Federal prosecutors say a Culver City nonprofit collected $118 million in homeless housing money and routed millions into shell vendors, a nightclub and a vintage Impala — while the agency writing the checks advanced it $2.8 million more.
On September 16, federal prosecutors in Los Angeles unsealed three criminal cases and a plea agreement arising from the same question: who, if anyone, was auditing the nonprofits that Los Angeles County pays to house its homeless population.
The answer offered by the government’s own filings is uncomfortable. According to the U.S. Attorney’s Office for the Central District of California, one nonprofit executive allegedly built a web of sham vendors with no employees and no offices, submitted forged bids and invoices through them, and moved taxpayer money into a nightclub, luxury travel and commercial real estate — over a period of years, while continuing to receive new contracts. A second defendant is accused of paying bribes for referrals of “ghost” clients who never occupied the beds being billed. A third allegedly won a county-funded grant by describing himself as a major housing provider despite a prior fraud conviction and a nonprofit that had reported no revenue.
“Nobody was minding the shop,” First Assistant U.S. Attorney Bill Essayli told reporters, according to LAist. “There’s no vetting. There’s no auditing. There’s no accounting. It was just a rush to push as much money out the door.”
All three defendants are presumed innocent. A complaint or indictment is an allegation, not a finding.
The $118 Million Pipeline
The largest case is United States v. Young. Michael Young, 46, of Baldwin Hills, a founder of the Culver City nonprofit Home At Last Community Development Corporation, was arrested on a federal wire fraud complaint carrying a statutory maximum of 20 years.
The Justice Department’s account of the money flow is specific:
- Home At Last received more than $118 million in public funds from the Los Angeles Homeless Services Authority (LAHSA), the City of Los Angeles, the County of Los Angeles and the U.S. Department of Housing and Urban Development, according to the Justice Department. HUD Secretary Scott Turner put the accumulation period at 2019 onward.
- More than $75 million of that came through LAHSA alone.
- The complaint alleges Young misappropriated more than $7.5 million through a sham-vendor scheme. Officials characterized the misappropriation across the newly announced cases as roughly $12 million, almost all attributed to Young — a figure that appears in the department’s national press release but not in the district’s narrower complaint summary.
- Alleged personal spending includes more than $1 million to open and operate a high-end Inglewood restaurant and nightclub called Six Seven Five Lounge, a Tahiti trip valued near $50,000, and a $140,000 restoration of a vintage Chevrolet Impala.
The mechanics described in the complaint are not exotic. Prosecutors allege Young created vendor entities that “had no employees, no locations, no legitimate operations, and existed only to funnel public money back to Young,” then manufactured the appearance of arm’s-length procurement with fake competing bids, forged signatures and fabricated invoices. He allegedly controlled the vendors’ bank accounts directly.
What the filings describe, in other words, is a scheme whose detection required only that someone verify a vendor existed.
Ghost Clients and a Guilty Plea
The second case reaches inside the referral system itself. Lakiya Malone, 48, an employee of Special Service for Groups (SSG) — a large nonprofit that administers substantial LAHSA funding through its HOPICS division — was arrested on a 21-count indictment alleging she accepted more than $180,000 in bribes and kickbacks.
Malone’s job was to refer homeless individuals to housing sites funded by HUD, LAHSA and the city and county. Prosecutors allege she instead sold priority referrals to Alexander Soofer, executive director of the nonprofit Abundant Blessings, routing payments through an entity she controlled called Grateful Hearts Realty & Consulting and disguising them as consulting fees. The indictment alleges the referrals included “ghost” participants who never lived at the sites, supported by fabricated welcome letters, forged sign-in sheets and falsified eligibility forms.
Soofer, charged separately in January 2026, has agreed to plead guilty to one count of wire fraud and one count of money laundering. He admitted in his plea agreement to obtaining $23 million in public money intended to combat homelessness and to pocketing at least $2 million for personal enrichment and unrelated businesses, and has agreed to forfeit the proceeds. Prosecutors say the inflated referral volume helped him draw more than $17 million from SSG.
SSG said in a statement that it has been working with federal prosecutors “to ensure that any responsible individuals are held accountable” and has strengthened its protocols and compliance.
The Soofer relationship was not unexamined. An LAist investigation found that LAHSA continued awarding contract renewals to Soofer’s organization after LAHSA’s own compliance team had flagged it as “high-risk” — including for billing while reporting no enrolled participants. The warning existed. It did not stop the checks.
What the Form 990s Show
Public tax filings deepen the picture, and in places contradict the scale of money prosecutors say moved.
Abundant Blessings, recognized as a 501(c)(3) in May 2019, reported total revenue of $452,602 for fiscal 2022 and $2,961,759 for fiscal 2023, according to IRS Form 990 data compiled by ProPublica’s Nonprofit Explorer. Soofer has admitted to obtaining $23 million in public funds. The organization is now defunct.
The Big Blue Umbrella, the nonprofit led by third defendant Donye Mitchell, 55, presents a starker gap. The most recent Form 990 data available for a California nonprofit registered under that name reports zero revenue for fiscal 2021 and total assets of $163,803 — a figure unchanged in the filings since at least 2017, per Nonprofit Explorer records. In January 2024, according to the complaint, Mitchell applied for more than $9 million in grant money from Epidaurus, which does business as Amity Foundation, a county-funded nonprofit, and was awarded more than $1.2 million after allegedly representing that Big Blue Umbrella was a major homeless housing provider. Amity terminated the contract in May 2025 after disbursing roughly $315,000, citing concerns about misrepresented spending and missed milestones.
Mitchell was convicted in 2011 of defrauding California’s unemployment system and was ordered in 2012 to repay the state $6 million, according to the criminal complaint as reported by LAist. The county-funded award came twelve years after that judgment. He is currently a fugitive.
Home At Last’s own filings are similarly difficult to reconcile with the $118 million figure. Nonprofit Explorer data shows reported revenue rising from $3.8 million in fiscal 2019 to $22.3 million in fiscal 2021 and $18.1 million in fiscal 2023, with no revenue data reflected for fiscal 2022. Fiscal-year boundaries and reporting gaps make a direct comparison unreliable, but the available filings account for well under half the public money prosecutors say the organization received. SSG, by contrast, is a far larger institution: its fiscal 2023 return reports $169.9 million in revenue, up from $114.4 million in fiscal 2019.
The Oversight That Failed Twice
The pattern these cases share is not clever fraud. It is the absence of a reviewer.
In March 2025, a court-ordered independent audit by Alvarez & Marsal, commissioned by U.S. District Judge David O. Carter, reviewed roughly $2.3 billion in city homelessness funding and reported what LAist described as a near-total absence of financial control. Auditors found the agency “failed to verify whether the services invoiced were provided,” could not produce documentation verifying the existence of approximately 2,300 housing sites under its management, and noted that 70 percent of the contracts for those sites disclosed no expenses over the prior year. A separate county audit had reached comparable conclusions months earlier.
When U.S. Attorney Bill Essayli announced the Homelessness Fraud and Corruption Task Force in April 2025, he framed the problem in budget terms: “California has spent more than $24 billion over the past five years to address homelessness. But officials have been unable to account for all the expenditures and outcomes, and the homeless crisis has only gotten worse.”
Both audits preceded the 2025-26 fiscal year. During that year, LAHSA advanced Home At Last an additional $2,790,732 in contract advances, according to the agency’s own June 2026 press release. The agency disclosed that figure while defending itself: Home At Last had notified LAHSA on May 21, 2026 that it would cease operations at two interim housing sites within four weeks, blaming delayed reimbursements, and LAHSA’s rebuttal was that it had already fronted the money. The commission voted unanimously to terminate the contracts for cause effective July 22, barring the organization from LAHSA funding for five years, and relocated 181 affected residents.
The same release contains a detail that reframes the timeline: in May 2026, LAHSA received a letter from the IRS stating it had seized cash from an address linked to Michael Young, and that LAHSA might be entitled to claim it as criminal forfeiture. The agency learned of the federal investigation, by its own account, from a forfeiture notice.
What Happens to the Money Now
LAHSA said it has “zero tolerance for fraud, waste, or the exploitation of public resources,” commended the prosecutors, and stated that no LAHSA staff are implicated — only external provider executives and outside contractors. The day before the charges were announced, the LAHSA commission voted to relinquish the federal roles it has held for decades, including submitting the region’s annual HUD funding application, worth roughly $240 million in the coming year, and administering the annual point-in-time homeless count.
Essayli was asked directly whether LAHSA leadership bore criminal responsibility. His answer drew the line the statutes actually draw: “It is not against federal law to be incompetent, unfortunately. I wish it were. So just because the people at the helm did not do a good job, that does not give us the authority to arrest them.” Los Angeles County District Attorney Nathan Hochman, whose Public Integrity Division is pursuing parallel state charges, said “many more” prosecutions are expected in coming months. Six people have now been charged in the widening probe.
Two things remain unresolved. The first is recovery: forfeiture proceedings are underway in the Soofer matter and LAHSA says it is pursuing the seized cash, but the $118 million that flowed to Home At Last vastly exceeds the roughly $12 million prosecutors have so far traced to alleged diversion, and the agency has said it is withholding payment pending document production it had not previously required. The second is structural. The contracts at issue were awarded by a joint powers authority that is now shedding its core federal functions, to providers whose tax filings — publicly available throughout — reported a fraction of the money they were receiving. Whether the county’s reassignment of those duties changes the verification standard, rather than the letterhead above it, is the test the next round of awards will apply.
Attorneys for Young and Malone did not respond to requests for comment relayed through LAist; counsel for Mitchell had not been publicly identified as of publication. SSG and LAHSA issued the public statements quoted above; Amity Foundation and Home At Last did not. Soofer’s plea agreement has been filed but not yet entered.