LA homelessness non-profit workers arrested over alleged corruption and bribes

Federal law enforcement officers have arrested two individuals connected to California-based homelessness non-profits, Michael Young and Lakiya Malone, on charges of corruption and alleged bribery. Young, a co-founder of the Culver City-based Home At Last organization, is accused of embezzling over $7.5 million in taxpayer dollars through a scheme involving contracts with Los Angeles County and other agencies. This money was reportedly used to establish a high-end restaurant, nightclub, and bingo hall.

Malone, who worked for the Los Angeles-based Special Service for Groups, is charged with receiving more than $180,000 in bribes and kickbacks from the organization's director, Alexander Soofer. Soofer has since agreed to plead guilty in a separate case. The U.S. Justice Department is also seeking to arrest Donye Mitchell, the CEO of The Big Blue Umbrella, a Los Angeles-based nonprofit.

Mitchell is accused of wire fraud for fraudulently obtaining $1.2 million in public grant funding, which prosecutors claim was used for personal expenses, including bail bonds, credit card debt, and PlayStation charges.

Assistant Attorney General Colin M. McDonald emphasized the commitment to tracking down fraudsters who exploit vulnerable individuals, stating, "we will track you down, bring charges where the evidence leads, and work relentlessly to reclaim every taxpayer dollar you stole." The investigation was spearheaded by the homeless fraud and corruption taskforce, established by U.S. Attorney Bill Essayli last year to address allegations of fraud, waste, abuse, and corruption involving funds allocated to combat homelessness in California's seven-county jurisdiction.

These arrests come amid efforts by the Trump administration to combat alleged corruption in blue states, such as California. In April, President Donald Trump appointed JD Vance as his "fraud czar," tasked with investigating "those blue states where crooked Democrat politicians have had a 'free for all' in the unprecedented theft of taxpayer money."

Previous actions by the administration include freezing federal childcare funding in Minnesota over accusations of fraud and suspending funds to Los Angeles's homelessness agency, Lahsa, pending an investigation. Additionally, 12 individuals in southern California have been charged with fraudulently collecting $10 million in government childcare payments, despite allegedly caring for few or no children.

Housing and Urban Development Secretary Scott Turner warned that failure to uphold taxpayer trust and the mission of ending homelessness would result in consequences, including the suspension of federal funding.