By Jose E. Navarro, MBA | San Diego | September 16, 2026
Federal agents in Kevlar vests descended on a Baldwin Hills home Wednesday morning and led away Michael Young, founder of the nonprofit Home At Last, in handcuffs. Simultaneously, in Westmont, agents arrested Lakiya Malone, an employee of the nonprofit Special Service for Groups. A third defendant, Donye “Danya” Mitchell, CEO of The Big Blue Umbrella, remains a fugitive. Between them, prosecutors say, the three are tied to more than $130 million in taxpayer money intended to shelter Los Angeles’s homeless population — more than $75 million of it funneled through the Los Angeles Homeless Services Authority alone.
The specifics are the kind that make the abstraction of “waste, fraud and abuse” suddenly concrete. Young allegedly used a web of shell companies and fraudulent billing to misappropriate more than $7.5 million from LAHSA, which had paid his organization over $75 million for homeless housing services. Among the uses federal prosecutors say he put that money to: more than $1 million to open and operate a nightclub in Inglewood called Six Seven Five Lounge, and a bingo hall. Malone is accused of taking more than $180,000 in bribes and kickbacks from a former nonprofit executive director in exchange for steering priority housing referrals — including, prosecutors allege, “ghost” participants who never actually lived at the subsidized sites being billed for their care.
HUD Secretary Scott Turner did not soften the verdict when he stood before cameras Wednesday. “LAHSA, the largest recipient of homeless funding in the nation, is riddled with fraud, waste and abuse,” he said. First Assistant U.S. Attorney Bill Essayli was more direct still: “Homelessness is actually up, not down.” This is now the third set of cases brought by the region’s Homelessness Fraud and Corruption Task Force since it was formed this spring, following a January arrest in which a Westwood nonprofit executive was accused of pocketing $10 million of a $23 million swindle — enough to buy a $7 million house, a $125,000 Range Rover, and private-jet travel, while the people his organization was funded to house remained on the street.
Every dollar named in these complaints was drawn from the same well this publication has tracked for months: the $24 billion California has spent on homelessness programs since 2018, a figure the state’s own auditor confirmed in 2024 alongside a finding at least as damning as any individual fraud case — that the California Interagency Council on Homelessness stopped consistently tracking whether that money was working in 2021. Three programs accounting for $9.4 billion in spending could not even be evaluated for effectiveness, the auditor found, for the simple reason that no one had kept adequate data. Los Angeles County District Attorney Nathan Hochman, standing alongside federal prosecutors Wednesday, cited a related 2025 court-ordered report finding that the City of Los Angeles failed to properly track $2.3 billion in homeless funds, largely because it outsourced that tracking to LAHSA — the same agency now named as the conduit for $75 million in alleged fraud.
This is the essential, and profoundly damning, throughline: the state audit warned that a lack of tracking made it impossible to know whether homelessness spending was effective. Wednesday’s arrests are what it looks like when that same absence of tracking is not merely an accountability failure but the precise mechanism that let a nonprofit founder allegedly bill the public for a nightclub. An agency that cannot verify whether a housing placement is real cannot distinguish a legitimate client from a “ghost” one. The consequent gap is not a technicality. It is the hole millions of dollars fell through.
The human cost is not abstract, and it should not be treated as such. Los Angeles County carries the largest homeless population of any county in the nation, concentrated heavily in Skid Row, South LA, and the San Fernando Valley — communities that are disproportionately Black and Latino, and that have absorbed both the visible failure of the crisis and, now, the evident theft of resources meant to end it. Every dollar diverted into a bingo hall or a Range Rover is a shelter bed, a case manager’s salary, or a rental subsidy that did not reach someone sleeping in a doorway a few miles from where these arrests were made.
Mayor Karen Bass’s abrupt departure from LAHSA’s board days before Wednesday’s announcement has drawn its own scrutiny, and it is a plausible reading that the timing was not coincidental, though this publication cannot confirm what she knew and when. What can be confirmed is this: prosecutors say the investigation is far from finished, and Hochman warned that state charges paralleling the federal ones will continue as authorities work through billions of dollars in homelessness spending still unaudited. The question California voters and Los Angeles taxpayers deserve answered is not whether more arrests are coming — officials have made clear they are — but whether the state will finally build the oversight infrastructure the 2024 audit demanded, before the next $24 billion is spent the same way the last one was.
The Navarro Report will continue tracking prosecutions tied to California’s homelessness spending as part of its ongoing $24 billion accountability series.
Human-Directed AI Journalism — reporting and analysis produced under human editorial direction with AI research and drafting assistance.