Federal authorities arrested two defendants Thursday and announced charges against three people in separate homelessness corruption and fraud cases, including a Culver City nonprofit founder accused of misappropriating more than $7.5 million in taxpayer funds and using the money to finance commercial real estate, a nightclub, and an adjacent bingo hall.

The arrests are the latest enforcement action by the Homelessness Fraud and Corruption Task Force, which investigates fraud, waste, abuse, and corruption involving funds allocated to eradicate homelessness in the seven-county Central District of California: Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara, and Ventura counties.

The two defendants arrested are expected to make their initial appearances Thursday afternoon in United States District Court in downtown Los Angeles.

United States v. Young

Michael Young, 46, of Baldwin Hills, a founder of the Culver City-based nonprofit Home At Last, was arrested on a federal criminal complaint alleging he engaged in a years-long scheme to defraud taxpayers and public entities providing funding for homeless housing. Some affected programs were administered by the Los Angeles Homeless Services Authority.

Young is charged with wire fraud, which carries a statutory maximum penalty of 20 years in federal prison.

According to the complaint, Young used a web of shell corporations and fraudulent billing practices to misappropriate millions of dollars in taxpayer funds earmarked for homeless housing. Through numerous contracts with LAHSA and other public entities, Young received more than $118 million in public funds from LAHSA, the City of Los Angeles, the County of Los Angeles, and the U.S. Department of Housing and Urban Development. LAHSA alone paid Home At Last over $75 million for homeless housing services.

Young allegedly used a sham vendor fraud to misappropriate more than $7.5 million of those funds. He spent more than $1 million to open and operate a high-end restaurant and nightclub in Inglewood called Six Seven Five Lounge, according to the complaint.

The complaint alleges Young created sham vendors to hide self-dealing transactions, submitting fake bids, forged signatures, and fraudulent invoices to make it appear the vendors were legitimate third-party companies. In reality, the vendors had no employees, no locations, and no legitimate operations, and existed only to funnel public money back to Young, who allegedly controlled their bank accounts and used millions for personal enrichment, including luxury vacations, vintage car restorations, and commercial properties unrelated to homeless housing.

In June 2026, LAHSA canceled its contracts with Home At Last.

United States v. Mitchell

Donye Mitchell, 55, also known as “Danya Mitchell,” of Orange, the CEO of a Los Angeles-based homelessness nonprofit, is charged in a federal criminal complaint alleging he fraudulently obtained more than $1.2 million in grant money from a Los Angeles County-funded nonprofit. He is considered a fugitive.

Mitchell is charged with wire fraud, which carries a statutory maximum penalty of 20 years in federal prison.

According to the complaint, Mitchell is CEO and executive director of The Big Blue Umbrella. In January 2024, he allegedly applied for over $9 million in grant money and several months later was awarded over $1.2 million from Epidaurus, which does business as Amity Foundation, a separate nonprofit funded by Los Angeles County to provide housing and mental health services.

Mitchell allegedly falsely claimed to Amity that Big Blue Umbrella was a major homeless housing provider and misrepresented its work with Special Service for Groups through its HOPICS division, despite having no contract and previously displacing SSG clients by failing to pay rent.

After receiving grant funds, Mitchell allegedly lied about staffing and spending, using the money for personal expenses including inflated salary payments, bail bond costs, credit card debt, family transfers, rent, and PlayStation charges. In May 2025, after Amity had disbursed approximately $315,000, it terminated Big Blue Umbrella’s contract.

United States v. Malone

Lakiya Malone, 48, of South Los Angeles and an employee of SSG, was arrested on a 21-count federal indictment accusing her of taking more than $180,000 in bribes and kickbacks from Alexander Soofer, executive director of the nonprofit Abundant Blessings, who is separately charged and has agreed to plead guilty.

In exchange for the bribes, Malone allegedly provided priority referrals of homeless housing participants, including “ghost” participants who never lived at the sites.

Malone’s role at SSG involved referring homeless individuals to housing sites funded by HUD, LAHSA, and the City and County of Los Angeles. According to the indictment, Soofer paid her through checks made out to her and an entity she controlled, Grateful Hearts Realty & Consulting, disguising the payments as consulting fees. The payments were allegedly tied to the number of referrals Malone sent and to “ghost clients” whose files she helped fabricate with fake welcome letters, forged sign-in sheets, and falsified eligibility forms.

Soofer allegedly received more than $17 million from SSG during the scheme. Malone faces up to 20 years in prison per wire fraud count, 10 years per bribery count, and five years on the conspiracy charge.

United States v. Soofer – Guilty Plea

Soofer has agreed to plead guilty to one count of wire fraud and one count of money laundering. In a plea agreement filed Thursday, Soofer admitted to his role in the bribery scheme with Malone.

He further admitted that he obtained $23 million in public money intended to combat homelessness, at least some of which he obtained through fraud, and that he pocketed at least $2 million in taxpayer money for personal enrichment and businesses unrelated to homeless housing.

Soofer has agreed to forfeit his ill-gotten gains to the U.S. government and is expected to plead guilty in the coming weeks.

Official Statements

“Today the Department of Justice, with the full force of the federal government, is announcing charges in a major fraud takedown targeting schemes that stole millions from programs meant to house California’s homeless,” said Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Division. “As alleged, Michael Young, through Home at Last, received more than $100 million in taxpayer funds and misappropriated more than $12 million, diverting that money into shell companies, real estate, and even a nightclub and bingo hall. That scheme is now halted in its tracks.”

“These defendants are accused of systematically diverting over $12 million in taxpayer funds for personal gain – robbing hardworking American citizens and directly hurting the people those funds are intended to support,” said FBI Director Kash Patel.

“Today’s arrests mark a major success for our Homelessness Fraud and Corruption Task Force and this Administration’s commitment to protecting taxpayers,” said First Assistant U.S. Attorney Bill Essayli for the Central District of California. “The scale and brazenness of these fraudsters expose a profound failure by the State of California and Los Angeles County to safeguard public funds.”

“Today’s actions reflect our commitment to protecting taxpayer dollars and ensuring accountability of public funds,” said Special Agent in Charge Darren Lian of IRS Criminal Investigation’s Los Angeles Field Office.

“Stealing from programs meant to feed, shelter, and support people experiencing homelessness isn’t just a financial crime – it’s an attack on the most vulnerable communities provided for by HUD programs,” said Acting Inspector General Brian D. Harrison of the U.S. Department of Housing and Urban Development, Office of Inspector General.

An indictment or complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.