Closing arguments expected in Hawaii public corruption trial

HONOLULU — The former police chief of Hawaii’s largest city and his wife, a former deputy prosecutor, abused their positions in an attempt to silence a relative who could have exposed the financial fraud that funded their lavish lifestyle, prosecutors said.

Closing arguments were being held Tuesday in the conspiracy trial against Louis and Katherine Kealoha, considered the largest public corruption trial ever in Hawaii.

U.S. prosecutor Joseph Orabona said the defendants didn’t need to have a written agreement to show they conspired to frame Katherine’s uncle in a plot to steal their mailbox. Orabona said their actions speak louder than words, and their motive involves greed, manipulation and abuse of power.

The allegations against the Kealohas shocked Hawaii’s law enforcement community, where the power couple held sway at the highest levels: He as a hometown boy who made good as police chief, and she ascending to a powerful attorney’s position in the city prosecutor’s office.

But federal prosecutors say it was their lavish lifestyle that was their undoing as Katherine cheated family and clients to pay for expensive cars and a lavish lifestyle, including spending money on her firefighter boyfriend.

Neither Kealoha testified in their defence.

The case got its start six years ago, when authorities say the Kealohas, with the help of a crew of handpicked police officers under Louis Kealoha’s command, tried to frame Katherine’s uncle with stealing their mailbox. The officers deny any involvement.

A main motive of the conspiracy was to keep Gerard Puana from revealing fraud that financed the couple’s lavish lifestyle, prosecutors said.

Another motive was to keep Puana from disclosing Katherine Kealoha’s fraudulent scheme to steal from her grandmother. He said Katherine took out a reverse mortgage on the home owned by his mother, who is Kathrine’s grandmother.

Katherine used some of the funds as intended, to buy him a condo, but authorities said she drained about $150,000 in leftover funds in six months instead of paying off her grandmother’s reverse mortgage.

That led to a two-year federal investigation that prosecutors say unraveled her scheme to bilk relatives, banks and children whose trusts she controlled to maintain their lifestyle.

They were indicted in 2017, and a judge split the case into two trials. This current case, which went to trial in May, focuses on the mailbox conspiracy. Two current police officers and one retired officer also face charges in this proceeding.

The second trial against the Kealohas will concentrate on bank fraud and identity theft charges.

Katherine Kealoha faces a third trial on allegations she and her brother, a pain physician, dealt opioids.

The once powerful couple has seen their political stock dwindle. She had to step down as a deputy prosecutor, and he retired with a $250,000 settlement package that he must repay if convicted of a felony.

Jennifer Sinco Kelleher, The Associated Press