Federal agents pulled two Los Angeles “charity” workers out of their homes this week and charged a third, accusing the group of turning roughly $12 million in homelessness aid into a nightclub, a Tahiti vacation, a vintage Impala and a stack of PlayStation charges.
The U.S. Attorney’s Office announced the charges on Wednesday, September 16, 2026, after FBI and IRS agents arrested Michael Young and Lakiya Malone at their homes that morning. A third defendant, Donye Mitchell, faces separate fraud charges. The case is the first big haul from a federal Homelessness Fraud and Corruption Task Force launched last year.
Story Snapshot
- Three people tied to Los Angeles homeless-services nonprofits are charged in an alleged $12 million fraud.
- Prosecutors say the founder of Home At Last spent more than $1 million of program money opening a nightclub.
- A 21-count indictment accuses a case worker of taking $180,000 in bribes to steer housing referrals.
- The county’s homeless agency paid Home At Last more than $75 million before canceling its contracts.
The Nightclub, The Tahiti Trip And The Impala
According to the complaint, Young ran the core scheme through shell companies and inflated or fake invoices billed against homeless-housing contracts. Prosecutors say he spent more than $1 million of that money opening and running the 675 Lounge, about $50,000 on a trip to Tahiti and more than $100,000 on a vintage Chevrolet Impala. Every dollar, the government says, was supposed to move people off the street and into housing.
Malone’s indictment describes a pay-to-play arrangement. Prosecutors allege she took more than $180,000 from businessman Alexander Soofer in exchange for priority referrals into his housing programs, and that her paperwork listed “ghost” participants who were never served. Mitchell is accused of fraudulently obtaining about $1.2 million in grants and spending it on bail bond payments, credit-card balances and PlayStation purchases.
How The Money Got Out The Door
The Los Angeles Homeless Services Authority paid Home At Last more than $75 million before pulling its contracts after red flags surfaced. Audits had warned for years that the agency could not track its own spending. A county review found LAHSA handed out $50.8 million in cash advances to providers without agreements spelling out when the money would come back. A federal court-ordered audit in 2025 said the city’s homeless system lacked the basic financial controls needed to catch waste and fraud.
In June, the Department of Housing and Urban Development suspended federal funding to LAHSA, citing what investigators called a “clear pattern of fraud,” including an inability to verify whether federal dollars were paying for empty hotel rooms. The agency’s chief executive and chief financial officer had already resigned.
What Happens Next
The U.S. Attorney’s Office says the task force, built with the FBI and IRS Criminal Investigation, is auditing contracts and tracing payments across the region’s homelessness programs, and that more charges are possible. Young and Malone made initial court appearances after their arrests. None of the three has entered a plea in the new charges.
For Los Angeles taxpayers, the number that matters is the one that never showed up on the street: fewer beds, slower placements and a $12 million hole in a system that spends billions and still cannot say where much of it went.
Sources:
townhall.com, apnews.com, reason.com, calmatters.org, foxla.com, latimes.com
