LA Homelessness Fraud
Federal Prosecutors Crack Down on LA Homelessness Program Corruption and Fraud
Anonymous
Key Points
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Michael Young was released on a $500,000 bond and is expected to be arraigned next month; Lakiya Malone was released on a $50,000 bond and is expected to go to trial in November.
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Young faces a wire-fraud charge carrying a potential sentence of up to 20 years in federal prison, while Malone faces a 21-count indictment alleging wire fraud, bribery and conspiracy.
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The broader federal operation was described as a citywide Los Angeles bust involving fraudsters accused of stealing more than $130 million intended for homeless people—substantially more than the $12 million attributed to the four defendants highlighted in the summary.
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The alleged misuse of funds included luxury Tahitian vacations and luxury vehicles, and Scott Turner criticized the local homelessness agency over the lack of results.
Federal prosecutors announced a sweeping crackdown on homelessness fraud in Los Angeles on Wednesday, charging four people with stealing more than $130 million in public funds meant to help homeless people. DOJ arrested Michael Young, founder of Home At Last, and Lakiya Malone, an employee at Special Service for Groups. A third defendant, Donye "Danya" Mitchell, remains at large. HUD Secretary Scott Turner said the Los Angeles Homeless Services Authority received $1 billion over five years "with zero results."
Young is accused of diverting at least $7.5 million to a nightclub, luxury vacations, and vehicle restorations. Mitchell allegedly obtained $1.2 million through false claims about fake staff and services. Malone accepted more than $180,000 in bribes from nonprofit executive Alexander Soofer in exchange for fake referrals. Law360 reported that Soofer admitted to the fraud and agreed to plead guilty to wire fraud and money laundering.
Nightclub, Vacations, and Vehicle Restorations
Michael Young, 46, founder of Culver City nonprofit Home At Last, faces wire fraud charges carrying up to 20 years in prison. Prosecutors say he siphoned $12 million into shell companies and fake invoices. Young spent $1 million opening the Six Seven Five Lounge nightclub in Inglewood. He also paid $140,000 to restore a 1960s Chevy Impala and $50,000 for a luxury Tahitian vacation, according to court documents. Young was released on a $500,000 bond and is scheduled for arraignment next month.
CEO Charged With Billing Ghost Clients
Donye "Danya" Mitchell, 55, CEO of The Big Blue Umbrella, allegedly obtained $1.2 million through fraudulent grant claims. Prosecutors say he billed the government for nonexistent program participants and services that were never provided. Mitchell used the money for personal expenses, including bail payments and video-game purchases. ZeroHedge reported that Mitchell remains at large. Federal agents are actively seeking him.
Employee Pocketed Bribes for Fake Referrals
Lakiya Malone, 48, accepted more than $180,000 in bribes and kickbacks from Alexander Soofer, former head of Abundant Blessings. In exchange, Malone referred grant money to Soofer's nonprofit for fake clients and nonexistent services. Townhall reported that Malone faces a 21-count indictment alleging wire fraud, bribery, and conspiracy. She was released on a $50,000 bond. Her trial is scheduled for November 2026.
System With No Oversight or Auditing
Bill Essayli, First Assistant U.S. Attorney, described the failures that enabled the fraud: "Nobody was minding the shop. 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." HuffPost noted that the Los Angeles Homeless Services Authority operated with minimal financial controls. Contractors billed for ghost clients and used fake invoices without detection for years.
The federal Homelessness Fraud and Corruption Task Force investigated the broader scheme across Southern California. On September 15, 2026, the day before the arrests, LAHSA voted not to renew its role as the region's lead homelessness agency. Mayor Karen Bass stepped down from the LAHSA Commission. The indictments expose a systemic failure in how public dollars were distributed and monitored.
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