‘A Real Injustice’: Katherine Kealoha Still Stands To Collect $680K From Grandmother, Uncle
Gerard and Florence Puana are still on the hook for the verdict in a civil case that happened before the Kealohas were convicted on criminal charges stemming from the same situation.
Each time Gerard Puana steps through the front door of his Salt Lake condominium he looks south to the Federal Detention Center, where his niece, Katherine Kealoha, awaits sentencing.
鈥淪he鈥檚 not my problem anymore,鈥 he said. 鈥淎nd she鈥檚 not my family鈥檚 problem either.鈥
On June 27, a jury convicted Kealoha, a former Honolulu city prosecutor, on a series of federal felonies stemming from her attempt to frame Puana for the 2013 theft of her mailbox.
Kealoha鈥檚 husband, retired Honolulu police chief Louis Kealoha, and two of his officers, Derek Hahn and Minh-Hung 鈥淏obby鈥 Nguyen, were also found guilty of conspiracy and obstruction of justice for taking part in the set-up.
A third officer, retired HPD major Gordon Shiraishi, walked free. Two other HPD officers pleaded guilty to other charges in connection with the federal investigation.
Related Coverage
For Puana, the convictions brought a sense of vindication, but not closure.
He still owes Kealoha $658,000 from a verdict in a state civil case that the federal government says was won through fraud, deceit and manipulation. She also still has her name on the deed to his condo.
His mother, Florence Puana, turns 100 later this month yet no longer has a home.
She was forced to sell it after she says she was duped by her granddaughter into getting a reverse mortgage. Kealoha鈥檚 lawyers then garnished what little money she had left over.
At 99, Florence is living with her daughter in Kailua, sleeping on a bed in the living room.
鈥淲e just got screwed in every direction,鈥 Gerard Puana said. 鈥淚t鈥檚 unbelievable what she did, and the tragic part is that she did it to family.鈥
鈥業t Was Just A Snow Job鈥
One of the biggest challenges facing the Puanas today is the verdict in the civil lawsuit they filed against Katherine Kealoha.
The federal government said the lawsuit was the motive behind the frame job.聽The Puanas had accused Kealoha in March 2013 of bilking them out of hundreds of thousands of dollars via a shady reverse mortgage on Florence鈥檚 home and a sham investment scheme.
The Puanas received more than $500,000 from the reverse mortgage. Most of the money 鈥 about $360,000 鈥 went toward buying the Salt Lake condominium for Gerard. The rest was supposed to be used by Katherine and her husband to consolidate their debts.
Instead, the Puanas lawsuit said, they used it to enrich their lives.
They spent the money on a Maserati and a Mercedes Benz. They purchased trips to Disneyland and bought Elton John concert tickets. They even threw a $24,000 party at the Sheraton Waikiki to celebrate Louis鈥 promotion to police chief.
By the time the Puanas discovered what was happening with their money it was too late.
The balance on the reverse mortgage 鈥 which Katherine had promised to payoff 鈥 had ballooned.
Florence sold her house to get out from under the debt and recover what money she could rather than give everything over to the bank. She also decided to fight back.
Federal prosecutors say the Puanas鈥 lawsuit had the potential to ruin the Kealohas鈥 image in the community as well as reveal a series of other financial crimes, including bank fraud and identity theft. The couple is scheduled to go on trial on those federal charges in January.
鈥淚t鈥檚 a mess. The only thing we have is justice.鈥 鈥 Gerard Puana
In February 2015 鈥 after the FBI began investigating the Kealohas 鈥 a state court jury sided with Katherine Kealoha in the lawsuit and awarded her $658,000 in damages.
More than a year later, the judge in the case, Virginia Crandall, who’s since retired, allowed Kealoha鈥檚 lawyers to garnish $108,000 from Florence Puana鈥檚 bank account to cover their attorney fees.
The Puanas鈥 attorney, Gerald Kurashima, has appealed the verdict, but he says the criminal conspiracy case likely won鈥檛 have any bearing on the decision.
Kurashima said the Puanas’ civil case is already in the appellate court process and that the evidence presented during the criminal trial cannot be added to the record.
He is exploring another option, however, to request a new civil trial based on 鈥渢he extent of the fraud that was committed in the civil case.鈥
鈥淚t was just a snow job,鈥 Kurashima said. 鈥淜atherine Kealoha is a very convincing liar.鈥
Courtroom Lies And Deception
The civil trial was fraught with problems, according to the U.S. government.
Katherine Kealoha tried using it in her defense in the criminal trial, but U.S. District Court Judge J. Michael Seabright kept it out at the behest of prosecutors so as to not confuse the jury.
Seabright said Kealoha鈥檚 defense team could use the dollar amount awarded during the trial to show that Gerard Puana might have potential bias when he testified against her, but that was all.
He even stopped Kealoha鈥檚 civil lawyer, Kevin Sumida, from testifying that his client had won the case 鈥渉andily.鈥 Seabright then told the jury to disregard Sumida鈥檚 statement.
Sumida was later accused by prosecutors of lying on the witness stand. He did not respond to a Civil Beat request for comment.
In court records, federal prosecutors argued that the civil jury was 鈥渄eceived鈥 into siding with Kealoha.
They said the case included 鈥渁 barrage of false testimony,鈥 鈥渨itness tampering鈥 and 鈥渙ther systemic flaws which effectively render the civil verdict a nullity.鈥
Some of Kealoha鈥檚 alleged lies were proven during the criminal trial while others were merely detailed in court records.
For example, prosecutors were able to show that a trust document Kealoha used to purchase the condominium for Gerard Puana was a forgery.
Puana鈥檚 signatures and initials on the document did not belong to him. Others, including those of Kealoha and a possibly nonexistent notary by the name of Alison Lee Wong, appear to have been signed by Kealoha herself.
鈥淚 would ask her, 鈥楬ow could you do that to your grandma? How could you do that to me?鈥欌 鈥 Florence Puana
Federal prosecutors says that Wong was in fact not a real person, that she was a fake persona created by Kealoha to help carry out her various criminal enterprises and advance her own career in government.
Kurashima wanted to use the trust document in the civil case, but he was unable to enter it into evidence because Kealoha said on the witness stand that the signatures on the document were not made by her.
In another example, federal prosecutors say Kealoha coached her father, Rudolph Puana, to provide false testimony during the civil trial to help her defense.
Kurashima said it was clear to him that Kealoha was being deceptive during the civil trial. In his view, there was no question she had stolen her uncle and grandmother鈥檚 money. He鈥檚 just not sure why the jury didn鈥檛 see it, too.
鈥淚t鈥檚 a real injustice,鈥 Kurashima said. 鈥淲hat can I say?鈥
Kealoha, meanwhile, is still hoping to use the verdict in the civil case as well as various evidence she and Sumida presented to throw out her criminal conviction and get a new trial.
The deed to Gerard Puana鈥檚 condominium, and the fact that Katherine Kealoha’s name is still on it, is a whole separate issue that must be addressed.
Kurashima said that because the trust was a forgery a judge should invalidate the deed and order that the condo rightfully belongs to Florence since it was her money that paid for it.
Still, it鈥檚 up to the courts to decide, he said, and because of that there are no guarantees.
鈥淚t鈥檚 easy to prey on the elderly, and it happens a lot more than people are willing to admit,鈥 Kurashima said. 鈥淭hat鈥檚 why Katherine Kealoha preyed on Florence, because she never expected Florence would come back against her.
鈥淪he thought Florence would be a defenseless victim and that no one would believe Gerard, which proved to be wrong.鈥
鈥楬ow Could You Do That To Me?鈥
Gerard Puana knows he can鈥檛 afford to pay Katherine Kealoha if the verdict stands in the civil case.
He has the condo, but he says he can鈥檛 sell it or take out a loan against it because his niece鈥檚 name is still on the deed.
The one thing he does know is if none of this happened he would most likely still be living with his mother in the home he was raised in on Wilhelmina Rise, taking care of her in her later years. For that, he says he can never forgive his niece.
鈥淚t鈥檚 a mess,鈥 he said. 鈥淭he only thing we have is justice.鈥
Florence Puana is somewhat more forgiving.
She said on the day her granddaughter was sent to jail she dreamed she was on her knees before God, begging for Katherine鈥檚 salvation. Florence finds solace in her religion, it鈥檚 one of the few things she has left at 99 years old.
Her health is fading and her eyesight mostly gone, but it helps to keep her mind sharp. She said she hasn鈥檛 talked to her granddaughter yet, and that if it happens forgiveness wouldn鈥檛 be the first topic of conversation.
鈥淚 wouldn鈥檛 say, 鈥業 forgive you in that moment,鈥欌 Puana said. 鈥淚 would ask her, 鈥楬ow could you do that to your grandma? How could you do that to me?鈥欌
GET IN-DEPTH REPORTING ON HAWAII鈥橲 BIGGEST ISSUES
Support Independent, Unbiased News
Civil Beat is a nonprofit, reader-supported newsroom based in 贬补飞补颈驶颈. When you give, your donation is combined with gifts from thousands of your fellow readers, and together you help power the strongest team of investigative journalists in the state.
About the Author
-
Nick Grube is a reporter for Civil Beat. You can reach him by email at nick@civilbeat.org or follow him on Twitter at . You can also reach him by phone at 808-377-0246.