Kailua-Kona business owner arrested in alleged state tax evasion case

A Kailua-Kona business owner now faces a 17-count state tax case that could translate into $800,000 in fines for an individual if every charge drew the maximum penalty. Georgia Santos, 74, was arrested Friday, April 10, with assistance from the Hawaii Police Department after an investigation by the Hawaii Department of Taxation and the Department of the Attorney General’s Criminal Justice Division.

The charges were filed March 25 in the Circuit Court of the Third Circuit in Hawaii County and involve Kahealani Property Services LLC of Kailua-Kona. Santos faces five felony counts under HRS Section 231-36.4 for wilful failure to collect and pay over tax, tied to alleged withholding-tax failures and required state returns for tax years 2018 through 2022. She also faces 12 non-felony counts under HRS Section 231-35 for wilful failure to file return, including general excise tax and withholding tax returns for tax years 2018 through 2023.

The penalty exposure is steep. Each felony count carries up to five years in prison and a fine of up to $100,000 for an individual, or $500,000 for a corporation. Each misdemeanor count carries up to one year in jail and or probation, plus fines of up to $25,000 per count for an individual or $100,000 per count for a corporation. Taken together, the charges could mean up to $800,000 in fines for an individual or $3.7 million for a corporation, before any prison time or probation is considered.

For local businesses, the case is a reminder that payroll taxes are not simply an accounting issue. Hawaii does not have a general sales tax; instead, businesses pay the general excise tax on business activities, and withholding taxes are core filing obligations. When those taxes are allegedly collected from workers or customers but not remitted, compliant competitors can be left at a disadvantage while public trust erodes.

Director of Taxation Gary Suganuma said, “Ensuring that employers meet their tax obligations is essential to maintaining fairness for Hawai‘i taxpayers.” The department says failures to file required returns or remit withheld taxes undermine that trust, and that criminal defendants are presumed innocent unless and until proven guilty in court.

The case lands as 2025 state income tax returns are due April 20, 2026, with an automatic six-month extension available for qualifying filers. Governor Josh Green also authorized filing and payment relief for eligible Kona Low-impacted taxpayers, pushing the deadline to July 20, 2026. Hawaiʻi’s Department of Taxation said its Special Enforcement Section is meant to make sure all sectors of the economy, especially cash businesses, pay their fair share, and to deter those who shortchange taxpayers who do comply.