Prosecutor Fleeced Her Grandma to Fund Romance with Firefighter: Feds

The seal of the United States Attorney for the District of Hawaii. The United States Attorney for the District of Hawaii

A Hawaiian prosecutor landed herself on the wrong side of the law when she allegedly duped her grandmother out of $20,000 to finance a romantic fling with a high-ranking firefighter who has been battling the Kilauea volcano.

Katherine Kealoha, a deputy prosecuting attorney in the county of Honolulu, and her husband, Retired Honolulu Police Chief Louis Kealoha—already indicted on bank fraud charges last month—also allegedly cooked up a scheme to meddle with trust money and pocket more than half a million dollars from Katherine's grandmother, which was supposed to be used to buy a condo for her son.

According to an indictment filed last month and a recent charging document filed in U.S. District Court in the District of Hawaii against her boyfriend that was first reported by The Honolulu Star Adviser on Monday, Katherine Kealoha also tried to thwart an investigation into her and her husband's questionable money grab.

In it, a conspiracy charge is levied against the deputy prosecutor's boyfriend, Jesse Ebersole, for lying about his love affair with Katherine Kealoha and playing dumb when probed about airfare and cash she allegedly gifted him when grilled under oath before a federal grand jury last year.

"It was further part of the conspiracy that when Ebersole was called to testify before the Federal grand jury in Hawaii, [Katherine] Kealoha would counsel Ebersole to lie to the grand jury about their true relationship... including falsely claiming that he and Kealoha were just 'friends'; and that he had 'no idea' why his name would appear on Kealoha's credit card statements," according to the document.

Going back to 2009, the Kealohas are accused of dipping into a deposit of $513,474 made by her grandmother (identified only by the initials "F.P.") that was supposed to "purchase a condominium for her son" (who is Kealoha's kin, and identified by initials "G.K.P.") who looked after herand didn't have adequate credit to buy, the document states.

Kealoha helped take out a "reverse mortgage" loan on the grandmother's home and the documents suggest that she said she would put the proceeds toward a condo for her grandmother's son.

Only it appeared to be a false promise.

Federal prosecutors say they siphoned some of the mortgage cash to "consolidate their bills, thereby allowing them to improve their credit," according to the document.

The Kealohas then allegedly took out a separate mortgage on "F.P.'s" property so that they could collect mortgage payments made by her son "instead of to a bank," the papers say.

Over the years, according to the documents, Katherine Kealoha allegedly "withdrew and transferred funds to pay the Kealohas' personal expenses and to purchase items for and enrich Ebersole."

Then she allegedly carried on a fling with Jesse Ebersole. In 2009, the document details, Katherine Kealoha paid Ebersole's airfare from Hilo to Honolulu and she allegedly gave the firefighter a cashier's check worth $1,387.12.

In July 2012, the Kealohas allegedly took out a second mortgage on Katherine's grandmother's property to the tune of $150,000 and then "falsely certified that the information provided in support of their application was true and correct."

The couple also stands accused of making false claims of being paid $2,700 in monthly rent "when in fact no such lease agreement existed and no rent or lease had been paid to them," according to the document.

The feds say some of the money filled the Kealoha's coffers.

"Some of these loan proceeds were then deposited into a checking account held jointly by the Kealohas," the papers say.

Newsweek reached out to the Kealohas and their attorneys, and Ebersole, but did not receive a comment in time for publication.

Ebersole's attorney told Newsweek that his client was in the dark as to Kealoha's alleged "illegal conduct" but that once he found out, he cut ties to her.

"When Katherine was first indicted is when he first became aware of the illegal conduct," Donald Wilkerson said. "He had no idea what was going on."

That same year, Kealoha allegedly "used the fraudulently obtained loan proceeds "to pay for more travel-related expenses for Ebersole," the document states.

Ebersole was recently promoted to battalion chief and has been helping respond to ongoing Kilauea eruptions on the Big Island, an official for the County of Hawai'i Fire Department told Newsweek. The official wouldn't comment on his service record.

By 2014, the FBI opened an investigation into "potential violations of federal law by Kealoha and others," according to the document.

This included a corruption case involving several police officers, including Katherine's husband, Louis Kealoha, who as a result of the heat on him and almost a half-dozen rank and file implicated, stepped down as police chief.

"He's our chief, we hate to see our chief leave under these terms," then-president of Honolulu State of Hawaii Organization of Police Officers told Hawaii Now back in January.

The case stems from an FBI probe over the theft and conspiracy to falsely frame Kealoha's family member "G.K.P." of stealing her mailbox back in 2013, according to a federal complaint filed last year.

Investigators from the FBI and United States Postal Inspection Service contend that one former Honolulu police officer involved gave false statements when looking into the stolen mailbox case and hang bogus criminal charges against "G.K.P." who denied involvement.

The feds simultaneously then began also eyeing the deputy prosecutor for her questionable purchases, which included two more plane tickets for Ebersole to travel from Hilo to Honolulu in August and November; and for two separate hotel stays during that time as well, the documents state.

When Ebersole was asked to appear before a federal grand jury in a separate, undisclosed case where Kealoha herself was "a purported victim," they wanted to know "how Kealoha had used the funds misappropriated from F.P. [and] "fraudulently obtained" when she took out a second mortgage, the document states.

It adds that both Jesse Ebersole and Katherine Kealoha "did knowingly and voluntarily agree with each other, and with others, to corruptly obstruct, influence, and impede an official proceeding…"

The deputy prosecutor allegedly prepped Ebersole as a witness before the grand jury was held, according to the document.

"...Kealoha would arrange to meet with Ebersole prior to his testimony before the grand jury, and would coach Ebersole on how to falsely respond to questions posed to him in the grand jury," the papers say.

Even as far back as a year ago, federal prosecutors claim that Kealoha was still attempting to mire the investigation by chatting either directly with Ebersole or through third parties in which they "discussed Kealoha's desire that Ebersole continues to deceive the Federal grand jury about the true nature of their relationship."

On April 20, 2017, Ebersole allegedly "testified falsely about several aspects of his relationship with Kealoha" about their romance or "the financial benefits Kealoha provided to him," according to the document.

As a result, when Ebersole appeared before the grand jury a month later on May 18, federal prosecutors allege, he "refused to produce documents and answer questions."

The firefighter is due back in court on Thursday to make a plea to the conspiracy charge, a U.S. Attorney's Office official confirmed.

Ebersole's attorney Wilkerson said that his client regrets what happened, and said that the relationship with Kealoha "has long been over."

"He is ashamed with himself for getting involved with Katerine Kealoha," he said. "She has really gotten a lot of people involved in her shenanigans and she should own up and take responsibility for what's she's done."

This story has been updated to include comments from Ebersole's attorney Donald Wilkerson.