City reaches $2.85M settlement with central victim in Kealoha corruption scandal
HONOLULU (HawaiiNewsNow) - The city has reached a settlement in a closely-watched civil lawsuit brought by Gerard Puana, a key victim in the Kealoha corruption scandal.
The news was announced in federal court Wednesday ― and the settlement is still subject to City Council approval.
Disgraced ex-Police Chief Louis Kealoha and his estranged wife Katherine, a former city deputy prosecutor, framed Puana with a federal crime ― the theft of their mailbox ― during a financial dispute with the Puana family.
The case was an attempt to discredit him and hide the Kealohas’ theft.
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In December, a federal judge ruled that the city could be held liable for crimes the Kealohas committed, rejecting the city’s argument that the former power couple were operating in their own self-interest and not enacting policy.
When the Puana civil suit was first filed, attorneys demanded $30 million in damages.
But subsequent rulings significantly reduced the amounts they could seek.
“When we’re faced with a trial and the possibility that there might be subsequent appeals and other delays, we really needed to get this over,” said Eric Seitz, the Puana family attorney.
The settlement underscores a key fact in the case ― that the Kealohas and conspiring officers intentionally violated Puana’s rights.
The Kealohas are both serving time in federal prison.
“This was a story of enormous corruption that was allowed to go on for a long time,” said Seitz.
The Puanas did get additional funds through restitution and the sale of the Kealoha’s Hawaii Kai home after it was seized by the feds. There is also money from Louis Kealoha’s pension that is being garnished until he is released from prison in 2026.
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