Posted on: Tuesday, June 5, 2001

Pending trials canceled in theft of $1.54 million

By David Waite
Advertiser Staff Writer

Kahapea: Was a city housing official

Former city housing official Michael Kahapea pleaded no contest yesterday to allegations that he stole approximately $1.54 million from three different city projects over a nine-year period.

Kahapea, 58, a former relocations manager for city projects, was convicted last year of defrauding the city out of nearly $5.8 million by inflating the costs to move a handful of businesses from the city's 'Ewa Villages revitalization project and then awarding moving contracts to companies owned by friends and family members for work that was never done.

Kahapea was sentenced to 50 years in prison for the Ewa villages scandal and was scheduled to go to trial this week on nearly three dozen criminal counts, including theft, forgery, money laundering and ownership of illegal businesses in connection with the three other city projects.

Kahapea's no contest plea yesterday cancels all of his pending state trials.

"This puts an end to a dark chapter in city history," city Deputy Prosecutor Randal Lee said after the court proceeding.

The city was defrauded out of approximately $7.6 million — the largest amount ever stolen from a government agency here — by Kahapea and his associates primarily due to the amount of trust city officials placed in Kahapea, Lee said.

"Now, all of the taxpayers on O'ahu are going to have to pay for this," Lee said.

Kahapea was accused of defrauding the city out of about $800,000 between December 1990 and October 1992 by creating bogus contracts and companies to relocate a meat-packing company and tire sales outlet from property fronting Middle Street that was bought by the city to build a new bus maintenance facility.

Lee said Kahapea cheated the city, and taxpayers, out of another $600,000 between October 1988 and May 1991 by rigging relocation contracts in connection with the city's West Loch housing project.

In the third case, Kahapea was accused of stealing approximately $140,000 from the city in the form of quarters fed into coin-operated laundry equipment at two different city apartment projects between January 1992 and October 1997.

Lee told Circuit Judge Karl Sakamoto that if the case had gone to trial, the evidence would show that Kahapea brought the quarters home and had his children and nephew count and hand-wrap them before depositing the money in an account owned by one of Kahapea's sons, who was on the Mainland at the time.

At one point, nearly $300 a day was being removed from the account via an ATM card, Lee said.

As part of a plea agreement with the prosecution, Kahapea pleaded no contest to one count each of first-degree theft, money laundering and illegal ownership of a business in each of the three criminal cases against him.

In exchange, the prosecution agreed not to go to trial on an additional 25 criminal counts brought against Kahapea in three separate indictments. In addition, the prosecution agreed to seek no more than a 10-year prison term when Kahapea is sentenced July 31 and not to ask the Hawai'i Paroling authority to set a mandatory minimum term in the three cases.

Lee said prosecutors reached the agreement because Kahapea is already 58 years old and serving a 50-year sentence for the 'Ewa Villages scandal, and costs from a months-long trial in the three new cases would have been substantial.

And while restitution hearings are slated in connection with all four cases involving Kahapea, he has virtually no assets for the city to seize, Lee said.

According to weeks of testimony during the 'Ewa Villages trial, Kahapea gambled away much of the stolen city money in Las Vegas, taking trips there on an almost weekly basis over a series of years.

Kahapea's lawyer Donald Wilkerson said Kahapea believed he could beat some — but not all — of the charges against him in the three new cases.

"Mr. Kahapea is anxious to put all of this behind him," Wilkerson said.

By pleading no contest instead of guilty, Kahapea also is not conceding any civil claims that the city might bring against him in hopes of recovering some of the money, Wilkerson said.

He said the plea agreement was structured in a way that will allow Kahapea to appeal the convictions related to the West Loch and Middle Street cases, based on a claim too much time had transpired between Kahapea's alleged criminal activities and the indictment.