Federal agents arrested three figures connected to Los Angeles-area homelessness nonprofits in a sweeping crackdown involving more than $12 million in allegedly misused taxpayer funds. Michael Young, Donye Mitchell, and Lakiya Malone face charges arising from separate schemes involving money intended to provide housing and other services to homeless residents. Prosecutors say the funds instead supported a nightclub, commercial properties, personal debts, and fabricated housing referrals. The charges against Young, Mitchell, and Malone remain allegations, and all three are presumed innocent unless proven guilty.
The arrests were announced Wednesday as part of the Justice Department’s Homelessness Fraud and Corruption Task Force. Young founded Home At Last, Mitchell serves as CEO and executive director of The Big Blue Umbrella, and Malone worked for Special Service for Groups. The FBI, IRS Criminal Investigation, and the Department of Housing and Urban Development’s inspector general are investigating the cases. The task force covers seven Southern California counties.
Young, 46, is charged with wire fraud for allegedly using shell companies and fraudulent invoices to siphon more than $7.5 million from Home At Last. His organization received more than $118 million from government agencies, including over $75 million from the Los Angeles Homeless Services Authority. Prosecutors say Young submitted fake bids, forged signatures, and invoices from purported vendors that had no employees, offices, or legitimate operations. LAHSA canceled its contracts with Home At Last in June 2026.
Young allegedly controlled the supposed vendors and funneled their proceeds into unrelated businesses and personal expenses. As Fox 11 reported, authorities claim he spent more than $1 million opening and operating the Six Seven Five Lounge, an upscale restaurant and nightclub in Inglewood. The money also allegedly supported an adjacent bingo hall, luxury vacations, vintage-car restorations, and commercial real estate. Wire fraud carries a maximum statutory sentence of 20 years in federal prison.
Mitchell, 55, is accused of fraudulently securing an award of more than $1.2 million for The Big Blue Umbrella from the county-funded Amity Foundation. According to the Justice Department, Mitchell applied for more than $9 million in January 2024 while allegedly misrepresenting his organization’s size, work, and relationship with another service provider. Prosecutors say the grant money that was disbursed was then directed toward inflated salary payments, bail-bond costs, credit-card debt, family transfers, rent, and PlayStation purchases. Amity terminated the contract in May 2025 after distributing approximately $315,000.
Malone, 48, was arrested under a 21-count indictment accusing her of accepting more than $180,000 in bribes and kickbacks from Abundant Blessings executive director Alexander Soofer. Prosecutors say Malone steered housing referrals to Soofer, including “ghost” participants who never lived at the facilities. The files were allegedly supported with fabricated welcome letters, forged sign-in sheets, and false eligibility forms. Soofer disguised his payments to Malone as consulting fees paid to her and an entity she controlled, according to the indictment.
Watch the federal crackdown here:
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Soofer has agreed to plead guilty to wire fraud and money laundering in the related case. His plea agreement states that he obtained $23 million in public homelessness funding, some of it through fraud, and pocketed at least $2 million for himself and unrelated businesses. Prosecutors say Special Service for Groups paid Soofer more than $17 million during the alleged referral scheme involving Malone. Soofer has agreed to forfeit his illegally obtained proceeds to the federal government.
Los Angeles Controller Kenneth Mejia said his office receives hundreds of reports each year but lacks the personnel to investigate most of them. “We get 800 fraud, waste and abuse claims every year in the City of LA and we only have 5 people to investigate it,” Mejia said. First Assistant U.S. Attorney Bill Essayli blamed failures by California and Los Angeles County officials to protect public money. “Taxpayers deserve accountability. We will follow the money, expose the corruption, and prosecute those who exploit the American people for personal gain.”
Featured image credit: screengrab from the embedded video.