Kapaa Woman Indicted for Scheme to Defraud Coronavirus Rental and Utility Assistance Program

HONOLULU - On December 12, 2024, a federal grand jury returned an eight-count indictment against Kaiaulani C. Kaiawe, also known as Coty K. Duhaylongsod, 46, of Kapaa, Hawaii, charging Kaiawe with wire fraud, aggravated identity theft, and money laundering in connection with fraudulent claims for pandemic-related rental and utility assistance.

The charges in the indictment pertain to the Kauai Coronavirus Rental and Utility Assistance (CRUA) program. In 2021, Congress authorized the creation of Emergency Rental Assistance programs within the Department of the Treasury to fund rent, utility, and other housing-related expense assistance to households that were impacted by the COVID-19 pandemic. In the State of Hawaii, the County of Kauai used ERA funds to establish the CRUA program. The County of Kauai contracted with a local credit union to administer the CRUA program.

According to the indictment, Kaiawe is charged with wire fraud in connection with a scheme to defraud the CRUA program to obtain benefit payments she was not eligible to receive. The CRUA program required eligible claimants to submit an application electronically, using its website, and to provide certain personal information of the claimant, including his or her name and date of birth, as well as a landlord or property manager contact, before certifying that the representations made in the claim were true and accurate. If the credit union approved the claim, rental payments for the claimant were sent directly to the claimant's landlord or property manager, and utility payments were sent directly to his or her utility company.

The indictment alleges that Kaiawe submitted a false CRUA claim on her own behalf, using her former name, Coty Duhaylongsod, as the claimant, and then listing her then-current name, Kaiawe, as her landlord to improperly receive a CRUA benefit payment. The indictment further alleges that Kaiawe then submitted multiple other false CRUA claims using the personal information of others as claimants, without their knowledge and consent, and then falsely listing herself as their landlord or property manager to obtain additional benefit payments that she was not entitled to receive. Finally, the indictment alleges that Kaiawe submitted other false claims for CRUA benefits that used the identities of acquaintances as landlords or property managers, without their knowledge or consent; for these claims Kaiawe, entered a residential address for the landlord or property manager to receive payment that was within sight of her home, which allowed Kaiawe to intercept the rental assistance program check when it was delivered.

Kaiawe submitted CRUA claims seeking a total of almost $250,000 that she was not eligible to receive. According to the indictment, Kaiawe fraudulently obtained at least approximately $126,026 in CRUA assistance benefits.

"Congress appropriated critically important funds during the COVID-19 pandemic to help people in our community who were struggling," said United States Attorney Clare E. Connors. "We continue to investigate those who fraudulently obtained federal funds at the expense of those who needed this assistance in order to remain housed, and will hold them accountable."

Kaiawe is charged with four counts of wire fraud, three counts of aggravated identity theft, and one count of money laundering. Each of the wire fraud counts carries a maximum penalty of 30 years in prison and a fine of up to $1,000,000. Each of the aggravated identity theft counts carries a sentence of two years in prison. The money laundering count carries a maximum penalty of ten years in prison and a fine of up to $250,000 or up to twice the amount of criminally-derived property involved in the transaction. An indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department's response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice's National Center for Disaster Fraud (NCDF) at 866-720-5721 or online at www.justice.gov/DisasterComplaintForm.

This case is being investigated by the Federal Bureau of Investigation and the Kauai Police Department. It is being prosecuted by Assistant U.S. Attorney Gregg Paris Yates.