DOJ Uncovers $75 Million Funneled Through LAHSA After CFO, CEO and Mayor Bass Quit

Los Angeles Mayor Karen Bass left the Los Angeles Homeless Services Authority Commission last week, citing time constraints, and refused a House summons the following Tuesday for a hearing titled “Fixing Fraud and Failure in Federally Funded Homelessness Services.”

On Wednesday, the Justice Department unsealed fraud charges against nonprofit operators who drew tens of millions through that agency, including more than $75 million LAHSA paid one contractor now accused of turning homeless-housing invoices into a nightclub. 

HUD Secretary Scott Turner put the larger number on the table in a Fox News interview the same day. “LAHSA has received $1 billion—and I want everybody to hear this. A billion dollars of taxpayer money over 5 years with zero results,” Turner told Fox’s Matt Finn. “There’s no business in America that is ran that way or that would be sustained. Your own personal family budget cannot be ran that way and sustained.” 

NEW: Four people have been charged by the DOJ in a $130 million homeless fraud scheme.

At least $18 million reportedly went toward a home in Greece, a vacation in Tahiti, and a million-dollar nightclub in Los Angeles, @MattFinnFNC reports.

"One dollar is too much. Any dollar… pic.twitter.com/CRa9aMkagV

— Fox News (@FoxNews) September 16, 2026

Home At Last, the Culver City nonprofit founded by Michael Young, received more than $118 million from LAHSA, the city, the county, and HUD. LAHSA alone paid the group more than $75 million for homeless housing services. 

Federal prosecutors say Young used sham vendors, fake competing bids, forged signatures, and fraudulent invoices to siphon millions into shell companies, commercial real estate, a bingo hall, and Six Seven Five Lounge, a high-end restaurant and nightclub in Inglewood. 

Young, 46, of Baldwin Hills, was arrested Wednesday on a federal wire-fraud complaint. Officials allege he diverted more than $7.5 million, and in charging papers more than $12 million, including over $1 million to open and operate the nightclub: liquor license, architect, developer, and upscale finishes. Nearly $50,000 went to a trip to Tahiti. Another $140,000 restored a vintage Chevrolet Impala. 

“Taxpayers did not sign up to fund this nightclub,” Assistant Attorney General Colin McDonald said at the downtown Los Angeles news conference. 

First Assistant U.S. Attorney Bill Essayli called the scheme a “profound failure by the State of California and Los Angeles County to safeguard public funds.” Millions meant to house the homeless, he said, financed private real estate, a nightclub, a bingo hall, and personal expenses. 

The books those millions passed through were not run by a CPA. A degreed cultural anthropologist ran LAHSA’s finances, the Globe reported. Janine Trejo, promoted to chief financial officer in March 2024 by then-CEO Va Lecia Adams Kellum, listed a bachelor’s in cultural anthropology—not the accounting, finance, MBA, or CPA credentials the agency’s own job posting required. She left the agency in late March 2025 after months on leave.

Adams Kellum announced her own resignation days later. On April 4, 2025, three days after the Los Angeles County Board of Supervisors voted to strip LAHSA of more than $300 million and shift contracts to a new county department, she submitted a letter saying “now is the right time for me to resign as CEO.” As CEO, she and LAHSA directed more than $2 million in federal funds under the agency’s control to her husband’s employer. HUD later cited that deal in its case against the “homeless industrial complex.”

That was not the first LAHSA exit. 

As previously reported by the California Globe, Executive Director Peter Lynn stepped down in 2019 after five years in which he said LAHSA “deployed more than $780 million in new funding,” then “doubled our staff and then doubled it again.” His salary was about $250,000 a year. 

Bass, who appointed herself to the commission, missed 25 of 47 meetings and stepped off the board last week, days before Wednesday’s arrests. 

Turner used Wednesday to accuse LAHSA of negligence with public money.

“Make no mistake, HUD and the Trump administration will not tolerate the theft and abuse of taxpayers in this country,” he said. 

Coverage of the briefing flagged more than $14 million stolen from taxpayers across the related cases. The Fox segment circulating Wednesday also noted that tens of millions moved through LAHSA to another group used to steal the money. 

Two other defendants were charged the same day.

Lakiya Malone, 48, an employee of Special Service for Groups, faces 21 counts of conspiracy, wire fraud, and bribery for allegedly taking more than $180,000 from Alexander Soofer in exchange for housing referrals that included “ghost” clients. Soofer has agreed to plead guilty after obtaining more than $23 million in homelessness funds and pocketing at least $2 million. 

Donye “Danya” Mitchell, 55, CEO of The Big Blue Umbrella, is charged with wire fraud and remains a fugitive. 

LAHSA said it cooperated, canceled Home At Last contracts in June, and is seeking recovery of seized funds. It said no agency employees were implicated. On Tuesday the commission voted not to bid to remain the region’s lead Continuum of Care agency. 

As chronicled by the Globe, the spending binge is not a mystery. 

The city budgets more than $1 billion a year on homelessness, $961 million adopted in FY 2025, rising to about $1.1 billion with carryovers, and left nearly $473 million unspent in one recent year. Despite the billion-dollar budget, street homelessness surged.

Bass’s Inside Safe program moved more than 6,000 people into hotels; 41 percent were back on the street by late May. Its first year produced only 255 permanent housing placements. The City Council later slashed the program during a roughly $1 billion city deficit. Los Angeles County pulled hundreds of millions from LAHSA. 

HUD suspended further federal funding, citing unverifiable housing sites, empty hotel rooms, and weak controls. 

Statewide, California has spent more than $37 billion on homelessness since 2019—about $200,000 per person, while remaining home to a quarter to a third of the nation’s homeless population. 

Project Homekey sent $745 million into Los Angeles-area projects, many of which sat empty. 

The Justice Department’s charges do not invent that record. They price one sliver of it: $75 million out of LAHSA to a single nonprofit; a cultural anthropologist on the books who left in late March 2025 after months on leave; a CEO who announced her resignation weeks later, after the county pulled the money; and a mayor who walked off the board one week before the arrests.

The latest charges put a price on the homelessness industrial complex in months, not years: more than $75 million out of LAHSA to one contractor, tens of millions more through the same pipeline, and $14 million-plus alleged stolen for a nightclub, ghost clients, and luxury spending—a sliver of the $37 billion California has poured into homelessness since 2019, fraud federal prosecutors uncovered in short order after California Democrats spent years overseeing the books, the board, and the growing homeless encampments.