On Thursday, a federal grand jury in Honolulu returned a first superseding indictment in the case of the three city officials accused of conspiring to obtain funding for a severance payment to former Honolulu Police Chief Louis Kealoha “by materially false and fraudulent pretenses, representations, promises, and omissions of materials facts….”
Former corporation counsel Donna Leong, former managing director Roy Amemiya, and former police commission chair Max Sword, were first indicted in December 2021 for their roles in the alleged scheme.
The updated indictment adds five counts accusing Leong of making “materially false, fictitious, and fraudulent statements and representations” during an interview with FBI agents on November 13, 2017.
Each count of making false statements is punishable by up to five years in prison. This certainly appears to up the ante for Leong, and perhaps for the other defendants as well.
The original single count of conspiracy also carries a maximum 5 year sentence.
Here is the section of the superseding indictment regarding these new counts #2-6. The entire superseding indictment can be read or downloaded here.
Leong allegedly said during the interview that Acting HPD Chief Cary Okimoto was not involved in any conversation about the Kealoha payout agreement “leading up to it being reached,” and that she didn’t speak to Okimoto during that period.
However, the indictment alleges that on January 11, 2017, Leong “arranged a meeting with Deputy Corporation Counsel, HPD officials, and an HPD Senior Legal Advisor.” The legal advisor is not identified in the indictment. During the meeting, Leong allegedly disclosed she was working on a confidential retirement agreement for Kealoha, and was told HPD could not fund the payout. Leong then had a private side conversation with Okimoto, during which she “suggested” HPD make the payment and later falsely claim additional funding to make up the shortfall was necessary in order to pay new hires.
Okimoto emailed Leong the same day “and informed her that HPD would not be able to fund a payout to Kealoha,” the superseding indictment alleges.
However, according to the superseding indictment, Leong told the FBI agents that Okimoto raised no objections until after the Kealoha agreement had been signed.
In addition, the deputy corporation counsel who took part in the meeting was likely Duane Pang, who was assigned to advise the police commission. But Leong told agents during her November 13 interview that “Deputy Corporation Counsel, D.P.” would not have been allowed to talk to anyone outside of the police commission “because that was something Leong controlled very tightly.”
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Very nice summary. Every other media account so far has managed to miss the point: the superseding indictment added five new CRIMINAL CHARGES that Leong now faces, each of which carries a potential prison term.
The original indictment charged each of the three defendants with a single count of conspiracy, but had included the allegations that Leong lied multiple times to the FBI, so those allegations are not new. In fact, the alleged lies were mentioned just the other day in comments on this very blog to make the point that, if nobody charged in the indictment did anything wrong, it would seem unlikely that anybody would feel it necessary to lie to the FBI to cover anything up.
Yet news reports have highlighted and focused exclusively on the alleged lies, as if that were all new and breaking news, without even mentioning the new CHARGES and potential penalties, which are the actual news.
At any rate, the new charges lend themselves to some questions and theories.
Is Leong preparing to plead guilty to one or more of the new charges and become a prosecution witness in exchange for dropping the original conspiracy charge?
Or are the feds just signaling that they’re not playing around here and are going to play hardball all the way if the defendants keep making things difficult?
Or are the feds worried that the original conspiracy charge is weak and might not stick, and so added the additional charges just in case?
Is former mayor Caldwell getting worried? Did he really have no conversations about all this with Leong or the others who allegedly tried to pressure the former acting police chief to lie about the scheme to backfill the Kealoha payout? Did Caldwell issue or relay no orders about it? Did Leong really not brief him after being questioned by the FBI, for crying out loud? Will anyone in the media ever have enough sense to directly ask him pertinent questions? Or will it be left to his political opponents as he continues his quixotic run for governor?
Will the public ever know the truth?
Leong is scheduled to enter a plea to the new charges on Wednesday, and the court will hear arguments Thursday on Amemiya’s motion to dismiss the conspiracy charge against him.
So stay tuned for more as this saga heats up.
There is no way in Hell Caldwell was kept entirely out of the loop to the point of being able to claim plausible deniability. No way.
Remember this when you DON’T vote for him in the Gov primary.
If Caldwell really didn’t know what was going on, then he was not the person really running the city and is therefore utterly unqualified and untrustworthy to be governor.
KHON2 actually had a good story that put the new charges in a proper context.
https://news.google.com/articles/CBMiUmh0dHBzOi8vd3d3Lmtob24yLmNvbS9oYXdhaWktY3JpbWUvZmVkcy1hZGQtZml2ZS1tb3JlLWNoYXJnZXMtYWdhaW5zdC1kb25uYS1sZW9uZy_SAVZodHRwczovL3d3dy5raG9uMi5jb20vaGF3YWlpLWNyaW1lL2ZlZHMtYWRkLWZpdmUtbW9yZS1jaGFyZ2VzLWFnYWluc3QtZG9ubmEtbGVvbmcvYW1wLw?hl=en-US&gl=US&ceid=US%3Aen
“The sound of every last coffin nail” could be hurd all around. Echoed through the basement of Deep Dark, Honolulu Hale’s underbelly of eternal damnation.
Each administration cursed in greed for all time. Even the once lovely gardens of Lau’ae ferns, that ringed the building are now all dead. Donna Leong, locked in the Tower, awaiting final Judgement day. Will She jump, take the Mayor and His team with Her or face destiny alone in a “White Pant Suit”?
Based on what’s been made public so far, the feds have at least three highly credible likely witnesses against Leong:
1. Former Acting Police Chief Cary Okimoto, referenced in Counts 2, 3, and 4 of the Superseding Indictment.
2. Acting Deputy Police Chief William Axt, who’s almost certainly the “W.A.” referenced in Count 5 and elsewhere in the indictment. It was Axt who truthfully testified before the City Council Budget Committee on 5/24/17 that a requested transfer of funds included $250,000 to backfill HPD’s salary account and replace the funds expended for the Kealoha payout, despite Amemiya allegedly pressuring Okimoto earlier in a telephone call to hide that fact and remove any reference to the Kealoha payout from “Acting HPD Deputy Chief W.A.’s” prepared Council testimony, and Amemiya the next day allegedly expressing his “displeasure” to HPD leadership about Axt’s truthful verbal testimony. (Question: If this was supposed to be such a big secret, why did no Council member express any surprise or concern, and simply vote unanimously in favor of the transfer, after Axt publicly spilled the beans despite Amemiya’s alleged intimidation? Likely answer: Because they already knew all about it and had been instructed to not make a fuss, or lacked the intestinal fortitude to do so even absent any such instructions.)
3. Deputy Corporation Counsel Duane Pang, who advised the Police Commission and, as Ian has pointed out here, is almost certainly the “D.P.” referenced in Count 6.
Leong obviously does not have to testify in her own defense, but even if she does so and paints a very different picture of any conversations referenced in the indictment, it could be very tough to refute testimony from a former police chief, deputy chief, and experienced city attorney should they be called as prosecution witnesses as appears likely.
This situation is getting very serious for the defendants, and the stakes for Leong especially are now very, very high.
Why didn’t the administration just seek City Council approval for the Kealoha payout and avoid all this? Did somebody confer with one or more Council members about that prospect and learn that the Council would reject such an honest and straightforward arrangement but be amenable to quietly later approving the backfill of an expenditure made from HPD’s salary account that did not need prior Council approval? Did the FBI or US Attorney question any Council members along those lines?
Could former Council members be called as prosecution witnesses?
Gotta also wonder then if council members were part of the conspiracy and could also face charges or maybe lied to the FBI or grand jury or something…
Here’s another thing that bothers me.
From a Jan 27 story in Civil Beat: “Former Honolulu budget and fiscal services director Nelson Koyanagi is a “critical witness” who can demonstrate the transaction was proper, attorney Lynn Panagakos wrote in a motion asking the court to depose him.”
Koyanagi is not a lawyer, as far as I can determine.
If his department had a question about the legality of a transaction, they would turn to…the Corporation Counsel.
Now, here’s Donna Leong, the former corporation counsel, trying to say that she took her legal advice from nonlawyer and didn’t look back
In my view, that just doesn’t fly, no matter what Koyanagi says, or fails to say, in the scheduled deposition.
Dumb and dumber or a game of hot potato.
Nelson is an honorable person who was the City’s chief accountant before moving to administration.
The desperation is so great, that you rely on a man near death, who has no ability or advice, that would overrule the City’s attorney Corporation Counsel Leong.
The only defense left is – just say Mayor Kirk made me do it. The End!
Naive question… but I am wondering why people in power would want so badly to get a severance payment approved for crook Kealoha. Did he have something to hold over them?
I think that’s the question that a lot of people are wondering about….
A careful reading of the indictment suggests that there could be additional charges and defendants, or unindicted co-conspirators.
Paragraph 25 alleges that Leong, Sword, and Amemiya — the only defendants so far— conspired with each other “and with others” to violate two federal laws.
Paragraph 30 alleges that “the conspirators” — plural— provided false and misleading statements to federal agents.
The superseding indictment’s new charges for making false statements were only leveled at Leong, but it sure seems possible that other defendants could also be charged with lying to the FBI, and that new defendants could be added and charged with conspiracy if they don’t snitch.