Overview
- Federal prosecutors announced criminal charges on Wednesday and arrested two nonprofit figures, Michael Young and Lakiya Malone, while authorities are searching for a third defendant, Donye Mitchell, who is being sought as a fugitive.
- Prosecutors allege Young used shell companies and fake vendor bills to divert roughly $7.5 million from his nonprofit to fund a nightclub, luxury trips and other personal expenses, and allege Malone took more than $180,000 in bribes to place fabricated "ghost" participants into homelessness programs.
- Officials say Mitchell, CEO of The Big Blue Umbrella, received more than $1.2 million in awards and used some of the money for personal costs including credit card payments and bail, and another nonprofit executive, Alexander Soofer, has pleaded guilty in a related scheme.
- The arrests came as LAHSA faces mounting oversight after audits and a court-ordered assessment found weak financial controls, the agency voted not to compete to retain several regional duties, and HUD has moved to suspend LAHSA’s grant access subject to ongoing litigation.
- Mayor Karen Bass declined to appear before a House oversight panel and recently left LAHSA’s governing commission, and city and county officials are already restructuring who will apply for and manage federal homelessness funds as prosecutors and investigators continue their work.