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That’s how much federal prosecutors estimate Louis and Katherine Kealoha improperly obtained through allegedly illegal actions.

The former police chief and his prosecutor wife — who’ve been referred to as a Honolulu power couple — aren’t accused of directly receiving that amount in cash. The bulk of the total — $3.8 million — came from bank loans and refinancing of mortgages that were allegedly obtained with fraudulent information.

Still, the amount shows the scope of the crimes the federal government is accusing the Kealohas of committing. The Kealohas have pleaded not guilty to the charges.

Much of the reporting on the Kealoha scandal has turned on two deals involving relatives: a purported investment scheme in which the Kealohas misappropriated money from Katherine’s uncle, Gerard Puana, and a complex venture that started with a reverse mortgage on the home of Katherine’s grandmother, Florence Puana.

But most of the federal allegations against the Kealohas aren’t about complex schemes to swindle relatives. Twelve of the government’s 20 charges are stunningly simple. They hinge on the alleged use of forged documents and other supposedly bogus information the Kealohas submitted to multiple financial institutions to obtain millions of dollars in loans.

Here’s where prosecutors allege the money came from:

Money Misappropriated From Relatives

$137,355
($45,000 from Gerard Puana; $92,355 from Florence Puana)

Two deals involving relatives are part of the federal indictment against the couple. One involved a reverse mortgage that Katherine Kealoha allegedly took out on the home of her grandmother, Florence Puana, who had granted Katherine power of attorney.

Although the deal was complex, the federal charge against the Kealohas is straighforward: that they misused $92,355 of the reverse mortgage to pay personal expenses to support a high-rolling lifestyle, including $10,663 in car payments for a Mercedes Benz and Maserati, $2,161 for Elton John concert tickets, and $26,394 at the Sheraton Waikiki for a brunch to celebrate Louis becoming police chief.

Another venture involved an “investment club” that Katherine allegedly invited her uncle, Gerard Puana, to join. The government claims the Kealohas took more than $45,000 from Gerard in the scheme.

The purported misappropriation of funds from the Puanas is not central to the government’s case. Indeed, Florence and Gerard Puana have sued the Kealohas in state court, and a jury found the Kealohas not liable of misappropriating money and breaching their fiduciary duties to the Puanas. That case has been appealed by the Puanas.

The federal charges focus on an alleged conspiracy to cover up the scams, which involve a variety of alleged abuses of authority and three counts of falsely testifying in federal court.

Bank Fraud Involving Misuse Of Children’s Trusts

$1.1 million home refinance from Hawaii USA Federal Credit Union
$105,082 in personal loans from American Savings Bank

In 2004, Katherine was appointed as trustee and guardian of Ransen and Ariana Taito. Ransen was 12 at the time and Ariana was 10. The siblings received more than $167,000 from the settlement of a medical malpractice claim brought by their father, Pakini Taito, against Kaiser Foundation Hospitals. Kealoha was appointed to oversee trust accounts set up at American Savings Bank for the kids’ benefit.

Instead, the government alleges, Katherine treated the funds as her own. On two occasions, Kealoha used one of the funds as collateral for personal loans, according to the charges. Another time, the Kealohas claimed the trust funds as personal assets when applying for a home refinancing, the government alleges.

As part of the scheme, the indictment asserts, Katherine doctored a monthly statement from one of the trust accounts to make it appear she owned the accounts and forwarded the bogus document to the credit union to support the loan application.

The indictment also alleges the Kealohas misappropriated almost $150,000 from the trusts; however, that theft is not one of the counts in the complaint. Louis Kealoha’s attorney, Gary Modafferi, declined to comment about the alleged misappropriation of the trust funds or other aspects of the case. Katherine Kealoha’s attorney, Myles Breiner, did not return calls.

Bank Fraud Involving Bogus Lease Agreement

$150,000 second mortgage from Hawaii Central Federal Credit Union

The alleged fraud involving the trust funds aren’t the only fraud charges. Altogether, the Kealohas face eight charges of bank fraud related to $3.8 million in funds; each count carries a sentence of up to 30 years in prison and a fine of up to $1 million dollars.

Another charge involves a supposedly fake lease agreement designed to make it appear the Kealohas were getting $2,700 in rental income every month from Officer Ming-Hung “Bobby” Nguyen and Katherine Kealoha’s niece, who once lived with the Kealohas, when in fact no such lease existed. That document allegedly was used to obtain a $150,000 second mortgage from Hawaii Central Federal Credit Union.

Bank Fraud Involving Forged Police Report

$180,000 home equity line, $980,000 mortgage, $90,000 home equity line, $1.04 million mortgage refinance, $172,500 home equity on rental property, all from Hawaii Central Federal Credit Union

The alleged forged lease isn’t the only bogus document federal prosecutors say the Kealohas used to get loans. Buried amid the documents filed by the government is a Honolulu Police Department statement dated March 30, 2009. In the statement, Kealoha says she believes she has either been the victim of identity theft – someone else used her name and social security number to open accounts – or a mistake by credit bureaus. At the bottom of the report is the signature of an investigating officer who took the report.

The federal government says the signature was forged. Prosecutors contend the Kealohas submitted the report to falsely claim they were victims of identity theft and “explain away their poor credit history.”

The alleged forgery is at the center of the four bank fraud charges. It also is the basis of four additional counts of aggravated identity theft, each of which carries a minimum sentence of two years.