Authorities in the Los Angeles metropolitan area have charged three individuals with fraud tied to the misallocation of funds intended to support homelessness programs.
The U.S. Department of Justice (DOJ) announced on Wednesday that it had charged three people with fraud involving federal funds earmarked for homelessness programs in the Los Angeles area.
Two of the defendants, Michael Young and Lakiya Malone, were taken into custody by federal agents at their residences on Wednesday morning. Both face wire fraud charges. A third defendant, Donye Mitchell, is still at large.
Young established the nonprofit Home At Last. The DOJ asserts that the charity collected about $118 million in public funds through multiple contracts with the Los Angeles Homeless Services Authority (LAHSA), a joint city-county body charged with coordinating and administering a broad array of city, state, and federal homeless grant programs.
Prosecutors contend that Young diverted roughly $12 million of those funds for his personal use, including vacations and ventures such as an Inglewood nightclub he started.
Malone, a staffer at the nonprofit Special Service for Groups, is alleged to have taken $180,000 in bribes and kickbacks from another homeless-services nonprofit, Alexander Soofer, to funnel homeless clients into programs run by his charity, including phantom “ghost clients” who existed only on paper.
Soofer was arrested in January on fraud charges tied to these schemes and has admitted diverting about $10 million of public funds for personal use. He is anticipated to plead guilty to felony fraud counts in the near future, per the DOJ.
Mitchell, according to prosecutors speaking at a press briefing this afternoon, had not yet been apprehended and is accused of falsifying his credentials as a homeless-services provider to secure public grant funding, which he then used for personal expenses, including covering his bail in a domestic-violence case.
“The scale and brazenness of these fraudsters expose a profound failure by the State of California and Los Angeles County to safeguard public funds,” said First Assistant U.S. Attorney Bill Essayli for the Central District of California in a statement.
The charges against Malone, Mitchell, and Young come several months after the Trump administration suspended federal funding to LAHSA, citing the authority’s poor financial management and conflicts of interest with vendors.
In August, LAist published a detailed report on how LAHSA continued to sign contracts with Soofer’s charities after internal auditors flagged it as “high-risk.” LAist had previously reported that hundreds of apartments rented by the authority to serve as housing for the homeless sat empty.
LAHSA’s mismanagement has become a focal point in Los Angeles’ mayoral election. Mayor Karen Bass, who appointed herself to the authority’s governing commission in 2023, has been criticized for its failures and for her own absence at LAHSA commission meetings.
Bass’ opponent, Councilmember Nithya Raman, who until recently chaired the committee overseeing the city’s homelessness spending, has been criticized by Bass allies for slow-walking efforts to redirect city homeless funds from LAHSA to city-controlled programs.
Los Angeles County has already diverted $300 million of its own funds from LAHSA to support homeless programs run by its new homelessness department.
In July, LAHSA announced that homelessness across the entire Los Angeles County had increased by 1.2 percent.
