Federal authorities on Wednesday charged three individuals with stealing $12 million in federal and state homelessness aid funds, alleging the money was used for personal expenses including real estate purchases, luxury trips, and vintage vehicles. The defendants, all affiliated with Los Angeles-area homeless services nonprofits, face charges of wire fraud and bribery in separate indictments unsealed this week.
Two defendants arrested; one remains at large
Federal agents arrested Lakiya Malone, 48, and Michael Young, 46, early Wednesday in Los Angeles. A third defendant, Donye Mitchell, 55, is considered a fugitive. The arrests follow a broader federal crackdown targeting alleged fraud in government aid programs, including a Tuesday indictment of 12 individuals accused of stealing over $10 million in federal childcare funds.
Prosecutors allege the defendants exploited their roles at nonprofits contracted to provide housing and social services to divert funds for unauthorized purposes. The charges include wire fraud, bribery, and kickbacks, with authorities describing the alleged scheme as an "attack on the most vulnerable communities."
Allegations of misuse and shell companies
According to court documents, Michael Young, founder of the Culver City-based nonprofit Home At Last, is accused of funneling $7.5 million in taxpayer funds to finance a high-end nightclub and restaurant in Inglewood, as well as luxury vacations and vintage car restorations. Prosecutors allege he used shell companies to conceal the misuse of funds, including $1 million spent to open Six Seven Five Lounge.
Lakiya Malone, an employee of Special Service for Groups, faces a 21-count indictment accusing her of accepting $180,000 in bribes and kickbacks for enrolling non-existent participants in homelessness services programs. Federal investigators allege she signed up "ghost participants" in exchange for payments from a nonprofit executive charged earlier this week.
Scope of alleged fraud and federal response
The alleged fraud spans multiple programs administered by the Los Angeles Homeless Services Authority (LAHSA) and other public agencies. Young’s nonprofit, Home At Last, received over $118 million in public funds since 2019, according to the Justice Department, with prosecutors alleging he misappropriated millions through fraudulent billing practices.
Federal officials framed the crackdown as part of a broader effort to root out corruption in government aid programs. HUD Secretary Scott Turner stated, "The days of these wire fraud experts flying on private jets, driving around Beverly Hills in Range Rovers and doing lavish things is over." Assistant Attorney General Colin M. McDonald emphasized, "The taxpayers did not sign up to fund this nightclub."
Defendants’ status and next steps
Neither Young nor Malone has yet appeared in court to enter pleas. Their attorneys have not been publicly identified. Donye Mitchell, the third defendant, remains at large. The cases are being prosecuted by the U.S. Attorney’s Office for the Central District of California and the Department of Justice’s Fraud Section.
The charges follow a pattern of federal enforcement actions targeting alleged fraud in social service programs. Earlier this week, authorities announced indictments in a separate case involving $10 million in stolen childcare funds, signaling an intensified focus on accountability in government spending.