HONOLULU (HawaiiNewsNow) - Federal agents are presenting evidence to a grand jury that the police chief's wife, a high-ranking prosecutor, abused the power of her position.
As only Hawaii News Now has reported, a federal grand jury is calling witnesses to determine if Honolulu Police Chief Louis Kealoha and his wife, Katherine, used elite police units for their personal needs.
Now, as part of an expanding focus of the FBI probe, authorities are trying to determine if Katherine Kealoha lied to the court to get a business associate out of a traffic ticket.
The allegations stem from a court hearing in September 2014, in which Kealoha appeared on behalf of the state.
It's unusual for the head of the city prosecutor's officer Career Criminal Division to be in traffic court, but Kealoha explained her appearance by suggesting the person who was issued the ticket had stolen a man's identity.
During the hearing, audio recordings show, Kealoha asked the judge to dismiss the ticket for a man HNN is identifying as A.W., who was cited for driving 78 mph in a 35 mph zone on Likelike Highway near the Wilson Tunnel.
So why does a high-ranking prosecutor care about this traffic ticket?
She told the court: "I know this is a speeding offense, but the individual who is driving the car at the time is a career criminal who was not the individual that he gave the identification for."
In other words, Kealoha is claiming that a criminal was impersonating A.W., using both his driver's license and his pick-up truck.
The judge asks whether the citation is now going to be shifted to the impostor: "So he was served?"
Kealoha responds: "Um, yes, he is in custody and we are going to serve him your honor."
Hawaii News Now couldn't find anyone else connected to the ticket in custody. There was no "career criminal" served with charges in state Circuit Court.
And that's where the problem lies.
Sources say the FBI is investigating whether Kealoha lied to the judge to get A.W. out of the speeding ticket because he was a business associate.
Sources say A.W. is a a solar installer. And, at the time, Kealoha was part member/manager of a solar company, Discount Energy Solutions.
Her partners: a Honolulu police lieutenant in the Criminal Intelligence Unit and someone in the solar business, the son of another Honolulu police officer who's also in CIU.
That's the same specialized police unit that handled evidence in the theft of the Kealohas' mailbox a year earlier. The minor crime isn't something the federally-funded CIU would typically investigate.
Both the police chief and his wife remain on the job, despite growing calls for them to step aside amid the federal probe.
In a statement late Thursday, Honolulu Prosecuting Attorney Keith Kaneshiro said, "An investigation is not a public trial and should, as a matter of fairness, remain confidential until a final determination is made. Spreading allegations and hearsay doesn't advance any search for the truth."
But attorney Victor Bakke says the allegations against Katherine Kealoha are serious, and could have widespread ramifications.
"When she occupies a top position and supervises others, the prosecutor's got to realize every case that she touches is now tainted," he said.
Former Mayor Peter Carlisle called the federal probe into the police chief and his prosecutor wife a "black eye to law enforcement."
"It's the kind of thing that causes people not to trust the police department and law enforcement entities in this state," he said.
Meanwhile, sources say that the FBI is looking into Katherine Kealoha's other business dealings -- and her relationships with other officers in her husband's department -- to determine if police were used as the couple's personal security detail.
The FBI has interviewed A.W. about the speeding ticket and about the work he did for Discount Energy Solutions, sources say. Both Katherine Kealoha and the CIU lieutenant are no longer associated with the solar company.
The Kealohas have declined to comment on the federal probe, and have maintained they've done nothing wrong.
DISMISSED TRAFFIC TICKET: