Prosecutors Say $1 Million in Homeless Money Went to a Nightclub

Federal and county authorities have now charged six people in a widening investigation of Los Angeles homeless services spending.

Three more people were charged on September 16, 2026, in a widening federal and county investigation into Los Angeles homeless services spending. The new cases allege roughly $12 million in misappropriated public money, nearly all of it tied to one nonprofit founder, LAist reported from the news conference where prosecutors announced them. Six people have been charged so far.

One count reaches the sidewalk. Lakiya Malone, 48, of South Los Angeles, worked for the nonprofit Special Service for Groups. Her job was referring homeless people to housing paid for by the Los Angeles Homeless Services Authority, known as LAHSA. Prosecutors say she took about $180,000 in bribes. In exchange, they say, she steered participants who didn't exist to a provider that then billed for services nobody received.

That provider, prosecutors say, was Alexander Soofer, who ran the now-defunct nonprofit Abundant Blessings and was charged in January. Authorities said he'll enter guilty pleas on a wire fraud count and a money laundering count. In his plea agreement, they said, he admitted the bribery scheme. He also admitted keeping at least $2 million in taxpayer money for himself and for businesses with nothing to do with homeless housing. He's agreed to forfeit that money. Prosecutors had earlier put the figure at $10 million or more.

The largest of the new cases names Michael Young, 46, of Baldwin Hills, who founded the Culver City nonprofit Home At Last. Prosecutors accuse him of using shell companies and fake bids to take $12 million in public funds, LAist reported from the announcement. They say the spending included:

• $1 million routed into a high-end nightclub
• a trip to Tahiti costing nearly $50,000
• a $140,000 restoration of a vintage Chevy Impala

Since 2019 the nonprofit had collected upward of $118 million in government money for housing, said Scott Turner, the secretary of Housing and Urban Development. More than $75 million of it came through LAHSA. The alleged theft is a sliver of that. It's a smaller sliver of the $2.3 billion in homeless funds that a court-ordered 2025 review found city officials had failed to track properly, a figure District Attorney Nathan Hochman raised at the same news conference.

The third new defendant is Donye Mitchell, 55, of Orange, of the nonprofit Big Blue Umbrella. Prosecutors accuse him of lying about his experience to win a $1.2 million county-funded grant. They say he collected $315,000 of it and spent the money on himself, including video games and bail after a domestic violence arrest. The criminal complaint says he was convicted in 2011 of defrauding California's unemployment system and ordered in 2012 to repay the state $6 million. A county vendor awarded him the new grant in 2024.

"Nobody was minding the shop," said Bill Essayli, first assistant U.S. attorney for the Central District of California, answering an LAist question about oversight of homelessness spending.

Special Service for Groups said in a statement that it's working with federal prosecutors so anyone responsible is held to account, and that it has tightened its compliance protocols. LAist said it left messages for lawyers for Young and Malone.

LAHSA said it has zero tolerance for fraud and praised the prosecutors. The agency said it cut off Young's nonprofit in June, once evidence of wrongdoing surfaced, and is trying to recover cash seized from him. None of its own staff are implicated, it said.

The charges came a day after the agency's governing commission voted to hand off its responsibility for federal money. That includes the roughly $240 million a year it applies for, and the annual homeless count. Mayor Karen Bass skipped a congressional hearing on LAHSA's fraud problems that same day, September 15, 2026, calling it a politically motivated attack.

Asked whether LAHSA's leadership shares the blame, Essayli called it a hard question. "It is not against federal law to be incompetent, unfortunately," he said.

Hochman said many more prosecutions are expected in the coming months.

Source: laist.com, retrieved September 23, 2026.