Federal prosecutors charge 3 in alleged $12M homelessness aid fraud in Southern California

Federal authorities have charged three people with stealing $12 million in homelessness aid, allegedly using the money to buy real estate, take luxury trips, and purchase vintage vehicles NEW YORK (AP) — Three people were charged by federal authorities Wednesday with stealing $12 million in federal and state homelessness aid dollars to buy real estate, go on luxury trips and buy vintage vehicles. This is the second such arrest of people on federal fraud charges in Southern California this week, as the Trump administration tries to emphasize a crackdown on fraud and waste in government and aid programs.

On Tuesday, 12 people were arrested and charged with stealing more than $10 million in federal childcare aid. The three defendants each worked for or ran Southern California-based homelessness aid nonprofit organizations, which often contracted with city, county, state or federal agencies to provide aid or money to find housing and social services for homeless people. Federal prosecutors allege that the defendants used funds from those contracts to pay personal expenses, accepted bribes, and billed for services that were never administered.

“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 (these) programs,” said Brian D. Harrison, acting inspector general at the Housing and Urban Development Department, in a statement. Two defendants, Lakiya Malone, 48, and Michael Young, 46, were arrested early Wednesday morning in Los Angeles.

A third defendant charged with wire fraud, Donye Mitchell, 55, is considered a fugitive. Young is the founder of the homelessness aid nonprofit Home At Last, an agency that took in more than $118 million in public funds since 2019 for its stated mission of providing housing and aid to the homeless. Instead, federal prosecutors say Young created shell companies that he claimed were independent contractors but were, in fact, controlled by him.

This alleged self-dealing allowed Young to be paid both at Home At Last and overbill federal and local authorities, prosecutors said. They say Young misused an estimated $7.5 million in taxpayer funds through these fake contractors and vendors. Young used the proceeds to take luxury trips to Tahiti, and used funds to open a nightclub in Inglewood called the Six Seven Five Lounge and other commercial real estate projects, prosecutors allege.

Mitchell is the CEO of Big Blue Umbrella, which was awarded more than $1.2 million from a federally supp… Three people were charged by federal authorities in Los Angeles on Wednesday with stealing $12 million in federal and state homelessness aid dollars to buy real estate, go on luxury trips and buy vintage vehicles.