HONOLULU (KHON2) — Criminals are often told they have to pay back their victims, but that’s not happening fast enough in one high-profile federal case. As Always Investigating learned, payback also isn’t happening for some other big federal cases, but has improved for many lower-dollar state judgments.
Katherine and Louis Kealoha are behind bars after their federal convictions, while people they owe money to are waiting for checks. So what can be done to get crime victims the restitution they’ve been promised?
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It’s been nearly two years since the convictions of the Kealohas and their accomplices in a federal corruption trial. Months later, the Kealohas pled guilty to other financial crimes. Besides federal prison time, the judgments also require payback of nearly a half-million dollars combined, to the victims: Katherine’s uncle Gerard Puana and her deceased grandmother’s trust in the first case, and the Taito siblings bilked while Katherine was their court-appointed trust guardian.
We wanted to know how much money they’ve received back. Attorneys tell me, it’s not going so well.
“We’ve addressed our questions to the people in San Diego who are handling this case, as well as the U.S. Attorney’s Office here. And we’ve got no responses and no answers whatsoever,” said Eric Seitz, attorney for the Puanas. “I guess we’ll have to file some sort of motion, because as of now, we’re not getting anything.”
According to federal court records, early on some funds from assets and liquidation were recovered for the grandmother’s estate but more than $227,000 is still owed. It was only last month that the federal government wrapped up final forfeiture of a valuable Rolex watch seized years before the convictions.
“Chief Kealoha’s (HPD) retirement payments are supposed to be coming in,” Seitz said. “My understanding is that he’s netting about $7,000 a month. So that means, since he went into prison, the end of June or first of July, he’s gotten close to $70,000. My understanding is that they were going to make restitution to the two (Taito) kids first, and then we were supposed to get all of it after that, but I have no idea where that stands.”
The attorney for the Taitos tells me they, too, are awaiting for full payment on their end.
They’re not the only ones in line for payback. The taxpayers of Honolulu are owed another $250,000 for the pre-conviction severance payment louis agreed to payback if guilty.
A city spokesperson told KHON2: “The City filed a lien with the bureau of conveyances. However, we were unable to find any real property at the time of the lien filing. The City has requested that the Honolulu Police Commission, Louis Kealoha’s former appointing authority, assist in searching for any real property or personal property interest that Kealoha may have.”
Hawaii victims in other high-profile federal cases are similarly left waiting. Remember the Wonder Blunder more than a decade ago? Marc Hubbard was convicted of scamming the University of Hawaii into thinking he’d lined up a Stevie Wonder concert for a $200,000 fee. That money is owed back as restitution following his 2018 sentencing.
A UH spokesperson told KHON2: “We received a $100 check in May 2019. Hubbard is in prison until 2026, which would impede his ability to make restitution.”
Lack of income while incarcerated is a universal problem when it comes to keeping up with restitution, but systems can do better to facilitate transfer of what money there is. The state Department of Public Safety and its Crime Victim Compensation Commission has been making inroads on it in recent years — more than doubling the number of convicts paying.
“We take 25 percent of every deposit that goes into the inmate’s account and apply it toward the restitution,” said DPS Deputy Director Tommy Johnson. “And while some of them may might not like it, they understand that it’s a requirement. It is part of the rehabilitative process.”
The average offender owes less than $1,000 in restitution, yet the stepped-up enforcement and percentages have added up to millions more back to victims. They’re finding even the big-ticket white-collar cases keep up with the obligation, too.
“So we’ve collected about $1.2 million in payments over $10,000,” said Pamela Ferguson-Brey, executive director of the Crime Victim Compensation Commission. “Two of those were over $300,000. We have a guy who continues to pay — he owed over $1 million — and he continues to pay years after he’s off status. He has to, because that’s his obligation. But that’s how he forgave himself and made himself whole in terms of the crime.”
Whether that will come to pass in the Kealoha federal cases remains to be seen. We’ve been asking the federal court and the U.S. Department of Justice for answers and will report back when they respond.