Michael Young, 46, of Baldwin Hills, founded a nonprofit called Home At Last that received $118 million in public funds from the Los Angeles Homeless Services Authority, the City of Los Angeles, the County of Los Angeles, and HUD. He used at least $7.5 million of it on shell corporations, luxury vacations, vintage car restoration, commercial real estate, and a nightclub-restaurant in Inglewood called Six Seven Five Lounge.

The people sleeping on Skid Row were not invited.

Federal prosecutors announced charges on September 17 against Young and two others — Donye Mitchell, 55, of Orange, and Lakiya Malone, 48, of South Los Angeles — in what the Department of Justice is calling a sweeping takedown of fraud inside LA's homelessness programs. A fourth defendant, Alexander Soofer, executive director of a nonprofit called Abundant Blessings, has already agreed to plead guilty to wire fraud and money laundering.

"Today the Department of Justice, with the full force of the federal government, is announcing charges" targeting fraud that stole directly from homeless programs, said Colin M. McDonald, Assistant Attorney General of the National Fraud Enforcement Division.

Young's operation was the biggest. LAHSA alone paid Home At Last more than $75 million. According to the indictment, Young created sham vendors — entities with no employees, no physical locations, no actual operations — then submitted fake bids, forged signatures, and fraudulent invoices. He controlled the sham vendor bank accounts himself. LAHSA finally canceled its contracts with Home At Last in June 2026.

Mitchell ran a different scheme through an outfit called The Big Blue Umbrella. She applied for more than $9 million in grant money starting in January 2024, falsely claiming BBU was a major homeless housing provider. The Amity Foundation awarded her $1.2 million before catching on and terminating the contract in May 2025 — but not before $315,000 had already gone out the door. Mitchell spent it on an inflated salary, bail bond costs, credit card debt, family transfers, and PlayStation charges. She is currently a fugitive.

Malone's case is the one that shows how the machine actually works. She was an employee at Special Service for Groups, a nonprofit that received more than $17 million during the scheme. She took over $180,000 in bribes and kickbacks from Soofer in exchange for priority housing referrals — including referrals for "ghost" participants who never lived at any of the sites. The payments were routed through a shell entity called Grateful Hearts Realty & Consulting. She fabricated welcome letters, forged sign-in sheets, and falsified eligibility forms. Malone faces a 21-count indictment including wire fraud, bribery, and conspiracy.

Soofer, who ran Abundant Blessings, obtained $23 million in public money. He pocketed more than $2 million for personal enrichment.

"Fraudsters like Alexander Soofer, who steal money meant to assist the homeless, are despicable, greedy, and shameless," said Los Angeles County District Attorney Nathan Hochman.

First Assistant United States Attorney Bill Essayli called the arrests "a major success for our Homelessness Fraud and Corruption Task Force." Robert Molvar, Acting Assistant Director in Charge of the FBI's Los Angeles Field Office, noted that "when taxpayer-funded programs are exploited for personal gain, it undermines public trust." IRS Criminal Investigation Special Agent in Charge Darren Lian said the evidence reveals "a deliberate scheme to defraud government programs designed to support vulnerable community members experiencing homelessness."

The task force covers seven counties: Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara, and Ventura. Young and Mitchell each face wire fraud charges carrying a maximum of 20 years. Malone's 21 counts carry up to 20 years each for wire fraud and 10 years each for bribery.

Los Angeles has spent billions on its homelessness crisis. The encampments grew. The budgets grew. The nonprofits multiplied. And inside those nonprofits, people were building shell companies, forging invoices, bribing caseworkers, and inventing homeless people who didn't exist — while real ones slept on concrete a few miles away.

Mitchell spent grant money on PlayStation. Malone ran ghost referrals through an entity called Grateful Hearts. Young bought a nightclub. Soofer took $23 million and kept $2 million for himself.

The homeless are still outside.