial was fraught with problems, according to the U.S. government.
Katherine Kealoha tried using it in her defense in the criminal trial, but U.S. District Court Judge J. Michael Seabright kept it out at the behest of prosecutors so as to not confuse the jury.
Seabright said Kealoha’s defense team could use the dollar amount awarded during the trial to show that Gerard Puana might have potential bias when he testified against her, but that was all.
He even stopped Kealoha’s civil lawyer, Kevin Sumida, from testifying that his client had won the case “handily.” Seabright then told the jury to disregard Sumida’s statement.
Sumida was later accused by prosecutors of lying on the witness stand. He did not respond to a Civil Beat request for comment.
In court records, federal prosecutors argued that the civil jury was “deceived” into siding with Kealoha.
They said the case included “a barrage of false testimony,” “witness tampering” and “other systemic flaws which effectively render the civil verdict a nullity.”
Some of Kealoha’s alleged lies were proven during the criminal trial while others were merely detailed in court records.
For example, prosecutors were able to show that a trust document Kealoha used to purchase the condominium for Gerard Puana was a forgery.
Puana’s signatures and initials on the document did not belong to him. Others, including those of Kealoha and a possibly nonexistent notary by the name of Alison Lee Wong, appear to have been signed by Kealoha herself.
“I would ask her, ‘How could you do that to your grandma? How could you do that to me?’” — Florence Puana
Federal prosecutors says that Wong was in fact not a real person, that she was a fake persona created by Kealoha to help carry out her various criminal enterprises and advance her own career in government.
Kurashima wanted to use the trust document in the civil case, but he was unable to enter it into evidence because Kealoha said on the witness stand that the signatures on the document were not made by her.
In another example, federal prosecutors say Kealoha coached her father, Rudolph Puana, to provide false testimony during the civil trial to help her defense.
Kurashima said it was clear to him that Kealoha was being deceptive during the civil trial. In his view, there was no question she had stolen her uncle and grandmother’s money. He’s just not sure why the jury didn’t see it, too.
“It’s a real injustice,” Kurashima said. “What can I say?”
Kealoha, meanwhile, is still hoping to use the verdict in the civil case as well as various evidence she and Sumida presented to throw out her criminal conviction and get a new trial.
The deed to Gerard Puana’s condominium, and the fact that Katherine Kealoha’s name is still on it, is a whole separate issue that must be addressed.
Kurashima said that because the trust was a forgery a judge should invalidate the deed and order that the condo rightfully belongs to Florence since it was her money that paid for it.
Still, it’s up to the courts to decide, he said, and because of that there are no guarantees.
“It’s easy to prey on the elderly, and it happens a lot more than people are willing to admit,” Kurashima said. “That’s why Katherine Kealoha preyed on Florence, because she never expected Florence would come back against her.
“She thought Florence would be a defenseless victim and that no one would believe Gerard, which proved to be wrong.”
Gerard Puana knows he can’t afford to pay Katherine Kealoha if the verdict stands in the civil case.
He has the condo, but he says he can’t sell it or take out a loan against it because his niece’s name is still on the deed.
The one thing he does know is if none of this happened he would most likely still be living with his mother in the home he was raised in on Wilhelmina Rise, taking care of her in her later years. For that, he says he can never forgive his niece.
“It’s a mess,” he said. “The only thing we have is justice.”
Florence Puana is somewhat more forgiving.
She said on the day her granddaughter was sent to jail she dreamed she was on her knees before God, begging for Katherine’s salvation. Florence finds solace in her religion, it’s one of the few things she has left at 99 years old.
Her health is fading and her eyesight mostly gone, but it helps to keep her mind sharp. She said she hasn’t talked to her granddaughter yet, and that if it happens forgiveness wouldn’t be the first topic of conversation.
“I wouldn’t say, ‘I forgive you in that moment,’” Puana said. “I would ask her, ‘How could you do that to your grandma? How could you do that to me?’”
Our small newsroom believes wholeheartedly that news and information is a public service – not something to be hidden behind paywalls or diluted by ads. Your donations ensure that our reporting remains free and accessible to all communities, regardless of a person’s ability to pay. For a limited time become a Civil Beat donor and we’ll throw in a limited-edition Civil Beat t-shirt!