Kapaa Woman Sentenced to Federal Prison After Fraud Scheme Targeted Hawaii COVID-19 Rental Assistance Program

HONOLULU — A Kapaa, Hawaii woman has been sentenced to federal prison after admitting to orchestrating a fraudulent scheme that exploited a pandemic-era emergency rental assistance program created to support households impacted by the COVID-19 crisis.

United States Attorney KEN SORENSON announced that KAIAULANI C. KAIAWE, 47, was sentenced on May 11, 2026, by United States District Judge JILL A. OTAKE to 40 months imprisonment for defrauding the Kauai Coronavirus Rental and Utility Assistance (CRUA) program.

In addition to the prison sentence, Judge OTAKE ordered KAIAWE to serve three years of supervised release and pay $126,026.10 in restitution to the State of Hawaii.

Federal court records show KAIAWE previously pleaded guilty on October 9, 2025, to two counts of wire fraud and two counts of aggravated identity theft connected to the fraudulent scheme.

According to court documents, Congress authorized Emergency Rental Assistance (ERA) programs in 2021 through the Department of the Treasury as part of broader pandemic relief efforts designed to prevent housing instability, utility shutoffs, and displacement during the COVID-19 economic emergency.

In Hawaii, Kauai County used ERA funding to establish the Kauai Coronavirus Rental and Utility Assistance program, commonly referred to as CRUA. The county contracted a local credit union to administer and process applications submitted through the online assistance system.

Federal prosecutors stated the CRUA program required applicants to submit personal identifying information electronically through the program’s website, including names, birth dates, landlord or property manager information, and certification statements affirming the accuracy of the submitted information. Once approved, rental assistance payments were sent directly to landlords or property managers while utility payments were issued directly to utility providers.

According to prosecutors, KAIAWE admitted to knowingly submitting fraudulent applications to obtain benefits she was not entitled to receive.

Court documents state KAIAWE initially submitted a false CRUA application on her own behalf using her former name, COTY DUHAYLONGSOD, as the claimant while identifying herself under her current name as the landlord in order to improperly obtain benefit payments.

Federal authorities stated the fraud scheme later expanded to include multiple additional fraudulent applications submitted using the personal information of other individuals without their knowledge or authorization. Prosecutors allege KAIAWE falsely identified herself or associates as landlords or property managers connected to those claims in order to redirect rental assistance payments for personal gain.

Investigators additionally stated KAIAWE admitted to creating and submitting false or altered supporting documentation tied to the fraudulent claims, including records intended to validate eligibility and tenancy information required by the program.

According to federal authorities, the scheme ultimately resulted in $126,026.10 in fraudulent CRUA benefit payments.

The case reflects the continuing nationwide effort by federal investigators and prosecutors to identify fraud tied to pandemic-era relief programs that distributed billions of dollars through emergency assistance initiatives during the COVID-19 crisis. Since the creation of federal relief programs in 2020 and 2021, investigators across the United States have pursued cases involving identity theft, falsified applications, shell entities, fabricated payroll records, synthetic identities, and misuse of emergency housing and unemployment assistance funds.

Federal investigators have repeatedly warned that many emergency pandemic assistance programs were deployed rapidly under crisis conditions, creating opportunities for fraud schemes targeting automated approval systems, online application platforms, and identity verification procedures.

The investigation was conducted by the Federal Bureau of Investigation and the Kauai Police Department.

The case was prosecuted by Assistant United States Attorney GREGG PARIS YATES.

Federal officials additionally referenced the recently announced National Fraud Enforcement Division established by the Department of Justice on April 7, 2026. According to the Department of Justice, the division was created to strengthen federal efforts targeting fraud involving taxpayer-funded programs and public assistance systems.

The Department of Justice stated the division supports broader federal initiatives focused on identifying fraud, waste, and abuse involving government benefit programs and emergency relief funding.

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