Law enforcement today arrested two defendants out of three total charged in separate federal homelessness corruption and fraud cases, including a founder of a Culver City-based nonprofit who allegedly misappropriated more than $7.5 million in taxpayer funds, and used this money for commercial real estate and to finance the construction of a nightclub and adjacent bingo hall.
Today’s enforcement action is the latest effort by the Homelessness Fraud and Corruption Task Force to investigate, combat, and prosecute fraud, waste, abuse, and corruption involving funds allocated toward the eradication of homelessness within the seven-county jurisdiction of the Central District of California: Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara, and Ventura.
“Today the Department of Justice, with the full force of the federal government, is announcing charges in a major fraud takedown targeting schemes that stole millions from programs meant to house California’s homeless,” said Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Division. “As alleged, Michael Young, through Home at Last, received more than $100 million in taxpayer funds and misappropriated more than $12 million, diverting that money into shell companies, real estate, and even a nightclub and bingo hall. That scheme is now halted in its tracks. My message to every fraudster who steals from the vulnerable is clear: We will track you down, bring charges where the evidence leads, and work relentlessly to reclaim every taxpayer dollar you stole.”
“These defendants are accused of systematically diverting over $12 million in taxpayer funds for personal gain – robbing hardworking American citizens and directly hurting the people those funds are intended to support,” said FBI Director Kash Patel. “Thanks to President Trump’s leadership and our interagency partners, fraud no longer has a safe haven in America. This FBI will act to hold those responsible accountable for their fraud – and today’s arrests demonstrate our continued commitment to protecting every dollar of taxpayer resources and ensuring that public funds are used exactly as intended.”
“Today’s arrests mark a major success for our Homelessness Fraud and Corruption Task Force and this Administration’s commitment to protecting taxpayers,” said First Assistant U.S. Attorney Bill Essayli for the Central District of California. “The scale and brazenness of these fraudsters expose a profound failure by the State of California and Los Angeles County to safeguard public funds. Millions intended to house the homeless allegedly financed private real estate, a nightclub, a bingo hall, and personal expenses. Taxpayers deserve accountability. We will follow the money, expose the corruption, and prosecute those who exploit the American people for personal gain.”
“Today’s actions reflect our commitment to protecting taxpayer dollars and ensuring accountability of public funds,” said Special Agent in Charge Darren Lian of the IRS Criminal Investigation’s Los Angeles Field Office. “The evidence uncovered by IRS Criminal Investigation and our law enforcement partners reveals a deliberate scheme to defraud government programs designed to support vulnerable community members who are experiencing homelessness. We will continue to pursue those who steal from the public and hold them accountable.”
“Stealing from programs meant to feed, shelter, and support people experiencing homelessness isn’t just a financial crime – it’s an attack on the most vulnerable communities provided for by HUD programs,” said Acting Inspector General Brian D. Harrison of the U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG). “HUD-OIG is steadfast in pursuing those who exploit federal housing programs, and this case underscores the strength of our partnerships with law enforcement and prosecutors. Together, we protect taxpayer dollars and deliver justice for victims.”
The two defendants arrested today are expected to make their initial appearances this afternoon in United States District Court in downtown Los Angeles.
The three new criminal cases being announced today are described below:
United States v. Young
Michael Young, 46, of Baldwin Hills, a founder of the Culver City-based nonprofit Home At Last (HAL), was arrested today on a federal criminal complaint alleging he engaged in a years-long, complex scheme to defraud taxpayers and public entities providing funding for homeless housing. Some of the affected programs were administered by the Los Angeles Homeless Services Authority (LAHSA), the lead agency that coordinates housing and social services for the homeless in Los Angeles County.
Young is charged with wire fraud, a felony that carries a statutory maximum penalty of 20 years in federal prison.
According to the complaint, Young used a web of shell corporations and fraudulent billing practices to misappropriate millions of dollars in taxpayer funds earmarked for homeless housing, including through programs administered by LAHSA.
Among other gross misuses of taxpayer money, Young spent more than $1 million to open and operate a high-end restaurant and nightclub in Inglewood called Six Seven Five Lounge.
Through numerous contracts with LAHSA and other public entities, Young received more than $118 million in public funds from LAHSA, the City of Los Angeles, the County of Los Angeles, and the United States Department of Housing and Urban Development. LAHSA alone paid HAL over $75 million for homeless housing services. Young allegedly used a sham vendor fraud to misappropriate more than $7.5 million of these funds.
Young lied repeatedly during the fraud, according to allegations in the complaint, claiming funds would be used for homeless housing or for vendors providing services for homeless housing, when he diverted large amounts of taxpayer money for personal use and unrelated businesses. He created sham vendors to hide self-dealing transactions, submitting fake bids, forged signatures, and fraudulent invoices to make it appear the sham vendors were legitimate, third-party companies, offering fair market services, when in reality, the vendors had no employees, no locations, no legitimate operations, and existed only to funnel public money back to Young.
Young allegedly controlled the sham vendors’ bank accounts and used millions in taxpayer funds for his personal enrichment, including spending millions for his lounge, luxury vacations, vintage car restorations, and commercial properties unrelated to homeless housing.
In June 2026, LAHSA cancelled its contracts with HAL.
Assistant U.S. Attorneys Kerry L. Quinn, Sarah E. Spielberger, and James C. Hughes (Major Frauds Section), and Tara Vavere (Asset Forfeiture and Recovery Section) for the Central District of California are prosecuting this case.
United States v. Mitchell
Donye Mitchell, 55, also known as “Danya Mitchell,” of Orange, the CEO of a Los Angeles-based homelessness nonprofit, is 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.
Mitchell is charged with wire fraud, which carries a statutory maximum penalty of 20 years in federal prison. He is considered a fugitive.
According to the complaint, Mitchell is the CEO and executive director of The Big Blue Umbrella (BBU), a Los Angeles-based nonprofit. In January 2024, Mitchell allegedly applied for over $9 million in grant money – and several months later was awarded over $1.2 million – from a separate nonprofit funded by the County of Los Angeles called Epidaurus, which does business as Amity Foundation, to provide housing and mental health services to vulnerable people.
The complaint alleges that Mitchell falsely claimed to Amity that BBU was a major homeless housing provider and misrepresented its work with Special Service for Groups (SSG), through its HOPICS division, a nonprofit administering large amounts of LAHSA funds, despite having no contract and previously displacing SSG clients by failing to pay rent.
After receiving grant funds from Amity Foundation, Mitchell allegedly lied about staffing and spending, instead using the money for personal expenses including inflated salary payments, paying his own bail bond costs, credit card debt, family transfers, rent, and PlayStation charges.
In May 2025, after Amity had disbursed approximately $315,000, it terminated BBU’s contract over concerns that Mitchell was misrepresenting his spending and failing to meet agreed-upon milestones.
Assistant U.S. Attorneys Sarah E. Spielberger and Kerry L. Quinn (Major Frauds Section) and Juan M. Rodriguez (Public Corruption and Civil Rights Section) for the Central District of California are prosecuting this case.
United States v. Malone
Lakiya Malone, 48, of South Los Angeles and an employee of SSG, was arrested on a 21-count federal indictment accusing her of taking more than $180,000 in bribes and kickbacks from Alexander Soofer, the executive director of the nonprofit Abundant Blessings, who is separately charged and has agreed to plead guilty.
In exchange for the bribes and kickbacks, Malone allegedly provided priority referrals of homeless housing participants, including “ghost” participants who never lived at the sites.
Malone’s role at SSG involved referring homeless individuals to housing sites funded by HUD, LAHSA, and the City and County of Los Angeles. According to the indictment, Soofer paid her through checks made out to her and an entity she controlled, Grateful Hearts Realty & Consulting, disguising the payments as consulting fees. In reality, the payments were tied to the number of referrals Malone sent and to “ghost clients” whose files she helped fabricate with fake welcome letters, forged sign in sheets, and falsified eligibility forms.
Soofer allegedly received more than $17 million from SSG during the scheme, inflated substantially by these fraudulent referrals. Malone faces up to 20 years in prison per wire fraud count, 10 years per bribery count, and five years on the conspiracy charge.
Assistant U.S. Attorneys Kerry L. Quinn (Major Frauds Section) and Juan M. Rodriguez (Public Corruption and Civil Rights Section) for the Central District of California are prosecuting this case.
United States v. Soofer
Relatedly, Soofer has agreed to plead guilty to one count of wire fraud and one count of money laundering. Soofer admitted in a plea agreement filed today to his role in the bribery scheme with Malone.
He further admitted that he obtained $23 million in public money intended to combat homelessness, at least some of which he admits he obtained through fraud, pocketing at least $2 million in taxpayer money for his own personal enrichment and for businesses unrelated to homeless housing.
Soofer has agreed to forfeit his ill-gotten gains to the U.S. government and is expected to plead guilty to the felony charges in the coming weeks.
Assistant U.S. Attorneys Kerry L. Quinn (Major Frauds Section), Juan M. Rodriguez (Public Corruption and Civil Rights Section), and Mariam Kaloustian and Thi Ho (Asset Forfeiture and Recovery Section) for the Central District of California are prosecuting this case.
The FBI, IRS Criminal Investigation, and HUD-OIG are investigating these cases.
An indictment or complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.