Fraud Investigation Targets Los Angeles Homeless Aid Funds
Federal authorities announced on Wednesday that taxpayer money meant for the homeless in Los Angeles may have been misused for personal luxuries, including a vacation in Tahiti, visits to upscale nightclubs, high-end cars, and more. This revelation came as agents conducted a fraud crackdown throughout the city.
At the heart of this investigation is Michael Young, 46, a founder of a nonprofit organization called Home At Last, based in Culver City. According to the Justice Department, he received over $118 million in public funds through government contracts, including more than $75 million from the Los Angeles Homeless Services Authority.
Prosecutors claim Young misappropriated substantial amounts, including a staggering $7.5 million via a fake vendor scheme.
Scott Turner, the Secretary of Housing and Urban Development, stated, “The days of these wire fraud experts flying on private jets, driving around Beverly Hills in Range Rovers, and engaging in lavish lifestyles are over.”
Details on the Allegations
Young wasn’t alone; he was one of three individuals charged in separate federal cases linked to alleged fraud involving funds designated to help the homeless in California. Two have been arrested, while a third remains at large.
The indictment alleges that Young utilized shell companies and deceptive billing practices to siphon taxpayer money, even spending over $1 million to establish and run Six Seven Five Lounge, an upscale restaurant and nightclub in Inglewood.
During a press conference, officials detailed other extravagant expenditures by Young, including nearly $50,000 on a luxury vacation and $140,000 on restoring a vintage Chevrolet Impala.
Assistant Attorney General Colin M. McDonald emphasized, “Taxpayers did not agree to fund this nightclub.”
Connections to Other Defendants
Lakiya Malone, 48, an employee at Special Service for Groups, was also arrested. She faces a 21-count indictment on allegations of accepting over $180,000 in bribes and kickbacks from Alexander Soofer, who is the executive director of another nonprofit, Abundant Blessings.
In return for her bribes, Malone purportedly provided priority referrals, including “ghost” clients who never actually lived at the housing locations. Prosecutors indicate that fraudulent documentation, such as fake welcome letters and forged sign-in records, was created to support these claims.
Soofer, who has also been indicted, has agreed to plead guilty to charges of wire fraud and money laundering. He admitted to securing $23 million in public funds designated for homelessness support, keeping at least $2 million for himself and private ventures.
Additionally, the third accused, Donye Mitchell, 55, CEO of The Big Blue Umbrella, is currently considered a fugitive. Allegations against him involve obtaining over $1.2 million in grant funding based on false claims, and misusing this money for personal expenses like bail, credit card payments, family transfers, and even video game purchases.
In light of these serious allegations, First Assistant U.S. Attorney Bill Essayli advised, “If you or someone you know is involved in defrauding money allocated for the homeless, it’s best to report it to law enforcement. Failing to do so could result in investigators showing up at your door next.”
