Two Arrested for Alleged Fraud in California’s Homeless Assistance Program

The U.S. Department of Justice revealed on Thursday that two individuals have been arrested on charges related to defrauding California’s Project Homekey, a program intended to aid the homeless. The allegations suggest that funds meant for assisting this vulnerable population were misused for personal benefit.

Project Homekey was initiated in response to the COVID-19 pandemic with the aim of providing housing for the homeless, often by renting hotel rooms or even acquiring properties. While it has seen some success in reducing homelessness in certain areas, critics argue that it doesn’t adequately address the deeper issues at play, such as mental health problems and substance abuse.

Bill Esseri, an Assistant U.S. Attorney for the Central District of California, announced the arrests on Thursday, noting that local residents were instrumental in bringing the suspected fraud to light.

FBI agents apprehended Cody Holmes, 31, from Beverly Hills early that morning. Holmes, who served as the former chief financial officer of Shangri-La Industries—a developer focused on affordable housing in downtown Los Angeles—faces allegations of fraud linked to the state’s Project Homekey initiative, a substantial program aimed at converting motels into residences for the homeless.

In a separate indictment, a federal grand jury charged Steven Taylor, 44, from Brentwood, with nine counts of fraud against financiers, as well as concealing real estate transactions involving Cheviot Hills Real Estate. This will be disclosed for the first time in 2023.

Esseri mentioned that these arrests are merely “the beginning.” Investigations have been ongoing, with multiple search warrants executed across Beverly Hills and Century City.

Additionally, there have been suspicions of fraud within local Los Angeles homeless programs, with billions of dollars being unaccounted for in a recent probe into spending on programs similar to Project Homekey.