Early Wednesday, federal agents in Los Angeles arrested Lakiya Malone, 48, and Michael Young, 46. A third defendant, Donye Mitchell, 55, is charged with wire fraud and is considered a fugitive. Prosecutors say the three stole $12 million in federal and state homelessness aid and spent it on real estate, luxury trips and vintage vehicles.
It was the second such case in Southern California that week. On Tuesday, 12 people were charged with stealing more than $10 million in federal childcare aid, as President Donald Trump’s administration pushes a crackdown on fraud and waste in government and aid programs.
Nonprofits at the centre
All three defendants worked for or ran Southern California nonprofits that contracted with city, county, state or federal agencies to help homeless people find housing and social services. Prosecutors allege they used that money for personal expenses, took bribes, and billed for services never delivered.
“Make no mistake, HUD and the Trump administration will not tolerate the theft and abuse of taxpayers in this country,” Housing and Urban Development Secretary Scott Turner said at a news conference. He also accused the Los Angeles Homeless Services Authority, the public body that approved grants to these defendants, of being negligent with taxpayer dollars.
Young founded Home At Last, which has taken in more than $118 million in public funds since 2019. Prosecutors say he set up shell companies, presented them as independent contractors, and controlled them himself. That let him be paid twice and overbill federal and local authorities, they say, misusing an estimated $7.5 million through fake contractors and vendors. The money allegedly paid for trips to Tahiti, a nightclub in Inglewood called the Six Seven Five Lounge, and other commercial real estate.
Mitchell is CEO of Big Blue Umbrella, which was awarded more than $1.2 million by a federally supported nonprofit for housing and mental healthcare aid. Prosecutors say he overstated what his organization could provide, then used award money to pay off credit cards, give cash to relatives, buy video games and cover legal fees in an unrelated case.
Malone is accused of taking more than $180,000 in bribes from another homelessness-aid nonprofit, and of placing people in aid programs who were not homeless.
A guilty plea
Prosecutors also announced that a fourth person has pleaded guilty to wire fraud and money laundering charges over the theft of at least $2 million in homeless aid. Alexander Soofer, executive director of Abundant Blessings, admitted working with Malone to bill federal and state authorities for services when his programs had no participants.
