LA’s Leading Homeless Agency Surrenders Federal Role as Massive Fraud Scandal Explodes

LAHSA’s surrender of its federal responsibilities comes after years of documented accounting failures, inadequate oversight and an inability to show where vast sums of public money went. While as many as 75,000 people remained in shelters or encampments, authorities poured roughly $1 billion a year into the homelessness system—yet official reviews repeatedly found missing records, deficient audit trails and contracts that were poorly monitored. Now federal prosecutors allege that millions intended for the homeless were diverted to luxury travel, real estate, a nightclub, vintage vehicles and personal expenses. This is not merely bureaucratic incompetence; it is a devastating institutional failure in which the people LAHSA was created to serve were abandoned while taxpayer money disappeared into a system with too little scrutiny and virtually no accountability. (Associated Press, LAist)

.@SecretaryTurner: "While homelessness funding tripled in LA over the past decade — homelessness has doubled… LAHSA, the largest recipient of homelessness funding in the nation is riddled with fraud, waste, and abuse." pic.twitter.com/Bqe9fCKKEK

— Rapid Response 47 (@RapidResponse47) September 16, 2026

After decades of poor reporting, porous accounting and squirming under the watchful eye of federal oversight from new leadership in D.C, the Los Angeles Homeless Services Authority is stepping back. Aaron Schrank at LAist reports: The Los Angeles region’s lead homelessness agency is effectively forfeiting the federal administrative roles it has held for decades, including applying for millions of dollars in funding for the region and leading the annual homeless count, the agency announced Tuesday. The decision comes as the Los Angeles Homeless Services Authority faces mounting criticism from both the Trump administration and local leaders who accuse the agency of mismanaging homeless services. It reverses a monthslong legal battle LAHSA had been waging with the federal government to continue in these duties…. At a county meeting Tuesday, Supervisor Lindsey Horvath called it “a fundamental change that reflects the significant performance, contracting and financial concerns that have plagued LAHSA for too long.” “ Officials avoiding accountability will no longer have LAHSA to hide behind, and the county and city must be accountable to each other and to our entire Los Angeles region,” Horvath continued (LAist). In June, the HUD announced an end to federal funding in the “fraud-filled” agency (HUD).

HUD Secretary Accuses Los Angeles Homeless Services Authority of $75 Million in Fraud

HUD Sec. Scott Turner yesterday made clear that incompetence alone does not account for what we’re seeing: [they have] stolen over 14 million from you, the taxpayers of America. And make no mistake, HUD and the Trump administration will not tolerate the theft and the abuse of taxpayer dollars in our country. These fraudsters received over $130 million. More than $75 million of those were funneled through the Los Angeles Homeless Services Authority, also known as LAHSA. That is nearly the same amount LAHSA received from HUD every year until the Trump administration put an end to the California corruption. LAHSA has continually funded a homeless industrial complex on the backs of American taxpayers while fraud has continually run rampant. No wonder their track record at LAHSA is a failing record. While homelessness funding tripled in LA over the past decade, homelessness has doubled. And when you dig deeper, we found out why. LAHSA, the largest recipient of homeless funding in the nation, is riddled with fraud, waste, and abuse. And those days of blank checks are, indeed, over. Today, those who broke the law are facing the ultimate consequence: law and order (Pratt).

On Wednesday last week, Karen Bass stepped down from the board (Los Angeles Times).

🚨 BOMBSHELL: Local California officials are being accused of KNOWING about all of these homeless fraudsters stealing millions through homeless aid

These 3 fraudsters are now CHARGED. Their names: Lakiya Malone, Michael Young, and Donye Mitchell

Roughly $1 BILLION PER YEAR is… pic.twitter.com/cCb3mFo9sh

— Eric Daugherty (@EricLDaugh) September 17, 2026

Local California officials now stand accused of ignoring and possibly concealing years of warning signs as millions of dollars intended for the homeless were allegedly stolen. Federal prosecutors have charged Lakiya Malone, Michael Young and Donye Mitchell in schemes involving roughly $12 million; the charges remain allegations unless proved in court. All of this unfolded inside a Los Angeles homelessness system consuming approximately $1 billion annually, much of it distributed through contractors overseen by LAHSA, an agency repeatedly cited for abysmal recordkeeping, inadequate oversight and missing audit trails.

The Trump administration has since suspended LAHSA’s federal funding and intensified criminal enforcement. Spencer Pratt has long accused Mayor Karen Bass and other local leaders of pouring ever-larger sums into homelessness programs while accountability collapsed. The question now is unavoidable: if Democrats had years of audits documenting the dysfunction, how did the money keep flowing—and why did serious consequences come only after federal authorities moved in?