U.S. Attorney Bill Essayli announced this week the creation of a task force to investigate possible fraud and corruption involving funds meant to combat homelessness across Southern California.
The Homelessness Fraud and Corruption Task Force will examine the use of billions in taxpayer dollars allocated to address the region's persistent homelessness crisis. Federal prosecutors will work alongside the FBI, Housing and Urban Development inspectors and IRS criminal investigators.
"California has spent more than $24 billion over the past five years to address homelessness," Essayli said. "But officials have been unable to account for all the expenditures and outcomes, and the homeless crisis has only gotten worse."
The task force will focus on seven counties in the Central District of California, where approximately 95,000 people experience homelessness. Los Angeles County alone reports more than 75,000 homeless residents, with over 45,000 in the city of Los Angeles.
The announcement follows a court-ordered audit last month that found homelessness services in Los Angeles were "disjointed" with "poor data quality" and insufficient financial controls to monitor contract compliance.
Federal authorities will prioritize reviewing programs receiving federal grants and funding, including $100 million in COVID-19 emergency aid sent to Los Angeles County and more than $200 million recently awarded by HUD.
"If state and local officials cannot provide proper oversight and accountability, we will do it for them," Essayli said. "If we discover any federal laws were violated, we will make arrests."
The task force will also investigate schemes involving the theft of private donations intended for homeless services.
FBI Assistant Director in Charge Akil Davis said, "Any exploitation of the homelessness crisis via the theft of funds intended to improve conditions cannot and will not be tolerated."
The federal investigation comes amid growing controversy over homelessness services in Los Angeles. For years, the city has been embroiled in a high-profile federal lawsuit, LA Alliance for Human Rights v. City of Los Angeles, where plaintiffs argue officials have mismanaged public funds while failing to address the humanitarian crisis.
The court-ordered audit mentioned in Essayli's announcement stems from this ongoing litigation, in which U.S. District Judge David O. Carter has repeatedly criticized local officials for ineffective spending and lack of transparency.
Federal involvement comes as local governments are becoming more critical of the way the area has handled the crisis. The County board of supervisors recently voted to defund the Los Angeles Homeless Services Authority (LAHSA), the joint city-county agency that has coordinated homeless services since 1993. While there’s no evidence of criminality at the organization, critics have long claimed LAHSA operated with minimal oversight despite receiving hundreds of millions in public funding.
The defunding decision followed revelations that LAHSA could not account for millions in expenditures over the past three years. The agency has also faced criticism for its annual homeless count methodology, with independent auditors suggesting the actual homeless population may be significantly higher than reported figures.
