Ewa Villages scam
involvement costs
Kahapea a $365,000 fine

The city prosecutor had wanted
him to repay $3.7 million

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By Debra Barayuga
dbarayuga@starbulletin.com

Circuit Judge Reynaldo Graulty has found that convicted city housing official Michael Kahapea has no ability to pay restitution in the Ewa Villages relocation fraud, but ordered him to pay a $365,000 fine.

Graulty denied the city prosecutor's request yesterday that Kahapea repay $3.7 million -- a portion he is accused of benefiting from after bilking the city of $5.8 million -- the largest theft in the city's history.

Kahapea, 58, is serving a 50-year jail term after he was convicted just over a year ago of theft, money laundering and numerous other charges in the Ewa Villages relocation scam in which the city paid for moving work that was never done or was performed at inflated prices.

Deputy Prosecutor Randal Lee said he would appeal the judge's ruling.

Lee said the court should have imposed the $365,000 as restitution, rather than a fine. Payment of restitution has priority over the payment of a fine. In this case, the fine, if paid by Kahapea, would go to the state.

Had restitution been ordered, payments would go to the city.

Kahapea did not dispute $1.6 million in cashier's checks he received from companies paid by the city for moving work they claimed they did, but he disputed the remaining $2.1 million sought by the state.

His attorney, Don Wilkerson, has said Kahapea has no assets and is unable to pay any restitution sought by the state in the Ewa Villages case or in the three other cases in which Kahapea was charged.

The state says Kahapea benefited from the $1.6 million directly. Evidence at trial showed at least four moving companies that were paid by the city withdrew cash from their accounts and made it payable to Kahapea's creditors, including Las Vegas casinos where he had racked up thousands in gambling debts.

Evidence also showed Kahapea used the money to invest, pay off loans and make mortgage and maintenance fee payments.

The state had asked that Kahapea give up his future retirement benefits -- a maximum $497 per month when he turns 65 -- and 10 percent of any prison wages toward restitution.

Kahapea was sentenced in another court last month to a 10-year term concurrent with the Ewa Villages sentence after pleading no contest to similar theft charges involving the city's Middle Street and West Loch relocation projects and theft of laundry money from two city housing projects.

Circuit Judge Karl Sakamoto in that case found Kahapea had the ability to pay and ordered him to pay $866,275 in restitution.