Katherine Kealoha’s uncle and 100-year-old grandmother will have their day
in court, again.
A state judge has granted Gerard Puana and Florence Puana a new trial for their civil lawsuit against the
disgraced former deputy prosecutor.
“That’s good,” Gerard Puana said. “That’s what we need.”
Acting Circuit Judge James McWhinnie signed an order last week granting the Puanas a new trial. In it McWhinnie says the Puanas presented clear and convincing evidence that there had been misrepresentations and fraud committed on the court by Kealoha. He says it is especially egregious since Kealoha was an officer of the court at the time as a Honolulu deputy prosecutor.
The Puanas sued Kealoha in 2013 over money they said Kealoha took from a
reverse mortgage she arranged on her grandmother’s Maunalani Heights home and $70,000 her uncle says he gave Kealoha for an investment hui and for safekeeping.
The case went to trial in state court in 2015, and the jury sided with Kealoha, awarding her $248,787 to pay her lawyers to defend her against the lawsuit, $200,000 for mental anguish and $210,000 in punitive damages. The grandmother wound up paying approximately $108,000 after the trial judge ordered the money garnished from her trust, even though the case was on appeal.
The Puanas’ civil lawyer, Gerald Kurashima, says he will file papers asking McWhinnie to vacate the 2015 judgment. Should the Puanas win their case on retrial, the court could take into account whatever restitution they receive from the Kealohas’ federal criminal case when awarding damages.
After the Puanas filed their lawsuit but before the case went to trial, Gerard Puana was arrested and charged with stealing the Kealohas’ mailbox. He said Kealoha; her husband, then-Honolulu Police Chief Louis Kealoha; and some officers who were members of the Honolulu Police Department’s elite Criminal Intelligence Unit framed him to discredit him in the civil case.
The criminal charge against Puana was dismissed, a federal grand jury indicted the Kealohas and others for scheming to frame Puana and in June a federal trial jury found the Kealohas and two now-
former Honolulu police officers guilty. Two other former police officers pleaded guilty before the trial.
The Kealohas agreed last month to repay Florence Puana $243,453 and Gerard Puana $46,261 as part of their sentence. The sentencing agreement is part of a larger settlement in which the
Kealohas pleaded guilty to bank fraud for lying on loan applications. Katherine Kealoha also pleaded guilty to
aggravated identity theft and for failing to report her brother’s involvement in illegal prescription drug distribution.
The brother, Rudolph B. Puana, was scheduled to stand trial in U.S. District Court with his sister in May. His lawyers and federal prosecutors agreed Tuesday to move up the trial to April.
The Kealohas are not yet ordered to pay any restitution because they and the two former police officers who were found guilty with them have not been sentenced. They are all scheduled to be sentenced in March. U.S. District Chief Judge J. Michael Seabright does not have to go along with the Kealohas’ sentencing agreement. He could order only the Kealohas to pay restitution or require the two former officers, Derek Wayne Hahn and Minh-Hung “Bobby” Nguyen, to also pay restitution.
Kurashima says the restitution amount the government determined is owed to Florence Puana sounds accurate. He says he still trying to reconcile how the government arrived at the amount due Gerard Puana.
Gerard Puana says his niece paid him back some of the $70,000 he gave her in the form of “interest.” He also paid his niece $1,300 per month to pay for the condominium that most of his mother’s reverse mortgage money paid for. Katherine Kealoha told her grandmother and uncle that she was going to use the leftover money to refinance the mortgage and her own debt, in effect, assuming the reverse mortgage. That never happened.
Still, Gerard Puana says he is fine with the government’s $46,261 restitution amount.
“It’s not like we’re going to see a dime of that money,” he said.
When the Kealohas were indicted on federal criminal charges in 2017, the government identified only the couple’s Hawaii Kai home and a Rolex watch as forfeitable assets. The home has since been foreclosed.
Gerard Puana says he would like the Kealohas’ civil lawyer, Kevin Sumida, to repay his mother the $108,000 that was garnished from her trust.
Sumida did not respond to a request for comment.
