Staff Reports
Federal agents this week moved in on a brazen scheme that prosecutors say siphoned millions meant for homeless services in Los Angeles. The U.S. Attorney’s Office announced arrests of two nonprofit workers, charges against a third who is at large, and a related guilty plea from another operator. The headlines are ugly, but the real scandal is how often this story could have been stopped — and wasn’t.
DOJ moves against homelessness fraud in L.A.
The Department of Justice and the U.S. Attorney’s Office for the Central District of California laid out sharp allegations. Prosecutors say Michael Young, founder of the Culver City nonprofit Home At Last, steered more than $118 million in public funds through his group and then diverted roughly $7.5 million through sham vendors. Lakiya Malone, an employee at Special Service for Groups, was arrested on a 21‑count indictment alleging she took over $180,000 in bribes to place “ghost” participants into programs. Donye Mitchell, CEO of The Big Blue Umbrella, is charged in a separate complaint and is currently at large. At the same time, Alexander Soofer of Abundant Blessings has agreed to plead guilty to wire fraud and money‑laundering counts tied to related schemes.
How prosecutors say the taxpayer money was spent
The filings paint a picture of money meant for tents and beds being rerouted into nightclubs, private travel and luxury purchases. Prosecutors allege Home At Last funds helped build and operate a nightclub and bingo hall, paid for vintage car work and luxury travel, and otherwise bankrolled unrelated commercial projects. Soofer’s group is accused of directing tens of millions into a Westwood house, a Range Rover and private‑jet travel, and Mitchell is accused of using grant awards for personal bills and video games. These are criminal allegations, and defendants remain presumed innocent — but the invoices and bank trails described by prosecutors read like a how‑to guide for abusing taxpayer programs.
Why this matters — and what should change
This is not just a few bad actors. It is a warning about fragile oversight and the temptation to turn public aid into private profit. First Assistant U.S. Attorney Bill Essayli and Assistant Attorney General Colin M. McDonald have signaled that the feds will follow the money. HUD Secretary Scott Turner has also criticized local oversight. LAHSA canceled contracts with Home At Last after problems surfaced, but cancelling contracts after the fact won’t bring back the money or the housing opportunities lost. Local officials need stronger audits, tighter vendor vetting, and real penalties for fraud — not more PR statements and closed‑door deals.
Court dates will sort the legal claims. Meanwhile, taxpayers and the homeless both get a raw deal: tents and encampments stay while executives allegedly spend public dollars on nightclubs and jets. If you want accountability, don’t wait for the next press release. Demand better oversight from the agencies that hand out the cash, and push for prosecutions when the paper trail points to theft. The DOJ stepped in this time. Let’s hope this becomes the rule, not the rare exception — and that the money meant for our most vulnerable actually reaches them.
