Big Island Public Official Pleads Guilty to Embezzlement

A former Big Island political figure has pleaded guilty in federal court to the crime of embezzlement.

Stacy Higa, 58, a former public official from Hilo, Hawai´i, entered a guilty plea on Wednesday, Oct. 13, 2021, to embezzling more than $38,000 from AmeriCorps and also to offering a bribe in return for grants under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The announcement was made by Channing D Phillips, Acting US Attorney for the District of Columbia, Deborah Jeffrey, Inspector General of AmeriCorps, and Steven Merrill, Special Agent in Charge of the FBI’s Honolulu Field Office.

Higa pleaded guilty in the US District Court for the District of Columbia to one count each of embezzlement and bribery. Both charges carry statutory maximums of 10 years in prison and financial penalties. Under the federal sentencing guidelines, Higa faces a likely range of between 46 and 57 months in prison and a fine of up to $200,000.

The plea agreement requires him to pay $38,642 in restitution to AmeriCorps and an identical amount in a forfeiture money judgment. The Honorable Reggie B Walton scheduled sentencing for Jan. 13, 2022.

“Our communities place great trust and responsibility in our public figures. Stacy Higa ultimately betrayed this trust when he abused his power to embezzle federal funds and participate in bribery,” said FBI Special Agent in Charge Merrill. “The FBI will not tolerate these crimes and will hold perpetrators accountable for their actions. Today’s guilty plea is a direct result of the hard work and dedication the FBI and our law enforcement partners put towards obtaining
justice.”

AmeriCorps is a federally funded network of national service programs that address critical community needs like 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, 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 Hawai´i County Council member 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 Hawai´i 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.

In his plea, Higa also admitted to carrying out a scheme involving the CARES Act, which was signed into law in March 2020 to provide 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 that scheme, Higa admitted to offering financial benefits to Hanalei Aipoalani, who was hired in August 2020 as Honolulu City and County’s Department of Community Service’s CARES Program Administrator. Aipoalani 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, 42, of Waianae, Hawai´i, separately pleaded guilty in the US District Court for the District of Columbia to embezzling from AmeriCorps and agreeing to accept a bribe under the CARES Act. Aipoalani was sentenced on June 30, 2021 to 46 months in prison and ordered to pay over $532,730 in restitution to AmeriCorps.

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.