The defendants allegedly set up scheme to take millions through grants and federally backed loans.
ANCHORAGE, Alaska – An Anchorage couple has been indicted by a federal grand jury for using their nonprofit, House of Transformations, and other corporate entities, as part of a scheme to fraudulently obtain millions of dollars in COVID-19 recovery funds.
According to court documents, Rosaline Natazha Mavaega, 41, and Esau Malele Fualema Jr., 44, submitted applications for over $1.6 million in American Rescue Plan Act (ARPA) funds in April 2021. The ARPA funds were being administered by the Municipality of Anchorage to help businesses who were struggling during the COVID-19 pandemic. In the application, Mavaega and Fualema falsely claimed the nonprofit would be providing housing, treatment and vocational training services, and strengthened their request with inaccurate information on the finances, organization and management of House of Transformations.
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 dept on another business, secure a personal cash loan and buy cryptocurrency.
In December 2021, the defendants submitted applications for various corporate entities under their control for over a million dollars in loans from the Economic Injury Disaster Loan program, a Small Business Administration fund that assists businesses impacted by major disasters, including the COVID-19 pandemic. According to court documents, the defendants falsified these applications by lying about the status of their businesses. They allegedly inflated the number of employees, made false claims about the corporations’ administration and structure, and used other people’s personal identifying information to make it appear that they were associated with the corporations’ management when they were not.
In summer 2022, Mavaega and Fualema fraudulently applied to the Municipality of Anchorage for approximately $2 million of additional ARPA grants.
Mavaega and Fualema are charged with five federal counts; one count major fraud against the United States, in violation of 18 U.S.C. §1031; one count wire fraud conspiracy, in violation of 18 U.S.C. §§1343 and 1349; one count wire fraud, in violation of 18 U.S.C. §1343; one count money laundering conspiracy, in violation of 18 U.S.C. §§1956(h) and 1957; and one count aggravated identity theft, in violation of 18 U.S.C. §1028A(a)(1). Both defendants were arrested today – Mavaega was arrested at Captain Cook Hotel, and Fualema was arrested at his residence. The defendants will make their initial U.S. District Court appearances on a later date. If convicted, they face a mandatory minimum penalty of 24 months in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney S. Lane Tucker of the District of Alaska; IRS Criminal Investigation, Seattle Field Office, Special Agent in Charge Adam Jobes; and Small Business Administration Office of Inspector General, Western Region Special Agent in Charge Weston King made the announcement.
The IRS Seattle Division and the Small Business Administration Office of Inspector General are investigating the case.
Assistant U.S. Attorneys James Klugman and Karen Vandergaw, and former U.S. Attorney George Tran are prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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