A U.S. judge sentenced a former high-ranking Honolulu prosecutor to 13 years in prison Monday, saying she stole money from her own grandmother and used her husband’s position as a police chief to frame her uncle for a crime he didn’t commit — all to maintain her lavish lifestyle.
Katherine and Louis Kealoha, now estranged, were once a respected power couple. Louis Kealoha, who agreed to retire amid the wide-ranging federal investigation, is scheduled to be sentenced later Monday in a separate hearing.
“This case has staggered the community in many ways,” U.S. District Judge J. Michael Seabright said, describing how Katherine Kealoha orchestrated a reverse mortgage scheme that forced her grandmother to sell her home, framed her uncle for stealing the Kealohas’ home mailbox, stole money from children whose trusts she controlled as a lawyer, cheated her uncle out of his life savings, convinced her firefighter lover to lie about their affair and used her position as a prosecutor to turn a drug investigation away from her physician brother.
“Truth can be stranger than fiction,” the judge said.
Her lawyer asked for a sentence of eight years, while prosecutors sought 14 years.
A jury convicted the Kealohas last year of conspiracy, along with two former officers who are scheduled to be sentenced Tuesday.
To avoid a second trial, the Kealohas later pleaded guilty to bank fraud, saying they provided false information to obtain loans.
Katherine Kealoha, 51, also pleaded guilty to an identity theft charge, saying she got a police officer to forge a police report she used to explain negative information on a credit report. She also pleaded guilty to a charge that involved protecting her brother from the drug investigation.
In a letter to the judge, she blamed a prescription drug addiction for clouding her judgement.
“My client was on drugs, her mind was not clear and she did a lot of bad things,” her lawyer, Gary Singh, said in court.
Kealoha apologized to her family in court and asked for forgiveness. “To my uncle, especially,” she said. “I know that he has been through so much pain and so much hurt.”
Kealoha’s aunt, Charlotte Puana Malott, read a letter she said her mother, Florence Puana, wrote before she died at 100 in February about her granddaughter’s “ruthless scheme.”
“I was 90 years old in 2009 when I agreed to a reverse mortgage on my home, not really understanding what it meant. It seemed complicated, yet I trusted you Katherine,” the letter said.
Kealoha came to Puana and her son Gerard Puana with an idea about taking out a reverse mortgage on her grandmother’s home to help buy a condo her uncle wanted. Kealoha said she would consolidate her debts and promised her uncle and grandmother that she would pay off the loan.
She used the money to buy her uncle’s condo, but instead of paying off the loan, she spent the leftover money on luxuries, including $26,000 for an induction banquet when her husband became police chief and $10,000 on Mercedes-Benz and Maserati car payments, the judge said.
“She perverted justice. And she did so for her own personal reasons,” said Michael Wheat, a special federal prosecutor. “To facilitate a lifestyle and a facade and an image in this community.”
Framing her uncle was to make him less credible in the family financial dispute, Judge Seabright said. “We still don’t know sitting here today, who stole the mailbox,” he said, adding that it clearly wasn’t Gerard Puana.
She used the police “to do your dirty work,” Seabright told Kealoha.
Louis Kealoha filed for divorce after they were convicted.
Monday’s sentencing hearings come after several postponements. Concern about the spread of the coronavirus delayed the proceedings in March. A Nov. 3 date was changed after officials realized that was Election Day.
“COVID has kept us from this date for quite a while,” the judge said.