HONOLULU (HawaiiNewsNow) - Embattled Honolulu Police Chief Louis Kealoha was relieved of his gun, badge and official duties Tuesday and placed himself on leave, one day after receiving a letter from a federal prosecutor notifying him that he is the target of an ongoing public corruption case.
The stunning development comes as his wife, a top city prosecutor, remains on the job despite also being a focus of the corruption case.
In a news conference Tuesday at HPD headquarters, Honolulu Police Commission Chairman Max Sword said the police chief will not report to work, will surrender his badge and weapon and will hand over all duties and responsibilities to his second-in-command.
Kealoha will be on paid leave and, Sword said, his status will be discussed at the commission's next meeting in January. He added that it was Kealoha's "decision to make ... and we said, 'Go for it.' Personally, I think it was the right decision to do."
Four other officers who have also received target letters in the case, meanwhile, have also been placed on restricted duty and re-assigned.
Acting HPD Chief Cary Okimoto sought to reassure the public Tuesday, while deflecting the impact of the case on the department.
"There will be no impact on public safety at any time," Okimoto said.
He added, "Today is not a good day, but I think this is the first big step in letting everyone know that we are moving on. I want to assure the rank-and-file to go out there and continue to do the great job that they do. They put their life on the line everyday. Our job is to make sure that we keep morale up."
On Monday, Hawaii News Now broke the news that Kealoha had received a letter from federal prosecutors informing him that he is a target of a federal investigation and will likely be indicted if he does not meet with prosecutors and seek to cooperate.
It is unknown whether his wife, Katherine, has also received a letter. She is believed to be a central figure in an alleged conspiracy to frame her uncle, with whom she had a longstanding financial dispute.
Chief maintains innocence
The police chief's decision to put himself on leave, while voluntary, also appeared to be reluctant.
Earlier Tuesday, Kealoha implied that he would not go on leave, saying, "If I leave the department now I give credence to the baseless attacks. I am voluntarily placing myself on ROPA status," an acronym for Restriction of Police Authority.
He said he will continue to stand up for his officers even if it means continued criticism from onlookers.
Sword added that going on leave wasn't Kealoha's initial offer.
"He was just gonna ROPA and then after discussion, we came to agreement that he is going to leave the building. It was good that he left the building and I'm glad that he took that position."
Kealoha's attorney, Myles Breiner, said the chief intends to fight the allegations against him.
"I cant prognosticate what the U.S. attorney is attempting to do other than, as I said before, send a message to various people involved that they are the target of an investigation, try to get people to come forward and work out plea agreements if necessary."
He added, "There's nothing to cooperate about. The chief has done nothing wrong whatsoever. Period." Breiner also told Hawaii News Now that the chief's target letter contained no specific facts or allegations, but was a generic form letter.
Family dispute fallout
It's hard to believe the scandal involving leaders of the city's two top law enforcement agency all started with a reported stolen mailbox and a messy family dispute involving Kealoha's wife.
In June 2013, Kealoha called 911 to report the mailbox had been stolen from their home. Kealoha accused her uncle, Gerard Puana, in the theft. The two had been in a feud for several years over hundreds of thousands of dollars.
Police immediately retrieved surveillance video from the Kealohas' home, claiming it depicted Puana taking the mailbox, and he was arrested.
Court documents now indicate the FBI believes the video was staged. And investigators believe Kealoha wanted to frame her uncle to help her win a civil court trial over the family money.
Kealoha won a verdict from the jury anyway -- which remains under appeal. And Puana went on trial for felony theft in the mailbox case in December 2014. But during the trial, Kealoha took the stand and triggered a mistrial -- by falsely stating Puana had a previous conviction for breaking and entering.
That mistrial launched an FBI investigation into the Kealohas. And that's when a grand jury probe started looking into allegations of public corruption and civil rights violations leveled against the couple.
For more than a year now, dozens of officers in various divisions, ranks and roles have been called to testify. So has Katherine Kealoha's boss: Honolulu Prosecuting Attorney Keith Kaneshiro, who has adamantly defended her.
Last week was a major turning point in the FBI's case. An officer who admitted to being deeply involved in the fake mailbox theft pleaded guilty to lying under oath in the Puana trial. Ex-officer Niall Silva, 52, has agreed to testify against other officers and Kealoha about their alleged roles in setting up Puana.
According to Kealoha's lawyer, as of Tuesday morning, the deputy prosecutor has not received a target letter and has not been charged with any crime. She's also still employed with the Honolulu Prosecutor's office.
Acting chief an HPD veteran
The man taking the helm at HPD is a 31-year veteran of the force and was named HPD's Police Officer of the Year in 2010. He was later appointed to deputy chief of administrative operations in 2015.
Okimoto has been called to the federal grand jury investigating the Kealohas, but he won't say why. Okimoto headed the Waikiki police district when officers in his "Crime Reduction Unit" arrested Puana after the mailbox theft. He said Tuesday if he receives a target letter, he will go on leave as well.
Mobile users: See a timeline of the case against the Kealohas by clicking here.