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New arrests linked to LA homeless fraud, corruption
Federal agents raided a home and made an arrest in the Westmont area near South Los Angeles Wednesday as part of an investigation into fraud tied to the alleged misuse of funds for the homeless.
LOS ANGELES - Federal authorities staged an early morning sweep across Los Angeles on Wednesday, taking two homelessness nonprofit figures into custody during a high-profile crackdown on public corruption.
Officials announced the charges at a downtown press conference, revealing that millions of dollars allocated to solve Southern California's homelessness crisis were instead funneled into private luxuries, real estate, and empty shell accounts.
What we know:
Federal agents arrested 46-year-old Michael Young of Baldwin Hills early Wednesday morning for allegedly orchestrating a multi-year scheme to divert over $7.5 million in public funds from his Culver City-based nonprofit, Home At Last.
Prosecutors allege Young spent more than $1 million to open Six Seven Five Lounge, a high-end restaurant and nightclub in Inglewood, alongside commercial real estate and a bingo hall.
Also arrested Wednesday was 48-year-old Lakiya Malone of Westmont, an employee at Special Service for Groups who was seen being led out of a home in handcuffs accompanied by First Assistant U.S. Attorney Bill Essayli.
Malone is charged with accepting over $180,000 in bribes from Alexander Soofer, the former executive director of Abundant Blessings, in exchange for submitting housing referrals for "ghost" participants who never lived at the facilities.
Soofer admitted to fraudulently obtaining $23 million in homelessness funds, pocketing $2 million for himself, and has agreed to plead guilty to wire fraud and money laundering.
What we don't know:
Law enforcement officers are actively searching for 55-year-old Donye "Danya" Mitchell of Orange, the chief executive of The Big Blue Umbrella, who is currently considered a federal fugitive.
Donye Mitchell / U.S. Attorney's Office, Central District of California
Investigators have not disclosed Mitchell's current location or whether additional co-conspirators were involved in helping him secure $1.2 million in fraudulent grant allocations.
Timeline:
Donye Mitchell applied for over $9 million in grant funding from the county-funded Amity Foundation in January 2024, ultimately receiving $1.2 million before the foundation severed ties in May 2025 over questionable spending, according to officials.
The Los Angeles Homeless Services Authority (LAHSA) formally terminated its housing contracts with Michael Young's organization in June 2026.
On Wednesday morning, federal agents executed arrest warrants across the Los Angeles area, leading to a afternoon court appearance for Young and Malone in downtown Los Angeles federal court.
Dig deeper:
The LAHSA board voted on Tuesday against applying to maintain its role as the region’s lead homelessness response agency, marking a dramatic shift as both the city and county move to separate from the agency and establish independent systems.
LAHSA’s decision follows escalating criticism, a federal fraud investigation by HUD, and a recent 9th U.S. Circuit Court of Appeals ruling that stayed an injunction, threatening LAHSA's access to critical federal funding.
Most recently, Mayor Karen Bass announced she is stepping down from LAHSA’s governing commission to focus on establishing a city-led response team, citing time commitments ahead of a congressional inquiry into federal homelessness spending and her upcoming November 3 mayoral election matchup against City Councilmember Nithya Raman.
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Mayor Bass steps down from LAHSA commission
Bass reportedly missed more than half of the meetings since appointing herself in 2023.
What's next:
Michael Young and Lakiya Malone are scheduled to make their initial appearances in United States District Court in downtown Los Angeles.
Former nonprofit executive Alexander Soofer is expected to formally enter his guilty plea and begin forfeiting millions in ill-gotten assets to the federal government in the coming weeks.
Meanwhile, federal law enforcement agencies are coordinating efforts to track down and arrest fugitive Donye Mitchell.
The Source: This report is based on official federal charging documents, press statements, and details delivered by law enforcement officials during a downtown Los Angeles press conference on Wednesday. Sourcing reflects court records from the U.S. District Court in Los Angeles, public statements from the U.S. Department of Justice, and direct reporting on the law enforcement operation overseen by First Assistant U.S. Attorney Bill Essayli, the FBI, IRS Criminal Investigation, and HUD-OIG.