Federal authorities on Wednesday arrested at least two people employed at Los Angeles-area homeless nonprofits, including one who allegedly misappropriated more than $7.5 million in taxpayer funds and used it to finance the construction of a nightclub and adjacent bingo hall.
Michael Young, 46, a founder of the Culver City-based nonprofit Home At Last, and Lakiya Malone, 48, an employee of Special Service for Groups, were arrested as part of a federal crackdown targeting homelessness corruption.
Young and Malone have not yet appeared in court to enter pleas in response to the charges. It’s unclear whether they are represented by attorneys.
Young, who is charged with wire fraud, allegedly spent more than a million dollars in taxpayer money to open and operate a high-end restaurant and nightclub in Inglewood called Six Seven Five Lounge. He also allegedly misused millions in taxpayer funds on luxury vacations, vintage car restorations, and commercial properties unrelated to homeless housing.
Malone was charged in a 21-count indictment accusing her of taking more than $180,000 in bribes and kickbacks from Alexander Soofer, the executive director of the nonprofit Abundant Blessings. Soofer was charged earlier this year and has agreed to plead guilty to wire fraud and money laundering.
The FBI is still searching for Donye Mitchell, 55, the CEO and director of The Big Blue Umbrella, an L.A.-based nonprofit. Federal authorities allege Mitchell was fraudulently awarded more than $1.2 million in grant money from a Los Angeles County-funded nonprofit.
Mitchell allegedly used money from a Los Angeles County-funded nonprofit for personal expenses, including paying his own bail bond costs, inflated salary payments, credit card debt, family transfers, rent and PlayStation charges.
“The scale and brazenness of these fraudsters expose a profound failure by the State of California and Los Angeles County to safeguard public funds,” First Assistant U.S. Atty. Bill Essayli said in a statement. “Taxpayers deserve accountability. We will follow the money, expose the corruption, and prosecute those who exploit the American people for personal gain.”
Federal authorities are expected to provide more details at a news conference Wednesday morning.
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