Attorney: Taxpayers could foot bigger bill if city doesn’t settle suit over Kealoha wrongdoing

In wake of convictions of Kealohas, city urged to settle related civil suit

HONOLULU, Hawaii (HawaiiNewsNow) - The conviction of ex-Police Chief Louis Kealoha and his wife Katherine, a former deputy prosecutor, is putting pressure on the city to pay damages to the man framed with stealing their mailbox.

Gerard Puana’s attorney, Eric Seitz, said in court Friday that it would be best for taxpayers if the city settles the civil lawsuit sooner rather than later and without another costly trial.

Florence Puana with her son Gerard Puana
Florence Puana with her son Gerard Puana

But attorneys for the city’s corporation counsel office asked the federal magistrate judge to hold off until after the Kealohas’ second trial in January on allegations of bank fraud and identity theft.

The Kealohas were convicted of conspiracy and obstruction this past June, along with two HPD officers, Bobby Nguyen and Derek Hahn.

The group framed Puana for the mailbox theft because Puana was trying to expose the Kealohas for stealing family money.

“Mr. Puana’s life was a disaster for several years," Seitz said. "He was followed by up to 30 police officers, he was arrested, he was in prison.”

And Puana’s elderly mother, Florence, was forced to sell her Wilhelmina Rise home because of Katherine Kealoha’s reverse mortgage scheme.

Seitz claims the city is on the hook for the Kealohas’ crimes.

“When city officials commit criminal acts in their capacities as policy makers, as high-ranking city officials then the city is responsible," he said.

Seitz added that if settlement talks are unsuccessful and this civil case has to also go to trial, it could result in a bill of tens of millions of dollars. “All of those things can be compromised and we’re willing to compromise on them if we can avoid running up additional costs and fees," he said.

Seitz believes the city will end up hiring expensive outside attorneys because the city’s corporation counsel is conflicted out. The head of the agency, Donna Leong, got a target letter connected to the same public corruption case that took down the Kealohas.

Taxpayers are already paying for the Kealohas’ court-appointed attorneys in the federal criminal cases, plus frivolous lawsuits they filed against their accusers ahead of trial.

Federal Magistrate Judge Wes Porter will decide if the two sides should start settlement talks or wait until after the next criminal trial.

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