INVESTIGATIONS

The Investigations Section within the OIG is responsible for the detection and investigation of fraud, waste, and abuse within AmeriCorps programs and operations. Special Agents conduct various criminal, civil, and administrative investigations. Some of our criminal investigations are conducted in conjunction with other federal, state or local law enforcement agencies. Criminal investigations are presented to the U.S. Attorney and, in some cases, the local prosecutor, for criminal prosecution and/or civil recovery.

The Investigations Section also conducts fraud awareness briefings and provides a pamphlet entitled "OIG Investigations and You" which discusses AmeriCorps employees rights and responsibilities regarding investigations. Also, See;

The Investigations Section also maintains the Fraud Hotline which can be used to report fraud, waste and abuse involving AmeriCorps programs and operations.

Closed Investigations

Closed Investigations

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

Department of Justice

U.S. Attorney’s Office

District of Columbia


FOR IMMEDIATE RELEASE

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 hotline@AmeriCorpsOIG.gov.

     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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Senior Corps Grantee Employee Debarred for Forgery of Criminal History Checks and Non-Compliant Criminal History Checks Results in Disallowed Costs

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

CNCS Elects Not to Require Grantees to Review Sub-grantee Budgets with Multiple Awards to Prevent Overbudgeting and Overlapping Costs. CNCS Disallowed Funds for Excess Living Allowances Paid to AmeriCorps Members

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

AmeriCorps Member Debarred for Falsification of Timesheets; Grantee Required to Repay Funds for Improper Education Awards

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

AmeriCorps Grantee Employee Debarred for Falsification of Criminal History Check

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

Former AmeriCorps Member Enters into Civil False Claims Act Settlement with Department of Justice for Falsifying Timesheets and is Debarred for Two Years

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

Grantee Employee Debarred for Falsification of Criminal History Checks

Closed 11/29/19

CNCS-OIG investigated allegations that an employee who worked on the AmeriCorps program at Graceland University, Lamoni, IA, submitted a fraudulent National Sex Offender Public Website (NSOPW) check to CNCS.  During the investigation, the employee admitted to fabricating the NSOPW check for one employee and falsifying the dates on NSOPW checks for two AmeriCorps members, in order to mislead CNCS that the NSOPW checks were compliant.  The employee was subsequently terminated.

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 checks. CNCS also debarred the employee for two years.

Case ID 2017-019

CNCS Staff Failed to Report Suspected Fraud to CNCS-OIG

Closed 9/30/2019

CNCS-OIG completed its investigation regarding allegations that two CNCS employees failed to report a complaint about potential fraud within a CNCS program to CNCS-OIG.  The employees acknowledged they understood their reporting obligations but neglected to report the matter to CNCS-OIG, as required by CNCS policy.

Agency/Administrative Actions

CNCS management disagreed that there was a violation of CNCS’s policy and elected to take no action in this case.  

Case ID 2018-041

AmeriCorps Members Recorded Excessive, Unsupported Service Hours on Timesheets

Closed 7/31/19

CNCS-OIG investigated allegations that a former employee of Regional School Unit 14 (RSU14) - Windham-Raymond Schools, Windham, ME, approved false timesheets for two former AmeriCorps members (members). CNCS-OIG found the members recorded excessive service days on their timesheets, often ranging from 16-18 hours in a day. The RSU14 employee supervising the members was not in a position to witness members serving that many hours in one day and she did not timely review and sign their timesheets. The CNCS-OIG investigation concluded that the hours submitted and approved for the two members were excessive and lacked adequate support.

Agency/Administrative Actions

CNCS management concurred with CNCS-OIG’s findings and RSU14 exited the two members without Education Awards.  

Case ID 2018-040

AmeriCorps Member Performed Prohibited Religious Activities

Closed 7/31/19

CNCS-OIG investigated allegations that AmeriCorps members (members) in the City of Orlando, Orlando Partnership for School Success (O-PASS) AmeriCorps Program, Orlando, FL, submitted false timesheets and displaced staff. The investigation did not substantiate those allegations. However, during its investigation, CNCS-OIG determined one member violated 45 C.F.R. § 2520.65(7), when she performed prohibited religious instruction as part of her AmeriCorps service.

Agency/Administrative Actions

CNCS management responded and concurred with CNCS-OIG’s recommendations. CNCS reported that City of Orlando provided additional training to its service sites on prohibited activities and member service activities and the Commission confirmed the hours performing prohibited religious instruction were disallowed and removed from the member’s timesheet.

Case ID 2018-033

AmeriCorps Program Directed an AmeriCorps Member to Perform Staff Work, Results in Disallowed Hours and Additional Training

Closed 7/31/19

CNCS-OIG investigated allegations that Rebuilding Together (RT), New York City, NY, expended grant funds early, drew down grant funds on unfilled AmeriCorps member (member) positions, paid grant funds to RT employees not listed on the grant, and assigned members to serve outside the scope of the grant. The investigation did not substantiate those allegations. However, during its investigation, CNCS-OIG found RT violated 45 C.F.R. § 2540.100(f) (“Nondisplacement”) when a member was directed to perform the work of paid staff for a week. Another member reported significant idle time due to lack of service opportunities. The investigation also found that RT staff violated the grant terms and conditions when it failed to notify CNCS and CNCS-OIG of a former member who submitted fraudulent timesheets. RT staff disallowed the false hours, terminated the member, and adjusted its draw downs accordingly.

Agency/Administrative Actions

CNCS management responded and reviewed timesheets and activity logs and found one eight-hour instance when the member engaged in staff work (website upgrades). RT disallowed the entire eight hours, which did not affect the members’ eligibility for his Education Award. RT program staff received training on staff displacement and reporting fraud to CNCS-OIG.

Case ID 2018-009

AmeriCorps Grantee Overpaid Program Staff Resulting in Disallowed Costs

Closed 7/31/19

CNCS-OIG investigated allegations that staff at the Salvation Army, Anchorage, AK, Safe Senior AmeriCorps Program (SSAP) mismanaged the AmeriCorps program and pressured AmeriCorps members (members) to add unearned service hours to their timesheets. The investigation did not substantiate those allegations.  However, during its investigation, CNCS-OIG determined one employee failed to document all of her time spent on the SSAP Planning Grant and another employee was given a year’s salary, but only worked at Salvation Army on the SSAP for approximately nine months.  

Agency/Administrative Actions

CNCS management responded and partially concurred with CNCS-OIG’s recommendations.  CNCS did not agree that one employee failed to properly document her time spent on the SSAP Planning Grant, but issued a debt for a portion of her salary that was over the approved budget line item.  CNCS disagreed that Salvation Army overpaid the other employee a year’s salary when the employee only worked on the program for nine months because she worked more hours than planned and the Salvation Army did not exceed the approved budget limits for her salary.  CNCS confirmed the Alaska Commission updated its Program Director’s Manual that now contains satisfactory requirements for staff timekeeping.

Case ID 2018-006

AmeriCorps Grantee Failed to Conduct Compliant National Service Criminal History Checks

Closed 7/24/19

CNCS-OIG investigated allegations that AmeriCorps members (members) in the Oswego City-County Youth Bureau (Youth Bureau), Oswego, NY, AmeriCorps Program submitted false timesheets.  The investigation did not substantiate that allegation.  However, during its investigation, CNCS-OIG identified six Federal Bureau of Investigation (FBI) Criminal History Checks (CHCs) that were initiated after the members started service.

Agency/Administrative Actions

CNCS management concurred with CNCS-OIG’s findings that the Youth Bureau’s FBI CHCs were non-compliant because they were initiated late and disallowed nominal costs pursuant to the sanctions matrix.  

Case ID 2018-032

AmeriCorps VISTA Members Tasked with Service Outside the Scope of the Grant and Duties Otherwise Performed by Employees

Closed 7/24/19

CNCS-OIG investigated allegations that SEEDS, Traverse City, MI, improperly required AmeriCorps VISTAs (VISTAs) to engage in direct service outside the scope of the grant and displaced staff.  The investigation revealed SEEDS violated 45 C.F.R. § 2556.150 when its staff directed and assigned three VISTAs to perform services or duties that would otherwise be performed by employed workers or other volunteers.  In addition, SEEDS did not have adequate policies or practices to prevent VISTAs from conducting direct service.  The investigation found no evidence to support the allegation of staff displacement.

Agency/Administrative Actions

CNCS responded that the CNCS Michigan State Office provided training to SEEDS staff, and conducted a visit to SEEDS to reinforce the training. Additionally, CNCS program officers conducted a site supervisor training in April 2019, which covered multiple aspects of VISTA project and member management, including allowable indirect capacity building activities vs. non-allowable direct service activities.

Case ID 2018-026

AmeriCorps Grantee Overcharges Grant for Staff Salary Payments

Closed 7/24/19

CNCS-OIG investigated allegations that Sunset Park Health Council (Sunset Park), New York City, NY, operated two separate AmeriCorps programs to make a profit from grant funding and utilized AmeriCorps members (members) to perform personal errands for staff.

The investigation found no evidence to support the allegations that Sunset Park profited from AmeriCorps grants or members performed service outside the scope of the grant.  The investigation did find a Sunset Park employee improperly charged 100 percent of her time and effort to the AmeriCorps grant, even though she spent one-third of her time on non-AmeriCorps programs.  CNCS-OIG recommended that CNCS disallow the costs associated with the inaccurate salary charges.

Agency/Administrative Actions

CNCS agreed with CNCS-OIG regarding the recommendation to disallow salary charges for the employee and initiated action to recover those funds.

Case ID 2018-010