Financial officer of Hawaiian charter school sentenced to imprisonment for embezzling over $600,000 from Big Island charter school

HONOLULU, Hawaii – Kelaukila Estabilio, 40, of Hilo, Hawaii, was sentenced today in federal court by U.S. District Judge Derrick K. Watson to 60 months imprisonment for embezzling funds from the Hawaiian charter school where she worked.

U.S. Attorney Kenji M. Price for the District of Hawaii announced that according to court documents and information presented in court, from 2006 through January 2019, Estabilio worked for the Kua O Ka Lā Public Charter School, formerly located in Pahoa, Hawaii on the Big Island. The charter school also had a non-profit financial support entity, Ho’oulu Lahui. Estabilio was the financial officer of the charter school and responsible for managing the books and records.

For over six years, from at least 2012 through November 2018, Estabilio misused the charter school’s funds to pay for her and her family’s personal credit card bills totaling around at least $628,835. Estabilio used the charter school’s funds to pay off personal bills for extensive interisland and mainland travel; personal care, such as nail salons; pet veterinary care; retail purchases, such as stores like Victoria’s Secret and Zales; entertainment, such as Bruno Mars tickets, MMA, Netflix, and iTunes; living expenses; and restaurant bills. For years, Estabilio falsified the books and records of the charter school to conceal her embezzlement activities from both her subordinates and supervisors.

The charter school’s campus was destroyed by lava from the Kilauea eruption in or around July 2018. Over approximately five months, between July and November 2018, when her fraud was uncovered, Estabilio stole more than $90,000 from the charter school and Ho’oulu Lahui. In sentencing Estabilio, the District Judge imposed a sentence above the range suggested by the U.S. Sentencing Guidelines. At the sentencing hearing, the District Judge characterized Estabilio’s conduct as “reprehensible,” and driven by “greed” and a sense of “entitlement.” The District Judge pointed out that Estabilio’s scheme was revealed ultimately because of the careful attention to detail by staff at the charter school; not a change of heart by Estabilio. The District Judge also stated that Estabilio took advantage of her position of trust within the charter school and her theft impacted the charter school movement as a whole. Because of Estabilio’s “selfish” actions, the District Judge noted that the money the charter school needed for the children it served and to rebuild was not there when it needed it the most.

“This investigation and prosecution brought to light the despicable conduct of Kua O Ka Lā Public Charter School’s former financial officer. While charter schools and other educational institutions work to educate our keiki, unfortunately there are those like Estabilio who undermine those efforts to line their own pockets. As a result of this prosecution, Estabilio will have five years in federal prison to reflect upon the damage her actions caused to the native Hawaiian community, and the plight of those whose lives are so dramatically impacted by her shameful conduct,” said U.S. Attorney Price.

“Today’s sentencing sends a very simple message that these types of financial frauds will not go unpunished—they will be investigated to the fullest extent of the law,” said Trevor Fenwick, Special Agent in Charge of the U.S. Secret Service Honolulu Field Office.

In addition to a term of imprisonment, the Court also imposed three years of supervised release, restitution, and criminal forfeiture.

The case was investigated by the U.S. Secret Service with the assistance of the State of Hawaii Attorney General’s Office. The case was prosecuted by Assistant U.S. Attorney Rebecca Perlmutter.