Former Executive Director of the Hawaii Commission Sentenced To 46 Months in Prison for Embezzling from AmeriCorps And Offering a Bribe in Return for CARES Act Grants
Defendant Pleaded Guilty in Two Schemes
News Release from USDOJ, Feb 22, 2022
WASHINGTON – Stacy Higa, 58, a former public official from Hilo, Hawaii, was sentenced in federal court today to 46 months in prison for embezzling from AmeriCorps and also for offering a bribe in return for grants under the CARES Act.
The announcement was made by Matthew M. Graves, U.S. Attorney for the District of Columbia, Deborah Jeffrey, Inspector General of AmeriCorps, and Steven Merrill, Special Agent in Charge, FBI Honolulu Field Office.
Higa pleaded guilty in October 2021, in the U.S. District Court for the District of Columbia, to embezzlement and offering a bribe. He was sentenced by the Honorable Reggie B. Walton. Following his prison term, Higa will be placed on three years of supervised release. He is required to pay $38,642 in restitution and an identical amount in a forfeiture money judgment. He also will be required to perform 200 hours of community service.
“This Defendant abused his position of trust when he robbed AmeriCorps, a critical federal program designed to help the most vulnerable Americans,” said U.S. Attorney Graves. “His attempt to obtain CARES Act funds through bribery showed a shocking disregard for the critical importance of the program. The Department of Justice will prosecute, to the fullest extent of the law, those individuals who choose to abuse their positions of power to enrich themselves at the cost of the American people.”
“Stacy Higa exploited his position of trust to steal AmeriCorps funds from vulnerable communities and schemed to deny his neighbors money needed for pandemic relief,” said Inspector General Jeffrey of AmeriCorps. “Today’s sentence holds him accountable, reflecting the gravity of his offenses.”
“The citizens of Hawai’i deserve a government free of corruption. Stacy Higa’s actions undermine the respect and reputation of all public officials who have the responsibility to uphold the public’s trust,” said FBI Special Agent in Charge Merrill. “Today’s sentencing reflects the ongoing commitment and dedication of the FBI to work with our partners to identify, investigate, and prosecute those who abuse their authorities and hold them accountable.”
AmeriCorps is a federally funded network of national service programs that address critical community needs, such as increasing academic achievement, mentoring youth, fighting poverty, sustaining national parks, preparing for disasters, and more. AmeriCorps’ national service members commit to service for a set period of time, usually a year, in exchange for a living allowance, funding to be used for college tuition, and other benefits.
From June 2011 until May 2020, Higa, a former Hawaii County councilman and mayoral candidate, served as the Executive Director of the Hawaii Commission for National and Community Service, the state service commission responsible for administering AmeriCorps programs in Hawaii. From February 2018 through his resignation from the Commission, Higa embezzled more than $38,000 in AmeriCorps funds by signing and authorizing contracts and purchase orders between the Hawaii Commission and two companies that he owned or controlled, without disclosing his control of the companies. Higa spent the embezzled funds on personal expenses including paying for approximately $20,000 of elective aesthetic dental care.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was passed by Congress and signed into law in or about March 2020, provided financial relief to individuals, businesses, states, and localities suffering the economic effects of the COVID-19 pandemic. Among other relief programs, the CARES Act created a $150 billion Coronavirus Relief Fund (CRF) to be distributed to states, localities, and tribal governments to support expenditures incurred due to COVID-19. Government entities that received money from the CRF could use the funds, among other things, to make grants to small businesses to reimburse the costs of business interruption caused by required closures and to provide economic relief for those suffering employment interruption.
In August 2020, Hanalei Aipoalani was hired to serve as Honolulu City and County’s Department of Community Service’s CARES Program Administrator and was responsible for administering CRF programs. From August 2020 through October 2020, Higa offered to provide financial benefits to Aipoalani in order to influence the approval of Higa’s applications for two grants totaling $845,000 under the CARES Act. Higa then directed an employee to draft and submit false and backdated invoices under the grants. Higa and Aipoalani discussed opening LLCs on Oahu and using their wives as principals in order to launder the money. As part of his plea agreement, Higa admitted to expecting to receive at least $250,000 in profit from the CARES Act funds.
Aipoalani, 43, of Waianae, Hawaii, separately pleaded guilty to embezzling from AmeriCorps and agreeing to accept a bribe under the CARES Act. Aipoalani was sentenced on June 30, 2021 to 46 months’ imprisonment and ordered to pay full restitution to AmeriCorps.
The Inspector General for AmeriCorps and the FBI’s Honolulu Field Office investigated the case. The case was prosecuted by Assistant U.S. Attorney Leslie A. Goemaat of the Fraud, Public Corruption, and Civil Rights Section of the U.S. Attorney’s Office for the District of Columbia.**
The Inspector General for AmeriCorps, the FBI, and the U.S. Attorney’s Office are committed to investigating and prosecuting individuals who defraud the AmeriCorps program and programs under the CARES Act. If you are aware of fraud, waste, or abuse affecting AmeriCorps or any of its programs, contact the AmeriCorps Office of Inspector General Hotline at 1-800-452-8210 or hotline@AmeriCorpsOIG.gov.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.
For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
Additionally, anyone who is aware of fraud, waste, or abuse affecting AmeriCorps or any of its programs, is encouraged to contact the AmeriCorps Office of Inspector General Hotline at 1-800-452-8210 or hotline@AmeriCorpsOIG.gov.
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