[*See update at end of post]

There’s been a two-fer in Honolulu’s Federal District Court this week.

Judge Michael Seabright is presiding over Rudy Puana’s drug trial. This case is a spinoff of the federal corruption investigation that snared Puana’s sister, former ranking deputy city prosecutor Katherine Puana Kealoha and her husband, former Honolulu police chief Louis Kealoha. Katherine Kealoha described a personal history of drug use and abuse going back to 2001 or so, as I recall, starting with prescription drugs and, later, to cocaine and, perhaps other drugs.

Puana, who operated a pain clinic, apparently took care of his sister, and when push came to shove, she took care of him. In 2015, Katherine Kealoha was tipped off that police were investigating Puana’s involvement in a small group buying and using cocaine. She then maneuvered to put herself in the position of leading the investigation from the prosecutor’s side, and in the process keeping Puana from being charged in the case.

Her admission of longstanding prior drug problems always seemed to me to provide a natural link to the tie, widely rumored in the community, between Kat Kealoha and Michael Miske. If she were looking for drugs, and Miske was looking for influence with the prosecutor’s office, this was a natural match.

In the Kealoha trial, and in the run-up to the Puana trial, there have been transactions described where Puana allegedly prescribed drugs which were then traded for cocaine, which apparently went back to him. Was any of that cocaine obtained from any of the dealers that prosecutors allege operated under the umbrella of the Miske enterprise?

It’s a fair question but, so far, I’m not aware of any evidence surfacing anywhere along the way to support this connection.

Meanwhile, back in federal court, Judge Leslie Kobayashi is presiding over the criminal trial of Charles Kimo Brown, who was secretary-treasurer of the ILWU’s Longshore Division from December 2009 until around April 2014. Brown is charged with falsifying union pay vouchers in order to receive payments he was not entitled to. Each of two incidents that serve as the basis for the indictment involve filing a false pay voucher, which resulted in receiving more than he should have, essentially embezzling from the union, prosecutors allege.

The two instances charged in the indictment involve two allegedly false vouchers filed in April 2014. They led to only a relatively small overpayment, just $1,575 in total.

But the government alleges that these were part of a pattern of overpayments that started as soon as Brown took office and continued through his term. The earlier instances could not be charged because they were beyond the statute of limitations by the time they were discovered by prosecutors. Leading up to the trial, prosecutors gained approval to use evidence of the prior instances in court during the trial, over the objections of Brown’s defense attorney, William Harrison.

“[T]he defendant did not wake up in April 2014 and decide to start stealing from the union on two isolated occasions occurring during two weeks in April 2014; rather, he had been doing it consistently for more than four years already and the charged offenses were just the latest in a long string of embezzlements,” prosecutors allege.

“The crimes charged in the Indictment were allegedly part of a much longer scheme, beginning in January 2010 and continuing thereafter until April 21, 2014. The Government did not seek additional counts relating to the earlier thefts and false entries because they were time-barred by the five-year statute of limitations on the day the case was presented to the grand jury,” prosecutors stated in court filings.

Prosecutors allege Brown embezzled about $100,000 from the ILWU Longshore Division during the time he was secretary-treasurer office.

As laid out in court filings, the secretary-treasurer receives the same pay for doing the union’s business as for his regular job as a machine operator for McCabe Hamilton & Renney, Co., Ltd., described as Hawaii’s oldest stevedore company.

Mr. Brown, as the Secretary-Treasurer of the Longshore Division, could have been paid a full-time salary by the union. Instead, the union decided to pay him what is called “lost-time” wages. That is, if Mr. Brown, on a particular day, could have worked 10 hours for McCabe, but did not do so because he was doing his union work (i.e., he “lost the time” Mr. Brown could have worked for McCabe), the union (and not McCabe) compensated Mr. Brown at the same rate and for the same hourly time period (irrespective of the actual time worked by Mr. Brown on union matters) as if Mr. Brown had worked the 10 hours for McCabe.

Each weekend, Brown would call the McCabe dispatcher to find out how much “lost time” he was due, and he would then file a voucher indicating the number of hours to be paid by the union. Prosecutors allege Brown regularly padded those hours in order to increase the amounts he received from the union.

According to the government:

The chief of the accounting department for Local 142 was Matthew Arakawa and the Government intends to call him as a witness at the trial. According to Mr. Arakawa, the Wage Vouchers were signed by the defendant, and co-signed by Division Director [Nate] Lum. Mr. Arakawa is expected to testify that the Accounting Department for Local 142 could not, and did not, challenge any of the Wage Vouchers submitted by the defendant (or anyone else who was an officer of the Longshore Division). Instead, the Accounting Department for Local 142 would prepare paystubs and issue checks to the defendant (and the other officers) based upon the “lost-time pay” he or they had claimed on their Wage Vouchers.

Brown’s attorney, William Harrison, argued prior to trial that “it was common knowledge that not all timekeepers kept accurate time logs,” and that therefore discrepancies found between McCabe’s records and Brown’s vouchers might be blamed on faulty company bookkeeping rather than a scheme to embezzle from the union. Harrison appears to have signaled that he will be arguing during the trial that there is a reasonable doubt that Brown committed a crime.

The trial continued today, but court minutes for the day have not been filed, so it isn’t clear whether the trial wrapped up today or whether a verdict was reached.

Nate Lum, who had controlled the docks for years as the longtime ILWU Longshore Division director and signed off on Brown’s pay vouchers, was himself convicted of tax evasion and identity theft in 2020 and sentenced to 30 months in prison.

[Update 4-8-2020] The non-jury trial of Charles Kimo Brown wrapped up Thursday afternoon following nearly five hours of testimony by the defendant, and cross-examination by the government.

It will be a while before the verdict is issued by Judge Kobayashi.

There were no dramatic moments at the close of the trial. The lawyers’ closing arguments will be submitted in writing.

Briefing schedule as follows upon receipt of the trial transcript:
2 weeks after receipt of transcript for Government to file it’s closing memorandum; 25 page limit.
2 weeks thereafter for Defense closing memorandum; 25 page limit.
1 week thereafter for Government rebuttal memorandum; 10 page limit.
Case will be taken under submission thereafter.

Brown remains free pending the verdict.