HONOLULU — A special federal prosecutor spent an hour taking jurors through what has been called the biggest corruption case to rock Hawaii, showing how a high-ranking law enforcement power couple schemed to silence relatives who threatened to expose the financial fraud that funded their lavish lifestyle.
Michael Wheat, a U.S. attorney from San Diego, said they tapped into a secret police force to carry out their plan to frame an uncle for a peculiar crime: stealing their home mailbox.
A trial against retired Honolulu Police Chief Louis Kealoha and former deputy city prosecutor Katherine Kealoha began Wednesday and continues Thursday, five years after they reported the mailbox missing outside their home in an exclusive neighborhood. The couple were indicted in 2017 after a two-year federal investigation that also ensnared current and former police officers, who are now on trial with the Kealohas.
“This case neither begins, nor ends, with a mailbox,” said Wheat, who was brought in because federal prosecutors in Hawaii recused themselves.
The case centers on the couple’s greed and abuse of their positions, he said, including allegations Katherine Kealoha stole money from banks, relatives and children whose trusts she controlled and police officers carried out their bidding and lied to investigators about it. The charges were so sweeping that a judge broke them into two trials — the first focusing on the mailbox conspiracy.
Defense attorney Cynthia Kagiwada told jurors what happened to the money from Katherine Kealoha’s disabled uncle and now-99-year-old grandmother is simply a family misunderstanding. She provided no specifics.
Louis Kealoha’s defense attorney, Rustam Barbee, said prosecutors are relying on circumstantial evidence. One glaring detail is missing from the prosecution’s case, Barbee said: “Five years after the mailbox theft, the government has no evidence of the identity of who they think stole that mailbox.”
Attorneys for the officers on trial said there was nothing secret about their police unit and there was never any conspiracy.
But the prosecutor said the “members of a secret police force called the Criminal Intelligence Unit” were hand-picked by the chief because they were closest to the couple.
Officer Minh Hung “Bobby” Nguyen was married to Katherine Kealoha’s niece and lived in the couple’s pool house, Wheat said. Lt. Derek Hahn was Katherine Kealoha’s partner in a solar business, and retired Maj. Gordon Shiraishi was one of her husband’s oldest friends.
