HONOLULU – In an extraordinary scene three years in the making, former Police Chief Louis Kealoha and his deputy prosecutor wife stood before a federal judge Friday after being arrested and indicted in a public corruption probe that also netted the arrests of three current police officers and a retired major this week.
Stories on the ongoing federal investigation of former HPD police chief Louis Kealoha and his wife Katherine, a deputy city prosecutor.
Louis and Katherine Kealoha entered pleas of not guilty, hours after surrendering to the FBI at their Kahala condo.
The two were each released on $100,000 bonds, with a trial date set for Dec. 19, and left the courtroom holding hands and wearing leis.
“We appreciate the continued community support and we look forward to our day in court,” Louis Kealoha told reporters.
In court Friday, federal prosecutors sought to argue that Katherine Kealoha should be detained without bond due to “multiple acts of obstruction.”
They also said she used more than 10 different encrypted phone lines to contact witnesses while the federal grand jury proceedings were underway, and has shown she is willing to destroy and falsify evidence. But the federal judge didn’t buy the argument, and said she should be released.
The two left the federal courthouse about 12:30 p.m., as the FBI and HPD brass stood shoulder-to-shoulder to detail the severity of the charges against a couple accused of wielding the power of their positions for their own gain.
“The 20-count indictment describes a complex web of fraud, deception and obstruction by a husband and wife team so desperate to fund their lifestyle and maintain their self-professed status as Honolulu’s power couple that they swindled hundreds of thousands of dollars from banks, credit unions and some of the most vulnerable members of the community, including a disabled uncle, a 98-year-old grandmother and two minor children who were under Katherine Kealoha’s guardianship,” said acting U.S. attorney Alana Robinson, at the news conference.
“The Kealohas used their considerable power and influence as public officials to launch a secret campaign to cover up their financial crimes … with the help of a few friends from the department’s elite intelligence unit.”
She added, “No one, not a police chief, not a prosecutor is above the law. Certainly this case has rocked the police department for some time now, but today is a new beginning.”
HPD acting Police Chief Cary Okimoto said the arrests this week “hurt the Honolulu Police Department and the entire community.”
“HPD has been and will continue to cooperate with the federal investigators,” he said.
The arrests are a dramatic — but not unexpected — development in a years-long federal investigation into public corruption at some of the highest levels of Oahu’s law enforcement.
In a comprehensive (and, at times, jaw-dropping) 42-page indictment unsealed Friday, the Kealohas were charged with fraud, making false statements, conspiracy and tampering with witnesses. Additionally, Katherine Kealoha was charged with bank fraud and identity theft.
After the arrests Friday, Mayor Kirk Caldwell said in a statement that Oahu residents “deserve to know what happened and expect justice to be served.”
He continued, “I thank the men and women of our police force who have continued to do their jobs every day with professionalism and without hesitation.”
The Honolulu Police Commission, meanwhile, said it is focused on “selecting a new chief and on supporting the men and women of HPD.”
“We at the police commission respect the decisions that the grand jury has made and leave the question of whether crimes were committed to the criminal justice system,” the commission said.
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