Prosecutors seek former official's benefits
By Curtis Lum
Advertiser Staff Writer
Prosecutors don't expect former city housing official Michael Kahapea to ever repay the millions of dollars he has been convicted of stealing. But they do hope to recover at least a fraction of the money by seizing his retirement benefits.
Advertiser library photo
Kahapea, 58, was convicted in October of theft, money laundering and other charges after a Circuit Court jury found him guilty of funneling city money to businesses owned by friends, many of which existed only on paper. The firms were paid by the city to move businesses away from the city's 'Ewa Villages revitalization project, but most of the moving work was never done.
Michael Kahapea was convicted of laundering city money.
He was sentenced to 50 years in prison and fined $365,000. The Hawai'i Paroling Authority will determine the minimum number of years Kahapea must serve before he is eligible for parole.
Kahapea appeared at yesterday's hearing dressed in brown prison-issued clothes and leg chains. He often whispered to his attorney, Don Wilkerson, but did not address the court.
Kahapea faces additional prison time when he is sentenced today by Circuit Judge Karl Sakamoto after pleading no contest to one count each of first-degree theft, money laundering and illegal ownership of a business. Kahapea last month pleaded no contest to stealing about $1.54 million from three different city projects over a nine-year period.
In return for the plea, the prosecution agreed not to go to trial on an additional 25 criminal counts brought against Kahapea in three separate indictments.
Yesterday, city Deputy Prosecutor Randal Lee asked Circuit Judge Reynaldo Graulty to order Kahapea to repay $3.7 million, or the approximate amount that directly benefitted Kahapea or his associates. Kahapea is accused of squandering about $5.6 million in city money allotted to the revitalization project.
A Honolulu police major at an earlier restitution hearing said that if Kahapea gave half of the $3.7 million to his friends or relatives and kept half for himself, Kahapea would have pocketed about $1.6 million.
Wilkerson called the state's calculations "voodoo accounting," saying they were not based on hard evidence, but on assumptions.
Lee acknowledged that the city may never collect the $3.7 million because Kahapea has little or no assets, and he's 58 years old and serving a 50-year term. Lee said, however, that Kahapea will be eligible for retirement benefits when he reaches 65 and he wants that money to go to the city.
Wesley Machida, an administrator with the city and state Employee Retirement plan, testified yesterday that Kahapea will receive the maximum $497 a month in retirement benefits at age 65.
"I want to make sure I take whatever we can get back. Six thousand a year is not too bad," Lee said after the hearing. Lee said Kahapea stole taxpayers' money and they shouldn't have to pay for Kahapea's retirement.
Graulty continued the restitution hearing for Sept. 26.
