U.S. Homelessness Fraud Crackdown Includes Money Laundering Guilty Plea

U.S. federal prosecutors have announced a group of fraud and corruption cases involving public funds intended for homelessness programmes in Southern California, including a guilty plea to money laundering by the former executive director of a nonprofit organisation.

The U.S. Department of Justice said on 16 September that two defendants were arrested and a third was charged in separate cases being pursued by the Homelessness Fraud and Corruption Task Force. The cases concern alleged misuse of millions of dollars allocated for homeless housing and related services across the Central District of California.

In a related case, Alexander Soofer, the former executive director of nonprofit Abundant Blessings, has agreed to plead guilty to one count of wire fraud and one count of money laundering. According to the Justice Department, Soofer admitted obtaining $23 million in public money intended to combat homelessness, at least some of it through fraud, and pocketing at least $2 million for his own enrichment and businesses unrelated to homeless housing.

Soofer also admitted his role in a bribery scheme involving Lakiya Malone, an employee of another nonprofit organisation. Prosecutors allege Malone accepted more than $180,000 in bribes and kickbacks in exchange for priority referrals of homeless housing participants, including purported “ghost” participants who did not live at the sites. The indictment alleges payments were disguised as consulting fees and that files for some participants were supported by fabricated documents.

Separately, Michael Young, a founder of Culver City-based nonprofit Home At Last, was arrested on a federal criminal complaint charging wire fraud. Prosecutors allege that he used shell companies and fraudulent billing practices to divert taxpayer funds earmarked for homeless housing. Home At Last and Young received more than $118 million from public entities, including more than $75 million from the Los Angeles Homeless Services Authority, according to the complaint. Prosecutors allege more than $7.5 million was diverted through a sham-vendor scheme, with funds used for commercial real estate, a restaurant and nightclub, luxury travel and other personal or unrelated expenditures.

A third defendant, Donye Mitchell, chief executive and director of The Big Blue Umbrella, was charged in a separate case concerning public grant funding. The Justice Department described the cases as part of a broader federal effort to investigate fraud, waste, abuse and corruption involving homelessness funding.

The allegations against defendants who have not pleaded guilty remain unproven. The Justice Department stated that indictments and complaints contain allegations and that defendants are presumed innocent unless proven guilty beyond a reasonable doubt.

Sources / References

U.S. Department of Justice — Central District of California, 16 September 2026