The American Indian Health Service of Chicago (AIHSC) must pay $100,000 to the Indian Health Service (IHS), despite arguing it was a victim of fraud committed by its former executive director.
On Oct. 26, the Civilian Board of Contract Appeals (CBCA), an independent tribunal that hears and decides cases involving federal agencies and government contractors, dismissed part of AIHSC’s challenge to the IHS’s demand that it repay the allegedly misspent funds in full.
In 2023, the AIHSC reported that its executive director made more than $200,000 in payments to herself and her husband, who was also an employee. Both were terminated in 2023.
In September 2025, IHS demanded full repayment of the charges from AIHSC. The organization challenged the order, arguing that $104,458.74 of the payments, including COVID-related hazard pay, premium pay, and retroactive pay, were authorized by its board and allowable under current policies, but IHS disputes their allowability.
AIHSC requested relief from the remaining $100,231.67 because it was a victim of fraud, and asked the board to direct the IHS to pursue payment directly from LaVallie-Unabi. The organization also argued it cannot afford to make the payment because it cannot use grant funds to cover the debt.
The board rejected AIHSC’s request, saying the government’s right to recover improperly spent contract funds is separate from whether employees committed fraud; however, it has yet to determine whether the $104,458.74 was allowable.
