Federal authorities say taxpayer money earmarked to house homeless people in Los Angeles was allegedly diverted to personal luxuries, including a Tahiti getaway, an upscale nightclub, luxury vehicles and other private expenses. Agents spread across the city early Wednesday as part of a fraud crackdown.
The investigation centers on Michael Young, 46, a founder of Culver City nonprofit Home At Last. According to the Justice Department, the organization received more than $118 million in public funding through government contracts, including over $75 million from the Los Angeles Homeless Services Authority.
Prosecutors say Young diverted millions of dollars, including more than $7.5 million through what authorities describe as a sham vendor arrangement.
“The days of these wire fraud experts flying on private jets, driving around Beverly Hills in Range Rovers and doing lavish things is over,” HUD Secretary Scott Turner said.
Michael Young, 46, Lakiya Malone, 48, and Donye Mitchell, 55, were charged in the federal fraud crackdown, authorities said Wednesday. (Department of Justice)
Young was among three people charged Wednesday in separate federal cases alleging fraud and corruption tied to funds meant to provide housing and services for homeless Californians. Authorities said two defendants were arrested, while a third remained a fugitive.
FBI agents take positions outside the home of Lakiya Malone, who was charged with fraud involving federal homelessness aid programs, in Los Angeles Wednesday, Sept. 16, 2026. (AP Photo/Jae C. Hong)
Authorities allege Young relied on shell companies and fraudulent invoices to siphon off taxpayer funds. Prosecutors say he spent more than $1 million opening and operating Six Seven Five Lounge, an upscale Inglewood restaurant and nightclub.
During Wednesday’s news conference, federal officials said Young also allegedly spent nearly $50,000 on a luxury trip to Tahiti and $140,000 to restore a vintage Chevrolet Impala.
FBI agents take positions outside the home of Lakiya Malone, who was charged with fraud involving federal homelessness aid programs, in Los Angeles Wednesday, Sept. 16, 2026. (AP Photo/Jae C. Hong)
“The taxpayers did not sign up to fund this nightclub,” Assistant Attorney General Colin M. McDonald said.
Authorities also arrested Lakiya Malone, 48, an employee of Special Service for Groups, on a 21-count indictment alleging she accepted more than $180,000 in bribes and kickbacks from Alexander Soofer, executive director of nonprofit Abundant Blessings.
Lakiya Malone, charged with fraud involving federal homelessness aid programs, walks out of her home toward federal authorities with her hands raised in Los Angeles Wednesday, Sept. 16, 2026. (AP Photo/Jae C. Hong)
In exchange, Malone allegedly provided priority referrals, including “ghost” homeless participants who never lived at the housing sites. Prosecutors allege their files were fabricated using fake welcome letters, forged sign-in sheets and falsified eligibility forms.
Soofer, who was previously charged, has agreed to plead guilty to wire fraud and money laundering. He admitted obtaining $23 million in public money intended to combat homelessness and pocketing at least $2 million for himself and unrelated businesses.
FBI agents stand outside the home of Lakiya Malone, who was charged with fraud involving federal homelessness aid programs, in Los Angeles Wednesday, Sept. 16, 2026. (AP Photo/Jae C. Hong)
A third defendant, Donye Mitchell, 55, CEO of The Big Blue Umbrella, is considered a fugitive. Prosecutors allege he obtained more than $1.2 million in grant funding after making false representations and later used grant money for personal expenses including bail-bond costs, credit card debt, family transfers and PlayStation charges.
“If you or someone you know has defrauded money allocated for the homeless, I suggest you report it to law enforcement,” First Assistant U.S. Attorney Bill Essayli said. “If you don’t, your door may be the next one we’re hitting.”