The Riverside grand jury charged Queer Works Chief Executive Officer Jacob Rostovsky with defrauding Palm Springs and Riverside County of $940,000. He faces 53 felony counts in the Oct. 16 indictment.
The City Council unanimously approved initial support for the nonprofit in a March 24, 2022, meeting.
Palm Springs City Councilmember Christy Holstege, a poverty-law attorney who is currently running to serve in the state assembly, had requested to add the guaranteed-income item to the agenda, according to the staff report.
While introducing the item, she said she unsuccessfully reached out to numerous guaranteed-income organizations to partner with the city before DAP Health agreed. DAP told Holstege at the time that Queer Works is who they worked with for that service, she said.
Rostovsky has pleaded not guilty to all charges, and is out on $944,000 bail. Queer Works has not yet responded to Follow Our Courts’ request for comment.
The CEO misappropriated part of $700,000 in funds the Palm Springs City Council awarded to his nonprofit to establish a universal basic income pilot program, according to the District Attorney’s Office. The program was intended to provide 180 transgender or nonbinary individuals with monthly income of $800 each.
“I am calling on the Riverside County Civil Grand Jury to investigate any potential government malfeasance or misconduct that may have occurred in the administration of these contracts,” said DA Michael Hestrin, according to a press release. “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.”
The DA’s Office accuses Rostovsky of submitting false statements and forged documents 89 times, impersonating a Queer Works client, and committing money laundering.
When arguing for the funds, Rostovsky said the money would be used to fix an income gap.
“I want you to think about this project as more than just a mayor’s guaranteed income project. This is a chance to help individuals to receive money that we can think of as a subsidy—to subsidize a gap in income that the trans and non-binary community faces due to having some of the highest levels of unemployment in the country,” Rostovsky said at the 2022 meeting where city’s support for the program was approved.
“I’m not asking us to solve hunger or immediately fix the housing crisis. But we do have an opportunity to feed and shelter individuals in our own backyard,” Rostovsky continued.
Holstege said at the meeting that other nonprofit groups turned down the option to run the program because they were too short on funds following the COVID-19 pandemic.
Then-Mayor Lisa Middleton, the Senate candidate sitting on the city council, said that Queer Works was a deserving organization.
“If anyone can make this work, they can,” she said at the meeting.
The city council unanimously approved $200,000 to Queer Works following the discussion March 24, 2022. The recommended motion on the staff report was, “Consider the request for financial support of a proposed guaranteed income pilot program and give additional direction to staff as needed.” Holstege instead made a motion to provide $200,000 to Queer Works.
The city council allocated a further $500,000 July 28, 2022, with a 3-2 vote. Middleton and Councilmember Dennis Woods voted no.
Rostovsky established Queer Works in 2018, according to their website. He has been a licensed marriage and family therapist since Sept. 7, 2020, according to California’s license database.
The group’s stated focus is to provide free mental health treatment to transgender and gender non-binary people.
The summary of the intended basic income pilot program highlighted the needs of transgender residents.
“The (transgender and gender non-binary) community is one of the most at-risk populations in our city, facing some of the highest levels of homelessness, unemployment, sexual and physical assault, and discrimination. The stories of our city’s TGNB community echoes those across the country. Our project will help to create the social and institutional change needed to help this vulnerable population begin to thrive,” the summary said.
In 2023, Queer Works had revenue of $723,000 and expenses of $594,000, according to a public financial document. The document states Rostovsky received $191,000 in above-board pay in 2023. It also claims $593,000 in expenses toward mental health care, therapy sessions, clothing, food and drink, medical testing and a litany of other expenses.
In 2021, Queer Works’ filing document stated revenue of $175,000, with no revenue from previous years. Rostovsky received only $16,000 in stated revenue that year.
Riverside Superior Court ordered three accounts, at Chase Bank, Pacific Premier Bank and Wells Fargo, to be closed on the day the indictment against Rostovsky was filed.
Rostovsky faces three felony counts of grand theft over $950, 22 counts of presenting a false claim, 16 counts of perjury, one count of misappropriation of funds, one count of embezzlement, one count of fraudulent claim for payment, one count of writing a fraudulent claim, one count of forgery and seven counts of money laundering.
Case information
Natasha Sorace prosecutes.
Michael V. Schafler defends
Case No. RIF2446500.
