One of the arrested defendants was a community health worker entrusted with connecting vulnerable residents to housing

Federal authorities announced a series of criminal cases involving more than $12 million allegedly diverted from programs intended to provide housing, mental health care, and other services to people experiencing homelessness in Southern California. Two defendants were arrested in Los Angeles, a third was considered a fugitive when the charges were announced, and a fourth individual has agreed to plead guilty in a related case (U.S. Department of Justice, 2026).

One of the people arrested, Lakiya Malone, was not merely employed by an organization that received homelessness funding. Public healthcare-provider records identify Malone as a community health worker affiliated with Special Service for Groups, Inc. (Healthgrades, 2026). Community health workers occupy an important position within a comprehensive community-safety system because they frequently serve as trusted intermediaries between vulnerable residents and the agencies responsible for delivering housing, healthcare, mental health treatment, food assistance, and other essential services.

Malone has not been identified as a social worker, and the terms “community health worker” and “social worker” should not be treated as interchangeable. Nevertheless, her documented community health role makes the allegations particularly relevant to the field of community safety. When a person responsible for connecting vulnerable residents to services allegedly manipulates referrals, fabricates participants, or accepts payments in exchange for access, the damage extends beyond the financial loss. Such conduct can undermine the relationships and trust upon which effective community-based services depend.

The arrests represent the latest enforcement action by the federal Homelessness Fraud and Corruption Task Force, which was established in April 2025 to investigate fraud, waste, abuse, and corruption involving homelessness funding throughout the seven-county Central District of California.

The allegations describe more than financial misconduct. They reveal how weaknesses in contracting, referral systems, financial monitoring, and program oversight can allow money intended for vulnerable residents to be redirected toward private enrichment. When funds designated for housing and supportive services disappear, the consequences are felt by people who remain unhoused, families waiting for assistance, legitimate service providers competing for limited resources, and taxpayers who are asked to continue funding programs they may no longer trust.

More Than $118 Million in Public Contracts

Federal agents arrested Michael Young, 46, of Baldwin Hills, the founder of the Culver City-based nonprofit Home At Last. The organization reportedly received more than $118 million from the Los Angeles Homeless Services Authority, the City of Los Angeles, Los Angeles County, and the U.S. Department of Housing and Urban Development. The Los Angeles Homeless Services Authority alone reportedly paid Home At Last more than $75 million for homeless housing services (U.S. Department of Justice, 2026).

Young is accused of using shell corporations, fabricated bids, forged signatures, and fraudulent invoices to make companies he controlled appear to be legitimate independent vendors. According to the federal complaint, these entities had no employees, physical locations, or legitimate operations. Prosecutors allege that they existed to transfer public money back to Young.

Authorities claim that Young misappropriated more than $7.5 million through the alleged vendor scheme. The money was reportedly used for commercial real estate, luxury vacations, vintage automobile restorations, and businesses unrelated to homeless housing. More than $1 million was allegedly spent opening and operating the Six Seven Five Lounge, a restaurant and nightclub in Inglewood, along with an adjacent bingo hall (U.S. Department of Justice, 2026).

Young has been charged with wire fraud, which carries a statutory maximum sentence of 20 years in federal prison. The charge remains an allegation, and he is presumed innocent unless proven guilty.

A Community Health Worker Accused of Facilitating “Ghost” Participants

Federal agents also arrested Lakiya Malone, 48, of South Los Angeles. Malone worked for Special Service for Groups, a nonprofit involved in referring people experiencing homelessness to housing sites supported by federal, city, county, and Los Angeles Homeless Services Authority funding. Public provider records list Malone’s professional category as community health work and connect her to Special Service for Groups at its Crocker Street location in Los Angeles (Healthgrades, 2026).

A 21-count federal indictment accuses Malone of accepting more than $180,000 in bribes and kickbacks from Alexander Soofer, the former executive director of Abundant Blessings. Prosecutors allege that Malone provided Soofer’s organization with priority referrals, including referrals for “ghost” participants who never lived at the housing sites where they were supposedly receiving services.

According to the Department of Justice, false welcome letters, forged sign-in sheets, and fabricated eligibility records were allegedly used to support the scheme. Payments to Malone were reportedly disguised as consulting fees made to her and to an entity she controlled, Grateful Hearts Realty & Consulting. Prosecutors allege that the payments were connected to the number of referrals she directed to Soofer’s organization (U.S. Department of Justice, 2026).

The alleged involvement of a community health worker is an important part of this community-safety story. Community health workers are often selected because of their familiarity with the communities they serve, their ability to reach people who may distrust traditional institutions, and their capacity to help residents navigate fragmented public systems. Their effectiveness depends upon credibility, accurate information, ethical conduct, and the confidence of both clients and partner organizations.

If the allegations against Malone are proven, the reported conduct would represent an abuse of precisely that trusted position. Referrals are not simply administrative paperwork. A referral can determine who receives a bed, who enters treatment, who is connected to mental health services, and who remains outside the system. Manipulating that process can displace people with legitimate needs while allowing public money to be claimed for services that were never delivered.

The alleged use of ghost participants is also troubling because public agencies depend upon accurate enrollment and service records to determine whether programs are successful. When those records include people who never received assistance, a fraudulent or ineffective program can appear productive. Policymakers may then continue funding the wrong organizations, while residents with genuine housing and health needs remain without assistance.

Malone’s publicly listed role should be described accurately. The available records identify her as a community health worker, not as a social worker, licensed clinical social worker, or mental health clinician. However, community health workers remain an important part of the community-safety workforce. Their inclusion in community-based programs reflects the recognition that housing, health, mental health, neighborhood relationships, and access to services are all connected to public safety.

A Third Defendant Remains at Large

Donye “Danya” Mitchell, 55, of Orange, was charged with wire fraud and considered a fugitive when federal authorities announced the cases. Mitchell is the chief executive and executive director of The Big Blue Umbrella, a Los Angeles-based homelessness nonprofit.

In January 2024, Mitchell allegedly applied for more than $9 million from Epidaurus, which conducts business as the Amity Foundation and receives Los Angeles County funding. The Big Blue Umbrella was ultimately awarded more than $1.2 million to provide housing and mental health services to vulnerable residents.

Federal prosecutors allege that Mitchell misrepresented the organization’s experience, staffing, service capacity, and relationship with other homelessness providers. After receiving the grant, he allegedly used portions of the funding for inflated salary payments, personal credit card debt, rent, transfers to family members, bail bond expenses, and PlayStation purchases. Amity terminated the organization’s contract in May 2025 after approximately $315,000 had been disbursed and concerns emerged regarding its spending and failure to meet contractual milestones (U.S. Department of Justice, 2026).

A Related Guilty Plea

In a related development, Alexander Soofer, 42, the former executive director of Abundant Blessings, has agreed to plead guilty to one count of wire fraud and one count of money laundering. Unlike the unresolved allegations against the other defendants, Soofer has admitted in a plea agreement that he participated in the bribery arrangement involving Malone.

Soofer also admitted that his organization obtained approximately $23 million in public funding intended to address homelessness, that at least some of the money was obtained through fraud, and that he diverted at least $2 million for personal enrichment and businesses unrelated to homeless housing. He has agreed to forfeit the proceeds of the offenses and is expected to formally enter his guilty plea in the coming weeks (U.S. Department of Justice, 2026).

Fraud Against Homelessness Programs Is a Community-Safety Failure

These cases should not be reduced to a story about wasteful spending or dishonest nonprofit executives. Housing stability, mental health treatment, food access, community health work, and supportive services are essential components of community safety. Money stolen from these systems represents housing placements that may never occur, treatment that may never be delivered, and relationships between service providers and vulnerable residents that may never be established.

The allegations also demonstrate why community-safety investments require strong administrative infrastructure. Governments cannot simply distribute grants and assume that promised services will follow. Effective oversight requires verification that participants exist, confirmation that services were delivered, routine examination of vendor ownership, independent financial audits, conflict-of-interest disclosures, and direct communication with the people whom programs claim to serve.

Referral systems deserve particular attention. Because frontline employees and community health workers may determine which residents enter particular housing or service programs, agencies should regularly compare referrals with verified occupancy, documented service delivery, and direct client confirmation. No employee should possess enough unchecked authority to create participants, direct public funds, and validate the resulting records without independent review.

Public accountability must also avoid stigmatizing community health workers or the broader nonprofit sector. Community health workers across the country provide essential assistance under demanding circumstances, frequently with limited resources and modest compensation. Thousands of legitimate nonprofit organizations provide housing, treatment, food, employment, and crisis-support services to people who might otherwise have nowhere to turn.

Strong oversight protects these workers and organizations. It prevents dishonest operators from competing for the same resources, damaging public confidence, and creating political pressure to reduce funding for necessary programs. The alleged conduct of one community health worker should not be used to condemn an entire profession, but it should remind public agencies that trust must be accompanied by verification, supervision, and enforceable ethical standards.

The federal complaints and indictment contain allegations that must be proven in court. Nevertheless, the cases already provide an important warning: money allocated for homelessness does not produce community safety merely because it has been appropriated. Public funding must be traceable from the government agency, through contractors, vendors, referral workers, and service providers, to the person who was supposed to receive assistance.

Without that chain of accountability, a program designed to provide shelter can instead finance a nightclub, a luxury vacation, or a private business. The public loses money, legitimate organizations lose credibility, community health workers lose public trust, and people experiencing homelessness lose opportunities that may have changed—or saved—their lives.

Sources Cited

Associated Press. (2026, September 16). Federal prosecutors charge 3 in alleged $12M homelessness aid fraud in Southern California. https://apnews.com/article/fraud-trump-homelessness-california-8848e96f919fa18e6958c5f2d2180bde

Healthgrades. (2026). Lakiya Malone: Community health worker in Los Angeles, California. https://www.healthgrades.com/providers/lakiya-malone-ffpvvqe501

Ozebek, K., & ABC7.com staff. (2026, September 16). Arrests made in crackdown of fraud, misuse of funds meant to combat Los Angeles homeless crisis. ABC7 Los Angeles. https://abc7.com/post/arrests-made-crackdown-involving-fraud-misuse-taxpayer-money-meant-combat-los-angeles-homeless-crisis/19839380/

U.S. Department of Justice. (2025, April 8). United States Attorney Bill Essayli announces criminal task force to investigate fraud and corruption involving homelessness funds. https://www.justice.gov/usao-cdca/pr/united-states-attorney-bill-essayli-announces-criminal-task-force-investigate-fraud

U.S. Department of Justice. (2026, September 16). Two defendants employed at L.A.-area homeless nonprofits arrested on federal charges alleging misuse of millions of taxpayer dollars. https://www.justice.gov/opa/pr/two-defendants-employed-la-area-homeless-nonprofits-arrested-federal-charges-alleging-misuse