Feds arrest 2 homeless prevention nonprofit execs, employee in $12 MILLION fraud crackdown in LA

On Wednesday, federal authorities conducted a sweep across Los Angeles to arrest multiple heads of homeless prevention nonprofits as part of a crackdown on public corruption.  

Funding going to the nonprofits was instead directed to fund a trip to Tahiti, a high-end nightclub, luxury vehicles, and other luxuries.   

At the center of the crackdown is Michael Young, 46, a founder of Culver City-based nonprofit Home At Last. Young’s organization was able to obtain over $118 million in public funds that were supposed to go towards preventing homelessness. It has been alleged that he misused $7.5 million, $1 million of which was allegedly used to open a high-end luxury restaurant and nightclub in Inglewood called the Six Seven Five Lounge.  

“As alleged, Michael Young, through Home at Last, received more than $100 million in taxpayer funds and misappropriated more than $7.5 million, diverting that money into shell companies, real estate, and even a nightclub and bingo hall. That scheme is now halted in its tracks. My message to every fraudster who steals from the vulnerable is clear: We will track you down, bring charges where the evidence leads, and work relentlessly to reclaim every taxpayer dollar you stole,” Assistant Attorney General Colin M. McDonald said.   

Also arrested was 48-year-old Lakiya Malone, who is an employee at Special Service for Groups. Malone has been charged with accepting $180,000 in bribes from Alexander Soofer, who was an executive at Abundant Blessings. The bribes were in exchange for submitting “ghost” homeless referrals where the supposed participants did not live at the facility. Soofer admitted pocketing $2 million out of $23 million in funding meant to help the homeless. Soorer was separately charged and agreed to plead guilty.

Donye "Danya" Mitchell of Orange, who is the head of The Big Blue Umbrella, was also taken into custody. Mitchell has been sought by authorities for his role in allegedly obtaining over $1 million in grants through fraud. He has been charged with wire fraud and allegedly was able to obtain $1.2 million in grant funds after he “falsely claimed to Amity that BBU was a major homeless housing provider and misrepresented its work with Special Service for Groups,” the DOJ said of the complaint against him. 

“These defendants are accused of systematically diverting over $12 million in taxpayer funds for personal gain – robbing hardworking American citizens and directly hurting the people those funds are intended to support,” said FBI Director Kash Patel. “Thanks to President Trump’s leadership and our interagency partners, fraud no longer has a safe haven in America. This FBI will act to hold those responsible accountable for their fraud – and today’s arrests demonstrate our continued commitment to protecting every dollar of taxpayer resources and ensuring that public funds are used exactly as intended.”