Overview
- Federal agents arrested and charged nonprofit executives in Los Angeles this week, with two suspects taken into custody and a third initially reported as a fugitive then arrested, as prosecutors described the actions at a Wednesday press conference.
- Michael Young, founder of Home At Last, is charged with wire fraud for allegedly using shell companies and fake vendors to divert roughly $7.5 million to $12 million in public homeless-aid funds for a nightclub, vacations and real estate projects.
- Lakiya Malone, an employee at Special Service for Groups, was indicted on bribery counts for accepting more than $180,000 to place so-called ghost participants into programs, and Alexander Soofer has agreed to plead guilty in a related kickback scheme.
- Authorities say Donye Mitchell of The Big Blue Umbrella was fraudulently awarded more than $1.2 million and used grant money for personal expenses, and prosecutors report that asset forfeiture and recovery efforts are already under way.
- Officials and audits point to systemic failures in LAHSA’s vendor oversight and recordkeeping that let the abuse occur, a problem that has prompted contract terminations, HUD scrutiny of LAHSA’s grant work, congressional inquiries, and warnings that prosecutions could disrupt funding and services for people experiencing homelessness.