HONOLULU — A former administrator of federal coronavirus aid funds allocated for Honolulu was sentenced Wednesday to over three years in prison for embezzling more than $500,000 in taxpayer money.
Hanalei Aipoalani, 42, pleaded guilty to embezzling from the AmeriCorps program and agreeing to take a bribe to administer grants through the Coronavirus Aid, Relief, and Economic Security Act, known as CARES. Prosecutors said he and his wife spent the money on themselves, including $22,000 at a hotel beach club, more than $3,000 at a Hawaii water park and more than $10,000 to lease a BMW.
Sentencing was postponed for his wife Angelita Aipoalani, who pleaded guilty to conspiracy to embezzle from AmeriCorps. Prosecutors say the program brings volunteers who receive stipends to work in vulnerable and marginalized communities.
The couple flaunted their lavish lifestyle on social media, prosecutors said, including photos of a Ferrari the husband rented for his birthday, the wife sitting in first class during a flight to San Francisco and a $395 dinner at a New York City steakhouse.
Hanalei Aipoalani, appearing at his Washington, D.C., sentencing hearing by video from Hawaii, blamed his actions on being naive and immature. He said while he takes responsibility for his crimes, he took issue with the Ferrari, noting that he didn’t rent it but posed in front of one at a car wash.
Prosecutors asked for a sentence of five-and-a-half years, while his court-appointed attorney asked for home confinement or jail on the weekends.
He has suffered “loss of face,” and has been shamed in the community, his attorney H. Heather Shaner said in a court document. Losing face “in the Hawaiian culture is a very real punishment,” she said. “In extreme cases it can be like losing all the senses, or losing one’s place in life.”
Judge Reggie B. Walton called Aipoalani’s crimes “reprehensible.” He said the 46-month sentence has to send a message for defrauding taxpayer money meant to help people during a devastating pandemic.
“You had a good time and now you have to pay a price,” Walton said.
The judge also said it was “cold blooded” to unfairly fire an AmeriCorps member in order to divert the worker’s living allowances into Aipoalani’s bank accounts.
He stole from AmeriCorps by fraudulently enrolling members without their knowledge and diverting their living allowances into accounts he controlled as human resources director of a Hawaii nonprofit, prosecutors said.
“To affect his frauds, the Defendant abused multiple positions of trust and treated public funds ear-marked for the most vulnerable and desperate Americans as his own personal piggy bank,” prosecutors said in a court document.