Three people now face criminal charges over federal homelessness money in Los Angeles, and the Department of Housing and Urban Development says the sums involved are large: more than $130 million in taxpayer dollars, of which $75 million passed through the city’s lead homelessness agency. Everything HUD has said so far is an allegation. No conviction has been announced, and the charged individuals are presumed innocent until a court rules otherwise.
What HUD announced on September 18
On September 18, 2026, HUD published a release titled “Secretary Scott Turner Announces Homeless Fraud Takedown.” Its central sentence reads: “These fraudsters have received more than $130 million taxpayer dollars, including $75 million through the Los Angeles Homeless Services Authority (LAHSA).” The wording matters. The $75 million is a portion of the larger $130 million figure, and it describes money that moved through LAHSA on its way to the people HUD names, as HUD’s own release puts it. HUD does not say LAHSA took the money, and it does not describe LAHSA as a defendant.
The release also says Turner announced that “we arrested criminals who allegedly stole $14 million meant to help America’s most vulnerable.” That is a separate and smaller figure than the $130 million, and HUD does not reconcile the two numbers on the page. Readers comparing figures should keep them apart: $130 million is the total HUD says the group received, $75 million is the share routed through LAHSA, and $14 million is the amount HUD says was allegedly stolen.
Whether public homelessness money is protected
The practical question the release raises is who, if anyone, stands between a federal grant and the people it is meant to serve. In this case HUD describes failure points at several stages: bidding, where shell companies allegedly submitted fake bids; service billing, where nonexistent clients were allegedly charged; and internal spending, where salary and card payments were allegedly misused. Each is a point where an independent review of bids, client rosters or expense records would be expected to catch a problem, and HUD’s account is that the problems were found by investigators and not by routine controls. The release does not say how the conduct was detected or over what period it ran.
Federal housing and homelessness funding keeps changing as agencies, courts and prosecutors act, and the brief follows that topic area as it moves.
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Who is charged, and what HUD says they did
HUD lists three people as charged: Michael Young, Lakiya Malone and Donye Mitchell. The descriptions below are HUD’s allegations, not findings by a court.
- Young is alleged to have “gamed the system by submitting fake bids for shell companies to pocket millions of dollars,” and to have siphoned millions to open a nightclub, a bingo hall and a gambling business. The release separately says he received more than $100 million and misappropriated more than $12 million.
- Malone is alleged to have “accepted bribes and kickbacks by charging for nonexistent homeless ‘ghosts’ who do not receive services.”
- Mitchell is alleged to have used federal funds for personal purposes, including inflating his own salary, making personal credit card payments and buying gifts for family.
The release does not identify the court, the statutes or the number of counts. It credits the Justice Department, a National Fraud Enforcement Division, the HUD Office of Inspector General and the White House Task Force to Eliminate Fraud. Scott Brady, the task force’s executive director, is quoted as saying “It ends today.” First Assistant U.S. Attorney Bill Essayli says “Taxpayers deserve accountability,” and Acting HUD Inspector General Brian D. Harrison calls the case proof of the strength of the agency’s partnerships with law enforcement.
The June suspension of LAHSA funding
The release states: “In June, Secretary Turner suspended funding to LAHSA, the lead agency for LA’s homelessness response, which has received over $1 billion taxpayer dollars since 2013.” The release gives mismanagement, fraud and abuse as the reasons for the suspension. It does not attach a dollar value to what was frozen, a duration, or conditions for restoring funds, and it does not say LAHSA has been charged with anything.
That distinction is the line between two different kinds of action. A funding suspension is an administrative step by a grantor against a grantee, taken here by the Secretary. Criminal charges are brought against individuals by prosecutors and tested in court. The HUD release links the two in one narrative, but the charges name three individuals, and the suspension concerns the agency that distributed money.
For scale, the release says the Los Angeles Continuum of Care has received $1 billion over five years. The Continuum of Care is the local network of providers that coordinates federal homelessness grants, and LAHSA serves as its lead agency. Set against that, the $75 million HUD ties to the charged individuals is a fraction of the total flow, though a sizeable one in absolute terms.
What the release leaves open
Several things a reader would want are absent from the page. There is no case number, no statement of what each person is charged with, and no hearing schedule. There is no statement on whether any of the $130 million has been recovered, and no account of what happens to services in Los Angeles while LAHSA’s HUD funding is suspended. Until prosecutors file documents or HUD updates its release, the only attributable positions are the ones in HUD’s text, and those are the claims of the department and its law enforcement partners.
Reporting suspected misuse of HUD-funded programs
People who suspect fraud in a HUD-funded program have a free official channel. The HUD Office of Inspector General hotline takes reports from HUD employees, contractors and the public at 1-800-347-3735, with a TTY line at (800) 877-8339, and through an online form. It accepts allegations of fraud, waste, abuse, mismanagement and whistleblower matters involving HUD or HUD-funded programs.
The Inspector General’s office says it concentrates on cases with high dollar losses or significant community impact, and that routine administrative complaints belong with local program administrators or other agencies. A report is more useful when it names the program or grantee, the approximate dates, the people or companies involved and any documents, such as invoices, rosters or bid paperwork, that the reporter lawfully holds.
The September 18 release, HUD No. 26-067, remains the primary record of what the department alleges, what it says about the $130 million and the $75 million routed through LAHSA, and the June suspension of the agency’s funding.
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This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
