Stacy Higa admitted in federal court Wednesday to embezzling money from two federal programs and using some of it for cosmetic dental surgery and to help fund his 2020 campaign for mayor.
Higa admitted to embezzling more than $38,000 from the AmeriCorps program that was geared for disaster preparedness and attempting to embezzle $850,000 from the federal coronavirus relief fund that was supposed to be used to reimburse the costs of business interruption caused by required closures and to provide economic relief for those suffering employment interruption.
After pleading guilty to one count of embezzlement from a federal program and one count of bribery in a series of transactions involving federal coronavirus relief and AmeriCorps grants, Higa was ordered to surrender his passport, but was allowed to remain free until a Jan. 13 sentencing hearing.
Under 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.
U.S. District Judge Reggie B. Walton, holding the hearing via video and audio-conference from Washington, D.C., seemed inclined to sentence Higa to prison time.
“I consider this to be very serious conduct. I don’t understand the mentality of someone when we appropriate money to try to help people during the most devastating occurrence that has happened to this country. … People are so low they would steal the money for your own purpose,” Walton said. “People don’t want to pay taxes because so much is stolen. … You better be in a position to explain to me why you shouldn’t go to prison.”
Higa — a 58-year-old former County Council chairman who placed fifth in the 2020 mayoral primary race — was president and CEO of the Na Leo community television channel and former executive director of the Hawaii Commission for National and Community Service, the state service commission responsible for administering AmeriCorps programs in Hawaii.
During the hearing, Higa had little to say beyond “Yes, your honor,” and “No, your honor,” to an almost hour-long series of primarily rote questions from the judge. Higa’s Honolulu attorney William A. Harrison pushed for Higa to remain free until his sentencing hearing, but had little else to add.
Assistant U.S. Attorney Leslie A. Goemaat, who is prosecuting the case, had no objection to Higa remaining free.
Higa’s guilty plea follows a similar plea by a co-conspirator, Hanalei Aipoalani, 42, of Waianae, who admitted to embezzling from AmeriCorps and agreeing to accept a bribe under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Aipoalani was sentenced on June 30 to 46 months in prison and ordered to pay more than $532,730 in restitution to AmeriCorps.
A 13-page statement of offense, signed Aug 19 by Higa and Harrison and also signed by Goemaat, detailed a complicated series of transactions among Higa; Aipoalani; Na Leo; Makaala Solutions LLC, a business and leadership consulting company owned by three of Higa’s Na Leo employees — Assistant General Manager and Marketing Manager Micah Alameda, Grants Manager Kyle Kawano and Production Manager Matt Cordero and Kawaico Inc., an embroidery company owned by Higa and his wife at his Hilo home address.
The statement of offense doesn’t specifically name the companies or the parties other than Higa and Aipoalani, but the names were ascertained by the newspaper from public records, campaign spending reports and business filings.
The statement signed by Higa says Higa asked his Na Leo employees to create Makaala Solutions with him as a silent partner, and he had control over it. He then had Kawano create a back-dated false invoice for $270,000 and other invoices through Na Leo adding up to $845,000 of CARES Act funds based on his relationship with Aipoalani, who had been named City and County of Honolulu Department of Community Services grant administrator for coronavirus relief funding.
Makaala Solutions also received $39,962.95 in AmeriCorps money based on contracts signed by Higa, and, in turn, forwarded $25,142.10 to Kawaico Inc., for Higa’s own use. Another $4,000 was sent to Higa’s mayoral campaign account as a business donation. Another $20,000 was spent on elective cosmetic dental care.
“Again and again, Stacy Higa betrayed his neighbors, the people of Hawaii, and American taxpayers to serve his greed and vanity by embezzling funds set aside to help communities in need,” Inspector General Deborah Jeffrey of AmeriCorps said in a statement.
The bribery charge stems from Higa’s promises to share some of the CARES money with Aipoalani in exchange for him steering the money to Higa’s companies.
