【ANN NEWS, LOS ANGELES】 The U.S. Department of Justice announced on September 16 that federal law enforcement authorities had launched a new round of action targeting alleged fraud and corruption involving funding for homeless services in the Los Angeles area, with three people connected to nonprofit organizations facing federal criminal charges. Two were arrested that day, while the third was listed as a fugitive. Federal prosecutors said the cases involve the alleged misappropriation of more than $12 million in public funds originally intended to help people experiencing homelessness.
Among those charged is 46-year-old Michael Young, founder of the Culver City-based nonprofit Home At Last (HAL), who faces a wire fraud charge. Prosecutors allege that Young spent years using shell companies, sham bids, forged signatures and fraudulent invoices to divert public funds intended for homeless housing programs to companies he controlled.
According to the Justice Department, since 2019, Young, through Home At Last, received more than $118 million in public funds from agencies including the Los Angeles Homeless Services Authority (LAHSA), the City of Los Angeles, Los Angeles County and the U.S. Department of Housing and Urban Development. LAHSA alone paid more than $75 million. Prosecutors allege that he misappropriated more than $7.5 million through a fraudulent vendor scheme and say the total amount of public funds he allegedly diverted exceeded $12 million.
Prosecutors said Young allegedly used more than $1 million to open and operate the upscale Six Seven Five Lounge restaurant and nightclub in Inglewood, and used some public funds for purposes unrelated to homeless housing, including commercial real estate, luxury travel and classic car restoration.
Another defendant, 48-year-old Lakiya Malone, is an employee of the nonprofit Special Service for Groups (SSG). She is accused of accepting more than $180,000 in bribes and kickbacks in exchange for giving priority referrals to homeless individuals for placement in related housing programs. Prosecutors said this even included “ghost participants” who never actually moved into the housing, and alleged that fraudulent welcome letters, forged sign-in sheets and eligibility documents were used to create records of occupancy.
The third defendant is Donye Mitchell, head of the Los Angeles nonprofit The Big Blue Umbrella. Prosecutors allege that he obtained more than $1.2 million through a Los Angeles County-funded program using false representations and, after receiving approximately $315,000, used some of the money for personal expenses, including personal bail, credit card debt, family transfers, rent and PlayStation purchases. The Justice Department said Mitchell is currently listed as a fugitive.
Meanwhile, Alexander Soofer, the former head of another homeless services organization, Abundant Blessings, has agreed to plead guilty to one count of wire fraud and one count of money laundering. According to the plea agreement, he admitted receiving $23 million in public funds intended to address homelessness, at least $2 million of which was used for personal gain and business activities unrelated to homeless housing.
LAHSA issued a statement that day saying it had terminated its contract with Home At Last in June and is currently seeking to recover the related funds that were seized. LAHSA also emphasized that the criminal charges involve executives and contractors of outside service providers and that no LAHSA employees have been accused of wrongdoing.
The cases remain in judicial proceedings. The U.S. Department of Justice emphasized that the allegations contained in criminal indictments and complaints are accusations only, and that the defendants are presumed innocent unless and until proven guilty in a court of law.
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