Full Breakdown
Federal Crackdown on Los Angeles Homelessness Funding Fraud
By Drooid · · How we work
Core Event: Arrests of Nonprofit Executives
Federal agents announced the arrest of three nonprofit leaders and the indictment of a fourth individual in separate cases tied to Los Angeles homelessness programs. Michael Young, founder of the Culver City-based nonprofit Home At Last (HAL), was taken into custody on wire-fraud charges. Lakiya Malone, an employee of Special Service for Groups, Inc. (SSG), faced a 21-count indictment alleging bribes and “ghost” participant referrals. Donye “Danya” Mitchell, chief executive of The Big Blue Umbrella (BBU), was named a fugitive after a wire-fraud complaint. Alexander Soofer, former executive director of Abundant Blessings, agreed to plead guilty to wire fraud and money-laundering in a related scheme.
Background & Context
The arrests stem from a multi-year investigation by the U.S. Attorney’s Office, the FBI, IRS Criminal Investigation, and the Department of Housing and Urban Development’s Office of Inspector General. The probe targeted the Homelessness Fraud and Corruption Task Force, which focuses on programs administered by the Los Angeles Homeless Services Authority (LAHSA) and other city, county, and federal entities that allocate funds to combat the region’s homelessness crisis.
Data & Statistics
- Home At Last received more than $118 million in public funding from LAHSA, the City of Los Angeles, Los Angeles County, and HUD; LAHSA alone paid over $75 million.
- Prosecutors allege Young misappropriated more than $7.5 million through sham vendors, spending over $1 million to open the Six Seven Five Lounge nightclub and additional funds on luxury travel, vintage-car restorations, and commercial real estate.
- The broader crackdown involves an estimated $12 million diverted from homelessness programs across the cases.
- Malone is accused of receiving over $180,000 in bribes and kickbacks from Soofer.
- Soofer admitted to obtaining $23 million in public money, pocketing at least $2 million for personal use.
- Mitchell allegedly secured more than $1.2 million in grant money from the county-funded nonprofit Epidaurus (doing business as Amity Foundation) after applying for over $9 million.
Official Statements & Responses
First Assistant U.S. Acting HUD Inspector General Brian Harrison warned that exploiting HUD-funded programs harms vulnerable populations and pledged continued partnership with law-enforcement agencies. Assistant Attorney General Colin M. and IRS Special Agent in Charge Darren Lian highlighted the deliberate nature of the scheme and affirmed the agency’s commitment to pursuing those who steal from the public.
Conflicting Reports & Gaps
- The amount Young misappropriated is cited as “more than $7.5 million” in some filings, while a separate source references a total diversion of “more than $12 million” across all cases, creating a discrepancy in the overall figure.
- HAL’s total public funding is reported as “more than $118 million” and, in another statement, as “over $100 million,” reflecting a variance in reported totals.
- No public comment has been recorded from the accused individuals or their legal representatives, leaving their defenses undocumented.
