Federal prosecutors charge 3 with stealing $12M in homelessness aid in
Southern California
[September 17, 2026]
By KEN SWEET
Three people were charged by federal authorities in Los Angeles on
Wednesday with stealing $12 million in federal and state homelessness
aid to pay for real estate, luxury trips and vintage vehicles.
It was the second such arrest of people on federal fraud charges in
Southern California this week, as President Donald Trump's
administration tries to emphasize a crackdown on fraud and waste in
government and aid programs. On Tuesday, 12 people were charged with
stealing more than $10 million in federal childcare aid.
The three defendants each worked for or ran Southern California-based
nonprofit organizations, which often contracted with city, county, state
or federal agencies to provide aid or money to find housing and social
services for homeless people. Prosecutors allege that the defendants
used funds from those contracts to pay personal expenses, accepted
bribes, and billed for services that were never provided.
“Make no mistake, HUD and the Trump administration will not tolerate the
theft and abuse of taxpayers in this country,” Secretary of Housing and
Urban Development Scott Turner said at a news conference.
Turner used the indictments to accuse the Los Angeles Homeless Services
Authority, which approved grants to these defendants, of being negligent
with taxpayer dollars.
Taxpayer aid spent on video games, nightclubs
Two defendants, Lakiya Malone, 48, and Michael Young, 46, were arrested
early Wednesday in Los Angeles. A third defendant charged with wire
fraud, Donye Mitchell, 55, is considered a fugitive.
Young is the founder of Home At Last, a nonprofit that took in more than
$118 million in public funds since 2019 for its stated mission of
providing housing and aid to homeless people.
Federal prosecutors say Young instead created shell companies that he
claimed were independent contractors but were, in fact, controlled by
him. This alleged self-dealing allowed Young to be paid both at Home At
Last and overbill federal and local authorities, prosecutors said. They
say Young misused an estimated $7.5 million in taxpayer funds through
fake contractors and vendors.
Young used the proceeds to take luxury trips to Tahiti, and used funds
to open a nightclub in Inglewood called the Six Seven Five Lounge and
other commercial real estate projects, prosecutors allege.
Mitchell is the CEO of Big Blue Umbrella, which was awarded more than
$1.2 million from a federally supported nonprofit for housing and mental
healthcare aid. Prosecutors say Mitchell not only misstated his
organization’s ability to provide such services, but also used money
from the award to pay off his credit card debts, give funds to family
members, buy video games and pay legal expenses for an unrelated case.
Malone was charged with accepting more than $180,000 in bribes from
another homelessness-aid nonprofit. Malone allegedly not only accepted
bribes but also placed people in homeless aid programs who weren’t
homeless.
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Lakiya Malone, charged with fraud involving federal homelessness aid
programs, walks out of her home toward federal authorities with her
hand raised in Los Angeles, Wednesday, Sept. 16, 2026. (AP Photo/Jae
C. Hong)
Separately, federal prosecutors announced that a fourth person
pleaded guilty to wire fraud and money laundering charges for
stealing at least $2 million in homeless aid. Alexander Soofer, the
executive director of Abundant Blessings, admitted to working with
Malone to bill federal and state authorities for homelessness aid
services when there were no participants in his programs.
Big money, little documentation
Some 72,000 to 75,000 people live in shelters or encampments in Los
Angeles and Los Angeles County, making it one of the largest
homeless populations in the country. It has been a significant issue
in Southern California for years, and Los Angeles Mayor Karen Bass
made it a cornerstone of her 2022 election campaign.
City and county authorities spend roughly $1 billion a year trying
to help the homeless population, often using LAHSA to coordinate
aid. While significant funds are spent to address the issue, city
and county reviews have repeatedly found that the programs lacked
appropriate recordkeeping, audit trails and documentation.
Nathan Hochman, the district attorney for Los Angeles County, told
reporters that the public should expect more investigations and
indictments into the misuse of homeless aid funds. Hochman’s
office's investigation into Soofer and Abundant Blessings led to his
indictment earlier this year.
“I can assure this is the beginning of these prosecutions and we are
far, far from the end,” he said, adding that his office's
investigation had found that the only “abundant blessings” Soofer
provided were to his friends and family.
Some of the Trump administration's efforts to go after fraud and
abuse of government benefit programs have faced criticism and legal
challenges. In December, Vice President JD Vance, who chairs the
administration’s task force on the subject, amplified a YouTube
video of a popular right-wing influencer accusing childcare
providers in Minnesota, many of them immigrants from Somalia, of
running scams. State authorities visited the centers and found
nearly all of them operating normally.
Nonetheless, the administration launched a massive immigration
crackdown in Minnesota. Officials later attempted to freeze federal
funds for childcare in five Democratic-led states but were halted by
a lawsuit.
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