Federal prosecutors charged three Southern California nonprofit workers Wednesday, Sept. 16, with stealing a combined $12 million in homelessness aid. The money allegedly went to real estate, luxury travel and an Inglewood nightclub and restaurant.

Two of the defendants were arrested early Wednesday morning in Los Angeles. The third is a fugitive.

The charges, announced by the U.S. Department of Justice, are the latest action by the federal Homelessness Fraud and Corruption Task Force, which targets misuse of public funds across seven Southern California counties. The FBI, IRS Criminal Investigation and the HUD Office of Inspector General are investigating.

$7.5 million in sham billing

Michael Young, 46, of Baldwin Hills, founded the Culver City-based nonprofit Home At Last. The organization received more than $118 million in public funds from the Los Angeles Homeless Services Authority (LAHSA), the city and county of Los Angeles, and the U.S. Department of Housing and Urban Development (HUD). LAHSA alone paid the nonprofit more than $75 million for homeless housing services.

Prosecutors allege Young created shell companies with no employees and no real operations, then submitted fake bids, forged signatures and fraudulent invoices to make them look like independent contractors. Through that scheme, he allegedly misappropriated more than $7.5 million.

According to the New York Post, prosecutors say Young spent more than $1 million in taxpayer money to open Six Seven Five Lounge, a restaurant and nightclub in Inglewood, and an adjacent gambling business called House Bingo. He also allegedly took a $48,000 trip to Tahiti and spent more than $140,000 restoring a vintage Chevrolet Impala. Another $500,000 allegedly went to commercial real estate unrelated to housing.

LAHSA cancelled its contracts with Home At Last in June 2026.

Ghost clients and bribes

Lakiya Malone, 48, of South Los Angeles, worked for Special Service for Groups (SSG), where her job was referring homeless individuals to housing sites. A 21-count federal indictment accuses her of taking more than $180,000 in bribes and kickbacks from Alexander Soofer, executive director of the nonprofit Abundant Blessings. Soofer allegedly received more than $17 million from SSG during the scheme.

In exchange, Malone allegedly provided priority referrals for "ghost" participants who never lived at the sites. Prosecutors say she fabricated welcome letters, forged sign-in sheets and falsified eligibility forms. Soofer allegedly paid Malone through checks to her and an entity she controlled, Grateful Hearts Realty & Consulting, disguising the payments as consulting fees.

Malone faces up to 20 years per wire fraud count, 10 years per bribery count and five years on a conspiracy charge.

A third defendant on the run

Donye Mitchell, 55, of Orange, is the CEO of The Big Blue Umbrella, a Los Angeles-based nonprofit. Prosecutors say Mitchell applied for more than $9 million in grant money in January 2024 and was awarded over $1.2 million from Amity Foundation, a county-funded nonprofit, to provide housing and mental health services.

Mitchell allegedly used the money for inflated salary payments, bail bond costs, credit card debt, family transfers and PlayStation charges. Amity terminated the contract in May 2025 after disbursing about $315,000. Mitchell is charged with wire fraud and is considered a fugitive.

Soofer agrees to plead guilty

Separately, Soofer, 42, agreed to plead guilty to one count each of wire fraud and money laundering. He admitted he obtained $23 million in public money intended to combat homelessness, pocketing at least $2 million for personal use. The DOJ said he is expected to formally enter his plea at a date not yet scheduled.

"Make no mistake, HUD and the Trump administration will not tolerate the theft and abuse of taxpayers in this country," HUD Secretary Scott Turner said at a news conference Wednesday, Sept. 16.

Young and Malone were expected to make initial court appearances Wednesday afternoon in U.S. District Court in downtown Los Angeles. It was unclear whether either had retained an attorney, the Los Angeles Times reported.

The charges land as Los Angeles continues to struggle with homelessness. According to the New York Post, LAHSA's 2026 count found 45,194 people experiencing homelessness in the city, a 3.4% increase from the prior year. A court-ordered audit had previously described the agency's financial controls as inadequate to prevent waste and fraud.