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Hanalei Aipoalani, a former Olelo TV executive and city CARES Act administrator was sentenced Wednesday to three years and 10 months in prison for taking federal funds for needy communities and using the money to buy “a life of luxury” for himself and his wife.
“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, and 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.
Aipoalani “abused multiple positions of trust and treated public funds earmarked for the most vulnerable and desperate Americans as his own personal piggy bank,” the government told the court in a document filed Friday.
The Aipoalanis flaunted on social media the lavish lifestyle they led with all the money they stole, the government said.
He also pleaded guilty to accepting a bribe in September while serving as the city’s temporary CARES Act program administrator from his friend, Na Leo TV CEO Stacy Higa. Aipoalani accepted the bribe to help Higa apply for $845,000 in CARES Act grants for Na Leo Hawaii and another company he ran. (Olelo and Na Leo TV are Public, Education and Government (PEG) Access channel operators.)
Aipoalani said he was sorry, but “I was naive and immature as an executive,” allowing the promise of advancement to prompt him to do “stupid things” when he was passed over for a promotion. In a letter to the judge he said he did it “out of spite” toward his former boss, Roy Amemiya Jr., former Olelo CEO, for his decision not to promote him and to terminate him.
Amemiya did promote someone else, but left Olelo before Aipoalani’s May 2019 termination. Amemiya, also the former managing director under former Mayor Kirk Caldwell, has himself received a federal target letter but has yet to be charged with a crime.
Walton, in a video teleconferencing hearing, called Aipoalani’s crimes especially egregious and reprehensible because he took money from the community and used it 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 (of which $74,730 is owed jointly with his wife); and $3,159 to a volunteer, who Aipoalani terminated early from the AmeriCorps program but had been paid only a living allowance of $12,500 a year.
“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.”
The national service program has a limited budget, which supports everything from disaster response to combating homelessness and environmental stewardship.
Aipoalani fraudulently submitted names of volunteers for AmeriCorps without their knowledge, and also fraudulently enrolled his wife — keeping the salaries for himself.
He stole from taxpayers and from a vulnerable community, the government said, and was motivated by “absolute pure greed.”
The government said Aipoalani enriched himself with $75,000 in cash.
The FBI traced $429,000 of fraudulent proceeds from the AmeriCorps scheme that was diverted from Olelo: $117,000 was spent on dining and entertainment, $56,000 on travel and hotel expenses, more than $87,000 on retail at Kay Jewelers ($3,534), Sephora ($1,700), nail salons ($1,300), Victoria’s Secret ($1,400), Massage Envy ($3,600) and Old Navy ($9,400).
The couple leased a new 2020 BMW X3, and used more than $10,000 of the stolen money on lease payments.
The government attached photos he posted on Instagram of himself in a red Ferrari rented for his birthday in January 2019 and of the couple in bed at Ko Olina Beach Resort, and a 2018 photo of his wife on a first class flight to San Francisco.
He denied renting a Ferrari, and said he was just posing in it at McKinley Car Wash, and the first-class flight was a business trip for Olelo.
The FBI tallied trips to the Cheesecake Factory totaling $4,085; Da Crawfish and Crab, $2,217; DB Grill, $2,106; and California Pizza Kitchen, $2,785; trips to Roy’s Ko Olina, $4,814; Kapolei Karaoke, $1,556 and to Wet ‘N Wild Hawaii, $3,287.
Higa, implicated in the bribery case as co-conspirator 1, has not been charged with any crime. However, Aipoalani’s attorney named Higa during the sentencing hearing.
Aipoalani 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.
Aipoalani was also banned in 2013 from involvement in any federal grant or contracting program because he previously tried to divert federal grant funds to his personal bank account, but created a document on Olelo letterhead purporting to be signed by its president stating that he had been replaced as its Americorps representative.
Aipoalani and the government entered into a plea deal in which they agreed he would receive between 70 to 87 months’ imprisonment, but the U.S. Probation Office disagreed with the original calculations, so the offense level was lowered and the term of imprisonment ended up less.
Angelita Aipoalani pleaded guilty April 1 for her role in the conspiracy. Her sentencing had been scheduled for Wednesday but was apparently continued.
Hanalei Aipoalani sentencin… by Honolulu Star-Advertiser
Correction: An earlier version of this article said Aipoalani said the AmeriCorps embezzlement was done out of spite for Amemiya’s decision not to promote him and to terminate him. Amemiya failed to promote him, but he left Olelo before Aipoalani was terminated in May 2019. Also, Aipoalani created a document on Olelo letterhead purporting to be signed by its president stating that he had been replaced as its Americorps representative. An earlier version said he had been replaced at AmeriCorps.
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