Trump admin unearths $75M in ‘homeless industrial complex’ fraud

Housing and Urban Development (HUD) Secretary Scott Turner announced Sept. 16 that his agency had identified approximately $75 million laundered through homeless services, mostly in California.

States and cities receiving federal taxpayer dollars to support homeless people funneled that money into nonprofit and non-governmental organizations, where the taxpayer dollars were spent on lavish vacations, private jets, luxury automobiles, opening nightclubs, and other personal ventures, according to the announcement. The “homeless industrial complex,” as Turner called it, involves nonprofits and non-governmental organizations that take federal taxpayer dollars, administered by states, and register non-existent identities as “homeless people” receiving aid, when no such people exist and no aid is given to real homeless people.

“When I was sworn in as secretary, I put the homeless industrial complex on notice with the clear message, ‘No more.’ No more abuse of the taxpayer by charging them for homeless ghosts who do not even exist or receive services,” Turner said.

“No more using government as a personal piggy bank,” he continued. “No more gaming the system by creating and submitting fake bids for shell companies to pocket millions and millions of dollars.”

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The HUD secretary listed a number of examples of alleged fraud, such as how Alexander Soofer and Leikia Malone ran an organization called Abundant Blessings. According to the U.S. Department of Justice (DOJ), Soofer allegedly defrauded the government of approximately $23 million, pocketing $10 million for himself. That money was used to purchase a $7 million house in Los Angeles’ affluent Westwood neighborhood, a Range Rover, and private jet travel.

“California is the poster child of rampant fraud, waste, and abuse of tax dollars,” First Assistant U.S. Attorney Bill Essayli said in a statement at the time. “The state has facilitated the spending of billions of dollars to combat homelessness, with little to show for it and almost no oversight.”

The DOJ confirmed that Soofer was arrested earlier this year on federal criminal fraud charges and that the federal government has begun auditing California’s spending.

Spencer Pratt, former Republican candidate for mayor of Los Angeles, suggested that incumbent Democratic Mayor Karen Bass and her political allies are likely profiting from the millions of fraudulently obtained dollars.

Pratt said the amount of money defrauded matches the amount of federal funds provided. 

“This is what [California] does with fed dollars. Leaders like Karen Bass just steal it,” he said in an X post. “I told you, over and over...it's ALL fraud. How else do you double the spending just to get double the homeless zombies?”

Pratt said that the Los Angeles Homeless Services Authority had “delayed” its homeless count until he failed to make it past the primaries earlier this year, placing third to Bass and Democratic city councilwoman Nithya Raman, in order to disingenuously downplay the city’s homelessness crisis, a key part of Pratt’s campaign platform.

“Then the two candidates who funnel billions in tax dollars into these homeless services organizations were left to have their sham election, and keep the grift going,” he said, adding that Bass and Raman belong in federal prison. “They are destroying LA and stealing our money.”

Other fraudsters Turner named included Donnie Mitchell, who allegedly used federal funds given to his homeless services group to inflate his own salary, pay personal credit card bills, and pay his bail for domestic violence and assault charges. Another fraudster named was Michael Last, who allegedly used taxpayer dollars to open a nightclub.

“Michael Young's organization was called Home At Last,” Turner said. “Instead, he created a home of last resort with a nightclub and gambling venture.”

>> Vance highlights billions in fraud uncovered by White House task force <<

Vice President JD Vance, who leads the White House’s anti-fraud taskforce, touted the entity’s success in a Sept. 15 speech.

“In just the last three months, we've taken close to 90 prosecutorial decisions that are making clear and sending a message to the fraudsters that if you defraud the American people, if you steal money from the American taxpayer that should go to American workers, we're actually going to prosecute you and we're going to try to send you to prison,” he said. “Let's get serious about fighting fraud and so long as congressional Democrats are not serious about fighting fraud, they shouldn't be anywhere near the halls of power.”

Following on the success of the Trump administration’s efforts to combat fraud, the U.S. House of Representatives voted Sept. 16 to codify the DOJ’s National Fraud Enforcement Division and grant the agency statutory federal authority to investigate and prosecute fraud across the U.S.

The bill was supported by 212 Republicans, 140 Democrats, and one independent. The only “no” votes came from 70 Democrats.

Assistant Attorney General Colin McDonald, who runs the DOJ’s National Fraud Enforcement Division and collaborates with the White House taskforce, lauded the vote and urged U.S. senators to support the legislation.

“This is great news for taxpayers and really bad news for fraudsters trying to steal from America,” he said on X. “On to the Senate!”

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