Key facts
- Michael Young is charged with embezzling over $7.5 million from public contracts.
- Lakiya Malone is charged with taking over $180,000 in bribes and kickbacks.
- Donye Mitchell is accused of fraudulently obtaining $1.2 million in public grant funding for personal expenses.
- The investigation is led by the homeless fraud and corruption taskforce.
- Federal funding to Los Angeles's homelessness agency, Lahsa, was suspended in the summer pending an investigation into fraud allegations.
Federal law enforcement officers have arrested two employees of California-based homelessness non-profits on corruption charges, alleging that they misappropriated millions in taxpayer dollars. Michael Young, a founder of Home At Last, is accused of embezzling over $7.5 million from contracts with Los Angeles county and other publicly funded agencies to fund personal ventures including a restaurant, nightclub, and bingo hall. Lakiya Malone, an employee of Special Service for Groups, is charged with accepting over $180,000 in bribes and kickbacks from the director of another homelessness non-profit, Alexander Soofer, who has agreed to plead guilty in a separate case. The Justice Department is also seeking the arrest of Donye Mitchell, CEO of The Big Blue Umbrella, for allegedly obtaining $1.2 million in public grant funding for personal expenses such as bail bonds and credit card debt.
Assistant Attorney General Colin M McDonald stated that the department will "track down, bring charges where the evidence leads, and work relentlessly to reclaim every taxpayer dollar you stole." The investigation was spearheaded by the homeless fraud and corruption taskforce, established by US Attorney Bill Essayli last year to probe fraud, waste, abuse, and corruption involving funds allocated for homelessness eradication in California.
These arrests occur amid broader efforts by the Trump administration to investigate alleged fraud in states like California. Earlier this year, Donald Trump appointed JD Vance as 'fraud czar' to focus on such investigations. In the past, the administration has frozen federal childcare and Medicaid funds to Minnesota over fraud accusations and suspended federal funding to Los Angeles's homelessness agency, Lahsa, pending an investigation into fraud allegations. Additionally, 12 individuals in southern California were recently charged with fraudulently collecting $10 million in government childcare payments.