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$1.3M Cash For Home Of Honolulu Couple In Corruption Probe

Cory Lum
Civil Beat

A U.S. judge on Wednesday approved the sale of a home belonging to a retired Honolulu police chief and his former prosecutor wife mired in a corruption investigation.

A buyer is offering more than $1.3 million in cash for Louis and Katherine Kealoha's home in Hawaii Kai, an upscale Honolulu neighborhood. There were multiple offers, said Jonathan Lai, an attorney representing Hawaii Central Federal Credit Union, which filed a foreclosure lawsuit that said the Kealohas weren't paying their mortgage.

The real estate listing said the four-bedroom home "captures island living" with custom travertine floors, renovated kitchen and heated pool.

The Kealohas are central to a wide-ranging corruption investigation that has resulted in an indictment against them and current and former officers alleging they used police resources to frame Katherine's uncle for stealing their home mailbox. Prosecutors say the framing was part of a scheme to cover up financial fraud.

A trial for the mailbox conspiracy has been postponed to May because of Katherine Kealoha's cancer treatment.

That is also pushing back a second trial against the Kealohas on allegations Katherine bilked banks, relatives and others to fund their lavish lifestyle. A magistrate judge Wednesday scheduled that trial for October.

Katherine Kealoha and her pain physician brother are facing another trial after a separate indictment accused them of dealing opioids and using her position as a prosecutor to cover up their crimes.

Targets of the ongoing investigation include high-ranking Honolulu officials.

The Kealohas have pleaded not guilty to all the charges against them.

The Kealohas purchased the four-bedroom home for $1.2 million in 2013.

Before confirming the sale, U.S. District Judge J. Michael Seabright asked if anyone attending the hearing wanted to bid on the house. No hands were raised.

Seabright said he will revisit whether the Kealohas must help pay for their taxpayer-funded defense team, now that they are no longer responsible for the home's mortgage.

Seabright previously approved court-appointed attorneys for the couple because they said they couldn't afford to hire lawyers. Seabright found that the mortgage payments on the Hawaii Kai house ate up most of Louis Kealoha's pension.

The judge said he wants to see updated financial affidavits from the couple.

The sale of the home is scheduled to close on March 29.

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