Title: Alleged Financial Fraudsters in American Samoa’s House of Transformations Indicted for $3.6 Million COVID-19 Funds Scheme

Defendants Charged with Major Fraud and Wire Fraud Conspiracy

Pago Pago, American Samoa — A Samoan couple, Rosaline Natazha Mavaega, 41, and Esau Malele Fualema Jr., 44, are facing federal charges for their role in an alleged financial fraud scheme that secured over $3.6 million in federal COVID-19 recovery funds.

Federal Indictment and Initial Court Appearance

The defendants appeared before a U.S. District Court on Friday, September 30, 2022.
They were indicted by a federal grand jury based in Anchorage, Alaska, on five counts including major fraud against the United States, wire fraud conspiracy, wire fraud, money laundering conspiracy, and aggravated identity theft.

Alleged Misappropriation of ARPA Funds

In April 2021, Mavaega and Fualema submitted applications for over $1.6 million in American Rescue Plan Act (ARPA) funds from the Municipality of Anchorage.
They claimed that their nonprofit, House of Transformations, would provide housing, treatment, and vocational training services.
However, federal investigators allege that the couple intentionally provided false information about the nonprofit’s finances, organization, and management.

Misuse of Granted Funds

Upon being granted the funds, the defendants did not use them for the intended purposes.
Instead, they transferred the money into their personal bank accounts and those of their controlled corporations.
The funds were then used to finance business operations, pay back taxes, secure a personal cash loan, and purchase cryptocurrency.

Alleged Fraud Against the Small Business Administration

In December 2021, Mavaega and Fualema allegedly defrauded the Small Business Administration by submitting false applications for over a million dollars in Economic Injury Disaster Loans.
They falsified these applications by lying about the status of their businesses and using the personal identifying information of others to fabricate corporate management.

Second Attempted Fraud against the Municipality of Anchorage

In summer 2022, Mavaega and Fualema reportedly attempted to defraud the Municipality of Anchorage again, applying for approximately $2 million in additional ARPA grants.

Penalties and Bail Conditions

If convicted, Mavaega and Fualema face a minimum penalty of 24 months in prison.
Their fates will be determined by a U.S. District Court judge after considering the U.S. Sentencing Guidelines and other statutory factors.

Arrest and Initial Pleas

The case was unsealed this week after the defendants were arrested on September 27 - Mavaega at Anchorage’s Captain Cook Hotel and Fualema at his residence in the same city.
They initially appeared before a U.S. District Court Judge on September 29 and entered not-guilty pleas.
Currently, they are released on several conditions, including seeking employment and surrendering their passports.