Three individuals have been arrested for stealing $12 million from government and state homeless aid in Los Angeles. They are accused of using these funds for purchasing properties, luxury travel, and buying classic cars.
Details of the Fraud
This case marks the second fraud arrest in Southern California this week, as the Trump administration seeks to highlight actions to combat waste in government programs. On Tuesday, 12 individuals were arrested for stealing over $10 million from government funds for child care.
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The three defendants in this case worked for or as directors of nonprofit homeless organizations in Southern California that had contracts with public entities to provide shelter and services. Prosecutors allege that they used contract funds for personal expenses, accepted bribes, and billed for services that were never provided.
Main Characters of the Case
Two defendants, LaKiya Malone (48) and Michael Young (46), were arrested on Wednesday morning in Los Angeles. The third defendant, Danie Mitchell (55), who has been charged with electronic fraud, remains at large.
Young founded the nonprofit Home At Last, which has received over $118 million in public resources to assist homeless residents since 2019. Federal prosecutors allege that Young created shell companies as independent contractors to self-service and impose additional costs on government entities. In this way, Young illegally stole approximately $7.5 million from taxpayer funds.
Young used these funds for luxury travel to Tahiti, financing commercial properties, and starting a nightclub in Inglewood called Six Seven Five Lounge.
Mitchell, CEO of Big Blue Umbrella, received over $1.2 million from a government-supported nonprofit organization. Prosecutors allege that he misrepresented his organization's operational capacity and used the received funds to pay credit card debt, give money to relatives, buy video games, and cover unrelated legal expenses.
Malone has been accused of receiving over $180,000 in bribes from another nonprofit homeless organization and placing non-homeless individuals in homeless aid programs.
Separately, Alexander Sofer (42), executive director of Abundant Blessings, has confessed to electronic fraud and money laundering for stealing at least $2 million. Sofer admitted to collaborating with Malone to bill authorities for homeless services without any actual participants in those services.
The Trump administration's efforts against fraud in government programs have faced negative reactions and legal resistance. In December, J.D. Vance, Vice President and head of the government's anti-fraud task force, shared a video from a right-wing influencer accusing providers of care for Somali immigrant children in Minnesota of fraud. Government investigations found that nearly all of them were operating normally.
However, the administration undertook a major immigration crackdown in Minnesota and attempted to halt child care funding in five Democrat-led states, an effort that faced a legal challenge.
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Source: independent.co.uk
