Palm Springs Revisits Funding Practices Following $70K Loss In Support Of Fraudulent Mental Health Business

PALM SPRINGS, CA — The Palm Springs City Council was slated to review a grand jury report regarding the city's handling of grants, specifically stemming from the Queer Works CEO Jacob Joseph Aaron Rostovsky's indictment.

In June, the Riverside County civil grand jury issued its findings, faulting the city for a "lack of adequate policies and procedures for processing and monitoring grants and contracts," following an investigation, city officials said.

Rostovsky, 35, allegedly pilfered over $90,000 in funds that were earmarked for providing mental health services for the transgender and nonbinary community. He was charged on Oct. 16, 2024 on a 53-count indictment for fraud, grand theft and misappropriation of public funds, insurance fraud and money laundering.

He pleaded not guilty to all charges and posted bail, which was set at $944,000.

Rostovsky is scheduled for a trial-readiness conference on Oct. 17 at the Riverside Hall of Justice.

The city allegedly lost more than $70,000 from its universal basic income pilot program due to "inadequate oversight," according to the report.

The 27-page report also includes recommendations moving forward, including implementing new comprehensive guidelines for grants and contracts and an annual mandate for fraud detection training for city employees.

The city council meeting will take place at 5:30 p.m. Wednesday in the council chamber at City Hall, 3200 E. Tahquitz Canyon Way.

Residents may attend in person or follow on the city's YouTube channel.