Millions Stolen in Homeless Services Fraud, Prosecutors Say

By the Editorial Team · Thursday, September 17, 2026

Federal authorities arrested three employees of Los Angeles homeless service nonprofits, including Michael Young, co-founder of Home At Last, for allegedly defrauding millions of dollars meant for homelessness programs. The arrests spotlight increased scrutiny over public funds in homelessness services, with investigations ongoing to ensure accountability and prevent misuse of taxpayer money.

Federal authorities in Los Angeles arrested three individuals employed at local homeless service nonprofits Wednesday on charges of defrauding millions of dollars in taxpayer funds intended for homelessness programs. Among those arrested was Michael Young, 46, co-founder of Home At Last, a Culver City-based nonprofit, who is accused of misappropriating over $7.5 million. The other two arrested were Lakiya Malone, 48, an employee of Special Service for Groups, and Donye Mitchell, 55, chief executive and director of Big Blue Umbrella, another Los Angeles nonprofit.

Young faces charges of wire fraud related to the alleged misuse of millions of dollars designated for homeless housing programs overseen by the Los Angeles Homeless Services Authority (LAHSA). Prosecutors say he diverted funds to finance the construction and operation of a nightclub and bingo hall in Inglewood, known as the Six Seven Five Lounge, as well as to cover luxury personal expenses, including vacations, vintage car restorations, and unrelated commercial properties.

The criminal complaint details that Young used shell corporations and fraudulent billing schemes to funnel money away from its intended purpose. LAHSA, which had paid Home At Last more than $75 million for homelessness services, terminated its contracts with the nonprofit in June amid the investigation.

Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division condemned the misuse of public funds, emphasizing that taxpayer money meant to support vulnerable populations should not be exploited for personal gain.

Malone and Young have not yet entered pleas in court. Attorneys for both have not responded to requests for comment. Charges and investigations involving Donye Mitchell were also announced, though specific allegations against him were not detailed in the initial disclosures.

The federal crackdown highlights growing scrutiny over the management of funds allocated for homelessness programs in Los Angeles, where millions of dollars of public money are distributed annually to nonprofits tasked with providing housing and services. Officials reiterated their commitment to ensuring accountability and transparency in the stewardship of these funds.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.