A federal court judge in Washington D.C. sentenced today a former Olelo Community Media Center human resources director and city CARES Act administrator, to three years and 10 months in prison at the top of the sentencing guidelines.
“What would cause you to siphon off money for communities who need help to live a life of luxury?” Senior Judge Reggie Walton of the U.S. District Court for the District of Columbia asked Hanalei Aipoalani.
He said some do it because they need necessities, but told Aipoalani he engaged in activities that most Americans cannot afford, renting a Ferrari, flying first class to New York, eating expensive meals. “It’s just reprehensible that somebody would do what you did.”
Aipoalani, 42, pleaded guilty in March to embezzlement of federal funds involving AmeriCorps, a federal program to help communities in need, funneling the money to himself and his wife, Angelita.
He also pleaded guilty to accepting a bribe in September while serving as the city’s temporary CARES Act program administrator from Na Leo TV CEO Stacy Higa to help him apply for $845,000 in CARES Act grants for two companies, including Na Leo Hawaii and another company.
Olelo and Na Leo TV are Public, Education and Government (PEG) Access channel operators.
Aipoalani said, “I was naive and immature as an executive,” allowing the promise of advancement to do “stupid things” when he was passed over for a promotion.
Walton, judge of the U.S. District Court for the District of Columbia in a video teleconferencing hearing, called Aipoalani’s crimes especially egregious and reprehensible by taking money from the community, using the money to “have a good time and party.”
He could get a reduction of 3.8 months for good behavior, and serve just 36 months, which the judge called lenient.
The judge also ordered him to pay restitution in the amount of $532,730, with $527,000 to AmeriCorps and $3,159 to a person who Aipoalani terminated early from the AmeriCorps program.
“That is really low,” Walton said. “To terminate someone under the false guise their services aren’t needed. That would take somebody cold-blooded and to take it for the purposes you used.”
Higa was implicated in the bribery case, but has not been charged with any crime. However, Aipoalani’s attorney, during the sentencing hearing, did explicitly name Higa as co-conspirator 1.
He was expected to receive $60,000 a year in exchange for helping Higa get the grant money for the two fraudulent CARES Act grants, but no funds were ever disbursed.
On Oct. 8 federal agents from AmeriCorps OIG and the FBI executed search warrants on Na Leo TV’s Hilo offices, Aipoalani’s home and storage unit and the Hawaii Commission for National and Community Service, which oversees the distribution of AmeriCorps funds in the state.
Higa had also served as executive director for the Hawaii Commission from 2011 to May 31, 2020.
Aipoalani was also banned in 2013 from any involvement in any federal grant or contracting program, a year before the AmeriCorps scheme began, because he previously tried to divert federal grant funds to his personal bank account.
Aipoalani’s wife, Angelita, pleaded guilty on April 1 for her role in the conspiracy. She was scheduled to be sentenced but it appears the matter will be continued.