Federal and county prosecutors announced new criminal charges Wednesday against three individuals tied to alleged fraud within Los Angeles County’s homeless services network, adding to a growing list of cases that have raised serious questions about oversight of taxpayer dollars meant to house the region’s homeless population.
The announcement builds on charges filed earlier this year against three other defendants, and officials warned that more indictments are likely as the investigation continues.
Speaking at a news conference, First Assistant U.S. Attorney Bill Essayli said the latest case centers on a bribery scheme involving fabricated “ghost” clients — a scam he described as evidence of systemic failure rather than an isolated incident.
“Nobody was minding the shop,” Essayli told reporters when asked about the pattern of fraud. “There’s no vetting. There’s no auditing. There’s no accounting. It was just a rush to push as much money out the door.”
Among those arrested was Michael Young, founder of the Culver City-based nonprofit Home At Last. Prosecutors allege Young used shell companies and rigged bidding processes to misappropriate roughly $12 million in public funds. According to the charges, the misused money helped bankroll a $1 million investment in an upscale nightclub, a nearly $50,000 vacation to Tahiti, and a $140,000 restoration of a classic Chevrolet Impala.
U.S. Housing and Urban Development Secretary Scott Turner said Young’s organization has received more than $118 million in public funding for homeless housing programs since 2019, with over $75 million of that flowing through the Los Angeles Homeless Services Authority, commonly known as LAHSA.
A second defendant, Lakiya Malone, worked for the nonprofit Special Service for Groups and was responsible for referring homeless individuals into LAHSA-funded housing programs. Prosecutors say she accepted about $180,000 in bribes from Alexander Soofer, former head of the now-defunct nonprofit Abundant Blessings, in exchange for funneling fake, or “ghost,” clients his way so he could bill for services that were never actually provided.
“She was supposed to guard the money, and instead she took bribes,” Essayli said.
In response, Special Service for Groups issued a statement saying it has cooperated with federal investigators “to ensure that any responsible individuals are held accountable” and has since tightened its internal compliance procedures.
Soofer, whose arrest was first announced in January, has agreed to plead guilty to wire fraud and money laundering charges. In his plea agreement, he admitted to orchestrating the bribery arrangement and confessed to pocketing at least $2 million in public funds for personal use and for businesses unrelated to homeless services. He has agreed to forfeit that money to the federal government. Investigators had initially alleged Soofer diverted a far larger sum — upward of $10 million.
An earlier investigation revealed that LAHSA continued renewing multimillion-dollar contracts with Soofer’s organization even after its own internal compliance reviewers had flagged the nonprofit as “high-risk,” citing irregularities such as billing for services despite reporting zero enrolled clients.
The third person charged, Donye Mitchell, led the nonprofit Big Blue Umbrella. Prosecutors say Mitchell misrepresented his qualifications to secure a $1.2 million county grant, then used a portion of the roughly $315,000 he received for personal expenses — including bail following a domestic violence arrest and purchases of video games.
Essayli noted that Mitchell is “a convicted fraudster, by the way.” Court records show he was previously convicted in 2011 of defrauding California’s unemployment insurance system and was ordered in 2012 to repay the state $6 million. Despite that history, a county vendor awarded him the grant in question in 2024 — more than a decade after his fraud conviction.
Attorneys for Young and Malone did not immediately respond to requests for comment. It was not immediately clear who is representing Mitchell, whose arrest was disclosed after Wednesday’s press briefing.
Los Angeles County District Attorney Nathan Hochman joined Essayli in criticizing what both described as a systemic breakdown in financial oversight of homeless services spending. Hochman pointed to a court-ordered audit released in 2025 that found city officials failed to adequately track $2.3 billion in homelessness funding, largely because the city outsourced much of that responsibility to LAHSA — an agency the audit found had failed to collect reliable data on its vendors or hold them accountable for performance.
“We have not seen the results you would expect for billions of dollars being spent,” Hochman said.
He added that Wednesday’s announcement marks only the start of a broader crackdown, telling reporters that prosecutors expect to bring “many more” cases in the months ahead.
Original source: CalMatters
