The civil lawyer of former Honolulu Police Chief Louis Kealoha and his deputy prosecutor wife, Katherine Kealoha, is asking a federal judge to allow the Kealohas to sell their Hawaii Kai home so he can collect the attorney fees the Kealohas owe him.
Honolulu attorney Kevin Sumida filed the request not on behalf of the Kealohas, but on behalf of his law firm, Sumida Au & Wong LLLC, which holds a mortgage on the Kealohas’ Mariners Cove home. The Kealohas granted the Sumida law firm the mortgage in June as security to guarantee payment of past and future attorney fees up to $700,000.
There already was a $1.04 million mortgage on the home at the time held by Hawaii Central Federal Credit Union. The lender filed for foreclosure last week, claiming the Kealohas are in default and, as of Jan. 26, owe $1,037,837 in principal, accumulated late fees and interest.
Sumida is asking the court to lift a block on the sale or transfer the government placed on the home in October. A federal indictment charging the Kealohas with multiple counts of bank fraud lists the home as a proceed of the charged crimes and is therefore subject to forfeiture upon conviction.
The indictment also charges the Kealohas and four former members of the Honolulu Police Department’s elite Criminal Intelligence Unit with conspiracy and obstruction of justice in connection with the alleged frame-up of Katherine Kealoha’s uncle for the theft of a mailbox.
Sumida says in his request that it is his understanding that the Kealohas intended to sell the home before the government put a block on it and that a real estate agent already had performed the market studies and identified several potential buyers. He says the property can be sold at a price high enough to pay off Hawaii Central FCU and his law firm, with the surplus going to the government, since he claims the criminal forfeiture is secondary to the mortgages.
It is not clear whether the Kealohas agreed to Sumida’s request. Sumida did not respond to a request for comment. Louis Kealoha’s court-appointed lawyer, Rustam Barbee, said he hadn’t spoken to his client about it. Katherine Kealoha’s court-appointed lawyer, Cynthia Kagiwada, declined to comment on the matter.
U.S. District Chief Judge J. Michael Seabright cited the Kealohas’ high mortgage payments in November when he appointed criminal defense lawyers for them paid for by taxpayers.
The Kealohas bought their 2,123-square-foot, four-bedroom, three-bath home in August 2013 for $1.23 million with a $980,000 loan from Hawaii Central FCU. The credit union later gave the Kealohas a $90,000 home equity loan. In September 2016 the Kealohas granted Hawaii Central FCU an amended mortgage for $1.04 million. According to the latest Honolulu property tax records, the home’s tax-assessed value is $1,382,200.
Christine Donnelly has the day off. Kokua Line returns Thursday.
