As a federal grand jury considers corruption and abuse of power allegations involving the police chief and his county prosecutor wife, they spoke exclusively to Always Investigating about key episodes that started it all.

We’re going back to where it all seems to have begun — a family financial feud and a mailbox caper said by some to be theft, by others to be a frame job. For the first time since a federal investigation began, the Kealohas speak publicly about their version of events.

A Saturday morning in the summer of 2013 started normally at the Kealohas’ former Kahala home, but took a most unusual twist.

“Louis went surfing,” Katherine Kealoha said. “He came back that morning and he told me our mailbox is gone.”

“On the weekend, I go surfing. I woke up in the morning, put the board on my car and I looked and I said, ‘I think my mailbox is missing,’” Chief Kealoha recalls. “I went to look at it, and I checked and said, ‘Somebody took the mailbox off the stand.'”

“I called 911 and I reported it,” Mrs. Kealoha said, “and officers came to our house. It’s a very simple situation. There was nothing fancy or exceptional to that.”

A week later, they provided their home surveillance video, and in her subsequent police report, Katherine Kealoha identified the thief as an uncle who was on the other side of a lawsuit against her, filed just months before. That lawsuit accused her of financial fraud and elder abuse involving money from her grandma’s reverse mortgage.

View the actual police reports here.

The mailbox made it a federal charge, and a federal public defender got assigned to represent the uncle.

“When I first got the case, I thought it was going to be a very quick and easy guilty plea,” said federal public defender Alex Silvert. “I mean, here is someone who allegedly stole a mailbox of the chief of police and they had a video. How complicated is that?”

It turns out, very complicated.

“We looked at the video tape they claimed it was him. It clearly wasn’t him,” Silvert said. “We started investigating, slowly but surely, all the pieces of evidence, and basically what we found was a whole slew of falsified documents, false reporting, information that just was 100-percent untrue.

“It was astounding,” Silvert added. “I’ve never had a case like this where these prominent people are involved and it appears to have been a frame-up of a defendant for a specific reason.”

The uncle’s defense said the figure in the video couldn’t possibly be the uncle as he was much heavier than the surveillance figure, asserting someone else played the role.

“If we did that, a police officer did that, I tell you what, we have difficulty keeping secrets. This would be out in the public,” Chief Kealoha told Always Investigating. “If more than two people know about it, game over.”

The Kealohas show what they say is a photo of the uncle from around the same time, at a much slimmer weight than he carried for trial years later.

“Time and time again our officers have been questioned,” Chief Kealoha said, “and time and time again, they’ve denied any involvement in doctoring or falsifying any records. “If any of that was true, we’d have cops coming out and saying yes, because the cops who work in this unit are the same ones that will have no problem going to the FBI when they see something wrong with another officer, and they’ve done it in the past.”

The officers involved in the case were from the Criminal Intelligence Unit (CIU). Among the abuse of power allegations the grand jury is weighing is whether CIU was used inappropriately by the Kealohas in the family fight.

Always Investigating asked the chief, why were CIU resources being put to the investigation or the arrest in something like a mailbox theft?

“They weren’t used only in the mailbox theft,” Chief Kealoha said. “There were incidents, a series of incidents, that were going on for well over a year. Somebody was shooting out our windows. We only had one pane left and it was covered by cardboard. Each time we made reports.”

“On the mainland in other larger law enforcement agencies, they (the police chiefs) have security details. I don’t have a security detail, I don’t want a security detail. But when something happens where the lives of my family are in jeopardy or put in danger, of course I want somebody to investigate that, just like anybody else,” Chief Kealoha said. “So I’m going to bring those resources in, but I’m going to ask. It’s not just on my own direction. I have to ask to use these resources.”

Always Investigating asked the chief, did he ask to use the resources that were used on any of these things that were relating to the uncle?

“Absolutely,” Chief Kealoha said. “I delegated this. I didn’t want to be accused of what I’m being accused of, so I delegated it to the deputy chief (Marie) McCauley and said, ‘You can take care of this situation.’ She actually delegated it to the Criminal Intelligence Unit and they took care of it. She doesn’t micromanage the investigation. She just designates who is going to do it. She designated CIU and it is what it is. If there are any occurrences that come up, then she’ll be informed of what’s going on.”

Charges against the uncle were dismissed after a most unusual mistrial caused by the chief for making statements on the stand about the uncle’s criminal past.

“This is the chief of police who earlier had testified that he trains other officers in how to testify and what the rules of evidence are and what they can and cannot say during direct testimony,” Silvert said of the federal trial. “So he had just laid a foundation that he’s an expert and he knows how to do this, and yet on direct examination he causes a mistrial.

“I believe it was intentional because the chief of police and his wife knew the kind of evidence I had developed and knew that if the trial had continued, I would be able to expose that evidence,” Silvert said.

Always Investigating asked the chief, since the case ended in a mistrial after comments he made on direct questioning, did he throw that trial?

“No, absolutely not,” Chief Kealoha said. “I went into that trial, number one, not as a police chief. I went in as a husband and a father. I was overwhelmed and I was emotional because of the long history and series of incidents that were going on at my home.

“We wanted to win the case because we knew who it was. We knew the suspect, and that was Kathy’s uncle who stole our mailbox,” Chief Kealoha added. “We wanted to win. We didn’t go in to get this trial thrown out or cause a mistrial.”

The grand jury is also said to be hearing accusations that Katherine Kealoha entered the uncle’s residence in his absence, accompanied by HPD, and removed items without his permission.

Katherine Kealoha says she retrieved personal items on behalf of her uncle that he needed for his stay at a residential rehabilitation center. She says this took place years before any financial matters had come up, when she and the uncle were still on good terms. She said people accompanying her were there in their capacity as relatives and not as police officers, and that the belongings were logged for inventory at the rehab facility.

Meanwhile, a civil trial in the financial fraud case ended with the jury finding in Katherine Kealoha’s favor for hundreds of thousands of dollars.

“We went through an extensive civil trial and we were more than vindicated. We were awarded punitive damages because of the abuse of process,” Katherine Kealoha said.

She alleges the U.S. Attorney is rehashing much of that case behind closed grand jury doors.

“It’s very convenient that they’re bringing it to potentially a type of venue where I can’t respond,” Katherine Kealoha said. “I had been completely vindicated and the jury found this abuse of process. There was never a mention that there was doctored evidence, that there were doctored papers that (the opposing side) submitted in that case at all.”

A family representative said the grandmother, uncle and other relatives could not talk to us because of grand jury subpoenas, but their attorney says Katherine Kealoha speaks too soon of vindication.

“This is not finished,” said attorney Gerald Kurashima. “There are appeals pending in the civil case. The appellate court has the final say whether they overturn the findings of a lower court jury.”

An appeal of her award of attorney’s fees is already filed. Katherine Kealoha also petitioned to get a guardian appointed over her grandmother; a judge denied that request.

Grand jury testimony is expected to continue this week for the federal investigation.