Feds Say $7.5 Million in Homeless Funds Built a Nightclub

Michael Young of the Culver City nonprofit Home At Last faces a wire fraud charge; a second nonprofit worker was also arrested.

More than $7.5 million meant to house homeless Angelenos went instead to a nightclub, luxury vacations and vintage car restorations, federal prosecutors allege. Michael Young, 46, a founder of the Culver City nonprofit Home At Last, was arrested Wednesday on a wire fraud charge, the Los Angeles Times reported. Young hasn't entered a plea.

The money was public. Home At Last was paid more than $75 million for homeless housing services by the Los Angeles Homeless Services Authority, according to the criminal complaint as described by the Times. LAHSA is the joint city-county agency that contracts out much of the region's shelter and housing work. It canceled the nonprofit's contracts in June.

Prosecutors allege Young used more than $1 million of that taxpayer money to open and run Six Seven Five Lounge, a restaurant and nightclub in Inglewood. The complaint alleges he moved funds through shell corporations and false billing. Millions more went to trips, car restorations and commercial buildings with nothing to do with housing, prosecutors allege.

“The taxpayers did not sign up to fund this nightclub,” Assistant Atty. Gen. Colin M. McDonald of the Justice Department's National Fraud Enforcement Division said at a news conference Wednesday, according to the Times.

A second person was arrested the same day. Lakiya Malone, 48, an employee of the nonprofit Special Service for Groups, faces a 21-count indictment. Prosecutors allege she accepted more than $180,000 from Alexander Soofer, then the executive director of the nonprofit Abundant Blessings, in bribes and kickbacks.

In exchange, the indictment alleges, Malone gave Abundant Blessings priority housing referrals, including for “ghost” participants who never stayed at its sites or got services. Soofer's own charges came earlier this year. He has agreed to a guilty plea on wire fraud and money laundering counts, the Times reported.

Special Service for Groups, a separate organization from LAHSA, said in a statement that it already has prevention protocols and compliance practices and has moved to strengthen them. “Every dollar entrusted to us — federal, state, local, or private — must be protected and used as intended,” the statement said.

Attorneys for Young and Malone didn't immediately respond to the Times' request for comment, the paper reported. Neither did LAHSA.

The agency was already losing ground before Wednesday. Last year the Los Angeles County Board of Supervisors voted to pull county money out of LAHSA and build its own homelessness department. That came after two audits found the agency wasn't tracking its funds and programs closely enough to keep them from waste and fraud.

Scott Turner, the U.S. housing secretary, criticized LAHSA's record at the same news conference and said fraud had run rampant in the programs it funds. First Assistant U.S. Atty. Bill Essayli said in a statement that the cases expose a failure by the state and the county to protect public money, and that prosecutors will keep following it.

A third defendant hasn't been found. The FBI is still searching for Donye Mitchell, 55, chief executive of the L.A. nonprofit The Big Blue Umbrella, who is charged with wire fraud. Prosecutors allege Mitchell spent more than $1.2 million in grant money from a county-funded nonprofit on personal costs, among them bail bond fees, credit card debt, rent and PlayStation charges.

Source: latimes.com, retrieved September 16, 2026.