Three accused of homeless housing fraud in California

Law enforcement on Thursday arrested two out of three suspects charged in federal homelessness corruption and fraud cases, including a California nonprofit founder who allegedly misused $7.5 million in taxpayer funds.

All suspects are considered innocent until proven guilty.

Michael Young, founder of the nonprofit Home at Last, allegedly used $7.5 million meant for homeless housing to buy commercial real estate and build a nightclub and bingo hall. Prosecutors also charged Young with wire fraud, alleging he used shell companies and false billing to divert millions in homeless housing funds, including money from programs overseen by the Los Angeles Homeless Services Authority.

Lakiya Malone, an employee of Special Service for Groups, was arrested and charged with taking more than $180,000 in bribes and kickbacks from Alexander Soofer, a nonprofit executive who is also facing charges. Prosecutors allege Malone gave Soofer’s organization priority access to homeless housing referrals, including nonexistent participants who never actually lived at the housing sites.

Who is the third accused fraudster still at large? Donye Mitchell, CEO of a Los Angeles-based homelessness nonprofit, was charged with wire fraud and is considered a fugitive. He was also charged in a federal criminal complaint alleging he was fraudulently awarded more than $1.2 million in grant money from a Los Angeles County-funded nonprofit.

What else did investigators say? The scale and brazenness of these fraudsters, First Assistant U.S. Attorney Bill Essayli said, is evidence of the profound failure of California to guard taxpayer dollars. Despite this, Essayli said that today’s arrests mark a major success for our Homelessness Fraud and Corruption Task Force, crediting it to Trump’s administration.

FBI Director Kash Patel added that there was no longer a safe haven for fraudsters in America.