The $2.3 Billion Question: How LAHSA Lost a Fortune No One Was Watching
The number that should have ended careers didn’t make the news cycle it deserved.
In March 2025, a court-ordered audit by the financial firm Alvarez & Marsal released its findings on the Los Angeles Homeless Services Authority. Over a four-year period — from June 2020 to June 2024 — LAHSA, the joint city-county agency responsible for managing billions in homelessness funding, failed to properly account for $2.3 billion in spending. Not misplaced receipts. Not a rounding error. An institutional failure to track billions of taxpayer dollars flowing through an agency that existed for no purpose other than to help the most vulnerable people in the largest county in the United States.
The audit described “poor data quality and integration,” “disjointed” service delivery, and a system with no functional capacity to monitor vendor contracts for compliance or performance. At the time of the audit’s release, LAHSA was distributing roughly $306 million in city funds per year and receiving hundreds of millions more from the county.
Here is what happened next: the county voted to strip LAHSA of more than $300 million in annual taxpayer funding. The city began exploring how to pull its own dollars. LAHSA’s chief executive resigned. And then federal prosecutors moved in.
On April 8, 2025, U.S. Attorney Bill Essayli announced the formation of the Homelessness Fraud and Corruption Task Force, a dedicated criminal investigation unit staffed by the FBI, IRS Criminal Investigation, and HUD Inspector General. The task force would cover the Central District of California — Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara, and Ventura counties. Its mandate: investigate fraud, waste, abuse, and corruption in homelessness funds, including potential crimes involving federal grants and the theft of private charitable donations.
Less than ten months later, Alexander Soofer was arrested. He had been a contracted service provider through LAHSA’s network, running a nonprofit called Abundant Blessings. Federal charges allege he used $23 million in homeless funding for personal gain. He was not an anomaly. He was a symptom.
What LAHSA represents is a cautionary case study in what happens when scale replaces accountability as an organizational value. The agency grew into a multi-billion dollar operation without the governance infrastructure to manage it. Performance metrics were unreliable. Vendor oversight was close to nonexistent. And because the political pressure was always to spend money rather than track it, the oversight gaps went unaddressed for years.
Los Angeles County has since launched a new Department of Homeless Services and Housing, with a mandate to take over LAHSA’s functions by July 1, 2026. Its first approved budget is $843 million. The department already faces a $303 million deficit, partly driven by lower-than-expected revenue from a voter-approved sales tax.
The cycle is alive and running. The names have changed. The accountability hasn’t.
Sources: Alvarez & Marsal Court-Ordered Audit, March 2025; U.S. Department of Justice Press Release, April 8, 2025 (IRS.gov); Washington Examiner, February 4, 2026; LAist, March and April 2025; Fox 11 Los Angeles.*