Federal law enforcement officers in California arrested several people accused of separate instances of misappropriating millions of dollars in taxpayer funding meant to address homelessness.
Michael Young, Donye “Danya” Mitchell, Lakiya Malone and Alexander Soofer are accused of taking more than $12 million in taxpayer funds for personal use, according to FBI Director Kash Patel in a statement from the Department of Justice announcing the arrests on Wednesday.
Young, founder of a nonprofit called Home At Last, is accused of misappropriating more than $7.5 million, including using $1 million to open and operate an Inglewood restaurant and club, Six Seven Five Lounge. He is charged with wire fraud and faces up to 20 years in federal prison. Young was released on a $500,000 bond and is expected to be arraigned next month, NBC Los Angeles reported.
Separately, Mitchell, CEO of a nonprofit called The Big Blue Umbrella, is accused of fraudulently obtaining $1.2 million from a group that distributes county funding to address homelessness and lying about staffing and spending. He is accused of using the money to pay for personal expenses, including PlayStation purchases and his bail after being accused of domestic violence in 2024, and was also charged with wire fraud.
Finally, Malone, an employee of the nonprofit Special Service for Groups, is accused of accepting more than $180,000 in bribes and kickbacks from Soofer, the former executive director of the nonprofit Abundant Blessings, in exchange for providing “priority referrals of homeless housing participants, including ‘ghost’ participants who never lived at the sites.” She is facing a 21-count indictment on charges of wire fraud, bribery and conspiracy. Malone was released on a $50,000 bond and is expected to go to trial in November, according to NBC Los Angeles.
Soofer was arrested prior to the other three suspects and has agreed to plead guilty to one count of wire fraud and one count of money laundering.
The arrests this week resulted from an investigation by the federal Homelessness Fraud and Corruption Task Force.
In a statement, the Los Angeles Homeless Services Authority made it clear that no one from the agency was implicated in the alleged crimes.
“Diverting resources meant to house vulnerable neighbors undermines the entire safety net and cannot be tolerated,” LAHSA’s statement added.
LAHSA reported in July that homelessness in Los Angeles had risen 3.4% in the past year following two years of decline. The agency counted 45,194 unhoused people in the city of Los Angeles and more than 72,000 across the county.
Los Angeles Mayor Karen Bass, who is running for reelection in November, blamed the rise in homelessness on the Trump administration’s funding cuts and the rise in the cost of living.
“The Trump Administration has driven up the cost of gas, groceries, and rent — pushing more families to the edge — and slashed critical safety net funding,” Bass said about the increase in July.
On Wednesday, Bass said that her administration “has zero tolerance for fraud — period.”
“Any misuse of taxpayer funds meant to help unhoused Angelenos should be met with the full force of the law,” she added.