Homelessness Fraud and Corruption Task Force Nabs Two Alleged Fraudsters

“California has spent billions of taxpayer dollar to combat its homelessness crisis with very little to show for it,” Acting U.S. Attorney Bill Essayli correctly acknowledged today, and through the new Homelessness Fraud and Corruption Task Force launched by President Trump’s Department of Justice, two alleged fraudsters have been arrested in Brentwood and Beverly Hills, CA.

California has spent billions of taxpayer dollars to combat its homelessness crisis with very little to show for it. Six months ago, I announced the Homelessness Fraud and Corruption Task Force. Today, we begin to hold people accountable by announcing two cases where more than… pic.twitter.com/jUFpLhBmsZ

— Acting U.S. Attorney Bill Essayli (@USAttyEssayli) October 16, 2025

According to the DOJ’s press release:

Cody Holmes, 31, of Beverly Hills, was arrested this morning on a federal criminal complaint charging him with mail fraud, a felony offense that carries a statutory maximum sentence of 20 years in federal prison.

Steven Taylor, 44, of Brentwood, is charged with seven counts of bank fraud, one count of aggravated identity theft, and one count of money laundering.

As CFO of Shangri-La Industries, a for-profit affordable housing development company, Holmes used his executive position to allegedly embezzled tens-of-millions of dollars earmarked for low-income housing projects, and instead used the money to fund his lavish Beverly Hills lifestyle for him and his ex-girlfriend, Madeline Witt.

A lawsuit filed by a Shangri-La industries against Holmes and Witt claims that Holmes transferred vast sums of money to himself and Witt to pay for expensive handbags, jewelry, exotic cars, private jet travel, VIP concert tickets, and the monthly rent on a 6,500 square-foot Beverly Hills mansion.

According to the complaint, several years ago Shangri-La Industries utilized state funding made available through affordable housing programs such as Project Homekey to build and maintain low-income housing projects designated for the homeless.

But several of the properties are now in foreclosure, including Project Homekey developments at former motels in Redlands and San Bernardino. The company is being sued by the California Department of Housing and Community Development for breach of contract.

Shangri-La Industries is seeking damages greater than $20 million for money allegedly embezzled by the defendants, and an additional $20 million in damages because of financial exposure to third parties and lost business income because of the alleged theft,” reports ABC7 Eyewitness News.

“He took advantage of his position and embezzled millions of dollars using fraudulent and deceptive means to do so,” said Brian A. Sun, an attorney representing Shangri-La Industries. “(Those schemes included) doctoring up signatures, creating documents, and opening up fictitious accounts as detailed in our complaint.”

In a separate state-led lawsuit against Shangri-La Industries, California Department of Housing and Community Development (HCD) paid more than $100 million in Homekey Project money to Shangri-La Industries to convert old motels throughout California into homeless housing.

The California Department of Housing and Community Development contends that seven Project Homekey properties are facing foreclosure.

“The state is taking legal action as Shangri-La has misrepresented multiple financial considerations and has yet to cure a number of breached contractual obligations to the state and the Homekey program,” said Ryan Seeling, general counsel at the Department of Housing and Community Development.

“The difficulties they find themselves in are of their own making. This is clearly spelled out in the complaint. HCD will continue to make every effort to ensure Homekey dollars go toward housing individuals experiencing homelessness, and not enriching developers.”

According to the federal indictment against Steven Taylor:

From August 2019 to July 2025, Taylor used fake bank statements and false cash representations to obtain loans and lines of credit to operate his real estate business.  Among other uses for the fraud proceeds, Taylor acquired or refinanced properties in the Los Angeles neighborhoods of Silver Lake, Los Feliz, Westlake, Del Rey, Pico-Union, and Cheviot Hills.

Taylor also is charged with lying to lenders about his intended use of the properties, including lying to the lender funding his purchase of the Cheviot Hills property, misleadingly telling the lender he intended to renovate and use the property himself. In fact, Taylor already had contracted to sell the property, which he originally acquired for $11.2 million (obtained with a loan via fake bank statements) to a homeless housing developer purchasing it with public funds from the City of Los Angeles and the State of California for $27.3 million in a double-escrow transaction hidden from the victim lender and others.

The fake bank statements, false cash representations, and misrepresentations regarding liabilities were material to lenders in deciding whether to approve and to keep open the loans and lines of credit Taylor sought and maintained. Taylor used the fraudulently obtained lines of credit to make down payments on real estate that he also obtained with the fraudulent loans.

If convicted, Taylor would face a statutory maximum sentence of 30 years in federal prison for each bank fraud count, up to 10 years in federal prison for the money laundering count, and a mandatory consecutive two-year prison sentence for the aggravated identity theft count.

“In both of these cases, defendants took advantage of funds allocated to assist the homeless, some of the most vulnerable people in society and many of whom may be suffering from myriad conditions, including addiction,” said Akil Davis, the Assistant Director of the FBI’s Los Angeles Field Office. “The FBI is committed to the Homelessness Fraud & Corruption Task Force to find perpetrators of this insidious fraud and build cases to hold the offenders accountable in court. It is my hope that the charges we’re announcing today send a message to others who may be contemplating similar criminal behavior.”

“Accountability for the misuse of billions of tax dollars intended to combat homeless starts today,” said Acting United States Attorney Bill Essayli, “The two criminal cases announced is only the tip of the iceberg and we intend to aggressively pursue all leads and hold anyone who broke any federal laws criminally liable.”