In a dramatic sweep on Wednesday, federal agents reportedly dismantled a multi-million-dollar corruption network embedded within Los Angeles’ homelessness services sector.
Federal Bureau of Investigation (FBI) tactical units in Kevlar vests, armed with rifles and bullhorns, descended on multiple South Los Angeles residences to arrest figures accused of skimming taxpayer funds meant to shelter the city’s homeless residents.
The operation targeted figures linked to contracts administered by the Los Angeles Homeless Services Authority (LAHSA), revealing a deep web of kickbacks, “ghost” participants and lavish personal spending — funded by public aid.
Among those taken into custody during the morning raids was 48-year-old Lakiya Malone, an employee at Special Service for Groups (SSG), a nonprofit operating under LAHSA-funded programs.
Federal prosecutors say that Malone accepted over $180,000 in bribes and kickbacks to approve priority referrals and fabricate ghost participants — which are individuals who never actually received or resided in subsidized housing — to funnel millions in public funds into corrupt hands.
Malone was escorted out of her Westmont residence in handcuffs as First Assistant U.S. Attorney Bill Essayli and other law enforcement officers oversaw the arrest.
Simultaneously, federal agents also swarmed the Baldwin Hills residence of 46-year-old Michael Young, founder of the nonprofit Home At Last. Federal prosecutors charged Young with wire fraud, alleging that he misappropriated more than $7.5 million in public homelessness funds using a network of shell companies and fraudulent billing practices.
Rather than providing shelter, Young purportedly funneled the public cash into commercial real estate, a bingo hall, private vacations and over $1 million to build and operate a restaurant and nightclub called Six Seven Five Lounge in Inglewood.
The sweeps are tied to an expansive, ongoing federal probe into Southern California homeless service providers, which previously ensnared Alexander Soofer, the former executive director of the nonprofit Abundant Blessings.
Soofer, who was charged with orchestrating a $23 million fraud scheme to buy a $7 million Westwood home and finance luxury travel, agreed to plead guilty to wire fraud and money laundering while admitting to his role in paying kickbacks to Malone.
Meanwhile, authorities are also searching for a third defendant in the new indictment, Donye Mitchell, 55, who faces federal charges for allegedly fraudulent grant applications exceeding $1.2 million.
Federal officials noted that the exploitation of homeless aid exemplifies a major breach of public trust, promising further action as investigations into L.A.’s homeless aid system continue.
Hellbound and Down 