Federal officials say taxpayer money meant to house Los Angeles’ homeless residents was instead used to finance a Tahiti getaway, a luxury nightclub, high-end vehicles and other personal purchases. The allegations emerged Wednesday as agents carried out an early-morning fraud operation at locations across the city.
The investigation centers on Michael Young, 46, a founder of Culver City-based nonprofit Home At Last. According to the Justice Department, Young’s organization received more than $118 million through government contracts, including over $75 million from the Los Angeles Homeless Services Authority. Prosecutors accuse him of diverting millions of dollars, including more than $7.5 million through an alleged sham-vendor operation.
“The days of these wire fraud experts flying on private jets, driving around Beverly Hills in Range Rovers and doing lavish things is over,” HUD Secretary Scott Turner said.
Michael Young, 46, Lakiya Malone, 48, and Donye Mitchell, 55, were charged in the federal fraud crackdown, authorities said Wednesday. (Department of Justice)
Young was among three people charged Wednesday in separate federal cases involving alleged fraud and corruption tied to programs serving homeless Californians. Authorities arrested two of the defendants, while the third was being sought as a fugitive.
FBI agents take positions outside the home of Lakiya Malone, who is charged with fraud involving federal homelessness aid programs, in Los Angeles, Wednesday, Sept. 16, 2026. (AP Photo/Jae C. Hong)
Prosecutors say Young relied on shell companies and fraudulent invoices to siphon public funds. More than $1 million allegedly went toward launching and running Six Seven Five Lounge, an upscale restaurant and nightclub in Inglewood.
Federal officials said Young also spent nearly $50,000 on a luxury trip to Tahiti and $140,000 to restore a vintage Chevrolet Impala.
FBI agents take positions outside the home of Lakiya Malone, who is charged with fraud involving federal homelessness aid programs, in Los Angeles, Wednesday, Sept. 16, 2026. (AP Photo/Jae C. Hong)
“The taxpayers did not sign up to fund this nightclub,” Assistant Attorney General Colin M. McDonald said.
Authorities also arrested Lakiya Malone, 48, an employee of Special Service for Groups. She faces a 21-count indictment accusing her of accepting more than $180,000 in bribes and kickbacks from Alexander Soofer, the executive director of nonprofit Abundant Blessings.
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)
In return, Malone allegedly arranged priority referrals, including so-called “ghost” participants who never lived at the housing locations. Prosecutors say the records were manufactured with fake welcome letters, forged sign-in sheets and falsified eligibility documents.
Soofer, who was charged earlier, has agreed to plead guilty to wire fraud and money laundering. He admitted securing $23 million in public funds designated for homelessness programs and keeping at least $2 million for himself and businesses unrelated to the program.
FBI agents stand outside the home of Lakiya Malone, who is charged with fraud involving federal homelessness aid programs, in Los Angeles, Wednesday, Sept. 16, 2026. (AP Photo/Jae C. Hong)
A third defendant, Donye Mitchell, 55, CEO of The Big Blue Umbrella, is considered a fugitive. Prosecutors allege he obtained more than $1.2 million in grant funding after making false representations and later used grant money for personal expenses including bail-bond costs, credit-card debt, family transfers and PlayStation charges.
“If you or someone you know has defrauded money allocated for the homeless, I suggest you report it to law enforcement,” First Assistant U.S. Attorney Bill Essayli said. “If you don’t, your door may be the next one we’re hitting.”
