Another co-defendant in the federal criminal case against former local businessman Michael Miske, Jr. will soon be released from Honolulu’s Federal Detention Center into the custody of his father pending trial, now scheduled for September 2022.

During a Thursday morning hearing, Federal Judge Derrick Watson overturned a magistrate judge’s earlier ruling and ordered Kaulana Freitas released to home detention, subject to a number of restrictions, including a ban on leaving Oahu, GPS tracking and random drug testing.

Freitas, 33, whose nickname is “Shorty,” is charged with being part of Miske’s racketeering conspiracy, conspiring to and using a termite treatment chemical as a ”chemical weapon” in an attack on a Honolulu nightclub, and joining with other Miske co-defendants in a conspiracy to distribute methamphetamine, cocaine and other drugs.

Miske and a total of twelve co-defendants were named in a pair of 22-count superseding indictments alleging Miske controlled and directed a sprawling criminal organization that, for two decades, engaged in a pattern of racketeering activities, including murder-for-hire, kidnapping, armed robbery and weapons offenses, money laundering, bank fraud, drug trafficking, extortion and other offenses.

Freitas will be the fifth of Miske’s 12 co-defendants to be released pending trial. A sixth has already pleaded guilty and is free pending sentencing, now scheduled for early 2022.

Federal law favors the release of criminal defendants unless there are no conditions or combination of conditions of release that will “reasonably assure” the safety of the community, as well as the defendant’s appearance in court as required.

Those facing certain charges, such as the drug charge against Freitas which carries a possible sentence of ten years or more, face a “rebuttable presumption” that detention is appropriate. This presumption can be overcome by evidence in the defendant’s favor.

Magistrate Judge Kenneth Mansfield had ruled in July 2020 that there were no conditions under which Freitas could be safely released. 

Third Time’s A Charm

Freitas’ attorney, Marc J. Victor, filed an appeal in early December seeking to overturn Mansfield’s decision, arguing it was flawed because the hearing took place just four days after Freitas’ original attorney withdrew from the case after less than a month, and was replaced by a second lawyer.

Victor, who was just assigned to represent Freitas in October, is his third court-appointed attorney, and wasted no time seeking to obtain his new client’s freedom.

“At the July 31, 2020 Detention Hearing, Mr. Freitas’ counsel presented no evidence or witnesses,” Victor said in a memorandum spelling out the legal basis for the appeal, which was filed on December 3.

Victor said Mansfield’s order was flawed in part because it was based on a section of the law that applies to those with prior felony convictions.

“Magistrate Judge Mansfield did not, and could not, find Mr. Freitas had been convicted of a felony while he was on release or had a felony conviction within the prior five years because Mr. Freitas does not have any felony convictions,” Victor wrote.

A check of both Hawaii and federal court records confirmed that while Freitas’ criminal record includes pleading no contest to a charge of 4th-degree theft in a 2011 incident, a petty misdemeanor, and to contempt of court in 2013, there are no felonies on his record.

Victor also pointed to factors that, by law, should have been considered when weighing the evidence for and against continued detention, including “the person’s character, physical and mental condition, family ties, employment, financial resources, length of residence in the community, community ties, past conduct, history relating to drug or alcohol abuse, criminal history, and record concerning appearance at court proceedings …. ”

All would have weighed in Freitas’ favor, Victor argued.

A report prepared by the court’s Pretrial Services and available at the time of the earlier hearing concluded Freitas has “extensive ties to the community and a history of employment. He has a minimal history of substance abuse and no known mental health issues.”

“Mr. Freitas’ father is a local businessman willing to take third party custody of his son and let him live in his home on Oahu,” according to the appeal. In addition, Freitas has two sons living on Oahu, and his former girlfriend, the mother of his sons, “does not believe Mr. Freitas is a danger to the community.”

In addition, “Mr Freitas’ mother and a few other family members have moved to Las Vegas, Nevada … and is willing to use the equity in her home as security for Mr. Freitas’ bond,” the appeal stated.

Freitas’ mother is a first cousin of Mike Miske. Her late mother and Miske’s mother were sisters.

The hearing to consider the appeal was held by video conference before Judge Derrick Watson on Thursday.

Victor briefly restated the basics of the argument spelled out in his written appeal, and then directly addressed prosecutors’ allegation that items found during a traffic stop of a car Freitas was driving in April 2017 was evidence of his threat to the community.

“Police found and seized a firearm, ammunition and a liquor bottle containing chloropicrin from inside the vehicle. Government witnesses described the bottle as the same type used to hold the chloropicrin released in the nightclub chemical weapons attacks in March 2017,” according to the government’s July 2020 memorandum.

However, Victor said these items had been found in a duffel bag “possessed by Mr. Smith, a witness in this case, not in Mr. Freitas’ possession.”

Jacob “Jake” Smith, a reputed “shooter,” has admitted to being part of Miske’s criminal group beginning at least in 2015 and continuing until his arrest on drug charges in August 2018. Smith was charged separately, and pled guilty in November 2020 as part of a deal with prosecutors, who agreed to drop several charges in exchange for his guilty plea and agreement to testify against his former associates.

Seven others, including two Miske co-defendants and five charged separately, have also pleaded guilty and are cooperating with prosecutors. An additional defendant is expected to plead guilty at a hearing now scheduled for the first week of January.

Victor also said Freitas’ father, Edward “Denny” Freitas, Jr., had removed any and all firearms and ammunition from his home, and moved them to a locked safe in a different location.

And because of the booming housing market in Las Vegas, the value of the home owned by Freitas’ mother has risen, and if necessary she could provide up to $100,000 to secure a bond for her son, Victor told Judge Watson.

Deputy U.S. Attorney Mark Inciong said the government was not introducing any new evidence or legal arguments to support its position, instead choosing to stand on the arguments successfully made during the original hearing before Magistrate Judge Mansfield nearly a year and a half ago.

Judge Watson quickly let his judgement be known.

“I do believe Pretrial Services got it right in its report, and that the magistrate judge erred,” Watson announced after hearing all arguments.

The judge agreed with Victor that the initial report by the court’s own Pretrial Services staff, which recommended Freitas be released on bond subject to home detention and a number of related restrictions, was sufficient to overcome the legal presumption that continued incarceration is necessary.

While the allegations contained in the 22-count indictment against Miske and his co-defendants are serious, Watson said prosecutors offered scant specific evidence to show Freitas poses a danger to the community beyond the general allegations contained in the indictment. 

“I do believe, first of all, that very little evidence of the defendant’s crimes has been presented to the court,” Watson said.

Watson then addressed several specific issues.

Prosecutors had raised concerns about $162,000 in payments by cash or check made by Mike Miske to Freitas during the period 2018-2019.

“But without more, I don’t know what to make of that,” Watson said. “I could speculate, but what that amount represents is unknown to me.”

The judge questioned the purpose of these payments. 

“Did Miske buy something? Was this payment for services Freitas performed for Mr. Miske? I don’t have any idea,” Watson said.

“It’s a substantial amount of money, no question,” Watson said, but said prosecutors offered no specific evidence it represented illicit activity.

Similarly, the government alleged broadly that Freitas would be able to draw on substantial sums of money the government says Miske has access to.

“I don’t know the extent of Mr. Miske’s finances would allow for that,” Watson said. “He has his own issues.”

Watson said prosecutors had not offered any evidence to show Miske has ever done that for anyone, even himself.

“He’s got many other bills he has to account for at the moment,” Watson said.

The judge then formally agreed Freitas has no significant criminal history, no history of significant drug use, no history of mental health issues, and has a good history of employment, although some of that came when he was employed by Miske or his companies.

State records show Freitas was licensed as a pest control operator for Miske’s Kamaaina Termite and Pest Control. He was also licensed as a car salesman in 2015, at the same time another Miske company, Hawaii Partners LLC, was licensed as a used car dealer.

Accordingly, one condition of release is that Freitas must maintain or actively seek employment, but cannot work for anyone or any business linked directly or indirectly to Miske. 

He is also prohibited from having any contact, direct or indirect, with any co-defendants in the Miske case.

“I have seen this provision violated by other defendants in other cases,” Watson warned. “I am suggesting this is an area fraught with concern. I promise you this. If we find out you have contacted any of the individuals, even once, or even by indirect third party means, you will be back [in federal detention] where you are now.”

Watson ruled Freitas will have to personally put up a $5,000 cash bond, in addition to a $50,000 mortgage secured by his mother’s equity in her Las Vegas home.

“I want the defendant to have some skin in the game,” Watson said.

Watson said Freitas could be released as soon as all pre-release conditions have been met.