Kahapea decides not
to fight theft charges

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By Debra Barayuga
Star-Bulletin

Convicted city housing official Michael Kahapea faces a 10-year prison term on charges he stole $1.6 million in city relocation funds from two city redevelopment projects.

That includes $120,000 in quarters from coin-operated laundry machines at two city apartment buildings.

Kahapea, 58, convicted last August of stealing millions that were supposed to pay for the relocation of businesses in Ewa Villages, changed his plea yesterday just before jury selection was to begin in a Middle Street fraud trial.

Under a plea agreement, Kahapea pleaded no contest to first-degree theft of $600,000 in both the Middle Street and West Loch relocations, theft from laundry machines at city-owned apartments in Kaneohe and Salt Lake, illegal ownership of business and money laundering.

The charges bring the total theft attributed to Kahapea, who used to be in charge of city relocations, at $7.6 million -- the largest fraud in the history of city government.

Kahapea's plea "puts an end to a dark chapter in the city's history," Deputy Prosecutor Randal Lee said yesterday.

Kahapea breached the city's trust and that of the taxpayers, who will end up paying for the loss, Lee said.

Prosecutors say Kahapea spent the money at local hostess bars and while gambling in Las Vegas.

Don Wilkerson, Kahapea's attorney, said his client has no assets and that it is highly unlikely he will be able to repay any of the money.

As in the Ewa Villages fraud, businesses and tenants were being asked to move from Middle Street and West Loch in Ewa to make way for what is now TheBus facilities and West Loch Estates.

Prosecutors say Kahapea was the mastermind behind the scam that involved the awarding of moving contracts to a handful of companies owned by his friends, billing the city for moving work that was not performed or done at inflated prices, and receiving kickbacks. Some of the companies that were paid by the city existed only on paper or were not in the moving business.

In the Middle Street scam, Kahapea and co-defendants Keith Ringler, owner of Reliable Trucking; Claude Hebaru of Titan Moving; and Richard Chung of RC Movers were accused of billing the city to move Consumer Tire and the Hawaii Meat Co. between December 1990 and October 1992.

The money they were paid was laundered into their companies' bank accounts and kicked back to Kahapea and his associates for their personal use, according to Lee.

In the West Loch scam, Kahapea and Ringler, a part-time Colorado resident, were accused of submitting falsified bids to relocate horse ranches and farms at West Loch. West Loch tenants Harry Akana and Clayton Haumea were also accused of submitting bogus bids and kicking back some of the money to Kahapea.

Kahapea also allegedly removed quarters from the laundry machines at Kulana Nani and Westlake between January 1992 and October 1997, took them home and had his children stuff them into rolls, Lee said.

The rolls of quarters were deposited into an account belonging to his son who was living on the mainland at the time. Kahapea would then "systematically remove" $300 per day from the account through ATM machines, Lee said.

Wilkerson said his client agreed to the state's offer because although he disputed some of the charges against him, he knew he would be found guilty of some of the charges and was anxious to put the remaining matters behind him. Kahapea also wanted to spare his family and the state the cost and hardship of going through another trial.

He will be sentenced July 31. The plea agreement calls for Kahapea to serve a 10-year sentence concurrently with the 50-year sentence he is now serving in the Ewa Villages fraud.

All of Kahapea's co-defendants -- except for three who have since died -- have either pleaded out or been sentenced, except for Akana.

Circuit Judge Karen Ahn last week granted Akana's request to continue trial to July 30.