Kapaa woman gets 40 months for COVID aid fraud scheme

A Kapaa woman who siphoned $126,026.10 from Kauai’s pandemic rental and utility aid program was sentenced to 40 months in federal prison, a case that took money meant to keep households housed and lights on.

Kaiaulani C. Kaiawe, 47, was sentenced May 11 by U.S. District Judge Jill A. Otake in U.S. District Court for the District of Hawaii. Otake also ordered three years of supervised release and restitution of $126,026.10 to the State of Hawaii. Kaiawe had pleaded guilty Oct. 9, 2025, to two counts of wire fraud and two counts of aggravated identity theft.

The fraud centered on the Kauai Coronavirus Rental and Utility Assistance program, known as CRUA, which the County of Kauai created with federal Emergency Rental Assistance money authorized by Congress in 2021 through the U.S. Department of the Treasury. The county contracted with a local credit union to administer the aid. Applicants had to apply electronically, provide personal identifying information and landlord or property manager contact details, and certify the claims were true and accurate. Approved rent payments were sent directly to landlords or property managers, while utility payments went straight to utility companies.

According to court documents, Kaiawe used her former name, Coty Duhaylongsod, on one false claim and listed herself as the landlord to obtain payment. She also submitted multiple additional false claims using other people’s personal information without their knowledge or consent, while falsely identifying herself or others as landlords or property managers. She backed the applications with false and altered documentation. In total, she fraudulently obtained $126,026.10 in CRUA benefit payments.

The case puts a spotlight on the pressure points in pandemic aid distribution on Kauai, where CRUA was described by county officials as urgent relief for families facing housing instability. It also shows how quickly a program built to help renters and utility customers in crisis can be exploited when identity checks and supporting documents are not enough to stop a false claim before money is paid out. Federal prosecutors said the scheme diverted critical resources intended for unemployed and struggling residents during the pandemic, a loss that went beyond one defendant and reached the trust residents place in future aid programs.