Anchorage charity under investigation after city gave it a big pandemic recovery grant

Anchorage City Hall
A small group of Anchorage Assembly members and the news media gather for a press conference outside Anchorage City Hall on April 19, 2023. (Jeremy Hsieh/Alaska Public Media)

Federal investigators are looking into the business dealings of an Anchorage woman whose charity the city gave $1.6 million during the coronavirus pandemic to help people experiencing homelessness or addiction. That’s according to reporting by Kyle Hopkins for the Anchorage Daily News and ProPublica.

Hopkins found that the city gave one of its biggest pandemic relief grants to Rosalina Magaeva’s nonprofit House of Transformations, despite the state having investigated Magaeva for alleged fraud and permanently banning her from serving as a Medicaid provider years earlier.

Hopkins joined Alaska News Nightly host Casey Grove to talk about his reporting.


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The following transcript has been lightly edited for clarity.

Kyle Hopkins: House of Transformations is a charity that is a place where you can go and stay, you know, after you get out of jail or are awaiting trial. It’s basically a halfway house, but also, more than that, a place where you can theoretically get substance abuse treatment, you can go into rehab, you can get hooked up with job training opportunities.

You know, imagine it’s 2020, there’s this new nonprofit that starts up, and pretty soon there’s just a wave of money, of federal relief money, that comes along to help businesses and nonprofits grapple with trying to survive the pandemic. And in 2021, the city had the first round of like $50 million to hand out. And so House of Transformations, along with many other local charities and nonprofits, they asked for some of that money, and they received $1.6 million from the city as part of what’s called ARPA, you know, the American Rescue Plan Act.

Casey Grove: So Rosalina Magaeva founded House of Transformations. She’s obviously a central figure here. Who is she, though? And what’s the story with those earlier Medicaid fraud allegations?

KH: Well, this was not someone who I was familiar with at all, really. I had been doing some reporting back in March on the Anchorage Equal Rights Commission, because there were lots of complaints being made by city employees. We’ve talked about this before, but, you know, city employees were alleging all kinds of things happening within City Hall. And one of the agencies that’s supposed to investigate discrimination within the city was the Anchorage Equal Rights Commission. And then I was trying to get familiar with their new commissioners, and Rosalina was one of the new commissioners appointed by Mayor Dave Bronson.

At the time, if you had Googled her, one of the first things that comes up is this permanent ban by the state of Alaska, because she had another company called A Loving Care, and that provided home personal assistance. So that business and then Magaeva herself were banned by the state from serving as Medicaid providers, which is, you know, a pretty drastic punishment from the state. And she actually was formally criminally charged, but they ended up going the administrative route and banning her and her corporation from serving as Medicaid providers. And I didn’t mention it in stories at the time, because it felt tangential and not super important to discussing why the investigators weren’t closing cases, and it didn’t come up again until more recently, when I learned that she’s now under federal investigation once again.

CG: Yeah, and so how do you know that they’re under investigation? Because, I mean, we haven’t seen an indictment or some charges come out. But I understand folks are talking about that.

KH: Yeah, and to be fair, I mean, we often hear people are under investigation and are unable to land stories about it. The feds, they investigate, they investigate lots of things, and they often don’t lead to indictments. But in this case, we knew that, for example, I’d spoken to a business owner who had been approached by a Treasury Department investigator, and maybe someone from the Small Business Administration. And remember, the Small Business Administration gave out the PPP loans. And they were asking questions about Bitcoin investments, and about these kind of nesting — what I’ve referred to as nesting dolls of nonprofits — because you have Magaeva, who owns House of Transformations, but then House of Transformations, either the nonprofit version or a for-profit version, might own a bunch of other corporations, right? So the investigators, frankly, they’ve talked to a lot of people as part of this investigation, so I think it was probably hard to keep it secret.

You know, two things allowed me, in my opinion, to report the story. One was I went to Transformations, and they just basically said, “Yeah, we’re being investigated.” I mean, they kind of admitted to the investigation. And the other element was eventually the city just said, “OK, here’s what we’ve been asked about,” you know, “We have heard from the feds, they are asking questions, and here are the corporations and entities they’re asking about.”

CG: Do we know what they’re under investigation for?

KH: I think it would be risky to kind of guess what they’re under investigation for exactly. I mean, we know that the feds are asking about the federal money that they received. The federal investigators are asking for things like the applications that they submitted, saying, “Here’s what we’re gonna do with those grants.” So I imagine they’d be looking at, well, you know, what was that money used for? Right?

CG: Obviously, a big part of the story is whether the city — and I guess in this case, we’re talking the Anchorage Assembly — properly vetted this nonprofit and its founder. So what does either the mayor’s office or the Anchorage Assembly have to say about that?

KH: Yeah, I mean, what struck me was just, it just seemed like it would come up. You know, if you’re gonna give a million dollars-plus to somebody that you would, like — the thing I was telling my editor was like, you would imagine that the state or the city would vet someone, you know, to the degree of somebody who’s like vetting their first Tinder date. Well, you know, that they would probably Google the name, maybe look at CourtView. We call it the “Tinder Threshold.” Like, did they do like that amount of vetting? And it does not seem like it. Or if they did, they sure didn’t ask about it, right? Which maybe even kind of raises even more questions.

Let’s see, Rivera was the chair at the time, I think. And he said, “Well, the Assembly doesn’t have the budget for an investigator.”

CG: And that’s Felix Rivera, the Assembly chair.

KH: Yeah. But I don’t know. I mean, they seem perfectly capable of Googling things. So, you know, it does seem like the kind of thing that maybe should be addressed in policy, like some type of formal policy.

CG: So there was a lot of federal money flowing into the state, as you noted in the story, during the pandemic, and for pandemic relief. Is your sense that this is, you know, one of maybe other groups that we’re going to find out in the future either wasn’t vetted properly or came under investigation?

KH: Absolutely. I think the ARPA funding was a beacon for fraud, nationwide. I think that’s been shown. And now we’re seeing examples of questions being raised about how that money was allocated, who was given to and what they did with it in Alaska. And, frankly, with this type of reporting, I feel like I’m just kind of getting started looking at, OK, where’s the federal money going? Because anytime you scratch in one direction or another, it just doesn’t take long to kind of come across something that just really raises a lot of questions. So I think I think there’s a lot more to be known in that arena.

a portrait of a man outside

Casey Grove is host of Alaska News Nightly, a general assignment reporter and an editor at Alaska Public Media. Reach him Read more about Caseyhere

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