Feds charge four in LA homelessness nonprofit schemes

By Los Angeles County Politics

Federal authorities yesterday announced charges against four people in a sweeping fraud crackdown targeting Los Angeles-area homelessness nonprofits, alleging schemes that diverted more than $10 million in taxpayer funds meant to house the county’s homeless population into shell companies and personal luxuries, including a nightclub and bingo hall.

The charges stem from three separate federal cases, plus a fourth defendant who has already agreed to plead guilty, all announced together by the U.S. Attorney’s Office as part of an ongoing Homelessness Fraud and Corruption Task Force investigation covering Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara and Ventura counties.

“The scale and brazenness of these fraudsters expose a profound failure by the State of California and Los Angeles County to safeguard public funds,” said First Assistant United States Attorney Bill Essayli. 

The largest case targets Michael Young, 46, of Baldwin Hills, founder of the Culver City-based nonprofit Home At Last. 

Prosecutors allege Young received more than $118 million in public funds through contracts with the Los Angeles Homeless Services Authority (LAHSA), the city, the county and HUD, and used a network of shell companies with fake invoices and forged signatures to misappropriate more than $7.5 million of it. 

According to the criminal complaint, Young spent more than $1 million to open and operate a restaurant and nightclub in Inglewood called Six Seven Five Lounge, as well as on luxury vacations, vintage car restorations, and unrelated commercial real estate. 

LAHSA canceled its contracts with Home At Last in June 2026. Young is charged with wire fraud, which carries a maximum 20-year federal sentence.

A separate complaint charges Donye Mitchell, 55, of Orange, CEO of Los Angeles nonprofit The Big Blue Umbrella, with wire fraud after he allegedly misrepresented his organization’s work to secure more than $1.2 million in grant funding from Amity Foundation, a county-funded nonprofit. 

Prosecutors say Mitchell then used the money for personal expenses, including inflated salary payments, his own bail bond costs, credit card debt, and PlayStation charges. Amity terminated the contract in May 2025 after disbursing roughly $315,000. Mitchell is considered a fugitive.

A third case charges Lakiya Malone, 48, of South Los Angeles, an employee of Special Service for Groups (SSG), with taking more than $180,000 in bribes and kickbacks from Alexander Soofer, executive director of the nonprofit Abundant Blessings. SSG operates HOPICS, the lead homelessness services agency for South Los Angeles, Compton, Lynwood and Paramount.

Prosecutors allege Malone provided priority homeless housing referrals — including fabricated “ghost” clients who never actually lived at the sites — in exchange for payments disguised as consulting fees through an entity she controlled. 

Soofer, who is separately charged, has agreed to plead guilty to wire fraud and money laundering and admitted to obtaining $23 million in public homelessness funds, at least some through fraud, pocketing at least $2 million for personal use. 

Malone faces up to 20 years per wire fraud count, 10 years per bribery count, and five years on a conspiracy charge.

Essayli said the charges are part of an ongoing federal effort targeting nonprofits associated with homelessness fraud in California, which has the largest homeless population of any state in the country, according to HUD’s annual national count.

“Taxpayers deserve accountability. We will follow the money, expose the corruption, and prosecute those who exploit the American people for personal gain,” he said.

The FBI, IRS Criminal Investigation and the HUD Office of Inspector General are investigating the cases. All defendants are presumed innocent until proven guilty.