Kealohas Plead Guilty in Federal Court

Former Honolulu Deputy Prosecutor Katherine Kealoha pleaded guilty in federal court to bank fraud, aggravated identity theft and drug charges, while her husband, former Honolulu Police Chief Louis Kealoha, pleaded guilty to bank fraud, in separate hearings Tuesday.

According to a press release from the US Department of Justice, the pleas resolve all outstanding charges that were pending against the Kealohas following their corruption conviction in another case by a federal jury in June 2019. US District Judge J. Michael Seabright’s acceptance of the guilty pleas mean the Kealohas will not face a second trial in January 2020 on the bank fraud charges, and Katherine Kealoha will not face a third trial in May 2020 on the drug charges.

In June 2019, the Kealohas were convicted by a federal jury for abusing their power by conspiring with two police officers to frame Katherine Kealoha’s uncle, Gerard Puana, for a crime he did not commit in a desperate attempt to discredit his claim that the Kealohas stole a substantial amount of money from him and his 100-year-old mother – Katherine’s own grandmother – Florence Puana.

As part of the guilty pleas Tuesday, the release states the Kealohas also entered into sentencing agreements in the case where the jury found them guilty of conspiracy to frame the uncle. In the sentencing agreements, the Kealohas agreed to waive their appellate rights. The parties also agreed to recommend that the Court order the Kealohas to pay $289,714.96 in restitution to the victims of their fraud, including $46,261 to Gerard Puana and $243,453.9 to Florence Puana.

In her plea agreements, Katherine Kealoha resolved two cases with admissions that she was involved in an elaborate bank fraud scheme and a drug trafficking conspiracy with her brother, anesthesiologist Rudolph B. Puana, who wrote medically unnecessary prescriptions for controlled substances such as oxycodone and fentanyl in order to resell them. When the brother came under police suspicion, Katherine Kealoha used her law enforcement position to take control of the investigation and ensure that she and her brother were not prosecuted.

Moreover, Katherine Kealoha also admitted that she obtained fraudulent loans from several banks and credit unions and stole more than $165,000 inheritance of two children, Ransen Taito and Ariana Taito, for whom she served as financial guardian. In her plea agreement, the parties agreed to recommend that the Court order Katherine Kealoha to pay restitution $165,269.82 to the Taitos and to forfeit $63,476.97 from the sale of the Kealohas’ home.

The release states both Kealohas admitted in plea agreements that they defrauded banks with elaborate schemes in order to obtain loans to fund their extravagant lifestyle. Louis Kealoha’s plea agreement said the couple spent more than $591,000, which was derived from: stolen proceeds from a reverse mortgage obtained by Florence Puana; stolen funds belonging to the Taito children; and loan proceeds obtained through banks and credit unions.

In his plea agreement, Louis Kealoha agreed that the Court order him to pay $165,269.82 to the Taitos and to forfeit $63,476.97 from the sale of the Kealohas’ home.

The Court will reset all of the sentencing hearings at a status hearing scheduled for next week.