Text messages between Stacy Higa and a former associate who pleaded guilty to a scheme to embezzle $600,000 in federal coronavirus relief funds show Higa allegedly offering to teach the associate how to “launder money” and “funnel cash.”
The text messages were filed by federal prosecutors Friday in U.S. District Court in anticipation of sentencing scheduled today for Hanalei Aipoalani, 42, former City and County of Honolulu Department of Community Services grant administrator for coronavirus relief funding.
Aipoalani has pleaded guilty to accepting a bribe in transactions with Higa during late 2020 and also to embezzling more than $532,000 from AmeriCorps from 2015 to 2017, at a time he served as a paid senior adviser to Higa.
Court records do not show that Higa has been charged with a crime and he isn’t specifically named in documents filed in the case. He didn’t return a message left on his cell phone by press-time Tuesday.
Aipoalani’s plea agreement names a “Co-Conspirator 1” — described as “president and chief executive officer of nonprofit 2” … which provides “public, education, and government programming via public access television for the entire island of Hawaii.”
Higa — a 57-year-old former County Council chairman who placed fifth in the 2020 mayoral primary race — was president and CEO of Na Leo, the only public access TV outlet on Hawaii Island. He remained on paid leave Tuesday, according to Connie Kiriu, interim president and CEO.
Na Leo’s Hilo studios and offices were raided by the FBI on Oct. 8. Aipoalani specifically names Na Leo in his letter of apology filed Friday in federal court.
Among excerpts of text messages filed by federal prosecutors:
9/16/2020
Co-Conspirator 1 (Higa): “I’ll teach you how to launder !! Lol”
Aipoalani: “Let’s do this.”
Higa: “Create a LLC for Angie. I already have my own. I will show you how to do it once we get funding and will contract your company. Then you will contract my company. Lol. Easiest way We will make sure that we keep enough for taxes. And we will make enough expenses to break even or just make a little.”
Aipoalani: “I’m all in.”
9/23/2020
Higa: “Go open up some credit union accounts in you and Angie name. Make sure get savings accounts. Just FYI when you take money out of savings account it is treated differently then checking accounts. Can’t tell you why but that is how you funnel cash. FYI. Lol. So I will use multiple accounts to send you checks and you deposit into savings accounts.“
“The Defendant then directed Co-Conspirator 1 to prepare backdated certifications claiming that nine Honolulu residents who had been adversely impacted by COVID-19 had been certified through 24-hour online training,” Assistant U.S. Attorney Leslie A. Goemaat said in the 31-page filing.
Most of the $600,000, if not all, will be “gravy,” Aipoalani added in a Sept. 29 text to Higa.
Goemaat, who asked the court to sentence Aipoalani to 66 months in prison, three years supervised release and a forfeiture money judgment, contends Aipoalani was also an instigator.
“From nearly the moment he was hired, the Defendant began coaching Co-Conspirator 1 about how to fashion grant applications through two different entities controlled by Co- Conspirator 1 and operated on Hawaii Island,” Goemaat said. “On August 25, 2020, the Defendant began advising Co-Conspirator 1 as to how to modify the “scope and reach” of his company to qualify for the funds. That same day, the Defendant sent Co-Conspirator 1 the grant application and began suggesting the content of Co-Conspirator 1’s grant application.”
Prosecutors illustrated their filings with Instagram photos of Aipoalani and his family enjoying life — driving a rented Ferrari, flying first class, splurging in Las Vegas and Universal Studios, at the Ko’Olina Beach Resort and Disney’s Aulani resort, eating a $395 dinner at Ben and Jack’s Steakhouse in New York City.
Aipoalani’s court-appointed attorney, H. Heather Shaner, asked for mercy. She asked for 12-24 months of home detention.
She noted that since Hawaii has no federal prisons, Aipoalani would be incarcerated 2,500 miles from home. In addition, she pointed to numerous letters of support from friends and family and also described how “losing face,” is a great punishment in certain cultures.
“As the news of his crimes spread in the community, he ‘lost Face’. Shame and the ‘loss of Face’ are of enormous importance in the Asian Pacific Islander culture of Hawaii. The press has damned the defendant. He has been shamed in his church, in his city and in his community. He has lost a position of respect. He has brought shame to his parents. To his siblings. To his wife,” Shaner said in a court filing Friday. “Please show mercy. Do not wrench him away from his wife and children. Do not exile him from the community and the family he loves.”
Aipoalani also begged for mercy.
“I pray for fruitful reconciliation with family, friends, community leaders, and victims. I am open to participating in ho’oponopono — Hawaiian version of reconciliation and forgiveness — sessions,” he said in his apology letter. “Once again, I offer my sincerest apologies to all whom were directly and indirectly impacted by my inappropriate behavior. I accept full responsibility and accountability for my wrongdoing. And I humbly await your judgement.”
Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.