RivCo Nonprofit CEO Accused Of Stealing Funds For Transgender Clients

PALM SPRINGS, CA — The founder of the Palm Springs-based Queer Works has been indicted on 53 felony counts in an alleged scheme that misappropriated more than $940,000 in public funds meant for transgender clients.

Jacob Joseph Aaron Rostovsky was accused by the Riverside County District Attorney's office of stealing funding from his clients at an arraignment on Tuesday.

Rostovsky's nonprofit is meant to offer support to the transgender and nonbinary community.

The charges include fraudulently filed claims, grand theft, misappropriation of public funds, insurance fraud, perjury and money laundering, according to District Attorney Mike Hestrin.

"It is simply unacceptable that public funds are handed out with the lack of due diligence or oversight that is alleged in this case. The people of Riverside County deserve better from their public officials who have a duty to act as responsible stewards of taxpayer dollars," Hestrin said.

The nonprofit reportedly received hundreds of thousands in public funding, including grant money from Riverside County for programs intended to help homeless people and victims of domestic violence; $200,000 from the City of Palm Springs to develop a universal basic income pilot program and another $500,000 in matching funds from the Palm Springs City Council for the pilot program that the nonprofit was supposed to pursue with the state.

The universal basic income program was supposed to fund 180 participants with a monthly stipend of $800.

But a review of Queer Works' financials by a county agency revealed a discrepancy in expenses reported by the nonprofit and showed Rostovsky had altered financial documents submitted to the county. What's more, checks issued by the Riverside County Treasury were deposited into Rostovsky's personal checking account. The findings were reported first to the Riverside Auditor-Controller and then Hestrin's office.

An investigation by Hestrin's office uncovered "a long-standing pattern of fraud," including forged documents and 89 documented false statements submitted to the county and the city of Palm Springs to get the $840,000 intended for the income program and clients in need of housing assistance, the D.A.'s office said in a release.

Instead, a portion of funds were reportedly spent at Disney, Burberry and the Beverly Garland Hotel, the D.A.'s office said.

Hestrin's office says Rostovsky collected another $90,00 by pretending to be one of Queer Works' clients when he fraudulently submitted an insurance claim against the nonprofit. The proceeds he gleaned from a settlement negotiated with the company's insurance carrier were directed back to himself.

"Rostovsky engaged in multiple acts of money laundering in relation to the allegedly ill-gotten funds," Hestrin's office said.