Judge orders assets frozen for Queer Works CEO, set to return to court in January

A judge ordered the assets of Jacob Rostovsky, the CEO of the local non-profit Queer Works, to be frozen as his fraud case continues to move ahead.

Rostovsky, 33, was indicted in October on 53 felony counts in a fraud scheme surrounding a universal basic income pilot program in Palm Springs.

Charges including fraudulent claims, grand theft, misappropriation of public funds, insurance fraud, perjury, and money laundering, according to the Riverside County District Attorney's office. The indictment includes an aggravated white-collar crime enhancement due to the significant economic loss of the scheme.

Rostovsky appeared in court on Tuesday, where the judge signed a preliminary injunction relating to the property that was frozen pursuant to an 186.11 petition that the DA's office filed, along with the indictment. 

According to the DA's office, the injunction prohibits anyone from transferring or withdrawing money from the assets (property and bank accounts) that were seized pursuant to the 186.11 petition. 

Rostovsky will return to court for a trial readiness conference on January 23.

Queer Works, founded by Rostovsky, was purportedly set up to provide mental health services to the transgender and nonbinary community.

In July 2021, Queer Works received grant funding from Riverside County for various programs aimed at assisting homeless individuals and victims of domestic violence.

In March 2022, the City of Palm Springs agreed to provide Queer Works with $200,000 to develop a universal basic income pilot program. In July 2022, the Palm Springs City Council approved a request for an additional $500,000 in matching funds for a universal basic income grant that Queer Works intended to pursue with the State of California.

The universal basic income program was supposed to provide 180 participants with monthly stipends of $800.

An investigation into Rostovsky started when the Riverside County Housing & Workforce Solutions found discrepancies in expenses reported by Queer Works. A financial review by the agency also showed that Rostovsky altered financial documents submitted to Riverside County. It was also found that checks issued by the Riverside County Treasury were deposited into Rostovsky's personal checking account.

Based on the findings by HWS, the matter was referred to the Riverside Auditor Controller and ultimately to the DA’s Office.

An investigation by the DA’s Office revealed that Rostovsky engaged in a longstanding pattern of fraud, including 89 separate instances of making false statements and submitting forged documents to the County of Riverside and the City of Palm Springs to obtain over $840,000 intended for housing assistance and basic income payments.

The DA's office alleges that Rostovsky used a portion of the funds, intended for individuals in need of assistance, on personal expenses, including purchases at Disney, Burberry, and the Beverly Garland Hotel.

Additionally, Rostovsky is accused of collecting an additional $90,000 by impersonating a Queer Works client and filing a fraudulent insurance claim against Queer Works. Rostovsky, using his fraudulent alias, then negotiated a settlement with Queer Work’s insurance carrier, Philadelphia Insurance, the proceeds of which were ultimately directed to Rostovsky himself.

Rostovsky is also accused of engaging in multiple acts of money laundering in relation to the allegedly illgotten funds.

On Tuesday, News Channel 3 reported that the California Department of Public Health confirmed Queer Works was still getting grant funds while it was under investigation for misuse of public funds.

The department says the grant agreement was ended once it learned of the investigation.