The former chief financial officer (CFO) for a Los Angeles-based affordable housing developer was arrested for using state grant funds to pay for his personal expenses.
According to an affidavit filed with the complaint, the California Department of Housing and Community Development (HCD) paid approximately $25.9 million in grant money in October 2022 to Shangri-La Industries LLC with the provision that the money be used to purchase, construct, and operate homeless housing in Thousand Oaks. These payments followed previous HCD grants to Shangri-La to buy, build, and operate housing for the homeless in Redlands (in San Bernardino County) and King City (in Monterey County), among other California cities.
According to the charges brought against him, Shangri-La’s CFO Cody Holmes knowingly submitted fake bank records to HCD that purportedly showed approximately $160 million supposedly controlled by Shangri-La and its affiliates to prove that Shangri-La had the capacity to fulfill the homeless housing projects for which it had coapplied for grants from HCD, including the Thousand Oaks project.
However, the bank accounts Shangri-La and Holmes said contained these funds did not exist. Holmes and Shangri-La also submitted to HCD balance sheets falsely representing that Shangri-La-affiliated entities held millions of dollars in cash that these entities did not actually have on deposit in the known accounts for those entities. This fraud was used to encourage HCD to release grant money to Shangri-La.
Holmes, a 31-year-old Beverly Hills resident, transferred more than $2.2 million from a Shangri-La account to a Holmes-controlled account in November and December of 2022, Afterwards, from November 2022 to May 2023, he paid more than $2 million to pay his American Express credit card accounts to cover purchases at well-known luxury retailers.
Holmes was arrested on a federal criminal complaint charging him with mail fraud, a felony offense that carries a statutory maximum sentence of 20 years in federal prison.
Too many of these Grant and also NGO’s that receive grants, have such corrupt management and the administrative cost are soaring out of control. There’s no auditing there’s no accountability.
During the Biden administration well paid grant writers were skillful at pushing all of the right DIE buttons. As long as those buttons were pushed, the flood gates of funding were opened with very little accountability. It sounds like things might be getting a little more difficult for them to cheat the American Tax Payer out of our money. Either way this fraudster is still going to be living for free and on us for the next 20 years.
No oversight, why is this?
What a shame! This puts a cloud on legit organizations that really do help people!