News Summary
Federal prosecutors have announced the arrests of two executives involved in fraudulent activities tied to California’s homelessness funding. The allegations include mismanagement and theft from taxpayer funds designated to combat homelessness. With over $24 billion allocated in the past five years, reports indicate that a fraction has been misused. The cases involve Project Homekey, aimed at housing the homeless, and have led to calls for better oversight and accountability in managing these funds.
Los Angeles
Federal prosecutors in Los Angeles announced on Thursday the arrests and criminal charges against two executives linked to alleged fraud involving California’s homelessness funding. The allegations are part of a broader crackdown aimed at holding accountable those who misuse taxpayer funds designated for addressing homelessness.
Over the past five years, California has allocated more than $24 billion to combat homelessness. However, reports have surfaced regarding the mismanagement, waste, and theft of a fraction of these funds.
Project Homekey Fraud
Cody Holmes, a 31-year-old former Chief Financial Officer of Shangri-La Industries, was taken into custody early Thursday. Holmes is accused of defrauding the state’s Project Homekey program, which is designed to convert motels into housing for homeless individuals. He allegedly submitted fraudulent bank statements that claimed $160 million in deposits, which led the state to release nearly $26 million for an incomplete project located in Thousand Oaks.
Investigators assert that at least $2.2 million from the program was misappropriated for Holmes’s personal expenses, including charges on an American Express account for luxury purchases.
Bank Fraud Charges Against Steven Taylor
In a separate case, 44-year-old Steven Taylor from Brentwood faces a nine-count superseding indictment involving various charges, including bank fraud, aggravated identity theft, and money laundering. The allegations against Taylor concern his real estate dealings relating to a property in Cheviot Hills, which he purchased for $11.2 million and subsequently sold for $27.3 million to the Weingart Center, a nonprofit housing developer. This transaction was reportedly funded by public money.
Taylor is accused of misrepresenting his intentions for a senior living facility on the property and hiding the resale transaction from lenders. The indictment highlighted issues with inflated property appraisals and discrepancies in valuation.
Broader Investigation and Accountability Efforts
Both Holmes and Taylor are facing multiple federal charges, including wire fraud and money laundering. Federal agents executed search warrants in locations including Beverly Hills and Century City as part of these ongoing investigations, which may suggest a wider pattern of exploiting government programs meant to assist vulnerable populations.
The California Interagency Council on Homelessness has faced criticism, notably from a 2024 State Auditor’s report, for its inadequate oversight of homelessness-related funds. As the investigations continue, prosecutors emphasize that these cases are likely just the beginning of a concerted effort to uncover further misuse of funds within the homelessness sector.
Authorities are encouraging members of the public to report any information concerning the misuse of homeless funding, indicating a community-involved approach to addressing these issues. It is anticipated that these cases may lead to additional arrests and shed light on other recipients and public officials involved in similar activities.
Deeper Dive: News & Info About This Topic
HERE Resources
Los Angeles Launches Task Force to Address Homelessness Fraud
Los Angeles Takes Action Against Homelessness Fraud
Additional Resources
- NBC Los Angeles
- Los Angeles Times
- CBS News Los Angeles
- Westside Current
- Wikipedia: Homelessness in California
Author: STAFF HERE BEVERLY HILLS WRITER
The Beverly Hills Staff Writer represents the experienced team at HEREBeverlyHills.com, your go-to source for actionable local news and information in Beverly Hills, Los Angeles County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Rodeo Drive Concours d'Elegance, the Beverly Hills artSHOW, Concerts on Canon, and holiday celebrations throughout the city. Our coverage extends to key organizations like the Beverly Hills Chamber of Commerce and Visit Beverly Hills, plus leading businesses in luxury fashion, hospitality, and entertainment that drive the local economy. As part of the broader HERE network, including HERELosAngeles.com, HERESantaAna.com, HEREHuntingtonBeach.com, and HERECostaMesa.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
