Kona business owner pleads not guilty in state tax case, trial set for Aug. 11

Georgia K. Santos will face a jury after pleading not guilty in a state tax case that puts the compliance practices of small West Hawaii service businesses under a sharper spotlight. Third Circuit Chief Judge Wendy DeWeese set the trial for 8:30 a.m. on Aug. 11, after Santos entered her not-guilty plea in connection with allegations that her house-cleaning business failed to collect, account for and pay withholding taxes and failed to file required returns.

The case is not a routine paperwork dispute. It is a criminal prosecution that now carries five felony counts of wilful failure to collect and pay over tax for tax years 2018 through 2022, along with 12 misdemeanor counts tied to filing failures for tax years 2018 through 2023. DeWeese also scheduled a 10 a.m. hearing on July 10 on a motion filed by Santos’ Honolulu attorney, Mark Kawata, giving the defense an earlier opportunity to challenge the case before trial.

State business records show Kahealani Property Services LLC was organized in Hawaii on March 12, 2018 and remains active. Those records list Santos as the member and give the company’s principal and mailing address as 75-233 Nani Kailua Dr. 130, Kailua Kona, HI 96740. That places the case squarely in the local economy, where many service businesses are small, closely held and dependent on careful payroll and tax handling.

The Hawaii Department of Taxation says employers must withhold Hawaii income taxes from employee wages and remit those taxes to the state. The agency’s Special Enforcement Section handles tax-cheat complaints, while criminal tax fraud cases are handled by the Criminal Investigation Section, signaling that officials treat this kind of conduct as more than an administrative lapse.

Charges were filed March 25, 2026, and Santos was arrested April 10, 2026 with help from the Hawaii County Police Department. The Department of Taxation’s 2024-2025 annual report said the Special Enforcement Section recovered $36 million in unpaid taxes last year through short-term rental enforcement, underscoring a statewide push to collect money officials say is owed.

For Kailua-Kona operators, the case shows how quickly payroll taxes, withholding obligations and filing requirements can turn into a criminal exposure. With a July hearing and an August trial now on the calendar, the dispute is set to remain in the local spotlight through the summer.