When the FBI arrested deputy prosecuting attorney Katherine Kealoha last month, one of the more troubling allegations was that Kealoha stole almost $150,000 from two children for whom she was serving as guardian and trustee.

Now allegations about the way Kealoha handled the trust of Ransen and Ariana Taito have gotten worse.

In documents filed Friday, the federal government says that Kealoha not only took the money, but also leaned on a witness in the guardianship case to help her cover it up.

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The Taitos’ attorney declined to discuss the newly filed documents, but said the Taitos would have had nothing to gain by helping cover up the wrongdoing. Their only motive, he said, would have been to help Kealoha, who had been their guardian when they were children — after their father had died and during a time when their mother was often absent.

“There’s always concerns about whether they committed perjury before the grand jury,” said Michael Green, a well-known criminal defense attorney now representing the Taitos.

“If they did, they certainly didn’t benefit from it, if someone took their money,” Green said.

So, he asked, “Why did they do that? Who would have asked them to do that?”

One person who might have benefited, he said, was Kealoha.

And, he said, “She was basically all they had.”

Nathan Eagle/Civil Beat

Kealoha, and her husband, former Honolulu Police Chief Louis Kealoha, have pleaded not guilty to all of the federal charges filed against them.

Her attorneys, Myles Breiner and Kevin Sumida, did not return calls for comment. However, Sumida has denied Kealoha took money from the Taitos and has said the Taitos testified to that under oath.

“The allegations in the indictment concerning the guardianship matter are shockingly inaccurate,” he told KHON’s “Always Investigating” last month.

Sumida repeated the assertion in a motion filed Tuesday, writing, “as the grand jury transcripts will undoubtedly confirm, both of the then-minor children, who are now adults, testified that they did in fact receive their funds, that they signed receipts for the funds, and that bank records will confirm receipt of such funds.”

Sumida also took aim at allegations in the indictment that said Kealoha bilked her uncle and grandmother, Gerard and Florence Puana, out of tens of thousands of dollars as part of a reverse mortgage and investment scheme. He said the accusations were already found to be untrue when a civil jury sided with Kealoha in a lawsuit filed against her by the Puanas.

He said, “the jury was so disgusted with the claims made against Katherine Kealoha that they had no difficulty awarding her over $600,000 in damages, including over $200,000 in punitive damages against the uncle.”

Sumida added that while Kealoha didn’t seek punitive damages against her grandmother, who is now 98, the elder Puana lost on every claim and was ordered to pay $80,448 in Kealoha’s attorney’s fees. The Puanas are appealing the decision.

But Sumida’s motion did not directly address the FBI report contained in the government’s motion filed this week concerning the guardianship case.

At the time he testified, Ransen was represented by Jacob Delaplane, a former deputy prosecuting attorney who worked with Kealoha in the career criminal division of the prosecutor’s office.

At the center of the new allegation is a document that Kealoha filed in the Taitos’ state guardianship case, which appears to clear her of stealing money from Ransen Taito. The document appears to be a statement, filed by Kealoha, in which Ransen approved a final accounting saying Ransen had gotten about $84,000 from his trust account after he turned 18. The final accounting also was filed by Kealoha.

Federal prosecutors now say the approval document was forged.

An FBI report filed as an exhibit on Friday describes an interview between the FBI and someone described as “Witness 1.” According to the report, Witness 1 told agents during an April 2017 interview that Kealoha called him for a private meeting in June 2016 during which she showed him the approval statement with his forged signature.

The government’s version of the document has redacted the names of two apparent witnesses, which appear in an unredacted version of the document filed in the state guardianship case: Bradley Ito and Elson Honda. They could not be reached for comment and it’s unclear exactly what their relationship is to Taito or Kealoha but they are on the document as witnesses.

According to the report, Kealoha told Witness 1 — apparently Ito or Honda — she didn’t know how his signature had gotten on the document or who had signed it. Kealoha told Witness 1 that if he received a subpoena to testify before the grand jury he should contact her and she would provide an attorney.

According to the FBI report, Witness 1 saw Kealoha’s comment as self-serving. The report quotes Witness 1 as saying he “felt that he has always been a good friend to KEALOHA, but she doesn’t always reciprocate” and that “she only answers (his) calls when it is convenient for her or when she wants something from him.”

Witness 1 did not tell Kealoha when he received the subpoena, the FBI report says.

It’s not clear what relationship Kealoha had with the Taitos before she became their guardian in 2004.

The Taitos’ maternal grandmother, Marlene Drew, said in an interview that she wasn’t aware of a connection, although Ransen and Ariana lived with her. She added that she was often kept “in the dark” about her grandchildren’s affairs.

What is clear is that Kealoha has been in the Taitos’ lives for years, at least since Ransen was 12 years old and Ariana 10. At that time, the Taitos had come into about $167,000 from a medical malpractice claim their father, Pakini, had brought against Kaiser hospital. Paikini and his wife, Lauren, were estranged and Pakini was sick with cancer, Drew told Civil Beat in a previous interview.

Kealoha, who had worked on the malpractice matter as a private attorney, was appointed guardian by a state circuit court in Honolulu. The court ordered the money to be put into trust accounts for Ransen and Ariana. The court also ordered the trust account to require signatures from Kealoha and her co-counsel, Jim Bickerton, in order to withdraw funds.

U.S. Attorney General

But the federal government alleges Kealoha didn’t do that. According to the federal indictment, she and her husband, former Honolulu Police Chief Louis Kealoha, used the funds as their own.

Specifically, the indictment alleges the Kealohas used the trust accounts as collateral for approximately $1.2 million in loans, including about $105,000 in personal loans and a $1.1 million home refinancing.

It also says they misappropriated almost $150,000 from the accounts.

Ransen declined to comment, saying he and Ariana have a good lawyer and “I don’t want to jeopardize anything.” Ariana did not respond to an interview request.

Civil Beat reporter Nick Grube contributed to this report.