5 years after investigation into Kealohas began, former Honolulu power couple sentenced

HONOLULU, Hawaii (HawaiiNewsNow) - Five years after the FBI launched an investigation into Honolulu’s then-police chief and and one of its high-ranking deputy city prosecutor, the former power couple — Louis and Katherine Kealoha — learned their fates Monday after being convicted more than 18 months ago.

Saying that Katherine Kealoha had “perverted justice over and over and over again,” a federal judge sentenced the former prosecutor to 13 years behind bars ― going above the sentencing guidelines of 10 years. Hours later, her husband ― ex-Police Chief Louis Kealoha ― was sentenced to seven years in prison.

And the two were ordered to pay nearly hundreds of thousands of dollars in restitution to their victims.

On Tuesday, one of their co-conspirators, former HPD Lt. Derek Hahn, was sentenced to 3 1/2 months in jail for his role in the corruption scandal.

Another co-conspirator, former officer Minh Hung “Bobby” Nguyen, was sentenced to 4 1/2 years behind bars.

Along with the Kealohas, the two were convicted in June 2019 for conspiracy and obstruction.

“For the last three years, the HPD has been working hard to repair and rebuild the public trust that was broken by these officers,” said current Honolulu Police Chief Susan Ballard, in a statement.

“We are glad that this chapter is finally being closed.”

The judge said that while Katherine Kealoha was the mastermind of one of the largest public corruption scandals in Hawaii history, Louis Kealoha “was right there by her side, cheering her on.”

And he said both of them used their positions of power to enrich themselves.

“The breadth of this criminal conduct is astonishing,” Chief Judge Michael Seabright told Louis Kealoha.

“It reached the highest levels of our city government and that included you. Your conduct ... has shaken the confidence in our governing institutions. You abused your power at HPD.”

“The system worked here, but boy, it took a long time.”

Wearing a white federal detention center jumpsuit and a face mask, with her hands clasped in front of her, Katherine Kealoha showed no emotion as her sentence was handed down.

Louis Kealoha, her now-estranged husband, appeared to tear up while addressing the judge.

He arrived at the federal courthouse about 1 p.m. wearing a blue suit and greeted members of his family before going through security. The sentencing hearing began with discussions about the size of Kealoha’s role in the scheme ― and how that would translate in sentencing guidelines.

During a statement to the court, Kealoha’s voice broke as he described his crimes ― and their broad impact on the community and the police department, including to the public’s trust for the agency.

“I am deeply sorry and ashamed for the negative impact my actions had,” he said.

[Read more: After sentencing, the Kealohas’ string of victims search for closure]

[Read more: Judge: Louis Kealoha wasn’t conspiracy’s mastermind, but he played a starring role]

“In this situation, I failed to live up to the standards I set for myself. I am sorry for the hurt, pain and disappointment I caused and I take full responsibility for my actions.”

The Kealohas were convicted more than 17 months ago of conspiracy and other counts in their plot. Two officers were also found guilty in the trial.

Before handing down Katherine Kealoha’s sentence, Seabright allowed her to make a statement to the court, gave her victims time to speak and then addressed the court himself.

And he did not hold back.

“Now it’s my turn,” he said, before launching into a 32-minute address to explain his sentencing decision and outline how Kealoha and her husband were “willing to cheat and steal, leaving no stone unturned,” use the power of their positions to level “retribution” on anyone who got in their way and orchestrate a scheme “driven by greed” that reached the highest levels of city government.

“You framed your uncle for a crime he never committed. And given that your husband was the chief of police, the task wasn’t difficult,” Seabright told Katherine Kealoha.

“That’s the shock of all of this. That somebody may engage in that conduct, it’s distressing. What’s shocking here is that at her disposal was the Honolulu Police Department led by Louis.”

“How was it that this went on so long undetected? How is that possible? Well the corruption was able to flourish given Louis’ position as the chief of police and Katherine’s position as a high-ranking prosecuting attorney. They prized self-indulgence and their lifestyle” above everything else.

During her statement in court Monday, Katherine Kealoha said she was “truly sorry for everything.”

She also touched on her addiction to prescription painkillers, saying that her actions were drug-induced but that her drug abuse was no excuse for her crimes.

Much of her statement was addressed to her uncle, Gerard Puana, who she attempted to frame with a federal crime ― with the help of her husband and the two officers.

At the time, they were locked in a bitter family dispute over Katherine Kealoha’s years of financial fraud.

“My uncle especially, I know that he has been through so much pain and through so much hurt,” Kealoha said. “I ask for forgiveness from my family and my uncle for all of the destruction and devastation that I’ve caused.”

After the sentencing, Puana told reporters that Kealoha’s apology “sounded genuine.” But he said he needs more time for him to come to terms with what she did ― and be able to forgive her.

A statement from Kealoha’s grandmother, Florence Puana, was also read in court.

Puana, who died in February at 100, lost her family home because of Kealoha’s financial crimes. And in the statement, she said Kealoha broke her family apart by her “dreadful and ruthless scheme.”

“You framed my son, Gerry, and unlawfully arrested him. I was in shock and in constant fear for his and my family’s safety. It all took a tremendous toll on my health and my heart, in particular.”

Charlotte Malott, Gerard Puana’s sister, said she also can’t yet forgive Katherine Kealoha for all the harm she has caused. “We take solace in knowing that the people involved in this conspiracy have been stopped,” Malott said. “God tells us to forgive and I’m working on it.”

Katherine Kealoha has been behind bars since her conviction in June 2019 and will begin serving her term immediately. Because of the COVID-19 pandemic, Louis Kealoha will not have to report to prison until at least spring 2021.

In court, Seabright said he used sentencing guidelines, recommendations and his own discretion to determine Kealoha’s sentence. He said he was going above sentencing guidelines, in part, as a “deterrence” to others who might use their high-ranking public positions for personal gain.

“The audience that the deterrence message goes out to in a case like this is pretty limited. And there should be real deterrence effect,” he said.

He said given the “grotesque deprivation of civil rights” against Puana, the judge said a “variance upward” in sentencing was also warranted.

Louis Kealoha also got a longer sentence because of the seriousness of the offenses and because of his former position.

• Read Katherine Kealoha’s handwritten letter to a judge ahead of her sentencing
• Police Chief Susan Ballard supports enhanced sentence for her predecessor
• Kealoha case fuels push to change pension laws for disgraced government employees
• Florence Puana, key figure in case against Kealohas, dies at 100

The public corruption case against the Kealohas doesn’t center around a mailbox theft, but it did start with that.

In June 2013, a mailbox was plucked from its post in the middle of the night outside the Kealohas’ former home in Kahala.

It was a seemingly minor federal crime that unraveled the largest law enforcement scandal in state history ― a scandal that would reveal the perfect image of a Honolulu power couple, Louis and Katherine Kealoha, was all a lie.

The two had been living beyond their means for years, stealing from relatives to fund their lifestyle. When those relatives caught on, they had to be taken down. That’s where the mailbox comes in.

Surveillance video of the theft would play a pivotal role in the scheme that the Kealohas had hatched. At the time, Gerard Puana and his mother were in a financial feud with the Kealohas.

Based on the Kealohas’ statements, Puana was charged with the mailbox theft.

And during the mailbox trial, Louis Kealoha took the stand, lied under oath and said that Puana was on the video. He then caused a mistrial by saying Puana had had a previous robbery conviction.

The entire episode raised red flags for Puana’s attorney, Ali Silvert.

Silvert showed the FBI evidence that the theft was organized by the Kealohas to frame Puana. A federal investigation was launched in 2015.

Two years later, Louis Kealoha was paid $250,000 to retire as HPD chief with the catch that he’d have to pay it back if he was convicted of a felony. Several HPD officers were also arrested as part of the federal probe. Then in October, the Kealohas were also arrested. In March 2018, more charges were added.

Six months later, Katherine Kealoha resigned from her job as Honolulu’s deputy prosecutor.

Once the corruption case against the Kealohas was in the hands in the jury, it took them less than nine hours to reach a guilty verdict on felony counts of obstruction of justice and conspiracy.

Officers “Bobby” Nguyen and Derek Hahn were also found guilty.

In October 2019, facing two more trials for financial and drug crimes, the Kealohas decided to take a plea deal and avoid going through the extra trials.

In exchange for their guilty pleas, prosecutors didn’t ask for extended sentences.

This story will be updated.

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