Former Honolulu Police Chief, Prosecutor and Officers Sentenced in Public Corruption Case

Honolulu Police Department, file photo by Wendy Osher.

Former Honolulu Police Chief Louis Kealoha and his wife, former Honolulu prosecutor Katherine Kealoha, were sentenced in federal court this week to 84 months and 156 months in prison, respectively, for a range of criminal conduct, including framing their relative with a crime to conceal their own fraud, according to the FBI.

Additionally, the Kealohas’ co-conspirators, former Honolulu police officers Derek Wayne Hahn and Minh-Hung “Bobby” Nguyen, received 42 months and 54 months, respectively, for their involvement in the conspiracy.

Chief US District Judge J. Michael Seabright of the District of Hawaiʻi handed down the sentences, saying that the conspiracy was “staggering in its breadth, its scope, and its audacity.” He further said, “the impact on the community is clear: The conduct of the defendants has shaken the community and its trust in the Honolulu Police Department.”

The FBI says the sentences mark the end of one of the largest public corruption cases in Hawaiʻi history.

In June 2019, after six weeks of trial and one day of deliberation, a federal jury in Honolulu convicted the Kealohas, Hahn, and Nguyen of conspiracy and attempted obstruction of justice pertaining to the false arrest and prosecution of Katherine’s uncle, Gerard Puana.

The evidence at trial established that the conspirators used their considerable power, including commandeering the Honolulu Police Department’s elite Criminal Intelligence Unit, to frame Gerard with stealing the Kealohas’ mailbox. Hahn and Nguyen were both members of CIU, which acted directly at the behest of Louis Kealoha, according to the FBI.

“The Kealohas’ motive for framing Gerard was to discredit and intimidate him after he accused Katherine of stealing money from him and his elderly mother—Katherine’s grandmother,” according to the FBI.

The evidence at trial demonstrated that the Kealohas took and spent more than $148,000 of the grandmother’s money in just a six-month period, with payments going towards expenses such as mortgage payments, Elton John concert tickets, Mercedes and Maserati car payments, a trip to Disneyland, and a $23,976 brunch tab at the Sheraton Waikiki to celebrate Louis Kealoha’s induction as Honolulu Police Chief in 2009.

The FBI reports that once Gerard started voicing claims of fraud, the Kealohas moved to silence him by falsely accusing him of a felony offense. “To frame Gerard, the conspirators prepped the Kealohas’ mailbox to be ‘stolen,’ selectively edited grainy surveillance video to conceal their preparatory acts, falsely identified Gerard as the culprit captured by the video, falsified police reports, withheld and destroyed evidence, and repeatedly lied about their activity to investigators, the federal grand jury, and the District Court for the District of Hawaiʻi. This all occurred while Louis Kealoha was Honolulu’s Police Chief and while Katherine Kealoha was a high-ranking Honolulu prosecutor,” the FBI reports.

“This was a flagrant and stunning abuse of power that victimized an entire community by undermining public confidence in its leaders and the rule of law,” said US Attorney Robert Brewer. “After years of manipulating the levers of justice to shroud their own crimes, justice has been delivered to these defendants.” Brewer praised FBI agents and Special Attorneys Michael Wheat, Joseph Orabona, Janaki Chopra, and Colin McDonald for achieving justice in this case after many years of tenacious investigation and skillful litigation.

“Our citizens entrust public servants with great powers and authorities. It is our responsibility to serve our community with integrity and authenticity – with truth and justice as our hallmark,” said Special Agent in Charge Eli S. Miranda. “The Kealohas betrayed this trust for their own selfish entitlements, using deception and breaking the same laws they swore to uphold. The FBI will enthusiastically continue to investigate any corrupt public official who willfully and maliciously abuse their office.”

In addition to their custodial sentences, Katherine Kealoha and Louis Kealoha were ordered to pay $454,984.78 and $237,698.56, respectively, in restitution to their victims, and ordered to forfeit property representing proceeds of fraud, including the Kealohas’ former home in Honolulu, a Rolex watch, and $228,746.79. Katherine Kealoha is already in custody; Louis Kealoha, Hahn, and Nguyen were ordered to self-surrender to the Bureau of Prisons on April 12, 2021.

DEFENDANTS                               

• Louis M. Kealoha, 60, of Honolulu
• Katherine P. Kealoha, 50, of Honolulu
• Derek Wayne Hahn, 48, of Honolulu
• Minh-Hung “Bobby” Nguyen, 46, of Kaneʻohe

SUMMARY OF CONVICTIONS

Louis Kealoha

CR No. 17-00582-JMS-WRP
Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison, $250,000 fine
Obstruction of Official Proceeding – Title 18, U.S.C., Section 1512(c) (three counts)
Maximum penalty: Twenty years in prison, $250,000 fine

CR No. 18-00068-JMS-WRP
Bank Fraud, in violation of 18 U.S.C. § 1344
Maximum Penalty: Thirty years in prison, $1 million fine

Katherine Kealoha

CR No. 17-00582-JMS-WRP
Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison, $250,000 fine
Obstruction of Official Proceeding – Title 18, U.S.C., Section 1512(c) (three counts)
Maximum penalty: Twenty years in prison, $250,000 fine

CR No. 18-00068-JMS-WRP
Bank Fraud, in violation of 18 U.S.C. § 1344
Maximum Penalty: Thirty years in prison, $1 million fine
Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A
Maximum Penalty: Mandatory term of imprisonment of two years, to be served consecutive to the sentence imposed for any underlying charge; fine of up to $250,000

CR No. 19-00015 JMS-WRP
Misprision of Felony, in violation of 18 U.S.C. § 4
Maximum Penalty: Three years in prison; fine of up to $250,000

Derek Wayne Hahn and Minh-Hung “Bobby” Nguyen

CR No. 17-00582-JMS-WRP
Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison, $250,000 fine
Obstruction of Official Proceeding – Title 18, U.S.C., Section 1512(c) (three counts)
Maximum penalty: Twenty years in prison, $250,000 fine