Anchorage nonprofit’s use of $750K in federal funds investigated

Our investigative team found federal investigators are looking into how one local nonprofit organization handled money they received.
Published: Jan. 14, 2023 at 5:16 PM AKST
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ANCHORAGE, Alaska (KTUU) - The president of an Anchorage nonprofit organization is facing serious questions about how the group spent hundreds of thousands of dollars in federal funds.

The money was part of an American Rescue Plan Act grant distributed by the Anchorage Assembly in 2021. The ARPA funds were intended to help communities recover from the effects of the coronavirus pandemic.

In 2021 the president signed a nearly $2 trillion COVID-19 stimulus package designed to help the country get back on its feet. It was divided between communities based on population.

Anchorage received more than $100 million dollars to distribute, but, as always with programs of this size, there are questions about where that money goes. The organization in question is called Revive Alaska Community Services (RACS). In 2021, the nonprofit was awarded a grant by the Anchorage Assembly for $750,000 to help feed needy families in South Anchorage.

Now city officials and federal investigators are looking into that transaction.

In 2021, RACS was using a large barn in South Anchorage as a makeshift food pantry on O’Malley Road. In April of that year, part of the roof caved in due to the weight of the snow.

That’s when the RACS President Prince Nwankudu publicly asked for funds to help make repairs. A week later, Nwankudu went before Anchorage Assembly members to ask for an ARPA grant to help him do that.

“We are requesting funding for repair, upgrade and expansion of the food pantry,” Nwankudu said.

In May of that year, the federal government awarded Anchorage a total of $103 million dollars in ARPA funds. The U.S. Treasury Department set the guidelines for how that money is spent.

Nwankudu soon applied for a grant by submitting documents requesting $750,000, with the intent to rebuild his food pantry on O’Malley Road. Assembly members felt those funds were well suited for that purpose.

“There really aren’t food pantry services available in South Anchorage,” Assembly Vice Chair Christopher Constant said.

The Assembly approved the grant, which required RACS to raise an additional $750,000 in matching funds themselves. But the $750,000 grant was never used to rebuild the barn and open another food pantry in South Anchorage. Instead, the structure was torn down.

“I was told they purchased a building in Midtown to provide their services that they had been awarded to for a South Anchorage project,” Constant said. “That was the first time that I had real concern that something wasn’t right.”

Constant then began wondering what happened to the ARPA grant money.

Last June, Nwankudu and his executive assistant, Carmen Wanous, spoke to the Assembly, but this time they wanted another grant from the city’s second round of ARPA funds.

“The amount we’re requesting now is $1.6 million,” said Nwankudu.

Wanous then explained how RACS had already spent the first $750,000.

“We decided to purchase a pre-existing building that is already equipped with a commercial kitchen,” Wanous said. “We have proceeded to purchase a property for $1.85 million with help from the $750,000 we got from the ARPA first round.”

Assembly member Forrest Dunbar questioned the request.

“I remember we took a tour of this facility that was off of O’Malley,” Dunbar said.

“That’s right,” Wanous replied.

“So my understanding is, and I think at the time you told us, ‘well this is where it’s going to go,’” Dunbar continued. “So what you’re telling us now is that, that’s not where it’s going.”

“The other existing structure was damaged beyond repair, according to engineers and, you know, people that inspected it,” Wanous said. “So that has since had to be torn down.” Wanous said. “We’ve since purchased property on Tudor and McInnes,” Wanous said.

“So the $750,000, is that going to go to anything on, on O’Malley,” Dunbar asked. “I mean that, that was sort of the understanding when we appropriated that money.”

Nwankudu then stepped in to reply.

“The money that was appropriated was for either building or, partly building, or relocation,” Nwankudu explained. “And we are applying it to relocation because right now the need is there for expansion.”

RACS expanded by purchasing a 16,000-square-foot church on MacInnes Street on six and a half acres of land. It’s also where Nwankudu presides over services.

“We have church every Sunday and we have bible studies on Wednesdays and we have prayer meetings on Fridays,” Nwankudu said.

Records show that one week after asking the Assembly for more funds, Nwankudu purchased the church through his corporation, GF Heritage, LLC for $1.85 million dollars. That was news to assembly members because they say the ARPA application they authorized stated the funds would be used to rebuild the South Anchorage food pantry.

“It certainly, as a member of the Assembly, raises concerns when funds are spent in a manner not authorized under law,” Constant said.

The grant agreement between RACS and the city of Anchorage was signed by Nwankudu and former Municipal Manager Amy Demboski. We found the contract differed from the proposal terms that the assembly had approved. It now included an appendix allowing RACS the option to “relocate” the pantry, which is something assembly members say they never agreed to.

“It wasn’t authorized, it was never discussed in any of the hearings, work sessions, committees,” Constant said. “Never was there a discussion about ‘please buy us a new building.’”

Both Constant and Assembly Chair Suzanne LaFrance want to know how that new language ended up in the contract.

“Certainly that was not part of what was approved by the assembly,” LaFrance said. “I’m hopeful that we’ll, we’ll find out what happened.”

Assembly members aren’t the only ones with concerns.

“I am aware of an investigation being done by the U.S. Department of Treasury,” LaFrance said.

“I did have a discussion with an inspector from the Department of Treasury, the IRS,” Constant said. “There is definitely interest in this transaction and what’s happened and what’s happening.”

An investigation into Nwankudu’s background found that he has prior criminal convictions. In 2012, records show Nwankudu was sentenced to federal prison for a felony he committed back in 2007.

According to the indictment, when Nwankudu was a mortgage broker in Texas, he submitted a fraudulent loan application for a $630,000 home loan. Investigators say Nwankudu made a profit of $71,230.50 in that transaction. Nwankudu was charged with conspiracy to commit mail fraud and records show he plead guilty.

As a result, a judge ordered him to serve 20 months in federal prison and then be deported to Nigeria. However, in 2013, records show Nwankudu successfully appealed his deportation and was allowed to remain in the United States.

Nwankudu’s staff agreed to an interview last November, inviting us to meet with him at their church on McInnes Street. Nwankudu gave a tour of the facility, showing us the kitchen and room that’s used as a temporary food pantry. He said it’s open to the public on Wednesdays between 11 a.m. to 2 p.m., or by appointment.

“If you’re just hungry show up, we’ll serve you food,” Nwankudu said.

When questioned about his criminal history, Nwankudu denied doing anything intentionally wrong, then later confessed when shown the documents detailing his felony charges.

“I made the mistake, I allowed it to happen, it was under my nose and I take full responsibility,” Nwankudu said. “But that’s not who I am and that’s not what it’s, is affecting what I’m doing now.”

Nwankudu was then asked why he applied federal ARPA funds towards the purchase of the church, instead of repairing the South Anchorage facility.

“The roof caved in,” Nwankudu said. “So we, even when we applied, I went to the assembly and openly asked them for the money for the repair of the food pantry, then went back and reported to them that the engineers are saying that there is no way that that food pantry will be repaired, that we needed more money to repair it.”

But assembly members say Nwankudu only told them he tore down the South Anchorage food pantry, and then used ARPA funds towards the purchase of the church, after the fact. That’s why they plan to investigate further.

“The specific report that I will be requesting is a detailed list of transactions that that $750,000 and the $750,000 in matching funds were spent on,” Constant said.

Constant says he plans to call for an independent audit of all ARPA funds disbursed to Anchorage. The city hired a local company called Denali FSP to oversee how that money is spent.

On Friday, Alaska’s News Source received documents that were first requested last November, but it is still not clear who approved the ARPA grant agreement between RACS and the municipality which allowed the non-profit group to relocate the food pantry. Whether that’s an appropriate use of the money is currently being investigated.

Anchorage Mayor Dave Bronson’s office told us he doesn’t get involved with the grant language since that’s his staff’s responsibility. He says the final step was when the former municipal manager signed off on it.