LOS ANGELES — Federal prosecutors have charged three people in separate Southern California homelessness fraud and corruption cases involving millions of dollars in taxpayer funds, including allegations that money intended for homeless housing was diverted to commercial real estate, a nightclub and personal expenses.
The U.S. Department of Justice announced the cases Wednesday as part of the Homelessness Fraud and Corruption Task Force, which investigates fraud, waste, abuse and corruption involving homelessness funding across the seven-county Central District of California.
Two of the three defendants were arrested Wednesday. The charges are allegations, and the defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
Prosecutors allege millions diverted from homeless housing
Michael Young, 46, a founder of Culver City-based nonprofit Home At Last, was arrested on a federal criminal complaint charging him with wire fraud. Prosecutors allege Young used shell companies and fraudulent billing practices to misappropriate more than $7.5 million in taxpayer funds earmarked for homeless housing.
According to the Justice Department, Home At Last received more than $118 million in public funding from the Los Angeles Homeless Services Authority, the City of Los Angeles, Los Angeles County and the U.S. Department of Housing and Urban Development. LAHSA alone paid the nonprofit more than $75 million for homeless housing services.
Prosecutors allege Young created sham vendors and submitted fake bids, forged signatures and fraudulent invoices to make the companies appear to be legitimate third-party providers. The government alleges he controlled the vendors’ bank accounts and diverted public money to unrelated businesses and personal expenses.
The complaint alleges Young spent more than $1 million to open and operate an Inglewood restaurant and nightclub, Six Seven Five Lounge, and used millions in taxpayer funds for commercial properties, luxury vacations and vintage car restorations.
LAHSA canceled its contracts with Home At Last in June 2026.
Separate grant and kickback cases
In a separate case, Donye Mitchell, 55, CEO and executive director of Los Angeles-based nonprofit The Big Blue Umbrella, is charged with wire fraud. Prosecutors allege Mitchell fraudulently obtained more than $1.2 million in grant funding intended to provide housing and mental health services to vulnerable people. He is considered a fugitive.
The complaint alleges Mitchell misrepresented his organization’s housing operations and later used grant money for personal expenses, including salary payments, bail bond costs, credit card debt, family transfers and rent.
Lakiya Malone, 48, an employee of Special Service for Groups, was arrested on a 21-count federal indictment accusing her of accepting more than $180,000 in bribes and kickbacks in exchange for priority referrals of homeless housing participants, including alleged “ghost” participants who never lived at the sites.
Federal prosecutors also announced that Alexander Soofer, executive director of nonprofit Abundant Blessings, has agreed to plead guilty to one count of wire fraud and one count of money laundering. According to his plea agreement, Soofer admitted obtaining $23 million in public money intended to combat homelessness, with at least some obtained through fraud, and pocketing at least $2 million for personal enrichment and businesses unrelated to homeless housing.
Federal housing oversight in focus
The cases bring renewed scrutiny to the oversight of public money intended for homelessness programs and housing services. The FBI, IRS Criminal Investigation and HUD’s Office of Inspector General are investigating the cases.
The Justice Department said its Homelessness Fraud and Corruption Task Force covers Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara and Ventura counties.
Young and Mitchell each face a statutory maximum sentence of 20 years in federal prison if convicted of wire fraud. Malone faces multiple charges carrying varying statutory maximum penalties.
Complaints and indictments contain allegations only. Young, Mitchell and Malone are presumed innocent unless and until proven guilty in court.
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