Feds announce $12 million homeless aid fraud bust in L.A.

Michael Young, Lakiya Malone and Donye Mitchell.

Federal authorities announced three suspects have been charged in a fraud ring in which so-called nonprofits were raking in millions in federal aid for homelessness and then completely misusing the money for anything but helping the homeless and, in some cases, spending it on video games, legal fees and lavish vacations abroad.

Lakiya Malone, 48, and Michael Young, 46, were taken into custody on Wednesday, and 55-year-old Donye Mitchell was charged, but remained at large and was considered a fugitive.

Young is charged with embezzling more than $7 million, some of which was used to fund the opening of an upscale restaurant. He's also accused of misusing federal funds to pay for trips to Tahiti and invest in other real estate projects, according to prosecutors. 

Malone is accused of accepting more than $180,000 in bribes from another nonprofit that purports to help homeless people and also is charged with enrolling people who weren't actually homeless into homelessness programs. 

Mitchell is accused of lying about his organization Big Blue Umbrella's ability to even provide services to homeless people, and then using federal funds he obtained to buy video games, make cash payments to family members, pay off credit card debt, and pay legal defense fees for unrelated cases. All told, more than $12 million was allegedly misused over the last seven years, according to authorities.

Federal and local authorities are working together to continue to root out fraud. Nathan Hochman, a Republican who was elected district attorney for Los Angeles County in Nov. 2024, promised the investigations in misuse of federal funds is just beginning, according to The Associated Press. “I can assure this is the beginning of these prosecutions and we are far, far from the end,” Hochman declared on Wednesday. Watch the video below for more on the story.