From California Post · · 2m
Feds bust LA homeless fraud scheme
FBI arrests three homeless service leaders for stealing $23M in taxpayer funds
In brief
FBI arrests three homeless service leaders for stealing $23M in taxpayer funds FBI targets LA homeless service fraudsters who diverted $23 million in public funds for personal luxuries Originally reported by California Post.
Feds target homeless fraud
FBI arrested Lakiya Malone, 48, for allegedly taking $180,000 in bribes from homeless service fraudster Alexander Soofer
“Malone allegedly accepted more than $180,000 in bribes and kickbacks in an illegal homeless services scheme”
Soofer's $23M fraud scheme
Alexander Soofer, 42, admitted stealing $23 million in public funds meant for homeless services through fake referrals
“Soofer allegedly received more than $17 million from SSG during the scheme, inflated substantially by these fraudulent referrals”
Young's luxury spending
Michael Young, founder of Home at Last, spent stolen funds on a $7 million mansion, luxury car, and nightclub in Inglewood
“Young allegedly spent some of the money he stole on a bingo hall and a nightclub”
Ghost clients scheme
Malone created fake homeless clients to inflate Soofer's referrals and receive bribes through shell companies
“In reality, the payments were tied to the number of referrals Malone sent and to ghost clients whose files she helped fabricate”
FBI's anti-fraud task force
Los Angeles prosecutor Bill Essayli leads a task force targeting fraud at the homeless services agency
“We're working our way up the chain. We're getting to those who are enabling the fraud, and not just the fraudsters themselves”
Taxpayer funds diverted
Feds found $23 million in public funds diverted to personal luxuries by three homeless service leaders
“The money went to enrich these fraudsters directly”
Soofer's lavish lifestyle
Soofer used stolen funds to buy a $7 million mansion, Range Rover, private jet, and luxury resorts
“He allegedly used the cash to buy a seven million dollar mansion in Westwood”
Young's fake vendor scheme
Young created fake companies to bill LAHSA millions for services that never happened
“He used these companies to fraudulently bill LAHSA millions of dollars for services that never happened”
Mitchell remains at large
Donye Mitchell, CEO of The Big Blue Umbrella, is a fugitive who kept $315,000 of stolen homeless funds for himself
“Mitchell spent some of the money on bail after he was arrested for domestic violence and assault”
Skid Row crisis
Over 70,000 homeless people live in Los Angeles County, with many in Skid Row where death is common
“Death is commonplace, and hope is rare in Skid Row”
Feds suspend funding
Trump administration suspended federal funds to LAHSA after corruption concerns
“The LAHSA has had recurring problems with corruption and late payments to nonprofit providers”
FBI's wire fraud charges
All three suspects face wire fraud charges with sentences up to 20 years in federal prison
“Young is charged with wire fraud, a felony that carries a sentence of up to twenty years in federal prison”
Funds mismanagement
LAHSA mismanaged $1 billion in federal funding for homeless services since 2021
“The federal government has provided more than one billion dollars in funding for homeless services in LA since 2021”
Feds find cash trail
Agents discovered cash, passports, and cash-counting machines in homes connected to the fraud scheme
“Cash found in CC-2”
In short
FBI targets LA homeless service fraudsters who diverted $23 million in public funds for personal luxuries
