Hilo Woman to Serve 5 Years After Embezzling From Charter School

July 30, 2020, 8:05 AM HST (Updated July 30, 2020, 8:05 AM)
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A Hilo woman was sentenced in federal court on Wednesday after embezzling more than $600,000 from an East Hawaii charter school where she was employed as its financial officer.

Kelaukila Estabilio, 40, will serve 60 months in prison after stealing funds from the Kua O Ka Lā Public Charter School, formerly located in Pahoa.

“While charter schools and other educational institutions work to educate our keiki, unfortunately, there are those like Estabilio who undermine those efforts to line their own pockets,” stated US Attorney Kenji M. Price. “As a result of this prosecution, Estabilio will have five years in federal prison to reflect upon the damage her actions caused to the native Hawaiian community, and the plight of those whose lives are so dramatically impacted by her shameful conduct.”

Estabilio worked at the school from 2006 through January 2019. The school also had a nonprofit financial support entity, Ho’oulu Lahui. Estabilio was the financial officer of the charter school and responsible for managing the books and records.

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For more than six years, from at least 2012 through November 2018, Estabilio misused the charter school’s funds to pay for her and her family’s personal credit card bills totaling around at least $628,835, according to court documents. Estabilio used the charter school’s funds to pay off personal bills for extensive interisland and mainland travel; personal care, such as nail salons; pet veterinary care; retail purchases, such as stores like Victoria’s Secret and Zales; entertainment, such as Bruno Mars tickets, MMA, Netflix, and iTunes; living expenses; and restaurant bills.

“For years, Estabilio falsified the books and records of the charter school to conceal her embezzlement activities from both her subordinates and supervisors,” officials stated in a press release from the US Department of Justice on Wednesday.

The charter school’s campus was destroyed by lava from the Kīlauea eruption in July 2018. Over approximately five months, between July and November 2018, when her fraud was uncovered, Estabilio stole more than $90,000 from the charter school and Ho’oulu Lahui.

In sentencing Estabilio, US District Judge Derrik K. Watson imposed a sentence above the range suggested by the US Sentencing Guidelines. At the sentencing hearing, Watson characterized Estabilio’s conduct as “reprehensible,” and driven by “greed” and a sense of “entitlement.”

Watson pointed out that Estabilio’s scheme was revealed ultimately because of the careful attention to detail by staff at the charter school; not a change of heart by Estabilio. The District Judge also stated that Estabilio took advantage of her position of trust within the charter school and her theft impacted the charter school movement as a whole. Because of Estabilio’s “selfish” actions, the District Judge noted that the money the charter school needed for the children it served and to rebuild was not there when it needed it the most.

“Today’s sentencing sends a very simple message that these types of financial frauds will not go unpunished—they will be investigated to the fullest extent of the law,” said Trevor Fenwick, Special Agent in Charge of the US Secret Service Honolulu Field Office.

In addition to a term of imprisonment, the Court also imposed three years of supervised release, restitution, and criminal forfeiture. The case was investigated by the US Secret Service with the assistance of the State of Hawaii Attorney General’s Office.

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