The state says former city Housing Department employee Michael Kahapea has paid just $50 toward the $365,000 he was fined for stealing millions of dollars from the city’s ill-fated Ewa Villages project, so it’s going after Kahapea’s state retirement payments for the rest.
The state attorney general filed a civil lawsuit in state court Wednesday against Kahapea and the state Employees’ Retirement System.
The lawsuit says Kahapea is believed to be receiving a state government pension based on his years working for the city. It is seeking garnishment of Kahapea’s state pension for $364,950 plus
10 percent annual interest from the date of Kahapea’s October 2000 state court sentence.
The ERS says it cannot disclose to third parties whether someone is receiving state retirement benefits unless by court order.
Retired state Circuit Judge Randal Lee successfully prosecuted Kahapea on multiple counts of theft, forgery, money laundering and other crimes before later becoming a state judge. He said if Kahapea is receiving a state pension, “I think there is something fundamentally wrong with someone being allowed to collect retirement benefits from the very people he stole from, especially considering the egregious way in which he committed the crimes.”
The ERS fund is built up on contributions from state and county workers.
A state jury found Kahapea guilty in August 2000 of 23 counts of theft, 11 counts of forgery, five counts of unlawful ownership of a business, two counts of money laundering, two counts of failing to report income and one count of bribery.
Lee told the jury that Kahapea diverted $5.8 million from the Ewa Villages relocation fund to himself, family and friends through bogus moving companies and false and inflated moving expenses. He used the money on frequent trips to Las Vegas, where casinos came to recognize him as a high roller, and had even chartered a plane there for friends and family.
Circuit Judge Rey Graulty sentenced Kahapea to five consecutive 10-year prison terms. He also fined Kahapea $365,000.
Graulty, however, did not order Kahapea to pay any restitution, citing a state sentencing law that allowed judges to order restitution only “in an amount the defendant can afford to pay.”
Lee had asked Graulty to order Kahapea to pay $3,734,169 in restitution.
By the time Kahapea went to trial, he had been fired from his city job.
In 2006 state lawmakers changed the law, directing judges “not to consider the defendant’s ability to make restitution in determining the amount of restitution to order.”
Hawaii Paroling Authority Administrator Tommy Johnson says Kahapea became eligible for parole in 2012, but it wasn’t until May 2015 when the board granted him parole. He said Kahapea was released in July 2015.
Kahapea or his lawyer could not be reached for comment.