Public charter school financial officer sentenced to prison for embezzling over $600K

A 40-year-old Hilo woman was sentenced to five years in prison for embezzling more than $600,000 from a Pahoa public charter school that was destroyed during the 2018 Kilauea eruption.

Kelaukila Estabilio was sentenced by U.S. District Judge Derrick K. Watson in federal court in Honolulu to 60 months imprisonment for embezzling funds from Kua O Ka La Public Charter School where she worked before the campus was destroyed by lava.

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From 2006 through January 2019, Estabilio worked for the Kua O Ka La Public Charter School, formerly located in Pahoa, according to U.S. Attorney for the District of Hawaii Kenji M. Price’s office. The charter school also had a nonprofit financial support entity, Hooulu 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, according to the Price’s office, 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, according to Price’s office.

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 Hooulu Lahui.

At Wednesday’s sentencing hearing, Watson characterized Estabilio’s conduct as “reprehensible,” and driven by “greed” and a sense of “entitlement.” He 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 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, Watson 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 La 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 Price.

Trevor Fenwick, special agent in charge of the U.S. Secret Service Honolulu Field Office, said the sentencing sends the message that such “types of financial frauds will not go unpunished.”

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“They will be investigated to the fullest extent of the law,” said Fenwick.

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

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