The University of Hawai‘i must pay nearly $500,000 in a civil settlement with the federal government over allegedly misappropriated grant funds.
The settlement, announced last week, stems from criminal investigations into Stacy Higa, the former Executive Director of the Hawai‘i Commission for National and Community Service, who pleaded guilty in 2021 to embezzling grant funds awarded by AmeriCorps, a federally funded network of service programs.
Between 2018 and 2020, Higa reportedly authorized false contracts and purchase orders paying out more than $38,000 in AmeriCorps funds to companies under his control. He then used those funds on personal expenses; the U.S. Department of Justice reported in 2022 that at least $20,000 of the embezzled funds were used on “elective aesthetic dental care.”
Higa’s embezzlements also involved Hanalei Aipoalani, the program administrator for Honolulu’s coronavirus relief programs in 2020, and his wife. Higa and Aipoalani reportedly conspired to embezzle $845,000 in covid relief funds, and Aipoalani, along with his wife, pleaded guilty to embezzlement in 2021 as well.
While the Higa case is over — he was sentenced in 2022 to nearly four years in prison — his actions represent a failure by the University of Hawai‘i, which administers the Hawai‘i Commission for National and Community Service, according to the U.S. Department of Justice.
As Higa was carrying out his scheme, UH was submitting regular reports to AmeriCorps certifying that the grant funds were being used properly. Those reports, of course were false; the DOJ contends that they were knowingly untrue.
“The egregious crimes committed by [Aipoalani] and Higa could have been mitigated by the University with proper oversight of AmeriCorps programs and HCNCS staff,” said Michael Pritchard, whose job title is AmeriCorps’ Official Performing the Duties of Inspector General.
Submitting fraudulent reports to the government is a violation of the False Claims Act, which can incur a penalty of up to three times the damages caused to the government.
The settlement, therefore, resolves the DOJ’s allegations without admitting whether UH is legally liable for the fraudulent reports.
Under the settlement’s terms, UH must pay $499,950 to the U.S. within 60 days.
“By requiring the University to pay half a million dollars, this settlement underscores a clear message: institutions that receive federal grant money have a responsibility to ensure proper oversight and to report the use of those funds honestly and accurately,” said Jeanine Pirro, U.S. Attorney for the District of Columbia.
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