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Federal agents just pulled the curtain back on what prosecutors call a brazen theft of taxpayer money meant to help the homeless in Los Angeles. The Department of Justice’s Homelessness Fraud and Corruption Task Force announced a coordinated fraud takedown that charged three people in separate but related cases, arrested two, left one a fugitive, and revealed a messy web of sham vendors, kickbacks, and luxury spending that stole from the very programs meant to protect the vulnerable.
What prosecutors say the takedown uncovered
According to the Justice Department, Michael Young — a founder of the Culver City nonprofit Home At Last — is accused of funneling millions from homelessness contracts into shell companies, commercial real estate, and even a nightclub in Inglewood. Prosecutors say Young and related entities received large sums from LAHSA, the City and County of Los Angeles, and HUD, and that more than $7.5 million was diverted through sham vendors. The indictments and complaints also name Donye (Danya) Mitchell as a fugitive accused of misusing more than $1.2 million in grant money, and Lakiya Malone, who is accused of taking bribes and kickbacks tied to “priority” referrals and ghost clients. In a related development, prosecutors say another defendant, Alexander Soofer, accepted a guilty plea and admitted to obtaining and pocketing millions in public funds. These are allegations laid out in federal charging documents — not convictions — but they are serious and detailed.
Why this matters for taxpayers and for people experiencing homelessness
Stealing from homeless programs is both cruel and costly. When contractors divert money into personal businesses and nightlife instead of housing and services, shelters go unbuilt and people stay on the streets. Beyond the human cost, this takedown exposes a failure of basic oversight. Agencies like LAHSA and county offices handed out large contracts and grants, and somewhere along the line vendors and audits failed to catch sham invoices and self-dealing. That’s not just an indictment of bad actors — it’s an indictment of a system that too often trusts organizations without verifying results or tracking where the dollars actually go.
Practical fixes — and the accountability we should demand
If we’re serious about helping the homeless and protecting taxpayers, reforms must follow the arrests. Start with basic financial controls: strict vendor verification, independent audits, public reporting of contract outcomes, and swift debarment for bad actors. Local officials need to stop treating nonprofit status as a free pass and instead demand proof of services delivered. Asset forfeiture and restitution should be pursued aggressively to claw back stolen dollars. And for the love of common sense, if someone is running a charity and also building nightclubs, that should trigger an immediate audit — not a year of silence while money disappears.
This takedown is a reminder that watchdogs and prosecutors matter, but prevention matters more. Watch the court filings and forfeiture actions closely as these cases move forward; the real test will be whether recovered funds go back to the programs they were meant for and whether officials tighten the rules so the next scandal can be stopped before it starts. Until then, taxpayers and the homeless both deserve better than the shell-game that federal prosecutors say they found — and if you’re thinking of opening a nightclub on the public dime, maybe try fundraising the old-fashioned way: with your own wallet.
