Federal investigators and FBI agents conducted a coordinated raid in Los Angeles on Wednesday, resulting in the arrest of three people accused of defrauding taxpayer‑funded homeless‑assistance programs. The operation underscores the dedication of law‑enforcement to safeguard public dollars and protect the most vulnerable Angelenos.
Key figures charged
Michael Young, 46, a founder of a Culver City‑based nonprofit, faces a wire‑fraud charge that carries a potential sentence of up to 20 years. According to the complaint, Young allegedly used a network of shell corporations and fraudulent billing to divert more than $7.5 million earmarked for homeless housing. The U.S. Attorney’s Office says Young spent over $1 million of the misappropriated funds to open and operate a high‑end restaurant and nightclub in Inglewood called Six Seven Five Lounge.
Lakiya Malone, 48, of Westmont, was charged with accepting more than $180,000 in bribes and kickbacks from Alexander Soofer, the former executive director of the nonprofit Abundant Blessings. In exchange, Malone allegedly gave priority referrals to homeless‑housing participants, including “ghost” participants who never lived at the sites.
Donye “Danya” Mitchell, 55, of Orange, the chief executive of the Los Angeles‑based nonprofit The Big Blue Umbrella, is charged with wire fraud for allegedly securing more than $1.2 million in grant money from a county‑funded nonprofit after applying for over $9 million.
Law‑enforcement response
First Assistant U.S. Attorney Bill Essayli praised the arrests as a major success for the district’s Homelessness Fraud and Corruption Task Force. “The scale and brazenness of these fraudsters expose a profound failure by the state of California and Los Angeles County to safeguard public funds,” Essayli said. “We will follow the money, expose the corruption, and prosecute those who exploit the American people for personal gain.”
Acting FBI Los Angeles bureau assistant director Robert Molvar added, “When taxpayer‑funded programs are exploited for personal gain, it undermines public trust and diverts critical resources away from the people who need them most. Our work does not stop with these arrests; we remain committed to identifying fraud, protecting taxpayer dollars, and safeguarding programs designed to help those experiencing homelessness.”
Local officials react
Los Angeles Mayor Karen Bass applauded the effort, stating, “My administration has zero tolerance for fraud — period. Any misuse of taxpayer funds meant to help unhoused Angelenos will be met with the full force of the law.”
The Los Angeles Homeless Services Authority (LAHSA) also commended the Department of Justice, emphasizing that the charges involve external providers and contractors, not LAHSA personnel. LAHSA noted it has terminated contracts with the implicated provider Home At Last and is pursuing recovery of the seized funds.
Legal proceedings
Young and Malone appeared in court Wednesday afternoon. Young was released on a $500,000 bond, with arraignment set for Oct. 22. Malone was released on a $50,000 bond, with a tentative trial date of Nov. 10.
In a related case, Alexander Soofer has agreed to plead guilty to wire fraud and money‑laundering charges, admitting he obtained $23 million in public money intended for homelessness services, pocketing at least $2 million for personal enrichment.
Impact on the community
The arrests send a clear message that fraud against vulnerable populations will not be tolerated. By targeting the misuse of HUD‑funded programs, federal and local authorities aim to restore confidence in the safety net that provides shelter, food, and support to Angelenos experiencing homelessness.
Original reporting: NBC4 Los Angeles — read the source article.
