Federal prosecutors announced on Wednesday that a federal grand jury indicted an Anchorage city commissioner and her husband for setting up a complex scheme of businesses to funnel $1.6 million in COVID-19 recovery funds administered by the city into their for-profit companies, pay tax debt, secure personal cash loans and buy cryptocurrency.
Rosaline Natazha Mavaega, 41, and Esau Malele Fualema Jr., 44, face charges for using their nonprofit, House of Transformations, to fraudulently obtain COVID-19 relief money. They’re the second high-profile case of alleged fraud related to Anchorage-administered COVID-19 relief grants and the first to face charges.
Mavaega was appointed to the Anchorage Equal Rights Commission as well as the Housing, Homeless and Neighborhood Development Commission by Anchorage Mayor Dave Bronson, and has held the position throughout the summer despite the administration being aware of the federal investigation.
The couple’s activities have been detailed in reports by the Anchorage Daily News’ Kyle Hopkins, who published a lengthy investigation on the couple earlier this year. That report detailed how the state of Alaska permanently banned Mavaega in 2015 from serving as a Medicaid provider because of a history of medical assistance fraud and how none of that was flagged in the process.
The money was supposed to provide housing, treatment and vocational services.
The announcement from the U.S. Attorney’s Office District of Alaska details the primary claim against the couple as follows:
In August 2021, the Municipality of Anchorage issued a check for $1,623,165, which was deposited into the House of Transformations checking account. According to the indictment, instead of using these funds for the purposes identified in the grant, the defendants moved the money into their personal bank accounts and accounts associated with other corporations under their control. They allegedly used the money to finance their for-profit business operations, pay tax debt on another business, secure a personal cash loan and buy cryptocurrency.
It also details how they followed up with two later applications for additional federal relief funds, accusing the two of falsifying applications and lying about the status of their businesses.
While the $1.6 million grant was paid out while Bronson was in office, it was approved before he took office. The chair of the Assembly at the time, Felix Rivera, told the Anchorage Daily News that they weren’t aware the state Health Department had banned Mavaega from serving as a Medicaid provider and that the Assembly didn’t have the resources to investigate all grant applicants.
Despite being aware of the federal investigation, Bronson has refused to move to remove Maveaga from the commission (Hopkins noted on Twitter that she’s still currently listed as a member of the commissions). Instead, the day after Hopkins asked the administration about Maveaga’s history on March 22 of this year, Bronson visited with Mavaega and the House of Transformations.
The U.S. Attorney’s Office announcement says Mavaega and Fualema were arrested on Wednesday and will face court appearances later. They face five federal charges: major fraud against the United States, wire fraud conspiracy, wire fraud, money laundering conspiracy and aggravated identity theft. The announcement says they could face a minimum penalty of 24 months in prison if convicted.
The other high-profile fraud case
While the grant to the House of Transformations was initiated before Bronson taking office, the same cannot be said for the other high-profile case of alleged COVID-19 fraud. That would be a $750,000 ARPA grant awarded to Revive Alaska Community Services, which the organization told the Anchorage Assembly it would use to rehabilitate a building in South Anchorage to serve as a food pantry.
Instead, the group ripped down the structure and used the money to purchase a church in Midtown Anchorage. According to a report by Alaska’s News Source, “Without Anchorage Assembly members’ approval, someone in Mayor Dave Bronson’s administration added language in RACS’s grant contract to allow the group the option of relocating.”
That group is also reportedly under federal investigation.
Matt Acuña Buxton is a long-time political reporter who has written for the Fairbanks Daily News-Miner and The Midnight Sun political blog. He also authors the daily politics newsletter, The Alaska Memo, and can frequently be found live-tweeting public meetings on Twitter.
