Trump Admin Yanks Million$ in HUD Funding from LA Homeless Agency Amid Explosive Fraud Probe

HUD has suspended federal funding to the Los Angeles Homeless Services Authority (LAHSA) effective immediately, citing widespread fraud, mismanagement, conflicts of interest, and poor oversight. LAHSA has received over $1 billion since 2021 in federal taxpayer funding.

The Homelessness Fraud and Corruption Task Force was launched in April 2025 by U.S. Attorney Bill Essayli, and involves HUD Office of Inspector General, FBI, and IRS-CI to probe fraud in homelessness funding across the region. This included cases like the LAHSA nonprofit executive allegedly embezzling millions.

“LAHSA’s former top executive, Va Lecia Adams Kellum, resigned last year after she was found to have been a party to directing $2.1 million in federal funds under LAHSA’s control to her husband’s Santa Monica-based nonprofit employer,” Fox News reported.

Her resignation came only two years after she joined the agency in 2023. Two outside audits found that LAHSA had lax accounting procedures and poor financial oversight, potentially leading to the loss of millions of dollars, the Los Angeles Times reported.

🚨 BREAKING: The Trump administration is officially DEFUNDING TENS OF MILLIONS of dollars from Los Angeles Democrats' HOMELESS program after rampant fraud, abuse and waste

LONG OVERDUE! The fraud is crashing down! 🔥

"They just were informed within the last hour that they are… pic.twitter.com/0yw7tSPOw0

— Eric Daugherty (@EricLDaugh) June 11, 2026

Fox News reported Thursday morning:

The Trump administration is officially DEFUNDING TENS OF MILLIONS of dollars from Los Angeles Democrats’ HOMELESS program after rampant fraud, abuse and waste LONG OVERDUE! The fraud is crashing down!

“They just were informed within the last hour that they are losing these tens of millions of dollars. They’ve gotten almost over a billion dollars since 2021 and federal taxpayer funding.”

“This is a huge blow to this L.A. homeless authority.”

The Trump Administration is committed to accountability and results for taxpayers when it comes to homelessness funding. We will continue to investigate and prosecute anyone we believe fraudulently obtained public funds intended to house the homeless.

Last year I created the… https://t.co/GsOgWk5Xyk

— F.A. United States Attorney Bill Essayli (@USAttyEssayli) June 11, 2026

Essayli posted to X:

Last year I created the Homeless Fraud and Corruption Task Force, which has already made significant arrests in this space. One such case was against Alexander Soofer, 42, of Westwood, the executive director of the Hyde Park–based charity Abundant Blessings, who is accused of misusing more than $10 million in homeless housing funds. Between 2018 and 2025, his organization received more than $23 million to provide housing and meals for hundreds of vulnerable Angelenos. Instead, he allegedly fabricated invoices, lied about vendor payments, created a fake board, and failed to offer adequate food or services to participants.

While the City of Los Angeles and LAHSA paid for safe shelter and three nutritious meals a day, residents got little more than ramen and canned beans. Meanwhile, Soofer allegedly diverted public money for personal luxuries, including a $7 million Westwood home, private school tuition, luxury travel, and a property in Greece.

Essayli’s DOJ explained the investigation:

Los Angeles County alone contains a homeless population of more than 75,000, of which more than 45,000 are within the city limits of Los Angeles. The total homeless population of the remaining six counties of the district exceeds 20,000.

Despite voter-approved initiatives and billions of dollars spent on tackling this issue, homelessness remains a crisis, especially in Los Angeles County. Last month, a court-ordered audit found that homelessness services provided by the city and county of Los Angeles were “disjointed” and contained “poor data quality and integration” and lacked financial controls to monitor contracts for compliance and performance.

During the COVID-19 pandemic, the federal government sent $100 million in emergency aid to Los Angeles County to address homelessness. Last month, the United States Department of Housing and Urban Development awarded more than $200 million to address homelessness in Los Angeles.

“California has spent more than $24 billion over the past five years to address homelessness,” said United States Attorney Bill Essayli. “But officials have been unable to account for all the expenditures and outcomes, and the homeless crisis has only gotten worse. Taxpayers deserve answers for where and how their hard-earned money has been spent. If state and local officials cannot provide proper oversight and accountability, we will do it for them. If we discover any federal laws were violated, we will make arrests.”

The full text of the HUD letter has not been publicly released in its entirety, however Fox News Digital received it.

Based on Fox reporting as of Thursday, here is what we know was in the HUD letter:

“Suspending LAHSA’s participation in federal government programs is a necessary step in accomplishing that critical mission in Los Angeles. LAHSA’s failures have been so severe and pervasive that Los Angeles County has withdrawn its funding for the agency, and the City of Los Angeles is considering doing so as well.” 

“HUD cannot ignore LAHSA’s wanton mismanagement of public funds. HUD’s mission is to reduce the plague of homelessness in America. Turning over billions of dollars from American taxpayers to an organization under investigation and suspected of gross misuse of federal funding and ‘obvious fraud’ does nothing to reduce homelessness. Indeed, diverting dollars from worthy programs to LAHSA merely makes the homeless crisis worse.” 

The letter was addressed to LAHSA Board Chair Wendy Greuel and CEO Gita O’Neill and cites, conflicts of interest and financial mismanagement, a federal judge’s finding of “obvious fraud” related to an 88-bed shelter funded at full capacity despite operating at roughly half, LAHSA’s inability to verify nearly 2,300 housing sites, with 70% of related contracts showing no reported expenses, and additional issues like late payments to providers, poor record-keeping, and $513 million unspent funding, noted in a 2024 City Controller audit.

A 2022 HUD OIG Audit stated, Los Angeles Homeless Services Authority, Los Angeles, CA, Did Not Always Administer Its Continuum of Care Program in Accordance With HUD Requirements and noted:

We audited the Los Angeles Homeless Services Authority’s Continuum of Care (CoC) program.  The audit was initiated because of the homelessness crisis in the City of Los Angeles, which has the highest number of unsheltered people in the United States.  In addition, the Los Angeles city controller issued a report in 2019, criticizing the Authority for falling short of City of Los Angeles homeless outreach goals.  (See Background and Objectives.)  Our audit objectives were to determine whether the Authority met the goals and objectives of housing and helping the homeless become self-sufficient through its CoC program and administered the program in accordance with HUD requirements.The Authority did not fully meet the goals and objectives of the program and did not always follow program requirements.  Specifically, it (1) did not use $3.5 million in CoC grant awards and left the funds to expire, (2) did not support Homeless Management Information System and planning grant costs, and (3) did not submit timely annual performance reports (APR).  As a result, the unused CoC funds represent a missed opportunity to meet the program’s goals of assisting the homeless, the U.S. Department of Housing and Urban Development (HUD) does not have assurance $879,847 in salary and rent costs were for the CoC grants, and CoC funds may have unnecessarily sat idle and unavailable for future awards.We recommend that the Director of HUD’s Los Angeles Office of Community Planning and Development require the Authority to (1) develop and implement policies and procedures to ensure that grant agreements are executed in a timely manner and effective monitoring is performed to prevent similar occurrences of grant funds going unused, (2) support payroll and rent costs or repay its CoC grants $879,847 from non-Federal funds, and (3) develop policies and procedures to ensure APRs are submitted in a timely manner and personnel are routinely trained on the grant closeout process.

California’s fraud is being exposed. With the FBI, HUD-OIG, IRS, and U.S. Attorney’s Office, this likely won’t end well for some Los Angeles officials, nor should it.