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Department of Justice

U.S. Attorney’s Office

District of Columbia


Wednesday, June 30, 2021

Hawaiian Non-Profit Executive Sentenced to 46 Months of Imprisonment for Embezzling Over $500,000 from AmeriCorps and for Agreeing to Receive a Bribe for Approving $845,000 in CARES Act Grants

     WASHINGTON – Hanalei Aipoalani, 42, of Waianae, Hawaii, was sentenced today in federal court to 46 months of imprisonment for embezzling more than $500,000 from AmeriCorps and for agreeing to accept a bribe for the administration of grants under the CARES Act.

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

     Hanalei Aipoalani, who pleaded guilty in March 2021 to embezzlement from AmeriCorps and agreeing to take a bribe related to CARES Act funds, was sentenced today by the Honorable Reggie B. Walton of the United States District Court for the District of Columbia to 46 months of imprisonment, three years of supervised release, and ordered to pay $532,730 in restitution to AmeriCorps and a $527,000 money judgment.  

     “The defendant’s greed greatly cost the people of Hawaii, depriving them of the valuable services that AmeriCorps members provide,” said Acting U.S. Attorney Phillips. “Were it not for the investigators here, Hanalei Aipoalani would also have deprived a qualifying organization of $845,000 in much-needed support under the CARES Act.  Today’s sentence should serve as a warning that the United States Department of Justice will prosecute those who abuse their positions of power to enrich themselves at the expense of the American people.”

     “Hanalei Aipoalani stole AmeriCorps funds from his neighbors in vulnerable communities to buy luxury goods and take lavish vacations.  Holding him accountable for these contemptible actions should deter anyone tempted to do likewise,” said Deborah Jeffrey, Inspector General of AmeriCorps.”

     “AmeriCorps trusted Hanalei Aipoalani with their mission in the State of Hawai’i and were ultimately betrayed.  Today’s sentencing marks the end of Aipoalani’s betrayal of the Hawai’i community" said Honolulu FBI Special Agent in Charge Steven B. Merrill.  “The FBI would like to thank AmeriCorps Office of Inspector General and the United States Attorney for the District of Columbia for their cooperation and dedication to the pursuit of 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 of time, usually a year, in exchange for a living allowance, funding to be used for college tuition, and other benefits.

     From December 2014 through May 2019, Hanalaei Aipoalani embezzled more than $527,000 from a non-profit that hosted an AmeriCorps program, by submitting false claims for payments to AmeriCorps members and directing those payments into his own bank accounts and by creating fraudulent invoices from non-profits for reimbursement by AmeriCorps.  As part of his embezzlement, Hanalaei Aipoalani used at least nine inactive or former AmeriCorps’ members’ names, without their knowledge or consent, to fraudulently claim living allowances and other payments, which he then diverted to his own use.

     As part of his guilty plea, Hanalaei Aipoalani admitted to conspiring to enroll his wife, Angelita Aipoalani, as an AmeriCorps member, even though she did not perform AmeriCorps service activities, and to cause a second non-profit to pay Angelita Aipoalani more than $69,000 for no compensable work. Hanalaei Aipoalani also admitted to engaging in a scheme to fraudulently obtain AmeriCorps education awards for Angelita Aipoalani, even though she had not performed the required service.  Angelita Aipoalani, 42, of Waianae, Hawaii, pleaded guilty in federal court on April 1, 2021, to conspiring with Hanalei Aipoalani to embezzle more than $69,000 from AmeriCorps and to fraudulently obtaining more than $11,000 in AmeriCorps education grants, and is pending sentencing.

     The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which was passed by Congress and signed into law in or about March 2020, provided 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 August 2020, Hanalaei Aipoalani was hired to serve as Honolulu City and County’s Department of Community Service’s CARES Program Administrator and was responsible for administering CRF programs. In that capacity, Hanalaei Aipoalani agreed to accept a financial benefit from an applicant who filed two fraudulent applications for CARES Act Funds under the agreement that Hanalaei Aipoalani would influence the approval of the grant applications and would receive a financial benefit in return for the approvals.

     The FBI, the Inspector General for AmeriCorps, and the U.S. Attorney’s Office are committed to investigating and prosecuting individuals who defraud the AmeriCorps program and programs under the CARES Act. If you are aware of fraud, waste, or abuse affecting AmeriCorps or any of its programs, contact the AmeriCorps Office of Inspector General Hotline at 1-800-452-8210 or

     In announcing the sentence, Acting U.S. Attorney Phillips, Inspector General Jeffrey, and Special Agent in Charge Merrill commended the work of those who investigated the case from the Office of the Inspector General for AmeriCorps and the FBI’s Honolulu Field Office. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including Assistant U.S. Attorneys Leslie A. Goemaat and Peter Lallas of the Fraud Section; Amanda Vaughn of the Public Corruption and Civil Rights Section; former Assistant U.S. Attorney Bianca Forde; and Paralegal Specialists Mariela Andrade, Stephanie Frijas, and Joseph McClanahan who worked on the case.

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Closed 03/31/20

CNCS-OIG investigated allegations that a former Senior Corps Program employee at the City of Jacksonville (COJ), Jacksonville, FL, submitted multiple forged National Sex Offender Public Website (NSOPW) checks to CNCS.  During the investigation, the employee admitted he forged two NSOPW checks and submitted the forged documents to CNCS as part of an Improper Payments Elimination and Recovery Improvement Act (IPERIA) review, in order to mislead CNCS that the NSOPW checks were compliant.  The investigation also found non-compliant NSOPWs for three Senior Corps volunteers.  This case was referred to the United States Attorney’s Office for the Middle District of Florida for prosecution and was declined.

Agency/Administrative Actions

In response to CNCS-OIG’s recommendations, CNCS debarred the employee for three years.  In addition, CNCS management concurred with CNCS-OIG’s findings and disallowed nominal costs pursuant to the sanctions matrix related to the noncompliant NSOPW checks for volunteers and forged NSOPWs for COJ staff.  

Case ID 2018-001

Closed 3/19/20

CNCS-OIG investigated allegations that Sunset Park Health Council (SPHC), Brooklyn, NY, operated two separate AmeriCorps programs to make a profit from grant funding and utilized AmeriCorps members (members) to perform personal errands for staff.  SPHC was also an operating site for the Healthy Futures Corps (HFC) grant, operated by the Community Health Care Association of New York State (CHCANYS), New York, NY.  While the initial allegations were not substantiated, our investigation found CHCANYS overbudgeted staff salary on two CNCS grants, requesting over 100 percent salary for one employee assigned to work on both projects.  Further, CHCANYS staff timekeeping methods were unable to demonstrate its billing was based on actual hours, as required.

The investigation also revealed some HFC AmeriCorps members were allowed to curtail their length of service by several months if they completed their required 1,700 service hours early.  After approving the curtailment, CHCANYS increased each members’ monthly living allowance in order to ensure all living allowances were expended before the end of their service terms.  

CNCS-OIG recommended CNCS implement controls to ensure multiple sub-grantee budgets are compared and do not over-budget staff salary; review staff salary charged to the grant to ensure it was not overcharged; implement controls to ensure staff recorded actual hours spent on the grant; disallow any excess living allowance payments to members who curtailed their service terms; and review policies that allowed members to exit the program earlier than expected.  

Agency/Administrative Actions

CNCS management concurred with some of CNCS-OIG’s findings.  CNCS elected not to implement controls to ensure sub-grantees that receive multiple awards do not overlap and overbudget staff salary.  Although CNCS concurred it was a best practice to review multiple budgets awarded to the same organization, CNCS elected not to implement a control to address this in future awards.  

The Commission reviewed staff salaries charged to the grant and found it did not overcharge the grants and did not exceed the allowable budget adjustments authorized by Federal regulations.  The Commission did find that CHCANYS staff could not demonstrate it billed based on actual hours and conducted a time-keeping study.  The time-keeping study found some of the staff salaries were charged to the wrong grant and some may have been under-charged.  The Commission also concurred that CHCANYS provided excess living allowances to members and disallowed $29,674.69 in grant funds.  

Case ID 2018-011

Closed 12/2/19

CNCS-OIG investigated allegations that a former AmeriCorps member (member) in the Michigan College Access Network (MCAN), Lansing, MI, AmeriCorps Program submitted fraudulent timesheets. The investigation revealed the former member submitted multiple false timesheets totaling over 140 false service hours that were recorded on holidays and days when the service site was closed.  The false hours allowed the former member to fraudulently obtain a Segal Education Award.  The investigation also discovered questionable AmeriCorps service hours for five additional former members, three of whom received Education Awards based on the questionable hours.  CNCS-OIG also discovered MCAN conducted late criminal history checks (CHC) for four employees.

CNCS-OIG recommended CNCS disallow the questionable service hours, recoup the improper Education Awards, assess MCAN’s timekeeping procedures, and disallow funds associated with the late CHCs. CNCS-OIG also recommended debarment of the former member who submitted multiple false timesheets.

Agency/Administrative Actions

CNCS management concurred with CNCS-OIG’s findings and debarred the former member for two years.  In addition, CNCS disallowed the questionable service hours related to days the service site was closed, issued a debt to MCAN for the improper Education Awards and had the Education Awards permanently placed on hold.  The Michigan Community Service Commission (Commission), Lansing, MI, reviewed MCAN’s timekeeping procedures and found MCAN now provided additional oversight and required additional signatures on member timesheets.  The Commission reviewed additional member timesheets and found some unallowable service activities; however, the disallowance of those hours did not affect those members’ Education Awards.  

Case ID 2018-002

Closed 12/2/19

CNCS-OIG investigated allegations that a former AmeriCorps Program employee at Easter Seals North Georgia (Easter Seals), Atlanta, GA, submitted a fraudulent National Sex Offender Public Website (NSOPW) check to CNCS.  During the investigation, the employee admitted she falsified the date on the NSOPW check and submitted the fabricated document to CNCS as part of an Improper Payments Elimination and Recovery Improvement Act (IPERIA) review, in order to mislead CNCS that the NSOPW check was compliant.

Agency/Administrative Actions

CNCS management concurred with CNCS-OIG’s findings and disallowed nominal costs pursuant to the sanctions matrix related to the noncompliant NSOPW check.  CNCS also debarred the employee for two years.

Case ID 2019-005

Closed 12/2/19

CNCS-OIG investigated allegations that a former AmeriCorps member (member) at Berea College, Berea, KY, submitted false timesheets.  The investigation revealed the former member continued to submit false timesheets for three months after she stopped showing up for service and subsequently received living allowance payments for time not served.  The member was terminated from the program when the timesheet fraud was discovered.  

The United States Attorney’s Office for the Eastern District of Kentucky accepted the matter for prosecution under the Civil False Claims Act, which resulted in a civil settlement and restitution.  In addition, CNCS-OIG recommended debarment of the former member.

Agency/Administrative Actions

CNCS management concurred with CNCS-OIG’s findings and debarred the former member for two years.

Case ID 2018-028

PHILADELPHIA and CAMDEN – United States Attorneys William M. McSwain for the Eastern District of Pennsylvania and Craig Carpenito for the District of New Jersey jointly announced that Our Lady of Lourdes Health Foundation and two related Our Lady of Lourdes companies have agreed to pay $1,143,881.19 to resolve claims arising from Lourdes’ administration of community service grants funded through the Corporation for National and Community Service (CNCS).

LEXINGTON, Ky. – A Madison County woman has agreed to resolve civil allegations that she violated the False Claims Act, a federal law that prohibits the submission of false or fraudulent claims, agreeing to pay the federal government, after admitting that she falsified timesheets that caused her to wrongfully receive federal funds from the AmeriCorps Program.

Closed 12/17/18
CNCS-OIG investigated allegations that AmeriCorps members serving in the St. Bernard Project (SBP), New York, NY, AmeriCorps program displaced the work of paid staff, served outside the scope of the grant, and were not reimbursed for travel expenses.
The investigation found no evidence to support the allegations but did find that SBP failed to conduct a compliant National Service Criminal History Check (CHC) on one former member, a violation of 45 C.F.R. § 2540.203.  The check was noncompliant because the search of the National Sex Offender Public Website (NSOPW) misspelled the former member’s first name.
Agency/Administrative Actions

CNCS management concurred with CNCS-OIG’s finding that SBP failed to conduct a compliant CHC on the former member; however, CNCS initially determined not to impose a financial consequence, asserting that, as long as the last name is correct, and the first name is similar to the actual name, the search is generally sufficient to ascertain whether the person is a registered sex offender.
On January 11, 2019, CNCS revised its decision and elected to impose a financial consequence on SBP for the noncompliant CHC.

Case ID 2018-012

The Corporation for National and Community Service (the Corporation or CNCS) has made significant progress in addressing the information security and privacy weaknesses identified in last year’s Federal Information Security Modernization Act of 2014 (FISMA) evaluation, resolving eight of 17 findings from FY 2015 and closing 67 of 90 recommendations open from prior years. CNCS has improved and updated its policies and procedures for key security program areas, e.g., information security continuous monitoring (ISCM), risk management and Plan of Action and Milestones (POA&M) management. It has also entered into new service level agreements with the information technology (IT) contractor that manages the Corporation’s desktops, servers and network infrastructure. These improvements led evaluators to reduce the severity of two previous program weaknesses from Significant Deficiencies to Control Deficiencies. Evaluators determined that the Corporation implemented improvements to close all seven recommendations related to privacy controls for protection of personally identifiable information (PII).

In April 2016, the Office of Inspector General, Corporation for National and Community Service (CNCS-OIG) reported that the National Association of Community Health Clinics (NACHC), an AmeriCorps grantee, allowed a few AmeriCorps members serving at one of its subgrantees, the Institute for Family Health (IFH), to provide emotional support to women during abortion procedures. The Federal statute authorizing the AmeriCorps Program expressly forbids the use of AmeriCorps resources to provide abortion services or referrals for receipt of such services.
Our investigation focused on the conduct of the grantee, subgrantee and AmeriCorps members. This report discusses points at which the Corporation for National and Community Service (CNCS or the Corporation) could have, but did not, reduce, prevent or detect the prohibited activities  that occurred. These observations concerning CNCS do not absolve NACHC of its responsibility for violating the law or mitigate its conduct. But they do suggest actions that are long overdue at CNCS to detect any similar activities and avert future violations.

This report identifies management and performance challenges facing the Corporation for National and Community Service (CNCS or the Corporation). We selected these challenges by considering past and ongoing audit, review and investigative work, as well as discussions with CNCS management regarding existing vulnerabilities. We also considered new activities that could pose challenges because of their breadth and complexity.  
The FY 2017 management challenges are:  
1. Strengthening Grant Oversight and Monitoring  
2. Protecting the Communities We Serve with Thorough Criminal History Checks and Prevention Measures  
3. Reducing Improper Payments  
4. Securing Information Systems and Modernizing Information Technology  
5. Rethinking the Fundamentals to Support National Service

House of Representatives
Education and the Workforce Committee
Subcommittee on Higher Education and Workforce Training
Hearing – “Demanding Accountability at the Corporation for National and Community Service”
Inspector General Deborah Jeffrey testifies before the House Subcommittee on Higher Education and Workforce Training.


The Cybersecurity Act of 2015, Sec 406 requires Inspectors General of agencies with covered systems to submit to the appropriate committees of jurisdiction in the Senate and the House of Representatives a report on agency policies, practices, and controls related to logical access and security management. The statute also calls for a determination whether the logical access policies and practices meet appropriate standards.

Based on the information that the Corporation provided, we conclude that its policies and  practices  for  logical  access  to  covered  systems  generally  reflect  appropriate standards, though there remain opportunities to strengthen these protections.  We did not verify or test the effectiveness of CNCS’s access controls in preventing incursions by unauthorized users.

Additional information bearing on security measures will be addressed in our forthcoming 2016 FISMA evaluation report.