Former Kauai police lieutenant indicted for theft, money laundering

Karen Kapua (Photo from 2009 Kauai Police Department annual report)

A once-highly decorated lieutenant with the Kauai Police Department is now accused of stealing tens of thousands of dollars in federal funds, which were intended to help fight crime on the Garden Island.

Karen Kapua appeared in federal court Thursday after being indicted by a grand jury on four counts involving “theft from organization receiving federal funds” and money laundering.

According to court documents, as a lieutenant, Kapua received benefits “in the form of grants from the federal government, including grants from the United States Drug Enforcement Administration, did knowingly embezzle, steal and intentionally misapply property having a value of more than $5,000, namely, approximately $25,000 in funds under the care, custody and control of the County of Kauai.”

Court documents claim she did this three times, on or about Dec. 23, 2013, June 13, 2014, and Dec. 5, 2014, for a total of $75,000.

Documents also allege that Kapua “did knowingly engage and attempt to engage in a monetary transaction” by initiating “a wire transfer of $11,457.98 to pay off personal debts, knowing that such funds had been derived from a specified unlawful activity.”

Kapua is a 16-year veteran of the department. She has been honored for her leadership, and was even named the department’s Officer of the Year in 2010.

According to Florence T. Nakakuni, United States Attorney for the District of Hawaii, Kapua was arrested without incident Thursday morning on Kauai, and brought to Honolulu where she pleaded not guilty to the charges before Chief United States District Judge J. Michael Seabright.

She was released from custody on $50,000 bail. A trial date has been scheduled for March 15. If convicted of the charges, Kapua would face a sentence of up to 10 years on each of the theft and money laundering offenses.

According to a Kauai County spokeswoman, “as a result of these allegations, internal protocols and procedures have already been reviewed and updated to assist in preventing any misuse of funds.”

Kauai Police Chief Darryl Perry released the following statement in response:

“The Kauai Police Department is cooperating with the Federal Bureau of Investigation (FBI) to investigate possible criminal activity by former KPD Lieutenant Karen Kapua.

As a result of the FBI investigation, the department initiated and completed an internal investigation, in accordance with standard procedure. As of Dec. 6, 2015, Lieutenant Kapua is no longer with the department.

The ongoing criminal investigation is being conducted by the FBI. As with any arrest, all individuals are presumed innocent unless and until proven guilty in a court of law.

I am hopeful that the public will view this as an isolated incident and not a reflection of the department as a whole. I stand by the men and women of the Kauai Police Department and their commitment to excellence. I am immensely proud of the work that they do to create a better, safer community.”

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