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Friday July 19th, 2019 8:23AM

Ex-prosecutor locked up after guilty verdict in Hawaii

By The Associated Press
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HONOLULU (AP) — Two U.S. marshals led a former Honolulu prosecutor out of a courtroom Friday when a U.S. judge ordered her detained after a jury found her guilty of conspiracy and he expressed concern that she could try to obstruct justice before being sentenced.

Katherine Kealoha left her purse with her defense attorney as the marshals approached to take her into custody after the bail hearing.

She "lies as easily as she draws breath" and will do anything to avoid consequences, prosecutors said in court documents seeking her detention.

"This defendant is a walking crime-spree," Michael Wheat, a special federal prosecutor, told the judge in court, saying she holds sway with police and has tampered with grand jury witnesses in the past.

Her lawyer said Friday that the judge should consider that the 48-year-old Kealoha had previously complied with all the conditions of her release on bond during the trial.

"That has to count for something," defense attorney Cynthia Kagiwada said. She also said there was no showing that Kealoha had engaged in obstructive behavior.

U.S. District Judge J. Michael Seabright interrupted: "We heard from 12 people yesterday." In finding Kealoha and her husband, former police chief Louis Kealoha, 58, guilty of conspiracy Thursday, the jury also determined they obstructed justice.

The jury also convicted two officers in a plot to frame Katherine Kealoha's uncle Gerard Puana for the theft of a mailbox to discredit him in a family financial dispute.

Prosecutors said during the trial that the Kealohas were afraid the uncle would reveal fraud that enriched the couple's lavish life. Maintaining their power and prestige was a motive for the framing, prosecutors said.

Prosecutors didn't oppose allowing Louis Kealoha, police Lt. Derek Hahn and Officer Bobby Nguyen to remain free on bond. The jury acquitted retired Major Gordon Shiraishi.

Louis Kealoha didn't attend his wife's bail hearing. They have appeared hand-in-hand or arm-in-arm when arriving at court since their 2017 indictment and during the trial that began in May.

The conspiracy charge carries a maximum 20-year sentence but legal observers believe Katherine Kealoha could get less than 10 years behind bars.

The Kealohas face another trial on bank fraud and identity theft charges involving allegations that she bilked relatives and children whose trusts she controlled.

Prosecutors say Katherine Kealoha stole from her now-99-year-old grandmother in a reverse mortgage scheme that forced her grandmother to sell her family home. They say Kealoha spent the money on Maserati and Mercedes-Benz car payments, a banquet when her husband became police chief and Elton John concert tickets.

Prosecutors say some was lavished on her firefighter lover.

Katherine Kealoha also faces a third trial on a separate indictment accusing her and her pain physician brother of drug dealing. She used her position as a prosecutor to cover up their crimes and protect her brother, the indictment said.

During the trial, prosecutors portrayed Katherine Kealoha as the ringleader of the conspiracy. She invented an alias, Alison Lee Wong, to forge documents, and tried to have her grandmother declared incompetent to silence her, prosecutors told the jury.

Jurors watched a deposition from Puana's mother, Florence Puana, who was unable to testify in court because of her failing health.

Gerard Puana testified that Katherine Kealoha came to them 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 — which prosecutors described as massive — and promised her uncle and grandmother that she would pay off the loan.

Wheat noted that Kealoha tampered with potential witnesses, including sending letters trying to convince them Alison Lee Wong is a real person.

"Well, it's pretty clear who Alison Lee Wong is," Seabright said. "It's Katherine Kealoha."

Kealoha had an innocent man incarcerated and tried to silence her grandmother "after engaging in an outright theft of their money," Seabright said.

"To be clear, it was her own grandmother she did this to," he said.

She also got her firefighter boyfriend to lie about their affair to a grand jury and convinced the man whose childhood trust she controlled that his mother would go to jail if he didn't lie and say Kealoha gave him his money, Seabright said.

Attempting to obstruct justice is "Ms. Kealoha's bread and butter," Seabright said.

Kenneth Lawson, who teaches criminal law at the University of Hawaii's law school, attended her bail hearing and said he knows how humiliating it is to be detained. He said he was sentenced to two years in federal prison for fraudulently obtaining prescriptions to feed an opioid addiction.

Kealoha will "adapt" at the Honolulu Federal Detention Center, he said, adding that like he did, she will be able to trade her legal expertise for "food and candy."

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