A Riverside County grand jury has indicted Jacob Rostovsky, the CEO of Queer Works, on 53 felony counts, including grand theft and money laundering. Prosecutors allege that Rostovsky misappropriated $940,000 from the city of Palm Springs and other entities, raising serious concerns about oversight in public funding.
Key Takeaways
- Jacob Rostovsky faces 53 felony counts, including grand theft and money laundering.
- Allegations include misappropriation of $940,000 from Palm Springs and Riverside County.
- Rostovsky allegedly used funds for personal expenses, including luxury purchases.
- The city of Palm Springs is tightening its financial policies in response to the scandal.
Background of the Case
Rostovsky’s nonprofit organization, Queer Works, received significant funding from the city of Palm Springs to develop a guaranteed income pilot program. In March 2022, the city allocated $200,000, followed by an additional $500,000 in July. The program aimed to provide monthly stipends of $800 to 180 participants.
However, city officials grew suspicious of Rostovsky’s spending habits, prompting a compliance audit that eventually led to the involvement of the Riverside County District Attorney’s Office.
Allegations of Fraud
The indictment against Rostovsky includes serious charges:
- Grand Theft: Allegedly stealing public funds.
- Misappropriation of Public Funds: Using taxpayer money for personal gain.
- Insurance Fraud: Collecting $90,000 by impersonating a Queer Works client.
- Perjury: Making false statements during the investigation.
- Money Laundering: Concealing the origins of the stolen funds.
Investigators uncovered a pattern of fraudulent behavior, including 89 instances of submitting forged documents to both Riverside County and Palm Springs. Instead of funding the intended programs, Rostovsky allegedly used the money for personal purchases at high-end retailers like Disney and Burberry.
Government Oversight Concerns
District Attorney Mike Hestrin has called for an investigation into potential government misconduct related to the distribution of public funds. He emphasized the need for better oversight, stating, "It is simply unacceptable that public funds are handed out with the lack of due diligence or oversight that is alleged in this case."
In response to the scandal, the Palm Springs City Council has updated its financial policies to enhance control over grant disbursements. New measures include:
- Eliminating lump sum payments over $75,000.
- Requiring independent audits for organizations receiving large grants.
Community Impact
The fallout from this case has raised concerns about the integrity of nonprofit organizations and the management of public funds. DAP Health, a larger nonprofit that initially supported Queer Works, has distanced itself from the program after the allegations surfaced. They have since taken over the administration of the guaranteed income program using their own funds.
The California Department of Public Health also awarded Queer Works a $500,000 grant for gender-affirming care, but there are no allegations of misuse related to these funds. However, payments were halted following the investigation into Rostovsky’s activities.
Conclusion
As the legal proceedings unfold, the case against Jacob Rostovsky serves as a stark reminder of the importance of accountability in the management of public funds. The community and local officials are now left to grapple with the implications of this scandal and the necessary reforms to prevent future occurrences.
Sources
- Charity CEO charged with stealing $940,000 in Palm Springs scheme, The Desert Sun.
