Three Arrested in $12M Homelessness Aid Fraud Scheme in LA
Feds arrest three in $12M homelessness aid fraud, luxury trips and real estate purchases uncovered.
POLICY WIRE — Los Angeles, United States — Federal authorities have arrested three individuals for allegedly siphoning $12 million in public funds meant for homeless assistance through fraudulent real estate investments, luxury travel, and high-end vehicle purchases.
The charges come as part of a broader federal initiative targeting misuse of government benefits, with this being the second major fraud case in Southern California this week. Earlier this week, 12 people were taken into custody for allegedly stealing over $10 million from federal childcare programs.
The three suspects were associated with or led nonprofits that received public contracts to provide shelter and support services for homeless individuals. Prosecutors claim they misused grant money for personal expenses, accepted bribes, and submitted false claims for non-existent services. Brian D. Harrison, acting inspector general at the Department of Housing and Urban Development, condemned the actions, calling it an attack on vulnerable communities.
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Lakiya Malone, 48, and Michael Young, 46, were arrested in Los Angeles, while Donye Mitchell, 55, remains at large. Young, founder of the nonprofit Home At Last, is accused of creating shell companies to inflate billing and misappropriate $7.5 million in taxpayer funds. He used the money for lavish vacations, commercial property, and opening a nightclub. Mitchell, CEO of Big Blue Umbrella, allegedly diverted over $1.2 million in grants to pay off debts and buy video games. Malone was charged with accepting $180,000 in bribes and falsifying eligibility for homeless aid programs.
A fourth individual, Alexander Soofer, 42, pleaded guilty to stealing $2 million from a similar program. He admitted to working with Malone to fabricate service records. Despite these efforts, some Trump administration anti-fraud initiatives have faced criticism, including a controversial campaign targeting immigrant childcare providers in Minnesota, which was later found to be largely unfounded.
Reporting by Policy-Wire (PW)
