Federal law enforcement officers in California arrested three individuals on Wednesday for the alleged misappropriation of taxpayer funds intended to address homelessness. According to the Department of Justice, Michael Young, Donye Mitchell, and Lakiya Malone were arrested following an investigation by the federal Homelessness Fraud and Corruption Task Force. Alexander Soofer was arrested prior to the others and has agreed to plead guilty to wire fraud and money laundering. These four individuals are accused of taking more than $12 million.
The arrests involve three separate sets of allegations against leaders and employees of various nonprofit organizations. The Los Angeles Homeless Services Authority (LAHSA) issued a statement clarifying that no agency employees were implicated in the alleged crimes. The agency stated that diverting resources meant for vulnerable neighbors undermines the social safety net.
Michael Young, founder of Home At Last, is accused of misappropriating more than $7.5 million, including $1 million allegedly used to operate a restaurant and club in Inglewood. Donye Mitchell, CEO of The Big Blue Umbrella, is accused of fraudulently obtaining $1.2 million and using it for personal expenses such as PlayStation purchases and bail. Lakiya Malone, an employee of Special Service for Groups, is accused of accepting $180,000 in bribes and kickbacks from Soofer in exchange for priority referrals, including "ghost" participants who never resided at the housing sites.
These cases affect unhoused residents in Los Angeles and the taxpayers who fund their support services. LAHSA reported in July that there are more than 72,000 unhoused people in Los Angeles County. Individual defendants are accused of diverting significant sums; for example, Young is accused of misappropriating more than $7.5 million.
The legal proceedings will determine the accountability for funds managed by nonprofits like Home At Last, The Big Blue Umbrella, and Abundant Blessings. The homeless population grew by 3.4% in the city of Los Angeles over the past year.
Mayor Karen Bass stated that her administration has "zero tolerance" for fraud and said misuse of taxpayer funds should be met with the full force of the law. Young was released on a $500,000 bond and is expected to be arraigned in October 2026. Malone was released on a $50,000 bond with a trial expected in November 2026. Soofer has already agreed to a plea deal. Young and Mitchell each face up to 20 years in federal prison if convicted of wire fraud.