Two LA homelessness charity workers arrested over millions in alleged fraud
US federal agents arrested two California non-profit workers on corruption charges, alleging they misappropriated millions in taxpayer funds meant for homelessness services.
Two LA homelessness non-profit workers charged with fraud and bribery
Federal law enforcement officers have arrested two employees of California-based homelessness non-profits on corruption charges, according to theguardian.com, alleging they misappropriated millions of dollars in taxpayer funds.
The US Department of Justice arrested Michael Young, a founder of the Culver City-based non-profit Home At Last, and Lakiya Malone, an employee of the Los Angeles-based Special Service for Groups. Both are expected to appear in court on Wednesday.
Young faces wire fraud charges in a scheme to embezzle more than $7.5m from contracts with Los Angeles County and other publicly funded agencies. Prosecutors allege he used the money to open a high-end restaurant, nightclub and bingo hall.
Malone is charged with accepting more than $180,000 in bribes and kickbacks from Alexander Soofer, the director of a separate homelessness non-profit, who has agreed to plead guilty in a related case.
The Department of Justice is also seeking to arrest Donye Mitchell, CEO of the Los Angeles-based non-profit The Big Blue Umbrella. Mitchell faces wire fraud charges for allegedly obtaining $1.2m in public grant funding fraudulently, which prosecutors say he spent on personal expenses including his own bail bonds, credit card debt and PlayStation charges.
"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," said assistant attorney general Colin M McDonald of the National Fraud Enforcement Division.
The investigation was led by the Homeless Fraud and Corruption Taskforce, established last year by US attorney Bill Essayli to probe "fraud, waste, abuse, and corruption involving funds allocated toward the eradication of homelessness" across seven counties in central California.
The arrests form part of broader Trump administration efforts to investigate alleged financial misconduct in Democrat-led states. In April, Donald Trump appointed JD Vance as "fraud czar", with a remit focused on "those blue states where crooked Democrat politicians have had a 'free for all' in the unprecedented theft of taxpayer money." Earlier, the administration froze federal childcare funding to Minnesota over similar fraud allegations and suspended more than a quarter of a billion dollars in Medicaid funds to the state.
This summer, federal funding to Los Angeles's homelessness agency, Lahsa, was suspended pending a fraud investigation; federal money accounted for roughly 8% of the agency's budget at the time.
Earlier this week, 12 people in southern California were separately charged with fraudulently collecting $10m in government childcare payments despite allegedly providing care for few or no children.
Housing and Urban Development Secretary Scott Turner addressed the issue directly at a press conference. "If you fail the taxpayer, if you fail our cities, if you fail our shared mission of ending homelessness, there will be consequences and we will cut you off," he said.
Source: Google News IE — Crime (en)